Exhibit 10.26

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE “SUBORDINATION AGREEMENT”) DATED AS OF DECEMBER 19,
2006 AMONG VERTICALNET, INC., THE SENIOR NOTEHOLDERS PARTY THERETO (THE “SENIOR
CREDITORS”) AND RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF THE CLASS A CONVERTIBLE
CROSSOVER SEGREGATED PORTFOLIO; AND RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF THE
CLASS A CONVERTIBLE CROSSOVER SEGREGATED PORTFOLIO, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time in accordance herewith and including all attachments,
exhibits and schedules hereto, the “Agreement”), dated as of December 19, 2006,
made by VERTICALNET, INC., a Pennsylvania corporation (the “Company”) and each
of its domestic Subsidiaries now or hereafter a party hereto (individually and
collectively with the Company, “Grantor”), in favor of RADCLIFFE SPC, LTD. FOR
AND ON BEHALF OF THE CLASS A CONVERTIBLE CROSSOVER SEGREGATED PORTFOLIO (the
“Secured Party”).

WHEREAS, the Company has issued a promissory note to the Secured Party (the
“Note”) pursuant to a Note Purchase Agreement, dated as of May 15, 2006 (the
“Purchase Agreement”), by and among the Company and the Secured Party;

WHEREAS, Section 14(g) of the Note provides that if the Company does not obtain
the consent of the Senior Creditors to permit the Company to grant subordinated
Liens and security interests to the Secured Party in all assets of the Company
and of its Subsidiaries on or before January 31, 2007, the Secured Party may
declare the outstanding Principal of, and all accrued Interest on, and any other
amounts due under the Note immediately due and payable;

WHEREAS, the Company has obtained the consent of the Senior Creditors to the
execution and delivery of this Agreement;

WHEREAS, the Secured Party and the Company agree that each Grantor execute and
deliver to the Secured Party this Agreement providing for the grant to the
Secured Party of a continuing security interest in all personal property and
assets of each Grantor, all in substantially the form hereof to secure all
Obligations (hereinafter defined); and

WHEREAS, the Company, each Grantor and the Secured Party agree that the
execution and delivery of this Agreement fully satisfies the Company’s
obligations pursuant to Section 14(g) of the Note and as a result the Secured
Party cannot declare the Note and any other amounts due under the Note due and
payable pursuant to the terms of Section 14(g) of the Note.

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NOW, THEREFORE, the parties agree as follows:

ARTICLE I. Definitions

Section 1.1. Definition of Terms Used Herein. All capitalized terms used herein
and not defined herein have the respective meanings provided therefor in the
Purchase Agreement or the Note, as applicable. All terms defined in the Uniform
Commercial Code (hereinafter defined) as in effect from time to time and used
herein and not otherwise defined herein (whether or not such terms are
capitalized) have the same definitions herein as specified therein.

Section 1.2. Definition of Certain Terms Used Herein. As used herein, the
following terms have the following meanings:

“Collateral” means all accounts receivable of each Grantor and all personal and
fixture property of each Grantor every kind and nature, including, without
limitation, all furniture, fixtures, equipment, raw materials, inventory, or
other goods, accounts, contract rights, rights to the payment of money,
insurance refund claims and all other insurance claims and proceeds, tort
claims, chattel paper, documents, instruments, securities and other investment
property, deposit accounts, rights to proceeds of letters of credit and all
general intangibles including, without limitation, all tax refund claims,
license fees, patents, patent licenses, patent applications, trademarks,
trademark licenses, trademark applications, trade names, copyrights, copyright
licenses, copyright applications, rights to sue and recover for past
infringement of patents, trademarks and copyrights, computer programs, computer
software, engineering drawings, service marks, customer lists, goodwill, and all
licenses, permits, agreements of any kind or nature pursuant to which such
Grantor possesses, uses or has authority to possess or use property (whether
tangible or intangible) of others or others possess, use or have authority to
possess or use property (whether tangible or intangible) of such Grantor, and
all recorded data of any kind or nature, regardless of the medium of recording
including, without limitation, all books and records, software, writings, plans,
specifications and schematics; and all proceeds and products of each of the
foregoing. Notwithstanding any of the foregoing, “Collateral” shall not include
Excluded Collateral.

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured, waived, or otherwise remedied
during such time) constitute an Event of Default.

“Event of Default” has the meaning specified in the Note.

“Excluded Collateral” means any of the following: (i) all of the Company’s
rights, title and interest in, to and under that certain Directors, Officer and
Corporate Liability Insurance Policy No. 14-MGU-04-A3710, effective February 11,
2004 through February 11, 2005, 12:01 AM (the “Policy”) issued by U.S. Specialty
Insurance Company (the “Insurer”); (ii) all claims and causes of action
resulting from that certain action filed against the Company by Jodek Charitable
Trust, R.A. (docketed at No. 04-CV-04455 in the United States District Court for
the Eastern District of Pennsylvania) (the “Action”) and resulting from and
arising under, out of or relating to, in any fashion, the Policy, including but
not limited to the Insurer’s actions and inactions under the Policy; the
Insurer’s denial of coverage, disclaiming of coverage or limitation

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or coverage under the Policy for the claims asserted in the Action; the
Insurer’s refusal to cover and pay any amount that may be agreed upon by the
parties to the Action in the settlement thereof (the “Settlement Amount”), and
the Insurer’s refusal to contribute to the Settlement Amount, as well as claims
against the Insurer for bad faith, including but not limited to claims under 42
Pa.C.S. Section 8371 (all of the foregoing, the “Insurance Claims”); and
(iii) all proceeds and products of the foregoing.

“Indemnitees” has the meaning specified in Section 7.5(b).

“Lien” means: (i) any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute, or contract, and including a security
interest, charge, claim, or lien arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes; (ii) to the extent not included under
clause (i), any reservation, exception, encroachment, easement, right-of-way,
covenant, condition, restriction, lease or other title exception or encumbrance
affecting property; and (iii) any contingent or other agreement to provide any
of the foregoing.

“Note” has the meaning assigned to such term in the first recital of this
Agreement.

“Obligations” means all indebtedness, liabilities, obligations, covenants and
duties of the Company and each other Grantor to the Secured Party of every kind,
nature and description, direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, arising by operation
of law or otherwise, now existing or hereafter arising under the Note.

“Registered Organization” means an entity formed by filing a registration
document with a United States Governmental Authority, such as a corporation,
limited partnership or limited liability company.

“Security Interest” has the meaning specified in Section 2.1 of this Agreement.

“Uniform Commercial Code” means the Uniform Commercial Code from time to time in
effect in the Commonwealth of Pennsylvania.

ARTICLE II. Security Interest

Section 2.1. Security Interest. As security for the payment and performance, in
full of the Obligations, and any extensions, renewals, modifications or
refinancings of the Obligations, each Grantor hereby conveys, assigns, sets
over, mortgages, pledges, hypothecates and transfers to the Secured Party, and
hereby grants to the Secured Party, its successors and assigns, a security
interest in, all of such Grantor’s right, title and interest in, to and under
the Collateral (the “Security Interest”).

Section 2.2. No Assumption of Liability. The Security Interest is granted as
security only and shall not subject the Secured Party to, or in any way alter or
modify, any obligation or liability of each Grantor with respect to or arising
out of the Collateral.

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ARTICLE III. Representations and Warranties

Each Grantor represents and warrants to the Secured Party that:

Section 3.1. Title and Authority. Each Grantor has good and valid rights in and
title to the Collateral with respect to which it has purported to grant a
security interest hereunder and has full power and authority to grant to the
Secured Party the Security Interest and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval which has
been obtained.

Section 3.2. Filings; Actions to Achieve Perfection. Fully executed Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a
description of the Collateral have been delivered to the Secured Party for
filing in the appropriate office in the jurisdiction specified in Schedule 3.2,
which are all the filings, recordings and registrations that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Secured Party in respect of all
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or with respect to the filing of amendments or new
filings to reflect the change of a Grantor’s name, location, identity or
corporate structure. Each Grantor’s name is listed on Schedule 3.2 attached
hereto identically to how it appears on such Grantor’s articles of incorporation
or other organizational documents.

Section 3.3. Validity and Priority of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject only to the
filings described in Section 3.2 above and the Permitted Liens (as such term is
defined in the Note), a perfected security interest in all Collateral in which a
security interest may be perfected by filing, recording or registration in the
United States pursuant to the Uniform Commercial Code or other applicable law in
the United States (or any political subdivision thereof) and its territories and
possessions or any other country, state or nation (or any political subdivision
thereof). The Security Interest is and shall be subordinate to any other
Permitted Lien on any of the Collateral.

Section 3.4. Absence of Other Liens. Each Grantor’s Collateral is owned by such
Grantor free and clear of any Lien other than Permitted Liens. Without limiting
the foregoing and except as set forth on Schedule 3.4 to this Agreement, no
Grantor has filed or consented to any filing described in Schedule A in favor of
any Person other than the Secured Party, nor permitted the granting or
assignment of a security interest or permitted perfection of any security
interest in the Collateral in favor of any Person other than the Secured Party.

Section 3.5. Valid and Binding Obligation. This Agreement constitutes the legal,
valid and binding obligation of each Grantor, enforceable against such Grantor
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as

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limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in this Agreement may be limited by applicable federal or
state securities laws.

ARTICLE IV. Covenants

Section 4.1. Change of Name; Location of Collateral; Place of Business, State of
Formation or Organization.

(a) Each Grantor shall notify the Secured Party in writing promptly of any
change (i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
(including the establishment of any such new office or facility), (iii) in its
identity or corporate structure such that a filed filing made under the Uniform
Commercial Code becomes misleading or (iv) in its Federal Taxpayer
Identification Number. In extension of the foregoing, each Grantor shall not
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Secured Party to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral.

(b) Without limiting Section 4.1(a), without the prior written consent of the
Secured Party in each instance, no Grantor shall change its (i) principal
residence, if it is an individual, (ii) place of business, if it has only one
place of business and is not a Registered Organization, (iii) principal place of
business, if it has more than one place of business and is not a Registered
Organization, or (iv) state of incorporation, formation or organization, if it
is a Registered Organization.

Section 4.2. Records. Each Grantor shall maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by it as
is consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Collateral, and, at such time or times as the Secured Party may
reasonably request, promptly to prepare and deliver to the Secured Party a duly
certified schedule or schedules in form and detail satisfactory to the Secured
Party showing the identity, amount and location of any and all Collateral.

Section 4.3. Notice of Changes. In the event there should at any time be any
change in the information represented and warranted herein or in the documents
and instruments executed and delivered in connection herewith, each Grantor
shall immediately notify the Secured Party in writing of such change (this
notice requirement shall be in extension of and shall not limit or relieve any
Grantor of any other covenants hereunder).

Section 4.4. Protection of Security. Each Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral
against all persons and to defend the Security Interest of the Secured Party in
the Collateral and the priority thereof against any Lien other than the
Permitted Liens.

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Section 4.5. Inspection and Verification. The Secured Party and such persons as
the Secured Party may reasonably designate shall have the right to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located, to
discuss each Grantor’s affairs with the officers of such Grantor and its
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of collateral in the
possession of any third Person, by contacting any account debtor or third Person
possessing such Collateral for the purpose of making such a verification.
Out-of-pocket expenses in connection with any inspections by representatives of
the Secured Party shall be (a) the obligations of each Grantor with respect to
any inspection after the Secured Party’ demand payment of the Note or (b) the
obligation of the Secured Party in any other case.

Section 4.6. Taxes; Encumbrances. At their option, the Secured Party may
discharge, Liens other than Permitted Liens at any time levied or placed on the
Collateral and may pay for the maintenance and preservation of the Collateral to
the extent any Grantor fails to do so and each Grantor shall reimburse the
Secured Party on demand for any payment made or any expense incurred by the
Secured Party pursuant to the foregoing authorization; provided, however, that
nothing in this Section shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Secured Party to cure or
perform, any covenants or other obligation of any Grantor with respect to any
Lien or maintenance or preservation of Collateral as set forth herein.

Section 4.7. Use and Disposition of Collateral. No Grantor shall make or permit
to be made an assignment, pledge or hypothecation of any Collateral or shall
grant any other Lien in respect of the Collateral without the prior written
consent of the Secured Party. No Grantor shall make or permit to be made any
transfer of any Collateral, other than the licensing of software in the ordinary
course of business and the sale of obsolete or unnecessary equipment, and each
Grantor shall remain at all times in possession of the Collateral owned by it,
other than with respect to Permitted Liens and other liens approved by the
Secured Party.

Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time
following the date of this Agreement, each Grantor, at its own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Collateral. In extension of the foregoing and without limitation, such
insurance shall, if requested by the Secured Party, be payable to the Secured
Party as loss payee under a “standard” loss payee clause, and the Secured Party
shall be listed as an “additional insured” on such Grantor’s general liability
insurance. Such insurance shall not be terminated, cancelled or not renewed for
any reason, including non-payment of insurance premiums, unless the insurer
shall have provided the Secured Party at least 30 days prior written notice.
Each Grantor irrevocably makes, constitutes and appoints the Secured Party (and
all officers, employees or agents designated by the Secured Party) as its true
and lawful agent and attorney-in-fact for the purpose, at any time following the
Secured Party’s demand for payment of the Note, of making, settling and
adjusting claims in respect of Collateral under policies of insurance, endorsing
the name of such Grantor on any check, draft, instrument

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or other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
a Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Secured Party may, without waiving or releasing any
obligation or liability of such Grantor hereunder, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Secured Party deems advisable. All
sums disbursed by the Secured Party in connection and in accordance with this
Section, including reasonable attorneys’ fees, court costs, expenses and other
charges relating thereto, shall be payable upon demand, by each Grantor to the
Secured Party and shall be additional Obligations secured hereby. Each Grantor
shall promptly notify the Secured Party if any material portion of the
Collateral owned or held by such Grantor is damaged or destroyed. The proceeds
of any casualty insurance in respect of any casualty loss of any of the
Collateral shall (i) so long as the Secured Party have not demanded payment of
the Note, be disbursed to such Grantor for direct application by such Grantor
solely to the repair or replacement of such Grantor’s property so damaged or
destroyed, and (ii) in all other circumstances, be held by the Secured Party as
cash collateral for the Obligations. The Secured Party may, at its sole option,
disburse from time to time all or any part of such proceeds so held as cash
collateral, upon such terms and conditions as the Secured Party may reasonably
prescribe, for direct application by the Secured Party solely to the repair or
replacement of such Grantor’s property so damaged or destroyed, or such Grantor
may apply all or any part of such proceeds to the Obligations.

Section 4.9. Legend. Each Grantor shall legend, in form and manner satisfactory
to the Secured Party, its accounts and its books, records and documents
evidencing or pertaining thereto with an appropriate reference to the fact that
such accounts have been assigned to the Secured Party and that the Secured Party
have a security interest therein.

ARTICLE V. Further Assurances; Power of Attorney

Section 5.1. Further Assurances. Each Grantor shall, at its own expense,
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Secured Party may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Secured Party, duly endorsed in a
manner satisfactory to the Secured Party.

Section 5.2. Power of Attorney.

(a) Each Grantor hereby irrevocably (as a power coupled with an interest)
constitutes and appoints the Secured Party (and all officers, employees or
agents designated by the Secured Party), its attorney-in-fact with full power of
substitution, for the benefit of the Secured Party,

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(i) to take all appropriate action and to execute all documents and instruments
that may be necessary or desirable to accomplish the purposes of this Agreement,
and without limiting the generality of the foregoing, each Grantor hereby grants
Secured Party the power to file one or more financing statements (including
fixture filings), continuation statements, filings with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) or other documents for the purpose
of perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by such Grantor, and naming such Grantor as debtor and the
Secured Party as secured party; and

(ii) at any time following the Secured Party’s demand for payment of the Note
(i) to receive, endorse, assign and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof; (ii) to demand, collect, receive payment of,
give receipt for and give discharges and releases of all or any of the
Collateral; (iii) to sign the name of such Grantor on any invoice or bill of
lading relating to any of the Collateral; (iv) to send verifications of accounts
to any account debtor or any other Person liable for an account; (v) to commence
and prosecute any and all suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect or otherwise realize on all or
any of the Collateral or to enforce any rights in respect of any Collateral;
(vi) to settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; and (vii) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things necessary
to carry out the purposes of this Agreement, as fully and completely as though
the Secured Party were the absolute owner of the Collateral for all purposes;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Secured Party to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Secured Party, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Secured Party with respect to the Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of such Grantor
or to any claim or action against the Secured Party.

(b) The provisions of this Article shall in no event relieve any Grantor of its
obligations hereunder with respect to the Collateral or any part thereof or
impose any obligation on the Secured Party to proceed in any particular manner
with respect to the Collateral or any part thereof, or in any way limit the
exercise by the Secured Party of any other or further right which it may have on
the date of this Agreement or hereafter, whether hereunder, by law or otherwise.

ARTICLE VI. Remedies

Section 6.1. Remedies upon Default.

(a) Subject to rights of the Senior Noteholders, upon the occurrence and during
the continuance of an Event of Default, each Grantor agrees to deliver each item
of its

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Collateral to the Secured Party on demand, and it is agreed that the Secured
Party shall have the right to take any of or all the following actions at the
same or different times (but at all times subject to any Permitted Liens): with
or without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral, exercise any
Grantor’s right to bill and receive payment for completed work and, generally,
to exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the
foregoing, each Grantor agrees that, subject to rights of the Senior
Noteholders, the Secured Party shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part
of the Collateral, at public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the Secured
Party shall deem appropriate. The Secured Party shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the Secured
Party shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely, free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
law) all rights of redemption, stay and appraisal which such Grantor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.

(b) The Secured Party shall give Grantor ten (10) days’ written notice (which
each Grantor agrees is reasonable notice within the meaning of Section 9-611 of
the Uniform Commercial Code) of the Secured Party’ intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Secured Party may fix and state in the notice (if any) of such sale. At
any such sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Secured Party may (in their
sole and absolute discretion) determine. The Secured Party shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Secured Party may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Secured Party until the sale price is paid by the purchaser or purchasers
thereof, but the Secured Party shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant

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to this Section, the Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to the Secured Party from any Grantor as a credit against the purchase
price, and the Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Secured Party shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Secured Party
shall have entered into such an agreement all Obligations have been paid in
full. As an alternative to exercising the power of sale herein conferred upon
it, the Secured Party may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.

Section 6.2. Application of Proceeds. The Secured Party shall apply the proceeds
of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, as follows:

(a) FIRST, to the payment of all costs and expenses incurred by the Secured
Party in connection with such collection or sale or otherwise in connection with
this Agreement or any of the Obligations, including all court costs and the fees
and expenses of its agents and legal counsel, and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder, under
the Purchase Agreement, the Note and the other Transaction Documents;

(b) SECOND, to the payment in full of the Obligations; and

(c) THIRD, to Grantor, their successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent jurisdiction
may otherwise direct.

Subject to the foregoing and subject to rights of the Senior Noteholders, the
Secured Party shall have absolute discretion as to the time of application of
such proceeds, moneys or balances in accordance with this Agreement. Upon any
sale of the Collateral by the Secured Party (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of any such
proceeds, moneys or balances by the Secured Party or of the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Secured Party or such officer or be answerable in any way for the misapplication
thereof.

Section 6.3. Grant of License to Use Intellectual Property. For the purpose of
enabling the Secured Party to exercise rights and remedies under this Article at
such time as the Secured Party shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants

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to the Secured Party an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to such Grantor) to use, license or
sub-license any of the Collateral consisting of intellectual property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Secured Party may be exercised, at the option of the Secured Party, only
following the Secured Party’ demand for payment of the Note.

ARTICLE VII. Miscellaneous

Section 7.1. Notices. All communications and notices hereunder to any Grantor
and to the Secured Party shall (except as otherwise expressly permitted herein)
be in writing and delivered to each Grantor or the Secured Party, as the case
may be, at the address set forth on the signature pages hereof.

Section 7.2. Security Interest Absolute. All rights of the Secured Party
hereunder, the Security Interest and all obligations of each Grantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Purchase Agreement, the Note, any Transaction Document or
any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Purchase Agreement, the Note, any Transaction Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, such Grantor in respect of the
Obligations or this Agreement.

Section 7.3. Survival of Agreement. All covenants, agreements, representations
and warranties made by each Grantor herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Secured Party and
shall survive the making of the loan and the execution and delivery to the
Secured Party of the Note, regardless of any investigation made by the Secured
Party or on their behalf; and shall continue in full force and effect until this
Agreement shall terminate.

Section 7.4. Binding Effect; Several Agreement; Successors and Assigns. This
Agreement shall become effective as to each Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been delivered to the Secured
Party and a counterpart hereof shall have been executed on behalf of the Secured
Party, and thereafter shall be binding upon such Grantor and the Secured Party
and their respective successors and assigns, and shall inure to the benefit of
such Grantor, the Secured Party and their respective successors and assigns,
except that no Grantor shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement, the Purchase Agreement, the Note or the other Transaction Documents.

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Section 7.5. Secured Party’ Fees and Expense; Indemnification.

(a) Each Grantor agrees to pay upon demand to the Secured Party the amount of
any and all reasonable expenses, including all reasonable fees, disbursements
and other charges of its counsel and of any experts or agents, which the Secured
Party may incur in connection with (i) the administration of this Agreement
(including the customary fees and charges of the Secured Party for any audits
conducted by them or on their behalf with respect to the accounts inventory),
(ii) the custody or preservation of, or the sale of, collection from or other
realization upon any of the Collateral, (iii) the exercise, enforcement or
protection of any of the rights of the Secured Party hereunder or (iv) the
failure of any Grantor to perform or observe any of the provisions hereof.

(b) Each Grantor agrees to indemnify the Secured Party and the agent,
contractors and employees of the Secured Party (collectively, the “Indemnitees”)
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery, or performance of this Agreement or any agreement or
instrument contemplated hereby or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnitee
is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby. The provisions of this Section shall remain
operative and in full force and effect regardless of the termination of this
Agreement, the Purchase Agreement, the Note or the other Transaction Documents,
the consummation of the transactions contemplated hereby, the repayment of any
of the Obligations, the invalidity or unenforceability of any term or provision
of this Agreement, the Purchase Agreement, the Note or the other Transaction
Documents, or any investigation made by or on behalf of the Secured Party. All
amounts due under this Section shall be payable on written demand therefor.

Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT
GIVING EFFECT TO ANY OF THE CONFLICTS OF LAW PRINCIPLES WHICH WOULD RESULT IN
THE APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION. THIS AGREEMENT
SHALL NOT BE INTERPRETED OR CONSTRUED WITH ANY PRESUMPTION AGAINST THE PARTY
CAUSING THIS AGREEMENT TO BE DRAFTED.

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Section 7.7. Waivers; Amendment.

(a) No failure or delay of the Secured Party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Secured Party hereunder and under the Purchase Agreement are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provisions of this Agreement, the Purchase Agreement, the Note or
the other Transaction Documents or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle any Grantor to any other or
further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements, in writing entered into
by the Secured Party and each Grantor.

Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE PURCHASE AGREEMENT OR THE NOTE. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE PURCHASE AGREEMENT AND THE NOTE, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 7.9. Severability. In the event any one or more of the provisions
contained in this Agreement should be held 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
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

Section 7.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract. Each party shall be entitled
to rely on a facsimile signature of any other party hereunder as if it were an
original.

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Section 7.11. Jurisdiction; Consent to Service of Process.

(a) Each Grantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any Pennsylvania State court
or Federal court of the United States of America sitting in Philadelphia,
Pennsylvania, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, the Purchase Agreement
or the Note, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Pennsylvania State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Secured Party may otherwise have to
bring any action or proceeding relating to this Agreement, the Purchase
Agreement, the Note or the other Transaction Documents against any Grantor or
its properties in the courts of any jurisdiction.

(b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, the Purchase Agreement, the Note or the
other Transaction Documents in any Pennsylvania State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.1. Nothing in this Agreement will
affect the right of any party to this Agreement to process in any other manner
permitted by law.

Section 7.12. Termination. This Agreement and the Security Interest shall
terminate when all the Obligations have been paid in full, at which time the
Secured Party shall execute and deliver to each Grantor, at such Grantor’s
expense, all Uniform Commercial Code termination statements and similar
documents which such Grantor shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section shall be without recourse to or warranty by the Secured
Party.

Section 7.13. Prejudgment Remedy Waiver. Each Grantor acknowledges that this
Agreement, the Purchase Agreement, the Note and the other Transaction Documents
evidence a commercial transaction and that it could, under certain circumstances
have the right, to notice of and hearing on the right of the Secured Party to
obtain a prejudgment remedy, such as attachment, garnishment and/or replevin,
upon commencing any litigation against a Grantor. Notwithstanding, each Grantor
hereby waives all rights to notice, judicial hearing or prior court order to
which it might otherwise have the right under any state or federal statute or
constitution in connection with the obtaining by the Secured Party of any
prejudgment remedy by reason of this Agreement, the Purchase Agreement, the
Note, the other Transaction Documents or by reason of the Obligations or any
renewals or extensions of the same. Each Grantor also waives any and all
objection which it might otherwise assert, now or in the future, to the exercise
or use by the Secured Party of any right of setoff, repossession or self help as
may presently exist under statute or common law.

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Section 7.14. Satisfaction of Section 14(g) under the Note. The Secured Party
hereby acknowledges and agrees that the execution and delivery of this Agreement
by the Grantors evidences the full and complete satisfaction of the obligations
of the Company which are set forth in Section 14(g) of the Note and as such
obligation has been fulfilled, the Secured Party no longer has any right to
declare the Note or any amounts thereunder due and payable pursuant to the terms
of the Section 14(g) of the Note.

Section 7.15. SUBORDINATION; Conflict between Subordination Agreement and
Security Agreement. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED
HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THE
SUBORDINATION AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, THE SECURED PARTY, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT. In the event of a
conflict between the terms of this Agreement and the Subordination Agreement,
the Subordination Agreement shall control.

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IN WITNESS WHEREOF, the parties have duly executed this Security Agreement as of
the day and year first written above.

 

VERTICALNET, INC., a Pennsylvania corporation By:  

/s/ Nathanael V. Lentz

Name:   Nathanael V. Lentz Title:   President and CEO

 

Address for Notices for all Grantors: Verticalnet, Inc. 400 Chester Field
Parkway Malvern, PA 19355 Telephone:   (610) 640-8030 Facsimile:   (610)
240-9470 Attention:   Legal

 

VERT TECH LLC, a Delaware limited liability company By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary VERTICALNET INTERNATIONAL LLC, a
Delaware limited liability company By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary VERTICALNET SOFTWARE, INC., a
Delaware corporation By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary

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VERTICALNET EMPLOYEES I CORP., a
Delaware corporation By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary VERTICALNET EMPLOYEES II CORP., a
Delaware corporation By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary B2E CONTRACT MANAGEMENT, INC., a
Delaware corporation By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary B2E SOURCING OPTIMIZATION, INC.,
a Delaware corporation By:  

/s/Christopher G. Kuhn

Name:   Christopher G. Kuhn Title:   Secretary

 

RADCLIFFE SPC, LTD.

for and on behalf of the Class A Convertible Crossover Segregated Portfolio

By:   RG Capital Management, L.P.   By:   RGC Management Company, LLC     By:  

/s/Gerald Stahlecker

    Name:   Gerald Stahlecker     Title:   Managing Director

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SCHEDULE 3.2

Grantors and Filing Jurisdictions

 

Verticalnet, Inc.    Pennsylvania          Vert Tech LLC    Delaware         
Verticalnet International LLC    Delaware          Verticalnet Software, Inc.   
Delaware          Verticalnet Employees I Corp.    Delaware          Verticalnet
Employees II Corp.    Delaware          B2e Contract Management, Inc.   
Delaware          B2e Sourcing Optimization, Inc.    Delaware         

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SCHEDULE 3.4

Absence of Other Liens

The Senior Noteholders are secured by a lien against all of the Collateral.