<PAGE>

                                                                   EXHIBIT 10.12

                    EMPLOYMENT AND NONCOMPETITION AGREEMENT

     THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement") is being
entered into as of March 7, 2001 by and between Onvia.com, Inc., a Delaware
corporation ("Onvia"), and Michael D. Pickett, an individual ("Employee").
Certain capitalized terms in this Agreement not otherwise defined are defined in
Exhibit A attached hereto.

                                    RECITALS

     A.  Pursuant to an Agreement and Plan of Merger dated as of August 10, 2000
by and among Onvia, Infrastructure Acquisition Corporation, a Delaware
corporation and wholly owned subsidiary of Onvia ("Sub"), and Hardware.com,
Inc., a Delaware corporation ("Hardware") (the "Merger Agreement"), Sub merged
with and into Hardware, with Hardware surviving as a wholly owned subsidiary of
Onvia (the "Merger").

     B.  Following the Merger, Employee joined Onvia as an employee and was
appointed President and Chief Operating Officer of Onvia.

     C.  Onvia desires to employ the Executive, and the Executive desires to be
employed by Onvia, on the terms and subject to the conditions set forth herein.

                                   AGREEMENT

     In consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:

     1.  Employment.

         1.1  Term; Duties.

              (a)  Term.  Employee agrees to serve as an employee of Onvia
during the period (such period, including any extensions thereto, the
"Employment Term") commencing as of the date of this Agreement and ending on the
first anniversary of this Agreement, and this Agreement shall be automatically
extended for an additional one year term on each subsequent anniversary unless
either party provides the other with written notice at least 30 days prior to
the expiration of any such one year term. Notwithstanding the foregoing, this
Agreement may be terminated at any time pursuant to Section 2 hereof.

              (b)  Duties.

                   (i)  During Employee's employment, Employee shall serve as
President and Chief Operating Officer of Onvia and shall perform such duties and
functions as the Chief Executive Officer and the Board of Directors of Onvia
shall reasonably determine from time to time; and in performance of Employee's
duties, Employee shall comply with all directions given by such officer to the
best of Employee's abilities and in a manner consistent with the ethical and
legal performance of such duties. If Employee is designated as Chief Executive
Officer of Onvia, Employee shall serve as Chief Executive Officer of Onvia and
shall

                                      -1-
<PAGE>

perform such duties and functions as the Board of Directors of Onvia shall
reasonably determine from time to time; and in performance of Employee's duties,
Employee shall comply with all directions given by the Board of Directors to the
best of Employee's abilities and in a manner consistent with the ethical and
legal performance of such duties.

                   (ii)  Employee agrees to serve Onvia faithfully and to the
best of Employee's ability, and to devote the substantial majority of Employee's
working time, attention and efforts to the business and affairs of Onvia.
Employee represents and warrants to Onvia that he is under no contractual
commitments inconsistent with Employee's obligations set forth in this
Agreement. Employee and Onvia acknowledge and agree that Employee, upon notice
to Onvia, may serve on behalf of other entities as a board member, advisor, etc.
so long as it does not, in the good faith discretion of Onvia, materially
conflict with Employee's duties and obligations under this Agreement.

         1.2  Salary.  In consideration of all services to be rendered by
Employee to Onvia during the Employment Term, Onvia shall pay to Employee during
the Employment Term a minimum salary of Two Hundred and Fifty Thousand Dollars
($250,000) per year, payable at such times as other salaried Onvia employees
receive their regular salary payments. Onvia shall be entitled to withhold from
the salary payments otherwise required to be made to Employee such amounts as
Onvia may be required to withhold under applicable tax laws and other applicable
legal requirements.

          1.3  Bonus.  Employee shall be eligible to receive a bonus of up to
Seventy-Five Thousand Dollars ($75,000), based on criteria determined by the
Board of Directors of Onvia in good faith.

          1.4  Other Benefits.

               (a)  During Employee's employment, Onvia shall provide to
Employee the same benefits that Onvia makes generally available to its employees
(e.g., participation in Onvia's 401(k) plan, stock option plan, employee stock
purchase plan and cash incentive programs), subject to Employee's satisfaction
of the respective eligibility requirements for such benefits. In respect of all
such benefits, Onvia shall retain the discretion to determine the amount or
value of the benefit to Employee, if such benefit is discretionary in nature in
respect of similarly situated Onvia personnel.

               (b)  Onvia will reimburse Employee for reasonable legal fees
incurred by Employee in connection with (i) the acquisition of Hardware by
Onvia, and (ii) the negotiation of this Agreement and the transactions
contemplated hereby, including the stock option agreement described in Section
1.5 of this Agreement. As a condition to receipt of such reimbursement, Employee
will be required to submit to Onvia reasonable evidence that such expenditures
were made by Employee in connection with the matters described in (i) and (ii)
of the preceding sentence. A letter from Employee's counsel summarizing legal
fees incurred shall meet the standard of reasonable evidence under this
paragraph and Employee shall not be required to provide Onvia with his legal
invoices received from counsel.

                                      -2-
<PAGE>

               (c)  From August 14, 2000 through January 1, 2002, Onvia will
reimburse Employee, upon reasonable verification, for a total of up to three
thousand dollars ($3,000) per month for living expenses in Seattle and/or
periodic travel to the Los Angeles, California area at Employee's discretion.
Such reimbursement will not be subject to withholdings and be paid within thirty
days of receipt of request and verification. The term of this living expense
reimbursement may be extended by mutual agreement of Employee and the
Compensation Committee of Onvia's Board of Directors.

         1.5  Stock Options.  In connection with the commencement of Employee's
employment, concurrent with the approval of this Agreement by Onvia's Board of
Directors, Onvia will grant Employee an option to purchase shares of Onvia
common stock on substantially the terms set forth in the stock option grant and
agreements (together, the "Option Agreements") attached hereto as Exhibits B-1
and B-2. Employee hereby acknowledges and agrees that the grant of options
pursuant to the Option Agreement attached hereto as Exhibit B-2 is subject to
stockholder approval of an amendment of Onvia's Amended and Restated 1999 Stock
Option Plan. If stockholder approval of such amendment is not received, such
grant shall be null and void ab initio and shall be of no further effect.

         1.6  Assignment Agreement.  The effectiveness of this Agreement is
conditioned upon Employee's execution, and delivery to an officer of Onvia, of a
Proprietary Information and Inventions Agreement in the form attached hereto as
Exhibit C.

         1.7  No Other Compensation.  Employee acknowledges and agrees that he
shall not be entitled to receive from Onvia, or from any Affiliate of Onvia, any
salary, bonus or other compensation or benefit of any nature (whether relating
to any period prior to the date of this Agreement or relating to any period
after the date of this Agreement), except as expressly provided in Sections 1.2,
1.3, 1.4 and 1.5 above and as provided in the Merger Agreement or as otherwise
authorized by Onvia's Board of Directors.

          1.8  Policies.  Employee agrees to be subject to and comply with such
corporate policies and guidelines of Onvia as are generally applicable to Onvia
employees. In the event of any conflict between Onvia policies and this
Agreement, this Agreement shall govern.

     2.  Termination.

         2.1  Right to Terminate.  Onvia shall have the right to terminate
Employee's employment, and Employee may resign, with or without Cause at any
time during or after the Employment Term. Upon Onvia's termination of Employee's
employment: (a) Onvia shall have no further monetary obligation or other
obligation of any nature to Employee under Section 1 or with respect to
Employee's employment, except as set forth in Section 2.2 below, and (b)
Employee shall have no further obligation to Onvia under Section 1.1. Except as
expressly set forth in this Section 2.1, the termination of Employee's
employment pursuant to this Section 2.1 shall not limit or otherwise affect any
of Employee's obligations under this Agreement, all of which shall remain in
full force and effect as provided herein.

         2.2  Termination.

                                      -3-
<PAGE>

              (a)  If (i) Onvia terminates Employee's employment without Cause,
or Employee resigns for Good Reason, during the Employment Term, (ii) Employee
satisfies all of Employee's obligations relating to the termination of
Employee's employment under this Agreement (including Employee's obligations
under Section 5.2 below), (iii) Employee executes and delivers to Onvia a
general release (reasonably satisfactory in form and substance to Onvia) of any
rights or claims that he may have or has ever had against Onvia or any of
Onvia's Affiliates, and (iv) Employee continues to satisfy all of Employee's
obligations under this Agreement (except for Section 1.1), then Employee shall
be entitled to receive (x) previously accrued and unpaid monthly salary
payments, bonuses and vacation time plus accrued, reasonable and unreimbursed
expenses which are documented and are within the scope of Employee's employment,
in each case through the date of termination, (y) the monthly salary payments
specified in Section 1.2 above and then existing benefits under Section 1.4(a)
above for three hundred and sixty-five (365) days following the effective date
of such termination, and (z) three hundred and sixty-five (365) days (determined
from the date of such termination) of accelerated vesting of all unvested
options granted to Employee solely in his capacity as a director pursuant to
Onvia's 2000 Directors' Stock Option Plan. The acceleration referred to in
paragraph (z) expressly excludes options granted pursuant to the Option
Agreements.

              (b)  If (i) Onvia terminates Employee with Cause and (ii) Employee
satisfies all of his obligations relating to the termination of his employment
under this Agreement (including his obligations under Section 5.2 below), then
Employee shall be entitled to receive previously accrued and unpaid monthly
salary payments, bonuses and vacation time plus accrued, reasonable and
unreimbursed expenses which are documented and are within the scope of his
employment, in each case through the date of termination.

              (c)  If (i) Employee's employment is terminated due to Employee's
Disability, (ii) Employee satisfies all of Employee's obligations relating to
the termination of Employee's employment under this Agreement (including
Employee's obligations under Section 5.2 below), (iii) Employee executes and
delivers to Onvia a general release (reasonably satisfactory in form and
substance to Onvia) of any rights or claims that he may have or has ever had
against Onvia or any of Onvia's Affiliates, and (iv) Employee continues to
satisfy all of Employee's obligations under this Agreement (except for Section
1.1), then Employee shall be entitled to receive (x) previously accrued and
unpaid monthly salary payments, bonuses and vacation time plus accrued,
reasonable and unreimbursed expenses which are documented and are within the
scope of Employee's employment, in each case through the date of termination,
and (y) the monthly salary payments specified in Section 1.2 above and then
existing benefits under Section 1.4(a) above for ninety (90) days following the
effective date of such termination.

     3.  Noncompetition.

         3.1  Restriction on Competition.  Employee agrees that, during the
period commencing on the date of the Agreement and ending on the one year
anniversary of the effective date of Employee's termination (the "Noncompetition
Term"), Employee shall not directly or indirectly, for Employee's own account or
for the account of any other Person, engage in any Competition in the Territory,
or directly or indirectly be or become an officer, director, stockholder, owner,
Affiliate, co-owner, licensor, sublicensor, licensee, sublicensee, partner,

                                      -4-
<PAGE>

trustee, promoter, employee, agent, representative, supplier, creditor,
consultant, advisor or manager of or to, or otherwise be or become associated
directly or indirectly with or acquire or hold any direct or indirect interest
in, any Person that engages directly or indirectly in any Competition in the
Territory; provided, however, that Employee may, without violating this Section
3, own as a passive investment less than five percent (5%) of the outstanding
shares of capital stock of a corporation which engages in Competition if
Employee is not otherwise associated directly or indirectly with such
corporation or any Affiliate of such corporation.

          3.2  Non-Solicitation of Employees.  Employee agrees that, during the
Noncompetition Term, he shall not directly or indirectly induce or attempt to
induce (on Employee's own behalf or on behalf of any other Person) any employee
of Hardware, Onvia or any subsidiary of Onvia to leave Employee's employment
with Hardware, Onvia or such subsidiary of Onvia.

          3.3  Specific Performance.  Employee agrees that in the event of any
breach or threatened breach by him of any covenant, obligation or other
provision contained in the Agreement, each party shall be entitled (in addition
to any other remedy that may be available to it) to (i) a decree or order of
specific performance or mandamus to enforce the observance and performance of
such covenant, obligation or other provision, and (ii) an injunction restraining
such breach or threatened breach.

     4.  Confidential Information.

         4.1  Obligation to Keep Confidential.  Employee agrees to keep all
Confidential Information strictly and permanently confidential and, accordingly,
agrees that he shall not at any time (whether during or after Employee's
employment with Onvia or during or after the Noncompetition Term) directly or
indirectly, willingly and knowingly use for any purpose, or disclose or permit
to be disclosed to any Person, any Confidential Information other than as
required in the performance of Employee's duties for Onvia. Employee
acknowledges that the Confidential Information constitutes a unique and valuable
asset of Onvia acquired at great time and expense by Onvia, and that any
disclosure or other use of such Confidential Information other than for the
benefit of Onvia or an Affiliate of Onvia would be wrongful and would cause
irreparable harm to Onvia. Employee shall not at any time willingly or knowingly
take any action that would reduce the value of any of the Confidential
Information to Onvia.

     5.  Miscellaneous Provisions.

         5.1  Other Agreements.  Nothing in this Agreement shall limit
Employee's obligations or the rights and remedies of Onvia under the Merger
Agreement, and nothing in the Merger Agreement shall limit Employee's
obligations or the rights and remedies of Onvia under this Agreement. Nothing in
this Agreement shall limit Onvia's obligations or the rights and remedies of
Employee under the Merger Agreement, and nothing in the Merger Agreement shall
limit Onvia's obligations or the rights and remedies of Employee under this
Agreement.

         5.2  Surrender of Records and Property. At such time as Employee no
longer serves as an employee of Onvia:

                                      -5-
<PAGE>

              (a)  Employee shall deliver promptly to Onvia all records,
manuals, books, blank forms, documents, letters, memoranda, notes, notebooks,
reports, data, tables, calculations or copies thereof which are the property of
Onvia or an Affiliate of Onvia or which relate in any way to the business,
products, practices or techniques of Onvia or an Affiliate of Onvia, and all
other property, trade secrets and Confidential Information, including all
documents which in whole or in part contain any trade secrets or Confidential
Information, which are in Employee's possession or under Employee's control:

              (b)  Employee shall comply with Onvia's normal procedures for
departing employees, providing they are not in conflict with this Agreement or
other legal rights of Employee; and

              (c)  Employee shall leave Onvia's premises immediately upon
Onvia's request.

         5.3  Notices.  Any notice or other communication required or permitted
to be delivered to either party under this Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile) to
the address or facsimile number set forth beneath the name of such party below
(or to such other address or facsimile number as such party shall have specified
in a written notice given to the other party hereto):

         If to Employee:

         Michael D. Pickett

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

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

         -----------------------
         Facsimile:
                   -------------

         If to Onvia:

         Onvia.com, Inc.
         1260 Mercer Street
         Seattle, WA  98119
         Attn:  Legal Counsel
         Facsimile (206) 373-8961

         5.4  Severability.

              (a)  If any provision of this Agreement shall be held by a court
of competent jurisdiction to be excessively broad as to duration, activity or
subject, it shall be deemed to extend only over the maximum duration, activity
and/or subject as to which such provision shall be valid and enforceable under
applicable law. If any provision shall, for any reason, be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement,

                                      -6-
<PAGE>

but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. Such court shall have
the authority to modify or replace the invalid or unenforceable term or
provision with a valid and enforceable term or provision which most accurately
represents the parties' intention with respect to the invalid or unenforceable
term or provision.

              (b)  The parties intend that the covenants contained in Section 3
above shall be construed as a series of separate covenants, one for each
geographical unit specified. Except for geographical coverage, each such
separate covenant shall be deemed identical in terms to the covenant contained
in Section 3 above. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants deemed included in this Agreement, then
the unenforceable covenant shall be deemed eliminated from these provisions for
the purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.

         5.5  Governing Law; Venue.  This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Washington (without giving effect to principles of conflicts of laws). Any legal
action or other legal proceeding relating to this Agreement or the enforcement
of any provision of this Agreement may be brought or otherwise commenced in a
state or federal court located in the County of King in the State of Washington.
Each party to this Agreement (a) expressly and irrevocably consents and submits
to the jurisdiction of each state and federal court located in the County of
King in the State of Washington (and all appellate courts located in the State
of Washington) in connection with any such legal proceeding; (b) agrees that
each state and federal court located in the County of King in the State of
Washington shall be deemed to be a convenient forum; and (c) agrees not to
assert (by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in any state or federal court located in the County of King
in the State of Washington, any claim that such party is not subject personally
to the jurisdiction of such court, that such legal proceeding has been brought
in an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.

         5.6  Waiver.  No failure on the part of either party to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of either party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. Neither party shall be deemed to have waived any
claim arising out of this Agreement, or any power, right, privilege or remedy
under this Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly executed and
delivered by the party to be charged; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.

         5.7  Captions.  The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

                                      -7-
<PAGE>

          5.8  Counterparts.  This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.

         5.9  Further Assurances.  Each party hereto shall execute and/or cause
to be delivered to the other party hereto such instruments and other documents
and shall take such other actions as such other party may reasonably request to
effectuate the intent and purposes of this Agreement.

         5.10  Entire Agreement.  This Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings between the parties relating
to the subject matter hereof and thereof.

         5.11  Attorneys' Fees and Expenses.  If any legal action or other legal
proceeding relating to the enforcement of any provision of this Agreement is
brought against either party hereto, the prevailing party shall be entitled to
recover reasonable attorneys' fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).

         5.12  Successors and Assigns.  The Agreement shall inure to the benefit
of and be binding to Onvia, Employee and their respective successors and assigns
(if any), however, Employee's obligations under this Agreement cannot be
assigned.

         5.13  Survival of Obligations.  Except as specifically provided herein,
all of the obligations of Employee and Onvia under the Agreement (including
Employee's obligations under Sections 3.1, 4.1and 5.9) shall survive the
termination of Employee's employment with Onvia and the expiration of the
Noncompetition Term. Without limiting the generality of the foregoing, the
termination of Employee's employment or the expiration of the Noncompetition
Term shall not operate to relieve Employee of any obligation or liability
arising from any prior breach by Employee of any provision of the Agreement. The
termination of Employee's employment or the expiration of the Noncompetition
Term shall also not operate to relieve Onvia of any obligation or liability
arising from any prior breach by Onvia of any provision of the Agreement.

         5.14  Amendment.  The Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered by Employee and Onvia (or any successor to Onvia).

                            [Signature page follows]

                                      -8-
<PAGE>

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


                                               ONVIA.COM, INC.,
                                               a Delaware corporation

                                               By:
                                                  ------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------



                                               ---------------------------------
                                               Michael D. Pickett, an Individual

               [SIGNATURE PAGE TO PICKETT EMPLOYMENT AGREEMENT]

<PAGE>

                                   EXHIBIT A

                              CERTAIN DEFINITIONS

     For purposes of the Agreement (including this Exhibit A):

     Affiliate. "Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.

     Cause. "Cause" means: (a) any material and willful (i) misconduct, (ii)
fraud or (iii) bad faith on the part of Employee in the performance of
Employee's duties as an employee of Onvia; (b) the conviction of Employee of, or
the entry by Employee of a plea of guilty or no contest to, any felony; (c) the
material breach by Employee of any provision in this Agreement or in the
Proprietary Invention Assignment Agreement between the Company and Employee, if
such breach is unremedied within thirty (30) days after Employee receives
written notice of such breach; (d) the failure of Employee to comply any lawful
order or instruction of Onvia's Board of Directors or its Chief Executive
Officer (or only the Board of Directors of Onvia if Employee is promoted to
Chief Executive Officer) within five (5) days after written notice of such
failure; or (e) repeated (where prior violations have been brought to Employee's
attention) and serious violations of the published and written rules or policies
of Onvia as such may be applicable to an individual in Employee's circumstances.

     Competition. A Person shall be deemed to be engaged in "Competition" if:
(a) such Person is engaged directly or indirectly in the design, development,
manufacture, assembly, promotion, lease, financing, sale, rental, distribution,
resale, installation, support, maintenance, repair, refurbishment, licensing or
sublicensing of any Product or in the promotion or performance of any Service;
or (b) such Person offers or attempts to design, develop, manufacture, assemble,
promote, lease, finance, sell, rent, distribute, resell, install, support,
maintain, repair, refurbish, license or sublicense any Product or promote or
perform any Service.

     Confidential Information. "Confidential Information" means any non-public
information (whether or not in written form and whether or not expressly
designated as confidential) relating directly or indirectly to Hardware, Onvia
or any of Onvia's subsidiaries or other Affiliates or relating to the business,
operations, financial affairs, performance, assets, technology, processes,
products, contracts, customers, licensees, sublicensees, suppliers, personnel,
plans or prospects of Hardware, Onvia or any of Onvia's subsidiaries or other
Affiliates, including any such information consisting of or otherwise relating
directly or indirectly to trade secrets, know-how, technology, computer
software, computer programs, designs, drawings, processes, license or sublicense
arrangements, formulae, proposals, customer lists or preferences, pricing lists,
referral sources, marketing or sales techniques or plans, operations manuals,
service manuals, financial information, projections, lists of suppliers, lists
of distributors or sources of supply; provided, however, that "Confidential
Information" shall not be deemed to include information which, at the time of
initial disclosure to the employee, was part of or, without violation of the
Agreement or without fault of any party to the Merger Agreement, becomes part
of, the public knowledge or literature and is readily accessible to third
parties; which is hereafter rightfully furnished by a

                                      -10-
<PAGE>

third party without restriction as to use; which was acquired prior to the
receipt of information from Hardware, Onvia or any of Onvia's subsidiaries or
other Affiliates and without restriction as to use or disclosure; which is
required to be disclosed pursuant to law, provided reasonable efforts are used
to give reasonable notice of such required disclosure to Onvia; or which is
disclosed with the prior written consent of Onvia.

     Disability. "Disability" means the death of Employee or the incapacity or
inability of Employee, whether due to accident, sickness or otherwise, as
determined by a medical doctor acceptable to the Board of Directors of Onvia and
confirmed in writing by such doctor, to perform the essential functions of
Employee's position under this Agreement, with or without reasonable
accommodation (provided that no accommodation that imposes undue hardship on
Onvia will be required) for an aggregate of ninety (90) days during any period
of one hundred eighty (180) consecutive days or such longer period as may be
required under applicable disability law.

     Good Reason. "Good Reason" shall mean (i) Onvia's material breach of the
terms of this Agreement or the Option Agreements; (ii) the assignment to
Employee of any duties that are substantially inconsistent with or materially
diminish Employee's position; provided, however, that if Employee is promoted to
Chief Executive Officer, Onvia may hire a President and/or Chief Operating
Officer and the hiring of such person, and the performance by such person of his
or her duties, will not constitute Good Reason; (iii) a material reduction of
Employee's salary, or material adverse modifications to the stock option(s)
awarded to Employee under Section 1.5, above, or a material reduction in the
Employee's total compensation hereunder; or (iv) a requirement that the Employee
be based at any office or location more than 50 miles from Employee's primary
work location prior to the Effective Date of this Agreement.

     Person. "Person" means any (a) individual; (b) corporation (including any
non-profit corporation, general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, cooperative, foundation,
society, political party, union, company (including any limited liability
company or joint stock company), firm or other enterprise, association,
organization or entity; or (c) governmental body or authority.

     Product. "Product" means (a) any present or future product or service
offering of Onvia in production or design or (b) any product that is the same
as, or that is functionally similar to or competes in any respect with, any
product referred to in clause (a).

     Service. "Service" means any: (a) service (including any repair service,
programming service, upgrade service, refurbishment service, installation
service, training service, support service, consultation service or maintenance
service) relating directly or indirectly to, or performed with respect to, any
Product, or (b) service that is the same as, or that is functionally similar to
or competes in any respect with, any service referred to in clause (a).

     Territory. "Territory" means any of the following geographic areas in
which: (a) any Product has been, or has been offered to be, designed, developed,
manufactured, assembled, promoted, leased, financed, sold, rented, distributed,
resold, installed, repaired, refurbished, licensed or sublicensed by Hardware,
Onvia or any Affiliate of Onvia at any time on or prior to

                                      -11-
<PAGE>

the date of the Agreement; (b) Hardware, Onvia or any Affiliate of Onvia has
otherwise conducted, carried on or engaged in any business or activity at any
time on or prior to the date of this Agreement; (c) Hardware, Onvia or any
Affiliate of Onvia has planned or proposed to design, develop, manufacture,
assemble, promote, lease, finance, sell, rent, distribute, resell, install,
repair, refurbish, license or sublicense, or to offer to design, develop,
manufacture, assemble, promote, lease, finance, sale, rent, distribute, resell,
install, repair, refurbish, license or sublicense, any Product; (d) Hardware,
Onvia or any Affiliate of Onvia has planned or proposed to promote or perform,
or to offer to promote or perform, any Service at any time on or prior to the
date of this Agreement; (e) Hardware, Onvia or any Affiliate of Onvia designs,
develops, manufactures, assembles, promotes, leases, finances, sells, rents,
distributes, resells, installs, repairs, refurbishes, licenses or sublicenses,
or offers to lease, finance, sell, rent, distribute, resell, install, repair,
refurbish, license or sublicense, any Product at any time during the
Noncompetition Term; (f) Hardware, Onvia or any Affiliate of Onvia promotes,
performs or offers to promote or perform any Service at any time during the
Noncompetition Term; or (g) Hardware, Onvia or any Affiliate of Onvia otherwise
conducts, carries on or engages in any business or activity at any time during
the Noncompetition Term in:

         (i)    any country or similar political subdivision of any state,
territory or possession of the United States or any province or territory of
Canada or of any state or territory of Mexico (including each of the counties in
the state of California);

         (ii)   any state, territory or possession of the United States;

         (iii)  any province or territory of Canada;

         (iv)   any state or territory of Mexico; or

         (v)    the European Union, Israel, Japan, Singapore, South Korea,
Taiwan or Hong Kong.

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