<PAGE>
                                                                    Exhibit 10.5


                                 ONVIA.COM, INC.
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

                               (Matthew S. Rowley)

     THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement") is being
                                                         ---------
entered into as of September 24, 2001 ("Effective Date") by and between
                                        --------------
Onvia.com, Inc., a Delaware corporation ("Onvia"), and Matthew S. Rowley, an
                                          -----
individual ("Employee"). Certain capitalized terms in this Agreement not
             --------
otherwise defined are defined in Exhibit A attached hereto.
                                 ---------

                                    Recitals

     A. Onvia is a leading exchange helping businesses secure additional revenue
by buying and selling products and services to other businesses and government
entities.

     B. Employee is currently employed by Onvia as its Chief Information
Officer.

     C. Onvia wants to enter into this Agreement to provide additional incentive
to Employee to serve as an employee of Onvia, and to encourage Employee's
continued service with Onvia.

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

                                      -1-

<PAGE>


               (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/she 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 One Hundred Seventy Thousand Dollars
($170,000) per year, payable at such times as other salaried Onvia employees
receive their regular salary payments on Onvia's regular payroll ("Annual Base
Salary"). 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 Priority Task Bonus. Employee shall be eligible to receive a priority
         -------------------
task bonus of up to Twenty-Five Percent (25%) of Employee's Annual Base Salary,
minus all applicable withholdings and taxes, based on criteria determined by the
President and CEO of Onvia in good faith.

     1.4 Performance Bonus.
         -----------------

          (a) If Onvia has met its quarterly performance metrics set forth on
Exhibits B-1, B-2, and B-3 and Employee is a full-time employee of Onvia on July
------------  ---      ---
1, 2002, in full compliance with all of his/her duties and obligations to Onvia,
Employee shall receive a lump sum payment equal to half of Employee's Annual
Base Salary, minus all applicable withholdings and taxes ("Performance Bonus").
This Performance Bonus shall be paid by July 31, 2002. If, prior to July 1,
2002, Onvia terminates Employee's employment (i) without Cause, (ii) when
Employee is performing his/her job duties satisfactorily (see Section 1.4(d)
below), or (iii) Employee resigns for Good Reason, Employee shall receive100% of
the Performance Bonus, provided that Onvia has met its quarterly performance
metrics for the quarter previous to the one during which termination of
employment occurred. If Onvia terminates Employee's employment (i) without
Cause, (ii) when Employee is performing his/her job duties satisfactorily (see
Section 1.4(d) below), or (iii) Employee resigns for Good Reason during the
fourth quarter of 2001, Employee shall receive 100% of the Performance Bonus
whether or not Onvia has met its quarterly performance metrics set forth on
Exhibit B-1).
-----------

          (b) If, prior to July 1, 2002, there is a Change of Control (as that
term is defined in the Amended and Restated 1999 Stock Option Plan (the "Plan"))
or a Liquidation of Onvia, and Onvia has met its quarterly performance metrics
set forth on Exhibits B-1, B-2, and B-3, Employee shall receive 100% of the
             ------------  ---      ---
Performance Bonus in addition to all the other rights and benefits provided
under this Agreement (i.e. upon a Change of Control or a Liquidation of Onvia on
April 1, 2002, Employee shall receive 100% of the Performance Bonus if Onvia has
met its performance metrics set forth on Exhibits B-1 and B-2, but upon a Change
                                         ------------     ---
of Control or a Liquidation of Onvia during the fourth quarter of 2001, Employee
shall receive 100% of the Performance Bonus whether or not Onvia has met its
quarterly performance metrics set forth on Exhibit B-1.
                                           -----------

                                      -2-

<PAGE>

          (c) If Onvia terminates Employee's employment with Cause or Employee
resigns without Good Reason, Employee shall not receive the Performance Bonus.

          (d) If Onvia terminates Employee's employment for non-performance or
unsatisfactory job performance of his/her job duties (as determined by the
President and CEO of Onvia in good faith), after such non-performance or
unsatisfactory job performance has been unremedied for thirty (30) days after
Employee receives written notice of such non-performance or unsatisfactory job
performance, then Employee shall not receive the Performance Bonus.

     1.5 Other Benefits. 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.

     1.6 Change of Control.
         -----------------

          (a) Acceleration of Stock Options. In lieu of the benefits provided in
              -----------------------------
Section 12(c) of the Plan, the following provision will apply in the event of a
Change in Control (as that term is defined in the Plan):

          Upon consummation of a Change in Control, 25% of the total number of
          then unvested shares underlying all options granted to Employee shall
          vest and become exercisable. If, within twelve (12) months after
          consummation of a Change in Control, Employee is terminated without
          Cause or resigns for Good Reason, then 100% of the total number of
          then unvested shares underlying all options granted to Employee shall
          vest and become exercisable upon such resignation or termination.
          Employee waives his/her rights to benefits under Section 12(c) of the
          Plan in exchange for the benefits provided in this Section 1.6(a).

          (b) Severance. If, within twelve (12) months after consummation of a
              ---------
Change in Control transaction, Employee is terminated without Cause or resigns
for Good Reason, then Employee shall be entitled to the monthly salary payments
specified in Section 1.2 above on Onvia's regular payroll and then existing
benefits under Section 1.5 above for (i) four (4) months following the effective
date of such termination if Employee has completed less than one (1) year of
employment with Onvia, or (ii) six (6) months following the effective date of
such termination if Employee has completed more than one (1) year of employment
with Onvia.

                                      -3-

<PAGE>

          (c) Assumption of Obligations. If this Agreement is excluded as a
              -------------------------
liability upon a Change of Control transaction, Onvia shall pay to Employee the
Severance as set forth in Section 1.6(b) above, minus all applicable
withholdings and taxes.

     1.7 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.
---------

     1.8 No Other Compensation. Employee acknowledges and agrees that he/she
         ---------------------
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, 1.5, and 1.6 above or as otherwise authorized by Onvia's Board of
Directors.

     1.9 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 with respect to Employee's employment, except
as set forth in Section 1.4 above and 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.
         -----------

          (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 5.1 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/she 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 on Onvia's regular payroll and then existing
benefits

                                      -4-

<PAGE>

under Section 1.5 above for four (4) months following the effective date of such
termination if Employee has completed less than one (1) year of employment with
Onvia, or six (6) months following the effective date of such termination if
Employee has completed more than one (1) year of employment with Onvia, and (z)
four (4) months (determined from the date of such termination) of accelerated
vesting of unvested options granted to Employee if Employee has completed less
than one (1) year of employment with Onvia, or six (6) months (determined from
the date of such termination) of accelerated vesting of unvested options granted
to Employee if Employee has completed more than one (1) year of employment with
Onvia.

          (b) If (i) Onvia terminates Employee with Cause and (ii) Employee
satisfies all of his/her obligations relating to the termination of his/her
employment under this Agreement (including his/her obligations under Section 5.1
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/her
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 5.1 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/she 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 1.5 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,
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.

                                      -5-

<PAGE>

     3.2 Non-Solicitation of Employees. Employee agrees that, during the
         -----------------------------
Noncompetition Term, he/she 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 Onvia or any subsidiary of Onvia to leave Employee's employment with
Onvia or such subsidiary of Onvia.

     3.3 Specific Performance. Employee agrees that in the event of any breach
         --------------------
or threatened breach by him/her 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/she 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 Surrender of Records and Property. At such time as Employee no longer
         ---------------------------------
serves as an employee of Onvia:

          (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.

                                      -6-

<PAGE>

     5.2 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:


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

         If to Onvia:

         Onvia.com, Inc.
         1260 Mercer Street
         Seattle, WA  98109
         Attn:  Legal Counsel
         Facsimile (206) 373-8960

     5.3 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, 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.

     5.4 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.

                                      -7-

<PAGE>

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.

     5.5 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.

     5.6 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.

     5.7 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.

     5.8 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.

     5.9 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.

     5.10 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).

                                      -8-

<PAGE>

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

     5.12 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, 4.1, and 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.

     5.13 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]

                                      -9-

<PAGE>

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


EMPLOYEE


By:   /s/
     ---------------------------------------

Print Name:
             -------------------------------

Title:
        ------------------------------------

 Date:
        ------------------------------------


ONVIA.COM, INC.


By:   /s/ Michael D. Pickett
     ---------------------------------------
     Michael D. Pickett
     President, CEO and Chairman


Date:
        ------------------------------------

<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 with any
lawful order or instruction of Onvia's Board of Directors or its 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 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 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, becomes part of, the public knowledge or literature and is readily
accessible to third parties; which is hereafter rightfully furnished by a third
party without restriction as to use; which was acquired prior to the receipt of
information from 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.

                                      -11-

<PAGE>

     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 President and CEO 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; (ii) a material reduction of Employee's salary, or a
material reduction in the Employee's total compensation hereunder; or (iii) a
requirement that the Employee be based at any office or location more than
thirty (30) miles from Employee's primary work location prior to the Effective
Date of this Agreement.

     Liquidation. "Liquidation" shall mean with respect to winding up the
     -----------   -----------
affairs of Onvia, by voluntary or involuntary proceedings, the process of
reducing assets to cash, discharging liabilities and dividing surplus or loss.
Upon a Liquidation of Onvia, Employee's employment with Onvia will be considered
terminated without Cause.

     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 Onvia or
any Affiliate of Onvia at any time on or prior to the date of the Agreement; (b)
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)

                                      -12-

<PAGE>

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)
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) 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) 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) 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.

                                      -13-