Securities Purchase Agreement



  
 Exhibit 4.1 

 
 SECURITIES PURCHASE AGREEMENT 
  
 This Securities Purchase Agreement (this “Agreement”) is
dated as of January 22, 2004, among Verticalnet, Inc., a Pennsylvania corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a
“Purchaser” and collectively the “Purchasers”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and
sell to the Purchasers, and the Purchasers, severally and not jointly, desire to purchase from the Company, in the aggregate, up to 5 million shares of Common Stock (as defined below) and Warrants (as defined below) on the Closing Date (as defined
below). 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agrees as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1: 
  
 “Action” shall have the meaning ascribed to
such term in Section 3.1(j). 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144.
With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Closing” means the closing of the purchase
and sale of the Common Stock and the Warrants pursuant to Section 2.1. 
  
 “Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’
obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived. 
  
 “Closing Price” means on any particular date (a) the last reported closing price per share of Common Stock on such date
on the Trading Market (as reported by Bloomberg L.P. ), or (b) if there is no such price on such date, then the closing price on the Trading Market on the date nearest preceding such date (as reported 

  

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by Bloomberg L.P., or (c) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then quoted on the OTC
Bulletin Board, the closing price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board (as reported by Bloomberg L.P.), or (d) if the Common Stock is not then listed or quoted on the Trading Market and if
prices for the Common Stock are then reported in the “pink sheets” published by the Pink Sheets LLC (formerly the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting
prices)), the most recent bid price per share of the Common Stock so reported, or (e) if the shares of Common Stock are not then publicly traded, the fair market value of a share of Common Stock as determined by a qualified independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding. 
  
 “Commission” means the United States Securities and Exchange Commission. 
  
 “Common Stock” means the common stock of
the Company, $0.01 par value per share, and any securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time shares of Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof
to receive, shares of Common Stock. 
  
 “Company Counsel” means Morgan, Lewis & Bockius LLP, with offices at 1701 Market Street, Philadelphia PA 19103. 
  
 “Disclosure Schedules” means the Disclosure Schedules of the Company attached hereto and incorporated herein. 

 
 “Effective Date” means the date that a
Registration Statement is first declared effective by the Commission. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “FW” means Feldman Weinstein LLP with offices located at 420 Lexington Avenue, Suite 2620, New York, New York
10170-0002. 
  
 “Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o). 
  
 “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other similar
restriction. 
  

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 “Material Adverse Effect” shall have the meaning ascribed to such term
in Section 3.1(b). 
  
 “Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m). 
  
 “Per Share Purchase Price” equals $2.02, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 
  
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other legal entity of any kind. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition). 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Warrant Shares or a portion
thereof (as provided for in the Registration Rights Agreement). 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of this Agreement, by and among the Company and each Purchaser, in the form of Exhibit A hereto.

  
 “Required Approvals” shall
have the meaning ascribed to such term in Section 3.1(e). 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 
  
 “Securities” means the Shares, the Warrants and the Warrant Shares. 
  
 “Securities Act” means the Securities Act
of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement. 
  

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 “Subscription Amount” means, as to each Purchaser, the amounts set forth
below such Purchaser’s signature block on the signature page hereto, in United States dollars and in immediately available funds. 
  
 “Subsidiary” shall mean the subsidiaries of the Company, if any, set forth on Schedule 3.1(a). 
  
 “Trading Day” means a day on which the
Common Stock is traded on a Trading Market. 
  
 “Trading Market” means each of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the New York Stock Exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market. 
  
 “Transaction Documents” means this Agreement, the Warrants and the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Warrants” means the Common Stock Purchase
Warrants, in the form of Exhibit B, issuable to the Purchasers, which warrants shall have a term of 5 years and have an exercise price equal to $3.72. 
  

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. On the Closing Date, each Purchaser shall purchase from the Company, severally and not jointly with the other Purchasers, and the Company shall issue and sell to each Purchaser, (a) a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price and (b) the Warrants as determined pursuant to Section 2.2(a)(iii). The aggregate Subscription Amounts for Shares sold hereunder shall be up to $8,000,000. Upon
satisfaction or waiver of the conditions set forth in Sections 2.2(d) and (e), the Closing shall occur at the offices of FW or such other location as the parties shall mutually agree. 
  
 2.2 Deliveries; Closing Conditions. 
  
 (a) On the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

  
 (i) this Agreement duly executed by the
Company; 
  
 (ii) a copy of the irrevocable
instructions to the Company’s transfer agent instructing the transfer agent to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such 

  

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Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser; 
  
 (iii) the Registration Rights Agreement duly executed by the
Company; and 
  
 (iv) a legal opinion of Company
Counsel, in the form of Exhibit C attached hereto. 
  
 (b) Within three Trading Days of the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser a Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have
the right to acquire up to the number of shares of Common Stock equal to 25% of the Shares issued to such Purchaser on the Closing Date. 
  
 (c) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following: 
  
 (i) this Agreement duly executed by such Purchaser;

  
 (ii) such Purchaser’s Subscription
Amount by wire transfer to the account as specified in writing by the Company; and 
  
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 
  
 (d) All representations and warranties of the other party contained herein shall remain true and correct as
of the Closing Date and all covenants of the other party shall have been performed if due prior to such date. 
  
 (e) From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any
suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally shall not have been suspended or limited on
any Trading Market, nor shall a general commercial banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of Purchasers representing a majority of the Subscription Amounts made by all
Purchasers, makes it impracticable or inadvisable to purchase the Shares at the Closing. 
  

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 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. Except as otherwise set forth under the corresponding section of the Disclosure Schedules attached hereto, which Disclosure Schedules shall be deemed a part hereof, the Company
hereby makes the representations and warranties set forth below to each Purchaser: 
  
 (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase such securities. If the Company has no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be disregarded. 
  
 (b) Organization and Qualification. Each of the
Company and the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted except where failure to be so qualified, organized or have such power and authority would not reasonably be expected to have a Material Adverse Effect (as
defined below). Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”), and to the knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations thereunder. The execution and delivery by the Company of each of the Transaction Documents to which it is a party and
the 

  

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consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company 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 limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) as the
rights to indemnification or contribution hereunder and thereunder may be limited by federal or state securities laws. 
  
 (d) No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party, the
issuance and sale of the Shares and the consummation by the Company of the other transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument evidencing a Company or Subsidiary debt or otherwise or other understanding to which the Company or any Subsidiary is a party or by which any property or material asset of the Company or any Subsidiary is bound, or (iii) subject to the
Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound, or (iv) violate the terms of any agreement by which the Company or any Subsidiary is bound or to which any property or
asset of the Company or any Subsidiary is bound; except in the case of each of clauses (ii), (iii) and (iv), such as would not have or reasonably be expected to result in a Material Adverse Effect. 
  
 (e) Filings, Consents and Approvals. The Company is
not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration Statement, (iii) application(s) to
each applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with 

  

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the Commission and such filings as are required to be made under applicable state securities laws, and (v) any other filings required to be made pursuant to
the terms of the Registration Rights Agreement (collectively, the “Required Approvals”). 
  
 (f) Issuance of the Securities. The Shares and Warrants have been duly authorized and, when issued and paid for in accordance with
the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents and under applicable federal
and state securities laws. The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. 
  
 (g) Capitalization. Since September 30, 2003, the Company has not issued any capital stock since such filing other than pursuant to
the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise of
outstanding Common Stock Equivalents outstanding. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a
result of the purchase and sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The issue and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares were issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. Except as disclosed in the SEC Reports, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
  
 (h) SEC Reports; Financial Statements. The Company
has filed all reports required to be filed by it under the Securities Act and the Exchange Act, 

  

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including without limitation, those filed pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing materials,
including the exhibits thereto, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 

 
 (i) Material Changes. Since the date of the latest
audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  

(j) Litigation. There is no action, suit, inquiry, notice of violation or proceeding pending or, to the knowledge of the
Company, threatened, nor, to the knowledge of the Company, is any investigation pending or threatened, against the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) challenges the legality, validity or enforceability of any of the 

  

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Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
  
 (k) Labor Relations. No material labor dispute exists
or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which would reasonably be expected to result in a Material Adverse Effect. 
  
 (l) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in
default under, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business,
except in each case as would not have a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither
the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any Material Permit. 
  
 (n) Title to Assets. The Company and the Subsidiaries have good and fee simple title to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do
not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment
of which is 

  

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neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases and no landlord for any such real property or facility has notified the Company or any such Subsidiary that any of them are in default under any such lease. 
  
 (o) Patents and Trademarks. The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to so have would have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no
known existing infringement by another Person of any of the Intellectual Property Rights of others which would have a Material Adverse Effect. 
  
 (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as the Company believes are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 
  
 (q) Transactions With Affiliates and Employees.
Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case
in excess of $60,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other benefits under benefit or pension plans sponsored by the
Company, including without limitation stock option agreements under any stock option plan of the Company. 
  
 (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley
Act of 2002 which are applicable to it as of the Closing Date. The Company and the 

  

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Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating
to the Company, including its subsidiaries, is made known to the certifying officers by others within those entities. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end
of the period covered by its most recently filed periodic report under the Exchange Act (the date of such evaluation, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act
the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the best of the Company’s knowledge, in other factors that could significantly affect the Company’s internal
controls. 
  
 (s) Certain Fees. Except for
amounts to be paid to The Shemano Group, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by this Agreement. To the knowledge of the Company, the Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. 
  
 (t) Private Placement. Assuming the accuracy of the Purchasers representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of
the Trading Market. 
  
 (u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. 
  

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 (v) Registration Rights. No Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company. 
  
 (w) Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any written notification that the Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is currently in compliance with all such listing and maintenance requirements. 
  
 (x) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (y) Disclosure. Except for terms of the Transaction Documents and the fact that the Company is considering consummating the
transactions contemplated therein, the Company confirms that, neither the Company nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that constitutes or might constitute
material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct
with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

  

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 (z) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of the Trading Market. 
  
 (aa) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the
Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
  
 (bb) Form S-3 Eligibility. The Company is eligible to register the resale of its Common Stock by the Purchasers under Form S-3
promulgated under the Securities Act. 
  
 (cc)
Taxes. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary. 
  
 (dd) General Solicitation. Neither the Company nor
any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising. The Company has offered the Shares for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act. 
  
 (ee) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for
unlawful 

  

 14 








 
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
  
 (ff) Auditor. The Company’s auditors are set forth on Schedule 3.1(ff) of the Disclosure
Schedule. To the Company’s knowledge, such auditors, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2003, are independent auditors as required by the Securities Act. 
  
 (gg) Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect
to the Transaction Documents and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby. 
  
 3.2 Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar
action on the part of such Purchaser. Each Transaction Document to which it is party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law. 
  
 (b)
Investment Intent. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or 

  

 15 








 
any applicable state securities law and is acquiring the Securities as principal for its own account for investment purposes only and not with a view to or
for distributing or reselling such Securities or any part thereof, has no present intention of distributing any of such Securities and has no arrangement or understanding with any other persons regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was
offered the Securities, it was, and at the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
  
 (d) Experience of Such Purchaser. Such Purchaser,
either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) General Solicitation. Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or
any other general solicitation or general advertisement. 
  
 The
Company acknowledges and agrees that each Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions. 
  
 (a) Each of the Purchasers hereby acknowledges that the Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an
effective registration statement or Rule 144, to the Company or to an Affiliate of a 

  

 16 








 
Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of such opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. As a condition of any such transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement. 
  
 (b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Securities in the following form: 
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT. 
  
 The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with 

  

 17 








 
a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the
preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or (ii) following
any sale of such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s
transfer agent to effect the removal of the legend hereunder. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, such Warrant Shares shall be issued
free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than seven Trading Days following the delivery by a Purchaser to the Company
or the Company’s transfer agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such
Purchaser a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on
transfer set forth in this Section. 
  
 (d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the Closing Price of the Common
Stock on the date such Securities are submitted to the Company’s transfer agent) subject to Section 4.1(c), $5 per Trading Day (increasing to $10 per Trading Day ten (10) Trading Days after such damages have begun to accrue) for each Trading
Day after the Legend Removal Date until such certificate is delivered. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by
the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
  
 (e) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the 

  

 18 








 
Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom. 
  
 (f) Until 30 days after the Effective Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a
majority in interest of the Shares. 
  
 4.2 Furnishing of
Information. As long as any Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the Company is no longer required to file reports pursuant to the Exchange Act (or if such filings are not otherwise generally available on the Internet free of
charge), it will prepare and furnish to the Purchasers (upon receipt of a written request) and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144. The
Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144. 
  
 4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of
the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 
  
 4.4 Securities Laws Disclosure; Publicity. The Company shall, by 9:00
a.m. Eastern time on the Trading Day following the Closing Date, issue a press release or file a Current Report on Form 8-K, in each case reasonably acceptable to each Purchaser disclosing the material terms of the transactions contemplated hereby.
Neither the Company nor any Purchaser shall issue any press release with respect to the transaction contemplated hereby or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of The Shemano Group, with respect to any press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication; provided, however, that only such portions of any press release to be issued by the Company that specifically reference the transactions
contemplated by the Transaction Documents shall be provided to The Shemano Group and be subject to their prior consultation and approval. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any 

  

 19 








 
Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (i) as required by federal securities law in connection with the registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i) or (ii). 
  
 4.5 Shareholders Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other Person that any
Purchaser is an “Acquiring Person” under any shareholders rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents. 
  
 4.6 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser
shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
  
 4.7 Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the
Securities hereunder for general corporate and strategic purposes, including, but not limited to, in connection with acquisitions, joint ventures and other similar transactions, and not for the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Company equity or equity-equivalent securities or to settle any outstanding litigation. 
  
 4.8 Intentionally Omitted. 
  
 4.9 Indemnification of Purchasers. Subject to the provisions of this
Section 4.9, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including without limitation all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur
as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of
them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such
Purchaser’s representation, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have 

  

 20 








 
with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud,
gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of
time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser
Party. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by an Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchasers in this Agreement or in the
other Transaction Documents. 
  
 4.10 Reservation of Common
Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to
issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants. 
  
 4.11 Listing of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing of the Common Stock on a
Trading Market, and as soon as reasonably practicable following the Closing (but not later than the earlier of the Effective Date and the first anniversary of the Closing Date) to list all of the Shares and Warrant Shares on such Trading Market. The
Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the
Shares and Warrant Shares to be listed on such other Trading Market as promptly as possible. The Company will take all action commercially reasonable and necessary to (a) continue the listing and trading of its Common Stock on a Trading Market and
(b) comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such Trading Market. 
  
 4.12 Equal Treatment of Purchasers. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended to treat the Purchasers as a class and shall 

  

 21 








 
not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

  
 4.13 Participation in Future Financing. From the date
hereof until 90 days after the Effective Date, if the Company desires to effect an offering of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”), each Purchaser shall have the right to participate in such
Subsequent Financing up to the lesser of (a) the portion of the Subsequent Financing not subscribed for by the purchasers of securities of the Company pursuant to the terms of the Subscription Agreement, dated as of August 12, 2003, and the
Subscription Agreement, dated as of October 9, 2003, each by and among the Company and the subscribers identified on the signature page thereto pursuant to the preemptive rights granted to them in connection with such financings and (b) 100% of such
Subsequent Financing (such lesser amount, the “Participation Maximum”). At least 4 Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request
of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than 2 Trading Days after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to
which shall be a term sheet or similar document relating thereto. If by 6:30 p.m. (New York City time) on the fourth Trading Day after all of the Purchasers have received the Pre-Notice, notifications of the Purchasers of their willingness to
participate in the Subsequent Financing (or to cause their designees to provide) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining portion of such Subsequent Financing on the
terms and to the Persons set forth in the Subsequent Financing Notice. If the Company receives no notice from a Purchaser as of such fourth Trading Day after all the Purchasers have received the Pre-Notice, such Purchaser shall be deemed to have
notified the Company that it does not elect to participate. The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.13, if the
Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice. In
the event the Company receives responses to Subsequent Financing Notices from Purchasers seeking to purchase more than the aggregate amount of the Subsequent Financing, each such Purchaser shall have the right to purchase their Pro Rata Portion (as
defined below) of the Participation Maximum. “Pro Rata Portion” is the ratio of (x) the Subscription Amount of a participating Purchaser and (y) the sum of the aggregate Subscription Amount of all participating Purchasers.
Notwithstanding the foregoing, this Section 4.13 shall not apply to (a) shares of Common Stock or options to consultants, employees, officers or directors of the Company pursuant to any stock or option plan duly adopted by the Company or to the
issuance of Common Stock upon exercise of such options, (b) any equity securities issued 

  

 22 








 
pursuant to any equipment leasing arrangement or debt financing from a bank or similar financial institution whose primary business is lending money and not
investing in securities, (c) any equity securities issued in connection with strategic transactions involving the Company and other entities, the primary purpose of which is not to raise capital, including (A) joint ventures, manufacturing,
marketing or distribution arrangements or (B) technology transfer or development arrangements (provided that the primary purpose of such transaction is not the raising of capital), (d) any securities issued for consideration other than cash pursuant
to a merger, consolidation, acquisition or similar business combination, (e) any securities issued in connection with the settlement of pending or threatened litigation or similar proceeding, (f) shares of Common Stock issued in conjunction with any
stock split, stock dividend or recapitalization of the Company, (g) any securities issuable upon the exercise or conversion of, or pursuant to the anti-dilution provisions contained within, any agreement, option, restricted stock awards, preferred
stock or warrants outstanding on the date hereof (but not to the extent amended hereafter), (h) any shares of Common Stock issuable under the Transaction Documents (including those issued pursuant to the anti-dilution provisions contained therein),
(i) shares of Common Stock issued in connection with the Company’s repurchase of the Company’s outstanding 5.25% Convertible Subordinated Debentures due 2004 and (j) shares of Common Stock issued to vendors in exchange for services
rendered to the Company. 
  
 4.14 Subsequent Equity Sales.
From the date hereof until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents; provided, however, the 90 day period set forth in this Section 4.14
shall be extended for the number of Trading Days during such period in which (y) trading in the Common Stock is suspended by any Trading Market, or (z) following the Effective Date, the Registration Statement is not effective or the prospectus
included in the Registration Statement may not be used by the Purchasers for the resale of the Shares and Warrant Shares. Notwithstanding the foregoing, this Section 4.14 shall not apply to any of the transactions set forth in the last sentence of
Section 4.13. 
  
 4.15 Deliver of Securities After Closing.
The Company shall deliver, or cause to be delivered, the respective Shares and Warrants purchased by each Purchaser to such Purchaser within 3 Trading Days of the Closing Date. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Fees and Expenses. Except as
otherwise set forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Securities. 
  
 5.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the 

  

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subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules. 
  
 5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile with confirmation of receipt at the facsimile number set forth on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via facsimile with confirmation of receipt at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 6:30 p.m.
(New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by a nationally recognized overnight courier service in the United States, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. 
  
 5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. 
  
 5.5
Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers.” 
  
 5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9. 
  

 24 








 5.8 Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an
action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding. 
  
 5.9
Survival. The representations and warranties herein shall survive the Closing and delivery of the Shares and Warrant Shares until the third anniversary hereof. 
  
 5.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof. 
  
 5.11 Severability. If any
provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 5.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its 

  

 25 








 
sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights. 
  
 5.13 Replacement of
Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 
  

5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described
in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 5.15 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred. 
  
 5.16
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by
the Transaction Document. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the 

  

 26 








 
Transaction Documents. For reasons of administrative convenience only, Purchasers and their respective counsel have chosen to communicate with the Company
through FW. FW does not represent all of the Purchasers but only The Shemano Group, placement agent to the transaction. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the
Company and not because it was required or requested to do so by the Purchasers. 
  
 5.17 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not
terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been
canceled. 
  
 (Signature Page Follows) 
  

 27 








 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

									
	VERTICALNET, INC.	 	 	 	 	 	 Address for Notice:

					
	 By:
	 	/S/    GENE S. GODICK	 	 	 	 	 	 400 Chester Field Parkway
 Malvern, PA 10355

	 	 	
	 	 	 	 	 
	 	 	 Name: Gene S. Godick
	 	 	 	 	 
	 	 	 Title: Executive VP and Chief Financial Officer
	 	 	 	 	 	 

  
 With a copy to (which shall not
constitute notice): 
  
 Morgan, Lewis & Bockius, LLP 
 1701 Market Street 
 Philadelphia, PA 19103 
 Attn: James W. McKenzie, Jr., Esq. 
 Fax: 215-963-5001 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR PURCHASERS FOLLOW] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Adams Market Neutral Fund, LLP 
 Signature of Authorized Signatory of Investing Entity: /s/ PATRICK ADAMS 
 Name of Authorized Signatory: Patrick Adams 
 Title of Authorized Signatory: Managing Partner 
  
 Address for Notice of Investing Entity: 
 5299 DTC Boulevard 
 Englewood, CO 80111 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $49,429.40 
 Shares: 24,470 
 Warrant Shares: 6,118 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Adams Select Fund, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ PATRICK ADAMS 
 Name of Authorized Signatory: Patrick Adams 
 Title of Authorized Signatory: Managing Partner 
  
 Address for Notice of Investing Entity: 
 5299 DTC Boulevard 
 Englewood, CO 80112 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $24,240.00 
 Shares: 12,000 
 Warrant Shares: 3,000 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Adams Technology Fund, LP 
 Signature of Authorized Signatory of Investing Entity: /s/ PATRICK ADAMS 
 Name of Authorized Signatory: Patrick Adams 
 Title of Authorized Signatory: Managing Partner 
  
 Address for Notice of Investing Entity: 
 5299 DTC Boulevard 
 Englewood, CO 80113 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $24,240.00 
 Shares: 12,000 
 Warrant Shares: 3,000 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Alpha Capital AG 
 Signature of Authorized Signatory of Investing Entity: /s/ KONRAD ACKERMAN 
 Name of Authorized Signatory: Konrad Ackerman 
 Title of Authorized Signatory: Director 
  

Address for Notice of Investing Entity: 
 Pradafant 7 
 9490 Furstenturns 
 Vaduz, Lichtenstein 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $228,451.90 
 Shares: 113,095 
 Warrant Shares: 28,274 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: AS Capital Partners, LLC 
 Signature of Authorized Signatory of Investing Entity: /s/ MICHAEL COUGHLIN 
 Name of Authorized Signatory: Michael Coughlin 
 Title of Authorized Signatory: CFO 
  
 Address for Notice of Investing Entity: 
 120 Broadway, Suite 901-7 
 New York, NY 10271 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
25,000.00 
 Shares: 12,376 
 Warrant Shares: 3,094 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Bear Stearns Securities Corp., as Custodian for Jeffrey Thorp IRA Rollover 
 Signature of Authorized Signatory of Investing Entity: /s/ JEFFREY THORP 
 Name of Authorized Signatory: Jeffrey Thorp 
 Title of Authorized Signatory: 
  
 Address for Notice of Investing Entity: 
 535 Madison Avenue, 7th Floor 
 New York, NY 10022 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
$3,585,500.00 
 Shares: 1,775,000 
 Warrant Shares: 443,750 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Bristol Investment Fund, Ltd. 
 Signature of Authorized Signatory of Investing Entity: /s/ PAUL KESSLER 
 Name of Authorized Signatory: Paul Kessler 
 Title of Authorized Signatory: Director 
  

Address for Notice of Investing Entity: 
 Bristol Capital Advisors, LLC 
 6363 Sunset Boulevard, 5th Floor 
 Hollywood, CA 90028 
 Attn: Amy Wang, Esq. 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $163,180 
 Shares: 80,782 
 Warrant Shares: 20,196 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Castle Creek Technology Partner, LLC 
 Signature of Authorized Signatory of Investing Entity: /s/ THOMAS A. FREI 
 Name of Authorized Signatory: Thomas A. Frei 
 Title of Authorized Signatory: Managing Director 
  
 Address for Notice of Investing Entity: 
 111 West Jackson Boulevard, Suite 2020 
 Chicago, IL 60604 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $326,361.30 
 Shares: 161,565 
 Warrant Shares: 40,391 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: City Platz Limited 
 Signature of Authorized Signatory of Investing Entity: /s/ FRANCIS WEBB 
 Name of Authorized Signatory: Francis Webb 
 Title of Authorized Signatory: Trident Trust Co. Company Secretary 
  
 Address for Notice of Investing Entity: 
 12-14 Finch Road 
 Douglas, Isle of Man IM991TT 
  
 Address
for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $505,000 
 Shares: 250,000 
 Warrant Shares: 62,500 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Cohanzick Partners, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ DAVID K. SHERMAN 
 Name of Authorized Signatory: David K. Sherman 
 Title of Authorized Signatory: Authorized Agent 
  
 Address for Notice of Investing Entity: 
 427 Bedford Rd, Suite 260 
 Pleasantville, NY 10570 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
 450 Park
Avenue, Suite 3201 
 New York, NY 10022 
  
 Subscription Amount: $202,00.00 
 Shares: 100,000 
 Warrant Shares: 25,000 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Cranshire Capital, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ MITCHELL P. KOPIN 
 Name of Authorized Signatory: Mitchell P. Kopin 
 Title of Authorized Signatory: President, Downingview Capital 
  
 Address for Notice of Investing Entity: 
 666 Dundee Rd, Suite 1901 
 Northbrook, IL 60062 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $156,653.02 
 Shares: 77,551 
 Warrant Shares: 19,388 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Daly, Kevin P. 
 Signature of Authorized Signatory of Investing Entity: /s/ KEVIN P. DALY 
 Name of Authorized Signatory: Kevin P. Daly 
 Title of Authorized Signatory: 
  
 Address for Notice of Investing Entity: 
 56 Summit Avenue 
 Bronxville, NY 10708 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
$50,500 
 Shares: 25,000 
 Warrant Shares:6,250 
  
 [SIGNATURE
PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: First Mirage, Inc. 
 Signature of Authorized Signatory of Investing Entity: /s/ DAVID A. RAPAPORT 
 Name of Authorized Signatory: David A. Rapaport 
 Title of Authorized Signatory: President 
  

Address for Notice of Investing Entity: 
 333 Sandy Springs Circle 
 Suite 230 
 Atlanta, GA 30328 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $65,272.26 
 Shares: 32,313 
 Warrant Shares: 8,078 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Gabriel Capital, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ DAVID K. SHERMAN 
 Name of Authorized Signatory: David K. Sherman 
 Title of Authorized Signatory: Authorized Agent 
  
 Address for Notice of Investing Entity: 
 450 Park Ave., Suite 3201 
 New York, NY 10022 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $454,500 
 Shares: 225,000 
 Warrant Shares: 56,250 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Grosvenor Investments 
 Signature of Authorized Signatory of Investing Entity: /s/ LEE E. MIKLES 
 Name of Authorized Signatory: Lee E. Mikles 
 Title of Authorized Signatory: Chairman, Investment Advisor 
  
 Address for Notice of Investing Entity: 
 c/o Mikles/Miller Mgmnt., Inc. 
 1801 Century Park E. 460 
 Los Angeles, CA 90067 
 Attn: Lee Mikles 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $7950.72 
 Shares: 3,936 
 Warrant Shares: 984 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Gryphon Master Fund, LP 
 Signature of Authorized Signatory of Investing Entity: /s/ E.B. LYON IV 
 Name of Authorized Signatory: E.B. Lyon IV 
 Title of Authorized Signatory: Authorized Agent 
  
 Address for Notice of Investing Entity: 
 500 Crescent Ct. #270 
 Dallas, TX 75201 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $163,179.64 
 Shares: 80,782 
 Warrant Shares: 20,196 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Kodiak Capital, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ LEE E. MIKLES 
 Name of Authorized Signatory: Lee E. Mikles 
 Title of Authorized Signatory: 
  
 Address for Notice of Investing Entity: 
 c/o Mikles/Miller Mgmt. Inc. 
 1801 Century Park East Suite 461 
 Los Angeles, CA 90067 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $15,273.22 
 Shares: 7,561 
 Warrant Shares: 1,890 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Kodiak Capital Offshore, Ltd. 
 Signature of Authorized Signatory of Investing Entity: /s/ LEE E. MIKLES 
 Name of Authorized Signatory: Lee E. Mikles 
 Title of Authorized Signatory: Chairman, Investment Advisor 
  
 Address for Notice of Investing Entity: 
 c/o Mikles/Miller Mgmt. Inc. 
 1801 Century Park East Suite 461 
 Los Angeles, CA 90067 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription
Amount:$103,345.22 
 Shares:51,161 
 Warrant Shares:12,790 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Kodiak Market Neutral Hedge, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ LEE E. MIKLES 
 Name of Authorized Signatory: Lee E. Mikles 
 Title of Authorized Signatory: Chairman, G.P. 
  
 Address for Notice of Investing Entity: 
 c/o Mikles/Miller Mgmt. Inc. 
 1801 Century Park East Suite 462 
 Los Angeles, CA 90067 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
$1468.54 
 Shares: 727 
 Warrant Shares: 182 
 95-4596249 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Kodiak Market Neutral Hedge Offshore, Ltd. 
 Signature of Authorized Signatory of Investing Entity: /s/ LEE E. MIKLES 
 Name of Authorized Signatory: Lee E. Mikles 
 Title of Authorized Signatory: Chairman, Investment Advisor 
  
 Address for Notice of Investing Entity: 
 c/o Mikles/Miller Mgmt. Inc. 
 1801 Century Park East Suite 463 
 Los Angeles, CA 90067 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
$2506.32 
 Shares: 1,241 
 Warrant Shares: 310 
  
 [SIGNATURE
PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Lonestar Partners, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ JEROME C. SIMON 
 Name of Authorized Signatory: Jerome C. Simon 
 Title of Authorized Signatory: Manager 
  
 Address for Notice of Investing Entity: 
 c/o Lonestar Capital Management LLC 
 One Maritime Plaza, Suite 1100 
 San Francisco, CA 94111 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $454,500.00 
 Shares: 225,000 
 Warrant Shares: 56,250 
 94-3223164 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Nob Hill Capital Partners, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ STEVEN MILLER 
 Name of Authorized Signatory: Steven Miller 
 Title of Authorized Signatory: 
  
 Address for Notice of Investing Entity: 
 One Sansome Street 
 Suite 2900 
 San Francisco, CA 94111 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $161,600 
 Shares: 80,000 
 Warrant Shares: 20,000 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Omicron Master Trust 
 Signature of Authorized Signatory of Investing Entity: /s/ BRUCE BERNSTEIN 
 Name of Authorized Signatory: Bruce Bernstein 
 Title of Authorized Signatory: Managing Member 
  
 Address for Notice of Investing Entity: 
 810 Seventh Avenue 
 39th Floor 
 New York, NY 94101 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $163,179.64 
 Shares: 80,782 
 Warrant Shares: 20,196 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: RHP Master Fund, Ltd. 
 Signature of Authorized Signatory of Investing Entity: /s/ KEITH MARLOWE 
 Name of Authorized Signatory: Keith Marlowe 
 Title of Authorized Signatory: Director 
  

Address for Notice of Investing Entity: 
 c/o Rock Hill Investment Management, L.P. 
 3 Bala Plaza-East, Suite 585 
 Bala Cynwyd, PA 19004 
 Attn: Keith Marlowe 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $65,272.26 
 Shares: 32,313 
 Warrant Shares: 8,078 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: RVM Global Partners, L.P. 
 Signature of Authorized Signatory of Investing Entity: /s/ JOSEPH W. VENCIL 
 Name of Authorized Signatory: Joseph W. Vencil 
 Title of Authorized Signatory: General Partner 
  
 Address for Notice of Investing Entity: 
 51 W. 95th St. 
 New York, NY 10025 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $50,500 
 Shares: 25,000 
 Warrant Shares: 6,250 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Stonestreet Limited Partnership 
 Signature of Authorized Signatory of Investing Entity: /s/ MICHAEL FINKELSTEIN 
 Name of Authorized Signatory: Michael Finkelstein 
 Title of Authorized Signatory: President 
  

Address for Notice of Investing Entity: 
 Michael Finkelstein/Hartley Zwingerman 
 260 Town Centre Blvd 
 Suite 260 
 Markham, Ontario, Canada, 10025 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
 c/o Cannacord Capital 

P.O. Box 6 
 Suite 1210-320 
 Bay Street, Toronto, Canada MSH 4A6 
  
 Subscription Amount: $303,000 
 Shares: 150,000 
 Warrant Shares: 37,500 
 N/A 
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: TCMP3 Partners 
 Signature of Authorized Signatory of Investing Entity: /s/ WALTER SCHENKER 
 Name of Authorized Signatory: Walter Schenker 
 Title of Authorized Signatory: Principal 
  

Address for Notice of Investing Entity: 
 c/o Titan Capital Mgmnt. 
 7 Century Drive 
 Suite 201 
 Parsippany, NJ 07054 
  
 Address for
Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $101,000 
 Shares: 50,000 
 Warrant Shares: 12,500 
 124050535 
  
 [SIGNATURE PAGES
CONTINUE] 







 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Truk International Fund, LP 
 Signature of Authorized Signatory of Investing Entity: /s/ MICHAEL E. FEIN 
 Name of Authorized Signatory: Michael E. Fein 
 Title of Authorized Signatory: Principal, Atoll Asset Management, LLC, the Managing Member of Truk International Fund, LP 
  
 Address for Notice of Investing Entity: 
 45 Rockefeller Plaza 
 Suite 2000 
 New York, NY 10111 
 Attention: Michael E. Fein 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $17,380.08 
 Shares: 8,604 
 Warrant Shares: 2,151 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Truk Opportunity Fund, LLC 
 Signature of Authorized Signatory of Investing Entity: /s/ MICHAEL E. FEIN 
 Name of Authorized Signatory: Michael E. Fein 
 Title of Authorized Signatory: Principal, Atoll Asset Management, LLC, the Managing Member of Truk Opportunity Fund, LLC

  
 Address for Notice of Investing Entity:

 45 Rockefeller Plaza 
 Suite 2000 
 New York, NY 10111 
 Attention: Michael E. Fein 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $86,900.40 
 Shares: 43,020 
 Warrant Shares: 10,755 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Tuva Financial Ltd 
 Signature of Authorized Signatory of Investing Entity: /s/ MINNA LEDEREICH 
 Name of Authorized Signatory: Minna Ledereich 
 Title of Authorized Signatory: Director 
  

Address for Notice of Investing Entity: 
 2 Manesse Str. 
 CH 8003 
 Zurich, Switzerland 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  
 Subscription Amount: $65,272.26 
 Shares: 32,313 
 Warrant Shares: 8,078 
  
 [SIGNATURE PAGES CONTINUE]








 [PURCHASER SIGNATURE PAGES TO VERT SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: Williams, Gordon 
 Signature of Authorized Signatory of Investing Entity: /s/ GORDON WILLIAMS 
 Name of Authorized Signatory: Gordon Williams 
 Title of Authorized Signatory: 
  
 Address for Notice of Investing Entity: 
 31 Ridgebrook Rd 
 Greenwich, CT 06830 
  
 Address for Delivery of Securities for Investing Entity (if
not same as above): 
  
 Subscription Amount:
$50,500 
 Shares: 25,000 
 Warrant Shares: 6,250 
  
 [SIGNATURE PAGES CONTINUE] 







 EXHIBIT A 
  

REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into as of January 22, 2004, by and among Verticalnet, Inc., a
Pennsylvania corporation (the “Company”), and each of the purchasers signatory hereto (each such purchaser, a “Purchaser” and collectively, the “Purchasers”). 
  
 This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the “Purchase Agreement”). 
  
 The Company and the Purchasers hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement
shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Advice” shall have the meaning set forth in Section 6(d). 
  
 “Effectiveness Date” means, with respect to the Registration Statements required to be
filed hereunder, the earlier of (a) the day 120 calendar days following the date of the Purchase Agreement and (b) the fifth Trading Day following the date on which the Company is notified by the Commission that such Registration Statement will not
be reviewed or is no longer subject to further review and comments; provided, however, that if a Holder fails to comply with the provisions of Section 3(k), then, as to such Holder only, the Effectiveness Date with respect to such
Holder’s Registrable Securities only shall be extended until 120 days following the date of receipt by the Company of such required information. 
  
 “Effectiveness Period” shall have the meaning set forth in Section 2(a). 
  
 “Event” shall have the meaning set forth in
Section 2(b). 
  
 “Event Date”
shall have the meaning set forth in Section 2(b). 
  
 “Filing Date” means, with respect to the Registration Statements required to be filed hereunder, the day 45 calendar days following the date of the Purchase Agreement; provided, however, that if a Holder fails
to comply with the provisions of Section 3(k), then the Filing Date with respect to such Holder’s Registrable Securities only shall be extended until 45 calendar days following the date of receipt by the Company of such required information.

  
 “Holder” or
“Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities. 
  

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 “Indemnified Party” shall have the meaning set forth in Section 5(c).

  
 “Indemnifying Party” shall
have the meaning set forth in Section 5(c). 
  
 “Losses” shall have the meaning set forth in Section 5(a). 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition). 
  
 “Prospectus” means the prospectus included in the applicable Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and supplements to such Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

  
 “Registrable Securities”
means all of the Shares and the Warrant Shares, together with any shares of Common Stock issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. 
  
 “Registration Statement” means a
registration statement required to be filed hereunder, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
  
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 “Shares” means the shares of Common Stock to be issued pursuant to the Purchase Agreement. 
  
 “Warrant Shares” means the shares of Common
Stock issuable upon exercise of the Warrants purchased pursuant to the Purchase Agreement. 
  

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 2. Registration. 
  
 (a) On or prior to the applicable Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all of the Registrable Securities not yet registered that are held by Holders that have complied with the provisions of Section 3(k) prior to such date for an offering to be made on a continuous basis
pursuant to Rule 415. Such Registration Statement required hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such Registration Statement shall be
on another appropriate form herewith). The Registration Statements required hereunder shall contain (except if otherwise directed by Holders owning a majority of the Registrable Securities outstanding at such time) substantially the “Plan of
Distribution” attached hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event not later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the date when all Registrable
Securities covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness Period”). Each Holder acknowledges and agrees that the Company shall be permitted to exclude such Holder’s Registrable Securities from
a Registration Statement if such Holder fails to timely comply with the Company’s request for information pursuant to Section 3(k); provided if such Holder provides such information prior to the filing of such Registration Statement the Company
shall use commercially reasonable efforts to include such Registrable Securities on such Registration Statement; provided further that this provision does not otherwise waive the Company’s obligation to register such Registrable Securities
pursuant to the terms hereunder upon such Holder providing the Company with the required information. 
  
 (b) If: (i) a Registration Statement is not filed on or prior to the applicable Filing Date (if the Company files a Registration Statement
without affording the Holder or Holders referenced in such Registration Statement the opportunity to review and comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied this clause (i)), or (ii) the Company
fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within no more than five Trading Days of the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will not be “reviewed,” or is not subject to further review, or (iii) prior to the date when a Registration Statement is first declared effective by the Commission, the Company fails
to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within 15 calendar days after the receipt of comments by or notice from the Commission that such
amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission on or before the applicable Effectiveness
Date, or (v) after a 

  

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Registration Statement is first declared effective by the Commission, it ceases for any reason to remain continuously effective as to all Shares for which it
is required to be effective, or the Holders are not permitted to utilize a Prospectus therein to resell such Shares, for in any such case 15 consecutive Trading Days but no more than an aggregate of 25 Trading Days during any 12 month period (which
need not be consecutive Trading Days) provided that any days during which a Registration Statement ceases to be effective due to the filing of a post-effective amendment thereto by the Company at the request of the Holders in order to amend the Plan
of Distribution (as provided for in Section 2(a)) shall not be counted towards such 15 or 30 Trading Day periods provided the Company uses commercially reasonable efforts to cause such post-effective amendment to be declared effective (any such
failure or breach being referred to as an “Event,” and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause (ii) the date on which such 10 Trading Day period is exceeded, or for purposes
of clause (iii) the date which such 15 calendar days is exceeded, or for purposes of clause (v) the date on which such 15 or 25 Trading Day period, as applicable, is exceeded being referred to as “Event Date”), then in addition to
any other rights the Holders may have hereunder or under applicable law: (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement for any Shares then held by such Holder; and (y) on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 2.0% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Shares then held
by such Holder. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven business days after the date payable, the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount
that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The liquidated damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. Notwithstanding anything herein to the contrary, the Company agrees and acknowledges that any extensions to the Filing Date or Effectiveness Date on
account of a Holder failing to timely comply with Section 3(k) relate solely to that Holder and in no way effect the Filing Date and Effectiveness Date under this Agreement as they relate to any other Holder. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the
Company shall: 
  
 (a) Not less than five Trading
Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall, (i) furnish to the Holders owning Registrable Securities registered under such Registration Statement copies of
all such documents proposed to be filed (including documents incorporated or deemed incorporated by reference to the extent requested by 

  

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such Person) which documents will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file any such Registration
Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities registered thereunder shall reasonably object in good faith, provided that the Company is notified of such
objection in writing no later than five Trading Days after such Holders have been so furnished copies of such documents. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and a
Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for the applicable Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to such Registration Statement or any amendment thereto and, as promptly as
reasonably possible, upon request, provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement; and (iv) comply in all material respects during the applicable Effectiveness
Period with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period in accordance with the Holders’ intended
methods of disposition set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. 
  
 (c) Notify the Holders of Registrable Securities to be sold as promptly as reasonably possible (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of a Registration Statement and whenever the Commission comments in
writing on a Registration Statement (the Company shall upon request provide true and complete copies thereof and all written responses thereto to each of the Holders); and (C) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority during the period of effectiveness of a Registration Statement for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of
such Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of 

  

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any event of which the Company has knowledge as a result of which a Prospectus, as then in effect, contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (d) Use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of
(i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as reasonably
practicable. 
  
 (e) Furnish to each Holder,
without charge, at least one conformed copy of each Registration Statement registering Registrable Securities held by such Holder and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested in writing by such Person, and all exhibits to the extent requested by such Person in writing (including those previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission. 
  
 (f)
Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the
Holder of Registrable Securities. Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of
the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(c). 
  

(g) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things
reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. 
  
 (h) If requested in writing by the Holders, cooperate with
the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the applicable Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase 

  

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Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders
may request. 
  
 (i) Upon the occurrence of any
event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the applicable Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither such Registration Statement nor the Prospectus included therein will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance
with clauses (ii) through (v) of Section 3(c) above to suspend the use of the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its
commercially reasonable efforts to ensure that the use of a Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(i) to suspend the availability of a Registration Statement
and the applicable Prospectus, subject to the payment of liquidated damages pursuant to Section 2(b), for a period not to exceed 60 Trading Days (which need not be consecutive days) in any 12 month period. 
  
 (j) Comply in all material respects with all applicable
rules and regulations of the Commission. 
  
 (k)
The Company may require each Holder, upon 3 Trading Days’ notice, to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the person that
has voting and dispositive control over such Shares. 
  
 4.
Registration Expenses. Except as otherwise provided for herein, all fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are
sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to
filings required to be made with the Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in a Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) reasonable fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its 

  

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officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions or, except to the extent provided for in the Transaction Documents, any legal
fees or other costs of the Holders. 
  
 5. Indemnification

  
 (a) Indemnification by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue statement of a material fact contained in a
Registration Statement (at the time of its effectiveness), any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus (each as of its date), or arising out of or relating to any omission of a
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent, but only to the extent, that (i) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in writing to the Company by or on behalf of such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in such Registration Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that such Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). 
  
 (b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party, to
the extent arising out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in a Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission of a material fact required to be stated therein or necessary to make the 

  

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statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so
furnished in writing by or on behalf of such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by or on behalf of such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in such Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such
Holder in writing that such Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially prejudiced the Indemnifying Party’s ability
to defend such action. 
  
 An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding;
or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall reasonably believe that a material conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be
liable for any settlement of any such Proceeding affected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of 

  

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the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of each of the Indemnifying Party and the Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue statement of a material fact omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder.

  
 The indemnity and contribution agreements
contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a 

  

 -10- 








 
breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities. The Company shall not file any other registration statement until
after the Effective Date except for registration statements on Form S-3 relating to up to 4,000,000 shares of Common Stock to be issued solely in connection with an acquisition of any entity or business or registration statements on Form S-8
relating to equity securities issuable in connection with the Company’s stock option or other employee benefit plan. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement. 
  
 (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under any Registration Statement until such Holder’s receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company will use its commercially reasonable efforts to ensure that the use of such
Prospectus may be resumed as promptly as it practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the
provisions of Section 2(b). 
  
 (e) Piggy-Back
Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to each
Holder a written notice of such determination and, if within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights. 
  

 -11- 








 (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each Holder of the then
outstanding Registrable Securities. 
  
 (g)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be made in accordance with the provisions of the Purchase Agreement. 
  
 (h) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement. 
  
 (i)
Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the
event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof. 
  
 (j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined with the provisions of the Purchase Agreement. 
  
 (k) Cumulative Remedies. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law. 
  
 (l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  

(m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the
meaning hereof. 
  
 (n) Independent Nature of
Purchasers’ Obligations and Rights. Except as otherwise provided for herein, the obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any
way for the performance of the obligations of any other Holder 

  

 -12- 








 
hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or
thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as
an additional party in any proceeding for such purpose. 
  
 (o) Notice of Disposition of Registrable Securities. Upon the request of the Company, each Holder shall promptly provide the Company written notice at such time as it no longer holds, directly or indirectly,
any Registrable Securities. 
  
 *************************

  

 -13- 








 EXHIBIT A 
  

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. 
  

			
	 VERTICALNET, INC.

		
	 By:
	 	 
	 	 	

	 Name:
	 	 
	 Title:
	 	 


  
 [SIGNATURE PAGE
OF HOLDERS FOLLOWS] 







 [PURCHASER’S SIGNATURE PAGE TO VERT RRA] 
  
 Name of Investing Entity:
                                        
                         
 Signature of Authorized Signatory of Investing entity:
                                        
                         
 Name of
Authorized Signatory:
                                        
                         
 Title
of Authorized Signatory:
                                        
                          
  
 [SIGNATURE PAGES CONTINUE] 







 [PURCHASER’S SIGNATURE PAGE TO VERT RRA] 
  
 Name of Investing Entity:
                                        
                         
 Signature of Authorized Signatory of Investing entity:
                                        
                         
 Name of
Authorized Signatory:
                                        
                         
 Title
of Authorized Signatory:
                                        
                          
  
 [SIGNATURE PAGES CONTINUE] 







 ANNEX A 
  
 Plan of Distribution 
  
 The Selling Stockholders (the “Selling Stockholders”) of the common stock (“Common Stock”) of Verticalnet, Inc. (the
“Company”) and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when selling shares: 
  

	 	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;


  

	 	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	privately negotiated transactions; 

  

	 	•	settlement of short sales; 

  

	 	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	a combination of any such methods of sale; 

  

	 	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or 

  

	 	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if
available, rather than under this prospectus. 
  
 Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares,
from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 In connection with the sale of our common stock or interests therein, the Selling Stockholders may enter into hedging
transactions with broker-dealers or other financial 








 
institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The Selling Stockholders may
also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
  
 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to
be underwriting commissions or discounts under the Securities Act. The Selling Stockholders have informed the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock.

  
 The Company is required to pay certain fees and expenses
incurred by the Company incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. 







 EXHIBIT B 
  

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT. 
  
 COMMON STOCK PURCHASE WARRANT 
  

To Purchase                      Shares of
Common Stock of 
  
 Verticalnet, Inc. 
  
 THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) CERTIFIES
that, for value received,                      (the “Holder”), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time or from time to time on or after the 185th day
following the date of issuance of this Warrant (such date, the “Initial Exercise Date”) and on or prior to 5:00 p.m., New York time on the fifth anniversary of the Initial Exercise Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Verticalnet, Inc. a corporation incorporated in the State of Pennsylvania (the “Company”), up to
                     shares (the “Warrant Shares”) of Common Stock, par value $0.01 per share, of the Company (the
“Common Stock”). The purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be $3.72, subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares
for which the Warrant is exercisable shall be subject to adjustment as provided herein. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated January 22, 2004, among the Company and the purchasers signatory thereto. 
  

 1 








 1. Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws
and Section 7 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with
the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company. 
  
 2. Authorization of Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue) and restrictions arising under applicable federal or state securities laws. 
  
 3. Exercise of Warrant. 
  
 (a) Exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and
on or before the Termination Date by surrender of this Warrant and delivery of a duly executed copy of the Notice of Exercise Form annexed hereto to the Company at its principal office (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company) along with payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check
drawn on a United States bank. Certificates for shares purchased hereunder shall be delivered to the Holder within seven Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant and payment of the
aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date the Notice of Exercise Form, this Warrant and
the aggregate Exercise Price is delivered to the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for
all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. If the
Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 3(a) by the seventh Trading Day following the Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise. In addition to any other rights available to the Holder, if the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise by the seventh Trading Day after the Warrant
Share Delivery Date, and if after such day the Holder is required by its broker to purchase in a bona fide open market transaction shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total 

  

 2 








 
purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying
(A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option
of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases in a Buy-In shares of Common Stock having a total purchase price of $11,000 to cover the sale of shares of Common Stock with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof. 
  
 (b)
If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 
  
 (c) Notwithstanding anything contained herein to the contrary, the Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 3(a) or otherwise, to the extent that after giving effect to such issuance after exercise, the Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Exercise, would beneficially
own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is not representing to Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and Holder is solely responsible for any schedules 

  

 3 








 
required to be filed in accordance therewith. To the extent that the limitation contained in this Section 3(c) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder) and of what portion of this Warrant is exercisable shall be in the sole discretion of such Holder, and the submission of a Notice of Exercise shall be deemed to be such
Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of what portion of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 3(c), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In
any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. 
  
 (d) If at any time after one year from the date of issuance of this Warrant there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder, this Warrant may also be exercised
at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  

					
	 (A)
	 	=	 	the Closing Price on the Trading Day immediately preceding the date of such election;
			
	 (B)
	 	=	 	the Exercise Price of this Warrant, as adjusted as of the date of such election; and
			
	 (X)
	 	=	 	the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

  
 (e)
Notwithstanding anything to the contrary set forth in subsection (d) above, the Holder may not utilize the “cashless exercise” method of payment of the Exercise Price if, on the date of exercise hereof, a Registration Statement for the
resale of the Warrant Shares has been filed and declared effective and maintained effective for at least 15 calendar days in the aggregate, but thereafter has ceased to be effective for a period of time which is not more than either (x) 25 Trading
Days in the aggregate during the year (defined as a period of 365 days commencing on the date a Registration Statement is first effective) in which such date of exercise occurs or (y) 15 consecutive Trading Days immediately prior to such date of
exercise.  
  

 4 








 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price. 
  
 5. Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment
of a sum sufficient to reimburse it for any transfer tax incidental thereto. 
  
 6. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
  
 7. Transfer, Division and Combination. 
  
 (a) Subject to compliance with any applicable securities
laws and the conditions set forth in Sections 1 and 7(e) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued. 
  
 (b) This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 
  
 (c) The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this
Section 7. 
  

 5 








 (d) The Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants. 
  
 (e) If, at the time of the surrender of this Warrant or the Warrant Shares in connection with any transfer of this Warrant or the Warrant Shares, as applicable, the transfer of this Warrant shall not be registered pursuant to an effective
registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant or Warrant Shares, as the
case may be, furnish to the Company an executed copy of the Assignment Form attached hereto and a written opinion of counsel (which opinion shall be reasonably acceptable to the Company as to form, substance and scope) to the effect that such
transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a) under
the Securities Act. The holder of this Warrant must obtain the prior written consent of the Company in order to transfer Warrants representing the right to purchase fewer than the lesser of (x) 1,000 Warrant Shares or (y) the number of Warrant
Shares for which this Warrant is then exercisable. 
  
 8. No
Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof and the payment of the Exercise Price in accordance with the terms
hereof (or exercise via cashless exercise). 
  
 9. Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of an indemnity agreement or security reasonably satisfactory to it in form and amount, or, if mutilated, upon surrender and cancellation of such Warrant or stock certificate, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
  
 10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday. 
  
 11. Adjustments of Exercise Price and Number of Warrant Shares; Stock Splits, etc. The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine 

  

 6 








 
its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification
of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of
the Company which it would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company that are purchasable
pursuant hereto immediately thereafter. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. 
  
 12. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition
to or in lieu of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 12. For purposes of this Section 12, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The foregoing 

  

 7 








 
provisions of this Section 12 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.

  
 13. Intentionally Omitted. 
  
 14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was made. 
  
 15. Notice of Corporate Action. If at any time: 
  
 (a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or 
  
 (b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the
Company to, another corporation or, 
  
 (c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 
  
 then, in any one or more of such cases, the Company shall give to Holder (i) at least 10 days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or
for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 10 days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i)
the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character
thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the
holders of Common Stock shall be entitled to exchange their Warrant Shares for securities or other property deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the Company and delivered in accordance with Section 17(d). 
  

 8 








 16. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance
of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. 
  
 Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking
of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant. 
  
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 
  
 17. Miscellaneous. 
  
 (a) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Purchase Agreement. 
  
 (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

  
 (c) Nonwaiver and Expenses. No course
of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall 

  

 9 








 
be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. 
  
 (d) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase Agreement. 
  
 (e) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or
purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company. 
  
 (f) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

  
 (g) Successors and Assigns. Subject to
applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. 
  
 (h) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder. 
  
 (i) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
  
 (j) Headings. The headings used in this Warrant are
for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 
  
 ******************** 
  

 10 








 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized. 
  
 Dated: January
            , 2004 
  

			
	VERTICALNET, INC.
		
	 By:
	 	 
	 	 	

	 Name:
	 	 
	 Title:
	 	 









 NOTICE OF EXERCISE 
  
 To: Verticalnet, Inc. 
  
 (1) The undersigned, (the holder of the attached Warrant) hereby elects to purchase
                     Warrant Shares of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any, in the aggregate amount of $                    . 
  
 (2) Payment is in the form of (check applicable box): 
  
  ̈ in lawful money of the United States; or 
  
  ̈ the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 3(d), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(d). 
  
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such
other name as is specified below: 
  
 ____________________________________________ 
  
 The Warrant Shares shall
be delivered to the following: 
  
 ____________________________________________ 
  
 ____________________________________________ 
  
 ____________________________________________ 
  
 (4) The
undersigned hereby confirms the representations and warranties set forth in Sections 3.2(b) through (e) of that certain Securities Purchase Agreement dated as of January         , 2004. 
  

			
	 [PURCHASER]

		
	 By:
	 	 
	 	 	

	 Name:
	 	 
	 Title:
	 	 
		
	 Dated:
	 	 
	 	 	



  









 ASSIGNMENT FORM 
  
 FOR VALUE RECEIVED,
                         (the “Assignor”) hereby sells, assigns and transfers all of the rights of the
undersigned Assignor under the attached Warrant with respect to the number of shares of common stock of Verticalnet, Inc. (the “Company”) covered thereby set forth below, to the following “Assignee” and, in connection with
such transfer, represents and warrants to the Company that the transfer is otherwise in compliance with Section 7(f) of the Warrant: 
  

					
	 Name of Assignee

	  	 Address/Fax Number

	  	 No. of Shares


	  

	  	  

	  	  


	  

	  	  

	  	  



  

							
	 Dated:
                    
	 	 	 	 Signature:

				
	  	 	  	 	 	 	  
	 	 	 	 	 	 	

				
	 	 	 	 	 	 	 Witness:

				
	  	 	  	 	 	 	  
	 	 	 	 	 	 	


  
 ASSIGNEE
ACKNOWLEDGEMENT 
  
 The undersigned Assignee acknowledges that it has reviewed the
attached Warrant and by its signature below it hereby represents and warrants that it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and agrees to be bound by
the terms and conditions of the attached Warrant as of the date hereof. 
  

			
		
	By:	 	 
	 	 	

		
	 Its:
	 	 
	 	 	




			
		
	 Address:
	 	 
	 	 	

		
	 	 	



  
 NOTE: The signature to this
Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a
fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. 
  









 EXHIBIT C 
  

FORM OF OPINION 
  
 1. The Company is a corporation duly organized, validly subsisting and in good standing under the laws of the Commonwealth of Pennsylvania and has all
requisite corporate power and authority to conduct its business and to own, lease and operate its properties and assets, all as described in the SEC Reports. 
  
 2. The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Agreements. The execution and
delivery of the Agreements by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate action on behalf of the Company. Each of the Agreements has been duly executed and
delivered and each of the Agreements constitutes valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms. 
  
 3. The execution, delivery and performance of the Agreements by the Company and the consummation by the Company of the
transactions contemplated thereby, including, without limitation, the issuance of the Shares and the Warrant pursuant to the terms of the Agreement and the issuance of Warrant Shares pursuant to the terms of the Warrant, does not and will not (i)
result in a violation of the Company’s Certificate of Incorporation or By-Laws; (ii) result in a violation of any federal or state law, rule or regulation or any rule or regulation of the Trading Market applicable to the Company except for such
violations as would not, individually or in the aggregate, have a Material Adverse Effect; or (iii) result in a breach or violation of, or material event of default under (or constitute any event which with notice, lapse of time or both would result
in any breach of or constitute a material default under), any indentures, contracts, leases, mortgages, deeds of trust, note agreements, loan agreements or other agreements or instruments that are both (a) an instrument by which the Company or any
of the Subsidiaries is bound and (b) material in relation to the Company and the Subsidiaries, considered as a single enterprise. 
  
 4. When issued in accordance with the terms of the Agreement and upon delivery, the Shares will be validly issued and outstanding, fully paid and
non-assessable. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued and outstanding, fully paid and non-assessable. 
  
 5. The Shares, Warrants and Warrant Shares have not been registered under the Securities Act of 1933, as amended (the
“Act”), or under the laws of any state or other jurisdiction, and, assuming that neither the Company nor any other person has engaged in any activity that would be deemed a “general solicitation” under the provisions of
Regulation D under the Act, the issuances of the Shares and the Warrants purchased by the Subscribers on the date hereof pursuant to the Agreement constitute transactions exempt from the registration requirements of Section 5 of the Act.