Document:

EX-10.2

Exhibit 10.2

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of
August 16, 2005 by and among Verticalnet, Inc., a Pennsylvania corporation (the “Company”),
and the purchasers listed on Schedule I hereto (the “Purchasers”).

This Agreement is being entered into pursuant to the Note and Warrant 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 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 meaning set forth in Section 4(c).

"Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such Person. For the purposes
of this definition, “control,” when used with respect to any Person, means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or otherwise; and the
terms of “affiliated,” “controlling” and “controlled” have meanings
correlative to the foregoing.

"Board” shall have meaning set forth in Section 3(n).

"Business Day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the state of New York generally are
authorized or required by law or other government actions to close.

"Closing Date” means the date of the closing of the purchase and sale of the Notes
pursuant to the Purchase Agreement.

"Commission” means the Securities and Exchange Commission.

"Common Stock” means the Company’s Common Stock, par value $0.01 per share.

"Effectiveness Date” means with respect to the Registration Statement the earliest of
(i) the ninetieth (90th) day following the Closing Date, if the Commission informs the Company that
the Commission will not review the Registration Statement, (ii) the one hundred twentieth day
(120th) day following the Closing Date, if the Commission informs the Company that the
Commission will review the Registration Statement, or (iii) provided that the Company has filed an
amended Form 8-K with the Commission setting forth the applicable financial statements required to
be filed on Form 8-K with respect to the Company’s acquisition of the stock of Digital Union
Limited, the date which is within five (5) days of the date on which the Commission informs the
Company that (x) the Commission will not review the Registration Statement or (y) the Company may
request the acceleration of the effectiveness of the Registration Statement and the Company makes
such request.

"Effectiveness Period” shall have the meaning set forth in Section 2.

"Event” shall have the meaning set forth in Section 8(d).

"Event Date” shall have the meaning set forth in Section 8(d).

"Exchange Act” means the Securities Exchange Act of 1934, as amended.

"Filing Date” means the thirtieth (30th) day following the Closing Date.

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

"Indemnified Party” shall have the meaning set forth in Section 6(c).

"Indemnifying Party” shall have the meaning set forth in Section 6(c).

"Losses” shall have the meaning set forth in Section 6(a).

"Note Shares” means the shares of Common Stock issuable (a) upon conversion of the
Notes issued to the Purchasers pursuant to the Purchase Agreement and (b) as payment of any
principal amount of the Notes or interest accrued and outstanding on the Notes issued to the
Purchasers pursuant to the Purchase Agreement.

"Person” means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other 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), whether
commenced or threatened.

"Prospectus” means the prospectus included in the 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 the Registration
Statement, and all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such Prospectus.

"Registrable Securities” means (i) the Note Shares and (ii) the shares of Common Stock
issuable upon exercise of the Warrants.

"Registration Statement” means the registration statement and any additional
registration statement contemplated by Section 2, 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 in such
registration statement.

"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.

"Rule 158” means Rule 158 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.

"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 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 effect as such Rule.

"Securities Act” means the Securities Act of 1933, as amended.

"Special Counsel” means one special counsel to the Holders, for which the Holders will
be reimbursed by the Company pursuant to Section 5.

"Warrants” means the warrants to purchase shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement.

2. Resale Registration.

On or prior to the Filing Date the Company shall prepare and file with the Commission a
“resale” Registration Statement providing for the resale of all Registrable Securities that are
held by Holders that have complied with the provisions of Section 3(m) for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration Statement 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 shall be on another appropriate form in accordance with
the Securities Act and the rules promulgated thereunder). The Company shall (i) not permit any
securities other than the Registrable Securities and the securities to be listed on Schedule II
hereto to be included in the Registration Statement and (ii) use its reasonable best efforts to
cause the Registration Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep
such Registration Statement continuously effective under the Securities Act until such date as is
the earlier of (x) the date when all Registrable Securities covered by such Registration Statement
have been sold or (y) the date on which the Registrable Securities may be sold without any
restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a
written opinion letter, addressed to the Company’s transfer agent to such effect (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(m);
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.

3. Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

(a) Prepare and file with the Commission on or prior to the Filing Date, a Registration
Statement on Form S-3 (or if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3 such registration shall be on another appropriate form in
accordance with the Securities Act and the rules promulgated thereunder). The Registration
Statement 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 this Agreement, the Company shall
use its reasonable best efforts to cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than five (5)
Business Days prior to the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be incorporated therein by
reference), the Company shall (i) furnish to the Holders and any Special Counsel, copies of all
such documents proposed to be filed, which documents (other than those incorporated by reference)
will be subject to the review of such Holders and such Special Counsel, 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 Special Counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. Unless otherwise advised by outside
counsel to the Company, the Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or any Special Counsel shall reasonably object in writing within three (3)
Business Days of their receipt thereof.

(b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the Registration Statement
continuously effective as to the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration Statements as necessary 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 (or any similar provisions then in force)
promulgated under the Securities Act; (iii) respond as promptly as possible, but in no event later
than fifteen (15) Business Days, to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and as promptly as possible provide the Holders
true and complete copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in accordance with the intended
methods of disposition by the Holders thereof set forth in the Registration Statement as so amended
or in such Prospectus as so supplemented.

(c) Notify the Holders of Registrable Securities to be sold and any Special Counsel as
promptly as possible (and, in the case of (i)(A) below, not less than five (5) days prior to such
filing) and (if requested by any such Person) confirm such notice in writing no later than one (1)
Business Day following the day) (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is filed; (B) when the Commission notifies
the Company whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has become effective; (ii) of
any written request by the Commission or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement covering any or all of the 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 any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that, in the case of the Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.

(d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

(e) If requested by the Holders of a majority in interest of the Registrable Securities, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration
Statement such information as the Company reasonably agrees should be included therein and (ii)
make all required filings of such Prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.

(f) Furnish to each Holder and any Special Counsel, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission.

(g) Promptly deliver to each Holder and any Special Counsel, 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; and 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.

(h) Prior to any public offering of Registrable Securities, use its reasonable best efforts to
register or qualify or cooperate with the selling Holders and any Special Counsel in connection
with the registration or qualification (or exemption from such registration or qualification) of
such Registrable Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder 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 necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement; provided,
however, that the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would subject it to
general service of process in any such jurisdiction where it is not then so subject or subject the
Company to any material tax in any such jurisdiction where it is not then so subject.

(i) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a Registration Statement,
which certificates shall be free of all restrictive legends (provided that the issuance of such
unlegended certificates is in compliance with applicable securities laws), and to enable such
Registrable Securities to be in such denominations as any Holder may request in writing at least
two (2) Business Days prior to any sale of Registrable Securities.

(j) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as possible,
prepare a supplement or amendment, including a post-effective amendment, to the 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 the Registration Statement nor such Prospectus 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 the light of the circumstances under which they were made, not
misleading.

(k) Use its reasonable best efforts to cause all Registrable Securities relating to the
Registration Statement to be listed on The Nasdaq SmallCap Market or any other securities
exchange, quotation system or market, if any, on which similar securities issued by the Company are
then listed or traded as and when required pursuant to the Purchase Agreement.

(l) Comply in all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company after the effective
date of the Registration Statement, which statement shall conform to the requirements of Rule 158.

(m) The Company may require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as is required by law to
be disclosed in the Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such information within
a reasonable time after receiving such request. The Company may require each Holder, upon three
(3) Business Days notice, to furnish to the Company a certified statement as to, among other
things, the number of shares of Common Stock beneficially owned by such Holder and name of the
natural person(s) that has voting and dispositive control over such shares.

(n) If (i) there is material non-public information regarding the Company which the Company’s
Board of Directors (the “Board”) reasonably determines not to be in the Company’s best
interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is
a significant business opportunity (including, but not limited to, the acquisition or disposition
of assets (other than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which the Board reasonably determines
not to be in the Company’s best interest to disclose, then the Company may (x) postpone or suspend
filing of the Registration Statement for a period not to exceed 30 consecutive days or (y) postpone
or suspend effectiveness of the Registration Statement for a period not to exceed 7 consecutive
Trading Days; provided that the Company may not postpone or suspend effectiveness of the
Registration Statement under this Section 3(n) for more than 20 days in the aggregate during any
360 day period; provided, however, that no such postponement or suspension shall be
permitted for consecutive 7 Trading Day periods arising out of the same set of facts, circumstances
or transactions.

4. Holders’ Rights and Obligations.

(a) If the Registration Statement refers to any Holder by name or otherwise as the holder of
any securities of the Company, then such Holder shall have the right to require (if such reference
to such Holder by name or otherwise is not required by the Securities Act or any similar federal
statute then in force) the deletion of the reference to such Holder in any amendment or supplement
to the Registration Statement filed or prepared subsequent to the time that such reference ceases
to be required.

(b) Each Holder covenants and agrees that (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus as then amended or
supplemented as contemplated in Section 3(g) and notice from the Company that such Registration
Statement and any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to them in connection with
sales of Registrable Securities pursuant to the Registration Statement.

(c) 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)(ii),
3(c)(iii), 3(c)(iv), 3(c)(v) or 3(n), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j),
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.

5. Registration Expenses.

All fees and expenses incident to the performance of or compliance with this Agreement by the
Company, except as and to the extent specified in this Section 5, shall be borne by the Company
whether or not the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement; provided,
however, that except as expressly set forth herein, in no event shall such fees and
expenses borne by the Company include any underwriting fees, discounts, commissions or fees
attributable to the sale of the Registrable Securities. 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 Nasdaq SmallCap Market and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, (B) with respect to filing fees required to be paid
to the National Association of Securities Dealers, Inc. and the NASD Regulation, Inc. and (C) in
compliance with 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 requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders, in the case of the Special Counsel, up to a maximum amount of $7,500, (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, including, without limitation, the Company’s independent public
accountants (including the expenses of any comfort letters or costs associated with the delivery by
independent public accountants of a comfort letter or comfort letters). 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 officers and employees performing legal or accounting duties), the expense of any
annual audit, the fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

6. 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, brokers (including brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of Common Stock), investment
advisors 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, costs of preparation and reasonable attorneys’ fees) and expenses
(collectively, “Losses”)(as determined by a court of competent jurisdiction in a final
judgment not subject to appeal or review), as incurred, arising out of or relating to any untrue or
alleged untrue statement of a material fact contained in the 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 or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the 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 or such
other Indemnified Party furnished in writing to the Company by such Holder expressly for use
therein and (ii) that the foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any untrue statement, allegedly untrue statement, omission or alleged omission
made in any preliminary prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not inure to the
benefit of any Holder, underwriter, broker or other Person acting on behalf of holders of the
Registrable Securities, from whom the Person asserting any loss, claim, damage, liability or
expense purchased the Registrable Securities which are the subject thereof, if a copy of such final
prospectus had been made available to such Person and such Holder, underwriter, broker or other
Person acting on behalf of holders of the Registrable Securities and such final prospectus was not
delivered to such Person with or prior to the written confirmation of the sale of such Registrable
Securities to such Person. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.

(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 and employees of such controlling Persons,
to the fullest extent permitted by applicable law, from and against all Losses (as determined by a
court of competent jurisdiction in a final judgment not subject to appeal or review), as incurred,
arising solely 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 the Registration Statement, any Prospectus, or any form of prospectus, or arising
solely out of or based solely upon any omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were made) not misleading,
to the extent, but only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder or other Indemnifying Party to the Company
specifically for inclusion in the Registration Statement or such Prospectus. Notwithstanding
anything to the contrary contained herein, each Holder shall be liable under this Section 6(b) for
only that amount as does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.

(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 promptly shall 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 proximately and materially adversely prejudiced the
Indemnifying Party.

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; or (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 have been advised by counsel (which shall be reasonably acceptable
to the Indemnifying Party) that a 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 such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of 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.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten
(10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to indemnification hereunder;
provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to
enforce such indemnification in accordance with its terms (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 attributable to the Indemnifying
Party on the one hand and the Indemnified Party on the other 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 or alleged untrue statement of a material fact or omission or alleged 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 6(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. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

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. Notwithstanding
anything to the contrary contained herein, the Holders shall be liable under this Section 6(d) for
only that amount as does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.

7. Rule 144.

As long as any Holder owns any Registrable 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 Section 13(a) or 15(d) of the
Exchange Act and, upon the written request of any Holder, to promptly furnish to such Holder true
and complete copies of all such filings. As long as any Holder owns any Registrable Securities, if
the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act,
it will prepare and furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial statements, together
with a discussion and analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports required by Section
13(a) or 15(d) of the Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as any Holder may reasonably
request in writing, all to the extent required from time to time to enable such Person to sell the
shares of Common Stock issuable upon conversion of the Notes without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions relating to such sale pursuant to Rule 144.

8. 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 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 Inconsistent Agreements. Neither the Company nor any of its subsidiaries has,
as of the date hereof entered into and currently in effect, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed in Schedule 2.1(c) of
the Purchase Agreement, neither the Company nor any of its subsidiaries has previously entered into
any agreement currently in effect granting any registration rights with respect to any of its
securities to any Person. Without limiting the generality of the foregoing, without the written
consent of the Holders of a majority of the then outstanding Registrable Securities, the Company
shall not grant to any Person the right to request the Company to register any securities of the
Company, under the Securities Act unless the rights so granted are subject in all respects to the
prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.

(c) No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto or as disclosed on Schedule
2.1(c) of the Purchase Agreement or Schedule II hereto) may include securities of the
Company in the Registration Statement, and the Company shall not after the date hereof enter into
any agreement providing such right to any of its securityholders, unless the right so granted is
subject in all respects to the prior rights in full of the Holders set forth herein, and is not
otherwise in conflict with the provisions of this Agreement.

(d) Failure to File Registration Statement and Other Events. The Company and the
Purchasers agree that the Holders will suffer damages if the Registration Statement is not filed on
or prior to the Filing Date and not declared effective by the Commission on or prior to the
Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Period
or if certain other events occur. The Company and the Holders further agree that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if (A) the
Registration Statement is not filed on or prior to the Filing Date, or (B) the Registration
Statement is not declared effective by the Commission on or prior to the date that is thirty (30)
days following the Effectiveness Date, or (C) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under the Securities Act within
three (3) Business 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 not subject
to further review, provided that the Company had already filed an amended Form 8-K with the
Commission setting forth the applicable financial statements required to be filed on Form 8-K with
respect to the Company’s acquisition of the stock of Digital Union Limited prior to receiving such
notice, or (D) the Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities at any time prior to the
expiration of the Effectiveness Period, without being succeeded promptly by a subsequent
Registration Statement filed with and declared effective by the Commission, or (E) the Company has
breached Section 3(n), or (F) trading in the Common Stock shall be suspended or if the Common Stock
is delisted from The Nasdaq SmallCap Market for any reason for more than three (3) Business Days in
the aggregate (any such failure or breach being referred to as an “Event,” and for purposes
of clauses (A) and (B) the date on which such Event occurs, or for purposes of clauses (C) and (F)
the date on which such three Business Day period is exceeded, or for purposes of clause (D) after
more than fifteen Business Days, being referred to as “Event Date”), the Company shall pay
in cash an amount, as partial liquidated damages and not as a penalty, to each holder of Notes, as
long as such Notes are outstanding, such holder’s pro rata portion of an amount equal to one and
one-half percent (11/2 %) for the first calendar month and one and one-half percent (11/2 %) per
calendar month thereafter or portion thereof of the initial principal amount of the Notes on the
Closing Date from the Event Date (provided that, with respect to the Event described in clause (B),
the “first calendar month” shall be deemed to commence on the thirtieth (30th) day prior
to the applicable Event Date) until the applicable Event is cured. Notwithstanding anything to the
contrary in this paragraph (d), if (i) any of the Events described in clauses (A), (B) or (C) shall
have occurred, (ii) on or prior to the applicable Event Date the Company shall have exercised its
rights under Section 3(n) hereof and (iii) the postponement or suspension permitted pursuant to
such Section 3(n) shall remain effective as of such applicable Event Date, then the applicable
Event Date shall be deemed instead to occur on the second Business Day following the termination of
such postponement or suspension which is permitted pursuant to Section 3(n).

(e) 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 the Holders of a majority of the Registrable Securities outstanding.

(f) 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 earlier of (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., New York City
time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number specified for notice
later than 5:00 p.m., New York City time, on any date and earlier than 11:59 p.m., New York City
time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service or (iv) actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be with respect to each Holder
at its address set forth under its name on Schedule I attached hereto, or with respect to
the Company, addressed to:

Verticalnet, Inc.

400 Chester Field Parkway

Malvern, PA 19355

Attention: Gene S. Godick

Tel. No.: (610) 240-0600

Fax No.: (610) 240-9470

	 	 	 
	with copies (which copies

shall not constitute notice

to the Company) to:

	 	

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attention: James W. McKenzie, Jr.

Tel. No.: (215) 963-5134

Fax No.: (215) 963-5001

or to such other address or addresses or facsimile number or numbers as any such party may most
recently have designated in writing to the other parties hereto by such notice.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns and shall inure to the benefit of
each Holder and its successors and assigns. The Company may not assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of a majority in interest of
the Holders. Each Purchaser may assign its rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

(h) Assignment of Registration Rights. The rights of each Holder hereunder, including
the right to have the Company register for resale Registrable Securities in accordance with the
terms of this Agreement, shall be assignable by each Holder to any Affiliate of such Holder or any
other Holder or Affiliate of any other Holder of all or a portion of the Registrable Securities if:
(i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within five (5) days after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws, (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of the provisions of
this Agreement, and (v) such transfer shall have been made in accordance with the applicable
requirements of the Purchase Agreement. In addition, each Holder shall have the right to assign
its rights hereunder to any other Person with the prior written consent of the Company, which
consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders
(and to subsequent) successors and assigns.

(i) 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. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to any of the conflicts of
law principles which would result in the application of the substantive law of another
jurisdiction. This Agreement shall not be interpreted or construed with any presumption against
the party causing this Agreement to be drafted. The Company and the Holders agree that venue for
any dispute arising under this Agreement will lie exclusively in the state or federal courts
located in New York County, New York, and the parties irrevocably waive any right to raise forum
non conveniens or any other argument that New York is not the proper venue. The Company and the
Holders irrevocably consent to personal jurisdiction in the state and federal courts of the state
of New York. The Company and the Holders consent to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agree that such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 8(j) shall affect or limit any right to serve
process in any other manner permitted by law. The Company and the Holders hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to this Agreement,
shall be entitled to reimbursement for reasonable legal fees from the non-prevailing party.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

(l) Severability. The provisions of this Agreement are severable and, in the event
that any court of competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Agreement and this Agreement shall be
reformed and construed as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.

(m) Headings. 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.

(n) Shares Held by the Company and its Affiliates. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company or its Affiliates (other than any Holder or transferees or
successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

(o) Independent Nature of Purchasers. The Company acknowledges that the obligations
of each Purchaser under the Transaction Documents 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 the Transaction Documents. The Company acknowledges that
the decision of each Purchaser to purchase securities pursuant to the Purchase Agreement has been
made by such Purchaser independently of any other purchase and independently of any information,
materials, statements or opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or prospects of the Company
or of its Subsidiaries which may have made or given by any other Purchaser or by any agent or
employee of any other Purchaser, and no Purchaser or any of its agents or employees shall have any
liability to any Purchaser (or any other person) relating to or arising from any such information,
materials, statements or opinions. The Company acknowledges that nothing contained herein, or in
any Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto
(including, but not limited to, the (i) inclusion of a Purchaser in the Registration Statement and
(ii) review by, and consent to, such Registration Statement by a Purchaser) 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 Documents.
The Company acknowledges that 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. The Company acknowledges that for reasons
of administrative convenience only, the Transaction Documents have been prepared by Proskauer Rose
LLP for Iroquois Master Fund Ltd. and such counsel does not represent all of the Purchasers but
only such Purchaser and the other Purchasers have retained their own individual counsel with
respect to the transactions contemplated hereby. The Company acknowledges that it 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. The Company
acknowledges that such procedure with respect to the Transaction Documents in no way creates a
presumption that the Purchasers are in any way acting in concert or as a group with respect to the
Transaction Documents or the transactions contemplated hereby or thereby.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

1

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

VERTICALNET, INC.

By: /s/ Gene S. Godick     

Name: Gene S. Godick

Title: Executive Vice President and Chief Financial Officer

2

PURCHASER: Alpha Capital AG     

Please print purchaser name

By: /s/ Konrad Ackerman     

Name: Konrad Ackermann

Title: Director

PURCHASER: JGB Capital LP     

Please print purchaser name

By:     /s/ Brett Cohen      Name: Brett Cohen

Title: President, JGB Management Inc., as General Partner

3

PURCHASER: Harborview Master Fund LP     

Please print purchaser name

By:     /s/ Jonno Elliott      Name: Navigator Management Ltd.

Title: Authorized Signatory

4

PURCHASER: Portside Growth and Opportunity Fund_

Please print purchaser name

By:     /s/ Jeffrey Smith      Name: Jeffrey Smith

Title: Authorized Signatory

5

PURCHASER: Iroquois Master Fund, Ltd._

Please print purchaser name

By:     /s/ Richard Abbe      Name: Richard Abbe

Title: Authorized Signatory

6

PURCHASER: Smithfield Fiduciary LLC_

Please print purchaser name

By:     /s/ Adam J. Chill       Name: Adam J. Chill

Title: Authorized Signatory

7

PURCHASER: Bristol Investment Fund, Ltd.

Please print purchaser name

By:     /s/ Paul Kessler       Name: Paul Kessler

Title: Director

8

PURCHASER: Nite Capital LP_

Please print purchaser name

By:     /s/ Keith A. Goodman      Name: Keith A. Goodman

Title: Manager of the General Partner

9

PURCHASER: Castle Creek Technology Partners LLC_

Please print purchaser name

By:     /s/ Stephen D. Friend      Name: Stephen D. Friend

Title: Managing Director of the Investment Manager

10

PURCHASER:DKR Soundshore Oasis Holding Fund Ltd. Please print purchaser name

By:     /s/ Brad Caswell      Name: Brad Caswell

Title: Director

11

PURCHASER: CAMOFI Master LDC      Please print purchaser name

By:     /s/ Richard Smithline      Name: Richard Smithline

Title: Director

12

PURCHASER: Whalehaven Capital Fund Limited      Please print purchaser name

By:     /s/ Evan Schemenauer      Name: Evan Schemenauer

Title: Director

13

PURCHASER: Platinum Long term Growth I, LLC      Please print purchaser name

By:     /s/ Mark Nordlicht     Name: Mark Nordlicht

Title: Managing Member

14

Schedule I

List of Purchasers 

 

15

Annex A

Plan of Distribution

16EX-10.3

Exhibit 10.3

EXECUTION VERSION

SECURITY AGREEMENT

SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time
in accordance herewith and including all attachments, exhibits and schedules hereto, the
“Agreement”), dated as of August 16, 2005, made by VERTICALNET, INC., a Pennsylvania corporation
(the “Grantor”), in favor of the secured parties listed on Exhibit A to this Agreement
(collectively, the “Secured Parties”).

WHEREAS, the Grantor has issued or will issue separate promissory notes to the Secured Parties
(the “Notes”) pursuant to a Note and Warrant Purchase Agreement, dated as of August 16, 2005 (the
“Purchase Agreement”), by and among the Grantor and the Secured Parties; and

WHEREAS, the Secured Parties and the Grantor agree that the Grantor execute and deliver to the
Secured Parties a security agreement providing for the grant to the Secured Parties of a continuing
security interest in all personal property and assets of the Grantor, all in substantially the form
hereof to secure all Obligations (hereinafter defined).

	 	 	 
	NOW, THEREFORE, the parties agree as follows:

	 
	 	 
	ARTICLE I.

	 	Definitions

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

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

"Collateral” means all accounts receivable of the Grantor and all personal and fixture
property of every kind and nature, including, without limitation, all furniture, fixtures,
equipment, raw materials, inventory, or other goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance claims and proceeds, tort claims,
chattel paper, documents, instruments, securities and other investment property, deposit accounts,
rights to proceeds of letters of credit and all general intangibles including, without limitation,
all tax refund claims, license fees, patents, patent licenses, patent applications, trademarks,
trademark licenses, trademark applications, trade names, copyrights, copyright licenses, copyright
applications, rights to sue and recover for past infringement of patents, trademarks and
copyrights, computer programs, computer software, engineering drawings, service marks, customer
lists, goodwill, and all licenses, permits, agreements of any kind or nature pursuant to which the
Grantor possesses, uses or has authority to possess or use property (whether tangible or
intangible) of others or others possess, use or have authority to possess or use property (whether
tangible or intangible) of the Grantor, and all recorded data of any kind or nature, regardless of
the medium of recording including, without limitation, all books and records, software, writings,
plans, specifications and schematics; and all proceeds and products of each of the foregoing.

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

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

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

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

"Notes” has the meaning assigned to such term in the first recital of this Agreement.

"Obligations” means all indebtedness, liabilities, obligations, covenants and duties
of the Grantor to the Secured Parties of every kind, nature and description, direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, now existing or hereafter arising under or in connection
with the Notes, this Agreement or the other Transaction Documents.

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

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

“Uniform Commercial Code” means the Uniform Commercial Code from time to time in
effect in the State of New York.

ARTICLE II. Security Interest

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

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

ARTICLE III. Representations and Warranties

The Grantor represents and warrants to the Secured Parties that:

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

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

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

Section 3.4. Absence of Other Liens. The Grantor’s Collateral is owned by the Grantor
free and clear of any Lien other than Existing Liens. Without limiting the foregoing and except as
set forth on Schedule 3.4 to this Agreement, the Grantor has not filed or consented to any
filing described in Schedule A in favor of any Person other than the Secured Parties, nor
permitted the granting or assignment of a security interest or permitted perfection of any security
interest in the Collateral in favor of any Person other than the Secured Parties. The Grantor’s
having possession of all instruments and cash constituting Collateral from time to time and the
filing of financing statements in the offices referred to in Schedule A hereto results in
the perfection of such security interest. Such security interest is, or in the case of Collateral
in which the Grantor obtain rights after the date hereof, will be, a perfected, first priority
security interest. Such notices, filings and all other action necessary or desirable to perfect
and protect such security interest have been duly taken.

Section 3.5. Valid and Binding Obligation. This Agreement constitutes the legal,
valid and binding obligation of the Grantor, enforceable against the Grantor in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies, and (iii) to the extent the indemnification provisions contained in this
Agreement may be limited by applicable federal or state securities laws.

ARTICLE IV. Covenants

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

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

(b) Without limiting Section 4.1(a), without the prior written consent of the Secured
Parties in each instance, the Grantor shall not change its (i) principal residence, if it is
an individual, (ii) place of business, if it has only one place of business and is not a
Registered Organization, (iii) principal place of business, if it has more than one place of
business and is not a Registered Organization, or (iv) state of incorporation, formation or
organization, if it is a Registered Organization.

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

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

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

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

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

Section 4.7. Use and Disposition of Collateral. The Grantor shall not make or permit
to be made an assignment, pledge or hypothecation of any Collateral or shall grant any other Lien
in respect of the Collateral without the prior written consent of the Secured Parties. The Grantor
shall not make or permit to be made any transfer of any Collateral, other than the sale of
inventory in the ordinary course of business and the sale of obsolete or unnecessary equipment,
and the Grantor shall remain at all times in possession of the Collateral owned by it, other than
with respect to Existing Liens and other liens approved by the Secured Parties.

Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time following
the date of this Agreement, Grantor, at its own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Collateral. In extension of the foregoing and
without limitation, such insurance shall, if requested by the Secured Parties, be payable to the
Secured Parties as loss payee under a “standard” loss payee clause, and the Secured Parties shall
be listed as an “additional insured” on Grantor’s general liability insurance. Such insurance
shall not be terminated, cancelled or not renewed for any reason, including non-payment of
insurance premiums, unless the insurer shall have provided the Secured Parties at least 30 days
prior written notice. Grantor irrevocably makes, constitutes and appoints the Secured Parties (and
all officers, employees or agents designated by the Secured Parties) as its true and lawful agent
and attorney-in-fact for the purpose, at any time following the Secured Parties’ demand for payment
of the Notes, of making, settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations and decisions with
respect thereto. In the event that Grantor at any time or times shall fail to obtain or maintain
any of the policies of insurance required hereby or to pay any premium in whole or part relating
thereto, the Secured Parties may, without waiving or releasing any obligation or liability of
Grantor hereunder, in their sole discretion, obtain and maintain such policies of insurance and pay
such premium and take any other actions with respect thereto as the Secured Parties deem advisable.
All sums disbursed by the Secured Parties in connection and in accordance with this Section,
including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto,
shall be payable upon demand, by Grantor to the Secured Parties and shall be additional Obligations
secured hereby. Grantor shall promptly notify the Secured Parties if any material portion of the
Collateral owned or held by Grantor is damaged or destroyed. The proceeds of any casualty
insurance in respect of any casualty loss of any of the Collateral shall (i) so long as the Secured
Parties have not demanded payment of the Notes, be disbursed to Grantor for direct application by
Grantor solely to the repair or replacement of Grantor’s property so damaged or destroyed, and (ii)
in all other circumstances, be held by the Secured Parties as cash collateral for the Obligations.
The Secured Parties may, at their sole option, disburse from time to time all or any part of such
proceeds so held as cash collateral, upon such terms and conditions as the Secured Parties may
reasonably prescribe, for direct application by the Secured Parties solely to the repair or
replacement of Grantor’s property so damaged or destroyed, or Grantor may apply all or any part of
such proceeds to the Obligations.

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

ARTICLE V. Further Assurances; Power of Attorney

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

Section 5.2. Power of Attorney. 

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

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

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

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

	 	 	 
	ARTICLE VI.

Section 6.1.

	 	Remedies

Remedies upon Default.
	
 
	 	 

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

(b) The Secured Parties shall give Grantor ten (10) days’ written notice (which Grantor
agrees is reasonable notice within the meaning of Section 9-504(3) of the Uniform Commercial
Code) of the Secured Parties’ intention to make any sale of Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the case of a
sale at a broker’s board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Collateral, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale shall be held at
such time or times within ordinary business hours and at such place or places as the Secured
Parties may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Secured Parties may (in their sole and absolute discretion)
determine. The Secured Parties shall not be obligated to make any sale of any Collateral if
it shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Secured Parties may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so adjourned. In case any sale
of all or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Secured Parties until the sale price is paid by
the purchaser or purchasers thereof, but the Secured Parties shall not incur any liability
in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon like notice.
At any public (or, to the extent permitted by law, private) sale made pursuant to this
Section, the Secured Parties may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said
rights being also hereby waived and released to the extent permitted by law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to the Secured Parties from Grantor as a credit against the
purchase price, and the Secured Parties may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall
be treated as a sale thereof; the Secured Parties shall be free to carry out such sale
pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the Secured
Parties shall have entered into such an agreement all Obligations have been paid in full.
As an alternative to exercising the power of sale herein conferred upon it, the Secured
Parties may proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.

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

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

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

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

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

Section 6.3. Grant of License to Use Intellectual Property. For the purpose of
enabling the Secured Parties to exercise rights and remedies under this Article at such time as the
Secured Parties shall be lawfully entitled to exercise such rights and remedies, Grantor hereby
grants to the Secured Parties an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to Grantor) to use, license or sub-license any of the Collateral
consisting of intellectual property now owned or hereafter acquired by Grantor, and wherever the
same may be located, and including in such license reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Secured Parties may be exercised,
at the option of the Secured Parties, only following the Secured Parties’ demand for payment of the
Notes.

ARTICLE VII. Miscellaneous

Section 7.1. Notices. All communications and notices hereunder to the Grantor and to
the Secured Parties shall (except as otherwise expressly permitted herein) be in writing and
delivered to the Grantor or the Secured Parties, as the case may be, as provided in the Purchase
Agreement.

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

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

Section 7.4. Binding Effect; Several Agreement; Successors and Assigns. This
Agreement shall become effective as to Grantor when a counterpart hereof executed on behalf of
Grantor shall have been delivered to the Secured Parties and a counterpart hereof shall have been
executed on behalf of the Secured Parties, and thereafter shall be binding upon Grantor and the
Secured Parties and their respective successors and assigns, and shall inure to the benefit of
Grantor, the Secured Parties and their respective successors and assigns, except that Grantor shall
not have the right to assign or transfer its rights or obligations hereunder or any interest herein
or in the Collateral (and any such assignment or transfer shall be void) except as expressly
contemplated by this Agreement, the Purchase Agreement, the Notes or the other Transaction
Documents.

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

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

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

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

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

Section 7.7. Waivers; Amendment. 

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

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

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

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

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

Section 7.11. Jurisdiction; Consent to Service of Process. 

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

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

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

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

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

1

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

VERTICALNET, INC.

By: /s/ Gene S. Godick     

Name: Gene S. Godick

Title: Executive Vice President and Chief Financial Officer

2

Secured Party: Alpha Capital AG     

Please print Secured Party name

By: /s/ Konrad Ackerman     

Name: Konrad Ackermann

Title: Director

Secured Party: JGB Capital L.P.      Please print Secured Party name

By:     /s/ Brett Cohen      Name: Brett Cohen

Title: President, JGB Management Inc., as General Partner

3

Secured Party: Harborview Master Fund LP     

Please print Secured Party name

By:     /s/ Jonno Elliott      Name: Navigator Management Ltd.

Title: Authorized Signatory

4

Secured Party: Portside Growth and Opportunity Fund_

Please print Secured Party name

By:     /s/ Jeffrey Smith      Name: Jeffrey Smith

Title: Authorized Signatory

5

	 
	 

	Secured Party:Iroquois Master Fund, Ltd._

	 

	Please print Secured Party name

By:     /s/ Richard Abbe      Name: Richard Abbe

Title: Authorized Signatory

6

Secured Party: Smithfield Fiduciary LLC_

Please print Secured Party name

By:     /s/ Adam J. Chill       Name: Adam J. Chill

Title: Authorized Signatory

7

Secured Party: Bristol Investment Fund, Ltd.

Please print Secured Party name

By:     /s/ Paul Kessler       Name: Paul Kessler

Title: Director

8

Secured Party: Nite Capital LP_

Please print Secured Party name

By:     /s/ Keith A. Goodman      Name: Keith A. Goodman

Title: Manager of the General Partner

9

Secured Party: Castle Creek Technology Partners LLC_

Please print Secured Party name

By:     /s/ Stephen D. Friend      Name: Stephen D. Friend

Title: Managing Director of the Investment Manager

10

Secured Party: DKR Soundshore Oasis Holding Fund Ltd. Please print Secured Party name

By:     /s/ Brad Caswell      Name: Brad Caswell

Title: Director

11

Secured Party: CAMOFI Master LDC      Please print Secured Party name

By:     /s/ Richard Smithline      Name: Richard Smithline

Title: Director

12

Secured Party: Whalehaven Capital Fund Limited      Please print Secured Party name

By:     /s/ Evan Schemenauer      Name: Evan Schemenauer

Title: Director

13

Secured Party: Platinum Long term Growth I, LLC      Please print Secured Party name

By:     /s/ Mark Nordlicht     Name: Mark Nordlicht

Title: Managing Member

14

EXHIBIT A

Secured Parties

15

SCHEDULE A

Places of Business; Chief Executive Office; Filing Locations

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]