Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into effective the 15th day of
May, 2006 (the “Effective Date”), by and between NORTHRIM BANCORP, INC. and its wholly owned
subsidiary, NORTHRIM BANK, a state-chartered commercial bank, with its principal office in
Anchorage, Alaska (collectively, the “Employer”), and JOSEPH M. BEEDLE (the “Executive”).

In consideration of the mutual promises made in this Agreement, the parties agree as follows:

1. Employment.

Employer employs Executive and Executive accepts employment with Employer as its Executive
Vice President and Chief Lending Officer.

2. Term.

The term of this Agreement (the “Term”) shall commence on the Effective Date and shall
continue through December 31, 2006; provided, however, that (i) on January 1, 2007 and each
succeeding January 1, the Term shall automatically be extended for one additional year unless, not
later than ninety (90) days prior to any such January 1, either party shall have given written
notice to the other that it does not wish to extend the Term and (ii) such one year extensions of
the Term shall not occur on and after the January 1 of the year in which the Executive will attain
age sixty-five (65) but instead the Term shall be extended only until the date of the Executive’s
sixty-fifth (65th) birthday. In the event the Term is not extended, Executive shall have no rights
to any of the severance payments or benefits continuation described in Paragraph 5.

3. Duties.

The Executive will serve as Executive Vice President and Chief Lending Officer of the
Employer. Executive shall render such executive, management and administrative services and
perform such tasks in connection with the affairs and overall operation of the Employer as is
customary for his position, subject to the direction of Employer’s Chairman, President and Board of
Directors. Executive shall devote necessary time, attention and effort to Employer’s business in
order to properly discharge his responsibilities under this Agreement.

4. Compensation, Benefits, Reimbursement and Bonus.

a. In consideration for all services rendered by Executive during the term of this Agreement,
Employer shall pay Executive an annual base salary (before all customary and proper payroll
deductions) of $195,000 , as adjusted from time to time (“Base Salary”). The Board of Directors of
the Employer shall review Executive’s salary at the end of each year, in a manner consistent with
that used for all management employees of the Employer, and in its sole discretion may adjust such
salary commensurate with the Executive’s performance under this Agreement.

b. Under the Employer’s Incentive Compensation Plan, Executive shall be eligible to receive an
annual bonus based on performance as defined by the Board of Directors. Executive’s annual target
bonus will equal 30% of Base Salary (“Target Bonus”). This is the amount payable for ambitious,
but expected, results as determined by the Board of Directors. Executive’s bonus may be more or
less than this amount at the Board of Directors discretion but may not exceed 150% of Base Salary.
Provided, however, Executive’s participation in Employer’s Incentive Compensation Plan in 2006 will
be prorated and equal 63% of what a normal full year of service would have earned in that year.

c. Executive shall be eligible for stock option grants under the Employer’s Stock Incentive
Plan. The timing and size of awards will be at the discretion of the Board of Directors.

d. At commencement of employment with Employer, Employer shall grant Executive 1,500
restricted units under Employer’s Stock Incentive Plan at the then fair market value at the close
of business on Executive’s formal date of hire.

e. Executive shall also be entitled to receive an annual contribution equal to 10% of annual
Base Salary, prorated for 2006, in accordance with the Employer’s Supplemental Executive Retirement
Plan and the Executive will also participate in the Employer’s Deferred Compensation Plan, with
$2.0 million of key man life insurance on Executive to be purchased by Employer.

f. Throughout the term of this Agreement, Employer shall provide Executive with reasonable
health insurance, disability and other employee benefits. Executive shall participate in all
employee benefit plans and programs of Employer on a basis at least as favorable as that accorded
to any other officer of Employer. Employer shall reimburse Executive for his reasonable expenses
(including, without limitation, travel, entertainment, and similar expenses) incurred in performing
and promoting the business of Employer. Executive shall present from time to time itemized
accounts of any such expenses, subject to any limits of company policy and the rules and
regulations of the Internal Revenue Service.

g. Employer will pay for Executive’s COBRA health insurance premium payments until such time
as Executive qualifies for Employer’s health insurance plan.

h. Employer will pay for Executive’s relocation costs.

i. Employer shall provide Executive with a car allowance of $700 per month.

5. Termination of Agreement.

a. Termination Due to a Change in Control. If Employer (either Northrim BanCorp, Inc.
or Northrim Bank) is subjected to a Change of Control (as defined in Section 5(f)(i)), and either
Employer or its assigns terminates Executive’s employment without Cause or Executive terminates his
employment for Good Reason within 730 days of such Change of Control, then Employer shall pay
Executive upon the effective date of such termination all Base Salary earned and all reimbursable
expenses incurred under this Agreement through such termination date, plus a pro rata portion of
any annual Target Bonus for the year of termination. In addition, Employer shall pay Executive an
amount equal to two (2) times Executive’s highest Base Salary over the prior three (3) years, plus
an amount equal to two (2) times the Target Bonus or two (2) times the average bonus paid over the
prior three (3) years, whichever is greater. In addition, Employer shall provide the benefits
described in Sections 5(b)(i) and (ii) below. Provided, also, that the payment and benefits
described in this Section 5(a) will only be paid conditioned upon Executive signing an agreement,
in a form acceptable to Employer, that releases and holds Employer harmless from all known and
unknown claims and liabilities arising out of Executive’s employment with Employer or the
performance of this Agreement (“Release Agreement”).

b. Termination by Employer Without Cause or by Executive for Good Reason. If Employer
terminates Executive’s employment without Cause, or if Executive terminates his employment for Good
Reason, Employer shall pay Executive upon the effective date of such termination all Base Salary
earned and all reimbursable expenses incurred under this Agreement through such termination date,
plus a pro rata portion of any annual Target Bonus for the year of termination. In addition,
Employer shall pay Executive an amount equal to two (2) times Executive’s highest Base Salary over
the prior three (3) years, plus an amount equal to two (2) times the Target Bonus or two (2) times
the average bonus paid over the prior three (3) years, whichever is greater. Provided, however,
that the payment and benefits described in this Section 5(b) will only be made conditioned upon
Executive signing a Release Agreement.

(i) Benefits Continuation. In addition, Executive shall be entitled to health and dental
insurance benefits for a period of eighteen (18) months following the termination of this
Agreement. These benefits will be provided at Employer’s expense, but such period shall count
towards the Employer’s continuation of coverage obligation under Section 4980B of the Internal
Revenue Code (“COBRA”).

(ii) Age and Service Credit. Executive shall also be entitled to receive age credit and
credit for period of service towards all pension/SERP plans for the remaining period of time
covered by this Agreement. If Executive is hired by Employer, its assigns, any company in control
of Employer, or any company controlled by Employer during the period covered by this Agreement,
then Executive will be entitled to be treated for all purposes relating to future compensation,
benefits, and retirement, as if this Agreement had never been terminated and as if Executive had
performed his responsibilities as an Executive throughout the period originally covered by this
Agreement.

c. Termination by Employer for Cause or by Executive Without Good Reason. If Employer
terminates Executive’s employment for Cause or if Executive terminates his employment without Good
Reason, Employer shall pay Executive upon the effective date of such termination only such Base
Salary earned and expenses reimbursable under this Agreement incurred through such termination
date. In such case, Executive shall have no right to receive compensation or other benefits for
any period after termination under this Agreement.

d. Termination Due to Disability. If Employer terminates Executive’s employment on
account of any mental or physical Disability that prevents Executive from discharging his duties
under this Agreement, Executive shall be entitled to: (A) all Base Salary earned and reimbursement
for expenses incurred under this Agreement through the termination date, plus a pro rata portion of
any annual Target Bonus for the year of termination. In addition, Employer shall pay Executive
full Base Salary for the year following the termination date (less the amount of any payments
received by Executive during such one (1) year period under any Employer-sponsored disability
plan), and (B) health and dental insurance benefits for a period of one (1) year following the
termination date, which benefits will be provided at Employer’s expense, but such period shall
count towards the Employer’s continuation of coverage obligation under Section 4980B of Code
(commonly referred to as “COBRA”). Provided, however, that the payment and benefits described in
this Section 5(d) will only be made conditioned upon Executive signing a Release Agreement.

e. Termination Upon Death of Executive. Executive’s employment under this Agreement
shall be terminated upon the death of Executive. In such case, the Employer shall be obligated to
pay to the surviving spouse of Executive, or if there is none, to the Executive’s estate: (A) that
portion of Executive’s Base Salary that would otherwise have been paid to him for the month in
which his death occurred, and (B) any amounts due him pursuant to the Employer’s pension plan, any
supplemental deferred compensation plan, and any other death, insurance, employee benefit plan or
stock benefit plan provided to Executive by the Employer.

f. Termination Definitions.

(i) “Change of Control.” For purposes of this Agreement, the term “Change of Control” shall
mean the occurrence of one or more of the following events: (A) One person or entity acquiring or
otherwise becoming the owner of twenty-five percent or more of Employer’s outstanding common stock;
(B) Replacement of a majority of the incumbent directors of Northrim BanCorp, Inc. or Northrim Bank
by directors whose elections have not been supported by a majority of the Board of either company,
as appropriate; (C) Dissolution or sale of fifty percent or more in value of the assets, of either
Northrim BanCorp, Inc. or Northrim Bank; or (D) A change “in the ownership or effective control” or
“in the ownership of a substantial portion of the assets” of Employer, within the meaning of
Section 280G of the Internal Revenue Code.

(ii) “Cause.” For purposes of this Agreement, termination for “Cause” shall include
termination because Executive (A) continually fails to substantially perform his duties with the
Employer, (B) is adjudged guilty of any crime involving a breach of his fiduciary duties to the
Employer, (C) is willfully and continually failing to comply with any law, rule, or regulation
(other than traffic violations or similar offenses) or final cease and desist order of a regulatory
agency having jurisdiction over Employer, or (D) is unable to substantially perform his duties with
the Employer due to drug addiction or chronic alcoholism. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Employer’s Board of Directors at a meeting of
the Board called for such purpose (after reasonable notice to Executive and an opportunity for him,
together with his counsel, to be heard before the Board), finding that in the good faith opinion of
the Board, he was guilty of conduct that constitutes Cause (as defined above) and specifying the
conduct in detail.

(iii) “Disability.” For purposes of this Agreement, “Disability” shall mean a medically
diagnosed physical or mental impairment that may be expected to result in death, or to be of long,
continued duration, and that renders Executive incapable of performing the duties required under
this Agreement. Employer’s Board of Directors, acting in good faith, shall make the final
determination of whether Executive is suffering under any Disability (as herein defined) and, for
purposes of making such determination, may require Executive to submit himself to a physical
examination by a physician mutually agreed upon by the Executive and Employer’s Board of Directors
at Employer’s expense.

(iv) “Good Reason.” For purposes of this Agreement, termination for “Good Reason” shall mean
termination by Executive as a result of any material breach of this Agreement by Employer. Good
Reason shall include, but not be limited to: (A) a material reduction in Executive’s compensation
defined as a reduction equal to or greater than five percent (5%) of Executive’s then annual base
salary, (B) a material reduction in Executive’s duties and responsibilities, but not merely a
change in title, or (C) relocation of Executives primary workplace by more than fifty (50) miles.

6. Excise Tax Gross-Up.

a. In the event that Executive becomes entitled to payments and benefits described in
Section 5 (“Payments and Benefits”) and those Payments and Benefits thereby trigger a “parachute
payment” as defined by Section 280G of the Internal Revenue Code and are subject to any excise tax
imposed under Section 4999 of the Internal Revenue Code of 1986 (“Excise Tax”), then Employer shall
pay to or for the benefit of Executive, an additional amount (“Gross-Up Payment”) such that the net
amount retained by Executive after deduction of any Excise Tax on the Payments and Benefits and any
federal, state and local income tax and Excise Tax upon the payments provided for under
Section 5(a), shall be equal to the amount of the Payments and Benefits.

b. For purposes of determining whether any of the Payments and Benefits is subject to the
Excise Tax and the amount of such Excise Tax, the definitions of the Code apply.

c. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed
to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of Executive’s residence on the termination
date of employment, net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes based on the marginal rate referenced above. In the
event that the Excise Tax is subsequently determined to be less than the amount taken into account
hereunder at the termination date, Executive shall repay to Employer, at the time that the amount
of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to such reduction plus interest on the amount of such repayment at the rate provided
in Section 1274(b)(2)(B) of the Code.

d. In the event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of Executive’s employment (including by reason of any
payment, the existence or amount of which cannot be determined at the time of the Gross-Up
Payment), Employer shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by Executive with respect to such excess, but only to the
extent that such interest, penalties or additions would not have been reduced by prompt payment by
the Executive to the appropriate tax authority of the Gross-Up Payments previously received) at the
time that the amount of such excess is finally determined.

e. Executive and Employer agree to reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Payments and Benefits.

7. Covenant Not To Compete.

a. Executive agrees that for the term of this Agreement and for a period of two (2) years
after this Agreement is terminated pursuant to Section 5(a) or (b) (with the understanding that the
two (2) year period will be shortened to one (1) year upon the completion of a transaction
constituting a Change of Control, as defined in Section 5(f)(i)), Executive will not directly or
indirectly be employed by, own, manage, operate, join, or benefit in any way from any business
activity that is competitive with Employer’s business or reasonably anticipated business of which
Executive has knowledge. For purposes of the foregoing, Executive will be deemed to be connected
with such business if the business is carried on by: (a) a partnership in which Executive is a
general or limited partner; or (b) a corporation of which Executive is a shareholder (other than a
shareholder owning less than 5% of the total outstanding shares of the corporation), officer,
director, employee or consultant.

b. The parties agree that if a trial judge with jurisdiction over a dispute related to this
Agreement should determine that the restrictive covenant set forth above is unreasonably broad, the
parties authorize such trial judge to narrow the covenant so as to make it reasonable, given all
relevant circumstances, and to enforce such covenant. The provisions of this paragraph shall
survive termination of this Agreement.

8. Nondisclosure of Confidential Information.

a. During the term of Executive’s employment and thereafter, Executive agrees to hold
Employer’s Confidential Information in strict confidence, and not disclose or use it at any time
except as authorized by Employer and for Employer’s benefit. If anyone tries to compel Executive
to disclose any Confidential Information, by subpoena or otherwise, Executive agrees immediately to
notify Employer so that Employer may take any actions it deems necessary to protect its interests.
Executive’s agreement to protect Employer’s Confidential Information applies both during the term
of this Agreement and after employment ends, regardless of the reason it ends.

b. “Confidential Information” includes, without limitation, any information in whatever form
that Employer considers to be confidential, proprietary, information and that is not publicly or
generally available relating to Employer’s: trade secrets (as defined by the Uniform Trade Secrets
Act); know-how; concepts; methods; research and development; product, content and technology
development plans; marketing plans; databases; inventions; research data and mechanisms; software
(including functional specifications, source code and object code); procedures; engineering;
purchasing; accounting; marketing; sales; customers; advertisers; joint venture partners;
suppliers; financial status; contracts or employees. Confidential Information includes information
developed by Executive, alone or with others, or entrusted to Employer by its customers or others.

9. Nonsolicitation.

During the course of Executive’s employment and for a period of one (1) year from the date of
termination of employment for any reason, Executive shall not directly or indirectly solicit or
entice any of the following to cease, terminate or reduce any relationship with Employer or to
divert any business from Employer: (a) any person who was an employee of Employer during the one-
(1) year period immediately preceding the termination of Executive’s employment; (b) any customer
or client of Employer; or (c) any prospective customer or client of Employer from whom Executive
actively solicited business within the last six (6) months of Executive’s employment.

10. Non-Disparagement.

Executive will not, during the Term or after the termination or expiration of this Agreement
or Executive’s employment, make disparaging statements, in any form, about Employer’s officers,
directors, agents, employees, products or services which Executive knows, or has reason to believe,
are false or misleading.

11. Mutual Agreement to Arbitrate.

a. In the event of a dispute or claim between Executive and Employer related to Employee’s
employment or termination of employment, all such disputes or claims will be resolved exclusively
by confidential arbitration in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (“AAA”). This means that the parties agree to
waive their rights to have such disputes or claims decided in court by a jury. Instead, such
disputes or claims will be resolved by an impartial AAA arbitrator whose decision will be final.

b. The only disputes or claims that are not subject to arbitration are any claims by Executive
for workers’ compensation or unemployment benefits, and any claim by Executive for benefits under
an employee benefit plan that provides its own arbitration procedure. Also, Executive and Employer
may seek injunctive relief in court in appropriate circumstances.

c. The arbitration procedure will afford Executive and Employer the full range of statutory
remedies. Employer will pay all costs that are unique to arbitration, except that the party who
initiates arbitration will pay the filing fee charged by AAA. Executive and Employer shall be
entitled to discovery sufficient to adequately arbitrate their claims, including access to
essential documents and witnesses, as determined by the arbitrator and subject to limited judicial
review. In order for any judicial review of the arbitrator’s decision to be successfully
accomplished, the arbitrator will issue a written decision that will decide all issues submitted
and will reveal the essential findings and conclusions on which the award is based.

12. Miscellaneous.

a. This Agreement contains the entire agreement between the parties with respect to
Executive’s employment with Employer, and is subject to modification or amendment only upon
agreement in writing signed by both parties.

b. This Agreement shall bind and inure to the benefit of the heirs, legal representatives,
successors and assigns of the parties, except that Employer’s rights and obligations may not be
assigned.

c. If any provision of this Agreement is invalid or otherwise unenforceable, all other
provisions shall remain unaffected and shall be enforceable to the fullest extent permitted by law.

d. In the event of any claim or dispute arising out of this Agreement, the party that
substantially prevails shall be entitled to reimbursement of all expenses incurred in connection
with such claim or dispute, including, without limitation, attorneys’ fees and other professional
fees. This paragraph shall apply to expenses incurred with or without suit, and in any judicial,
arbitration or administrative proceedings, including all appeals therefrom.

e. Any notice required to be given under this Agreement to either party shall be given by
personal service or by depositing a copy of such notice in the United States registered or
certified mail, postage prepaid, addressed to the following address, or such other address as
addressee shall designate in writing:

	 	 	 	 	 
	Employer:
	 	3111 “C” Street
	   Anchorage, AK  99503

	Executive:
	 	1985 Brandilyn Street
	   Anchorage, AK  99516

f. This Agreement shall be governed by and construed in accordance with the laws of the State
of Alaska.

	 	 	 
	EMPLOYER:

	 	NORTHRIM BANCORP, INC.
	 
	 	 
	
 
	 	By: /s/Ronald A. Davis
	
 
	 	 
	
 
	 	Ronald A. Davis

Its: Chairman of the Compensation Committee of

 The Board of Directors

NORTHRIM BANK

By: /s/Ronald A. Davis

Ronald A. Davis

Its: Chairman of the Compensation Committee of

 The Board of Directors

	 	 	 
	EXECUTIVE:

	 	/s/Joseph M. Beedle
	
 
	 	 
	
 
	 	Joseph M. BeedleEX-4.1

Exhibit 4.1

NEITHER THE ISSUANCE NOR THE SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION IN A GENERALLY ACCEPTABLE FORM OF COUNSEL, WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER AND BE REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF
THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE.

FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE COMPANY AT
VERTICALNET, INC., 400 CHESTER FIELD PARKWAY, MALVERN, PA 19355, ATTENTION: CHIEF FINANCIAL
OFFICER, AND THE ISSUER WILL PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE.

VERTICALNET, INC.

Senior Subordinated Discount Note

	 	 	 
	Issuance Date: May 18, 2006

	 	Principal: U.S. $5,300,000.00

FOR VALUE RECEIVED, Verticalnet, Inc., a Pennsylvania corporation (the “Company”), hereby
promises to pay to Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover
Segregated Portfolio or registered assigns (“Holder”) the amount set out above as the Principal
(the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest
(“Interest”) on any outstanding Principal at the rate of 6.00% per annum (the “Interest Rate”),
from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due
and payable, whether upon an Interest Date (as defined below), the Maturity Date, acceleration,
redemption or otherwise (in each case, in accordance with the terms hereof). Certain capitalized
terms used herein are defined in Section 28. Capitalized terms not otherwise defined herein have
the meanings set forth in the Note Purchase Agreement.

(1) MATURITY. On the Maturity Date, the Holder shall surrender the Note to the
Company and the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges, if any. The “Maturity
Date” shall be the earlier of (i) November 18, 2007, (ii) the date on which any Fundamental
Transaction is consummated or (iii) such earlier time as provided herein.

(2) INTEREST; INTEREST RATE.

(a) Interest on this Note shall commence accruing on the Issuance Date and shall be computed
on the basis of a 360-day year comprised of twelve 30-day months and shall be payable in arrears on
the first day of each January, April, July and October during the period beginning on the Issuance
Date and ending on, and including, the Maturity Date (each, an “Interest Date”) with the first
Interest Date being July 1, 2006. Interest shall be payable on each Interest Date in cash.
Interest on this Note shall accrue at the Interest Rate. From and after the occurrence of an Event
of Default, the Interest Rate shall be increased to 14.0% (the “Default Rate”). In the event that
such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence
shall cease to be effective as of the date of such cure; provided that the Interest as calculated
at such increased rate during the continuance of such Event of Default shall continue to apply to
the extent relating to the days after the occurrence of such Event of Default through and including
the date of cure of such Event of Default.

(b) In the event that any interest rate(s) provided for in this Section 2 shall be determined
to be unlawful, such interest rate(s) shall be computed at the highest rate permitted by applicable
law. Any payment by the Company of any interest amount in excess of that permitted by law shall be
considered a mistake, with the excess being applied to the principal amount of this Note without
prepayment premium or penalty; if no such principal amount is outstanding, such excess shall be
returned to the Company.

(3) [Reserved.]

(4) EVENTS OF DEFAULT; RIGHTS UPON EVENTS OF DEFAULT.

(a) Events of Default. Each of the following events shall constitute an “Event of
Default”:

(i) the Company’s failure to pay to the Holder any amount of Principal, Interest, Late
Charges or other amounts when and as due under this Note or any other Transaction Document
(as defined in the Note Purchase Agreement);

(ii) either the Company or any Subsidiary thereof shall (i) fail to pay, when due, or
within any applicable grace period, any payment with respect to any Indebtedness in excess
of $100,000 due to any third party, or otherwise be in breach or violation of any agreement
for monies owed or owing in an amount in excess of $100,000, which breach or violation
permits the other party thereto to declare a default or otherwise accelerate amounts due
thereunder, or (ii) suffer to exist any other circumstance or event that would, with or
without the passage of time or the giving of notice, result in a default or event of default
under any agreement binding the Company, which default or event of default would or is
likely to have a material adverse effect on the business, operations, properties or
financial condition of the Company and its Subsidiaries, taken as a whole;

(iii) the Company or any of its Subsidiaries, pursuant to or within the meaning of
Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief of debtors
(collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry
of an order for relief against it in an involuntary case, (C) consents to the appointment of
a receiver, trustee, assignee, liquidator or similar official (a “Custodian”), (D) makes a
general assignment for the benefit of its creditors or (E) admits in writing that it is
generally unable to pay its debts as they become due;

(iv) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company or any of its Subsidiaries in an involuntary
case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders the
liquidation of the Company or any of its Subsidiaries;

(v) bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings for the relief of debtors shall be instituted by or against the Company or any
subsidiary of the Company and, if instituted against the Company or any subsidiary of the
Company by a third party, shall not be dismissed within 60 days of their initiation;

(vi) a final judgment or judgments for the payment of money aggregating in excess of
$100,000 are rendered against the Company or any of its Subsidiaries, which judgments are
not, within 30 days after the entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 30 days after the expiration of such stay; provided, however, that
any judgment which is covered by insurance or an indemnity from a creditworthy party shall
not be included in calculating the $100,000 amount set forth above so long as the Company
provides the Holder a written statement from such insurer or indemnity provider (which
written statement shall be reasonably satisfactory to the Holder) to the effect that such
judgment is covered by insurance or an indemnity and the Company will receive the proceeds
of such insurance or indemnity within 30 days of the issuance of such judgment;

(vii) the Company’s certified public accountants or auditors issue any opinion, or
include any qualification or exception in any review or audit letter or report, as to the
Company’s ability to continue as a “going concern”;

(viii) any representation or warranty made by the Company in the Transaction Documents
is incorrect in any material respect when made, or the Company breaches any covenant (other
than the covenants set forth in Section 14 of this Note) or other term or condition of any
Transaction Document, except, in the case of a breach of a covenant which is curable, only
if such breach continues for a period of at least 10 Business Days;

(ix) any breach or failure to comply with Section 14 of this Note; or

(x) the Company fails to maintain the listing of its Common Stock on an Eligible
Market.

(b) Acceleration. If an Event of Default occurs under Section 4(a)(iii), (iv) or (v),
then the outstanding Principal of, all accrued Interest on, and any other amounts due under, this
Note shall automatically become immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived. If any other Event of Default
occurs and is continuing, the Holder, by written notice to the Company, may declare the Principal
of, all accrued Interest on, and any Late Charges or other amounts due under, this Note to be
immediately due and payable. Upon such declaration, such Principal, Interest, Late Charges and
other amounts shall become immediately due and payable. The Holder may rescind an acceleration and
its consequences if all existing Events of Default have been cured or waived, except nonpayment of
Principal, Interest, Late Charges or other amounts that have become due solely because of the
acceleration, and if the rescission would not conflict with any judgment or decree.

(5) [Reserved.]

(6) VOLUNTARY PREPAYMENT. The Company may prepay this Note in whole or in part at any
time upon 10 Business Days prior written notice to the Holders. On the date of such prepayment,
the Company shall pay any accrued and unpaid Interest on the Principal through the date of such
prepayment together with the amount of any accrued and unpaid Late Charges and the Principal.

(7) [Reserved.]

(8) [Reserved.]

(9) [Reserved.]

(10) NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will
not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Note, and will at all times in good faith carry out all of the provisions of this
Note and take all action as may be required to protect the rights of the Holder of this Note.

(11) [Reserved.]

(12) [Reserved]

(13) SUBORDINATION.

(a) The indebtedness evidenced by this Note is and shall be subordinate in right of payment to
the prior payment in full of the Senior Indebtedness.

(b) In the event the Holder institutes a demand for, suit for, declaration of a default as to,
or acceleration of the Maturity Date of the indebtedness evidenced by this Note, the Holder shall
not take or receive from the Company, directly or indirectly, in cash or other property or by
setoff or in any other manner (including, without limitation, from or by way of collateral),
payment of all or any of the payments due under this Note, or exercise rights against any assets of
the Company, unless and until the Senior Indebtedness shall have been paid in full.

(c) Upon any distribution of all or any of the assets of the Company to creditors of the
Company upon the dissolution, winding up, liquidation, arrangement, reorganization, adjustment,
protection, relief or composition of the Company or its debts, whether in any bankruptcy,
insolvency, arrangement, reorganization, receivership, relief or similar proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the assets and liabilities of
the Company or otherwise, (i) no amount shall be paid by the Company in respect of the Principal or
interest thereon at the time outstanding, unless and until the principal of and interest on the
Senior Indebtedness then outstanding shall have been paid in full, (ii) no claim or proof of claim
shall be filed with the Company by or on behalf of the Holder which shall assert any right to
receive any payments in respect of the amounts due under this Note except subject to the payment in
full of the Senior Indebtedness then outstanding and (iii) any payment or distribution of any kind
(whether in cash, property or securities) which otherwise would be payable or deliverable upon or
with respect to this Note shall be paid or delivered directly to the holders of the Senior
Indebtedness (in the case of cash) to or as collateral (in the case of noncash property or
securities) for the payment or prepayment of the Senior Indebtedness until the Senior Indebtedness
shall have been paid in full.

(14) COVENANTS.

(a) Rank. All payments due under this Note shall be senior to all other Indebtedness
of the Company and its Subsidiaries, other than Senior Indebtedness, the obligations of the Company
or its Subsidiaries under any lease of real or personal property by such Person as lessee which is
required under GAAP to be capitalized on such Person’s balance sheet and Indebtedness permitted by
clause (v) of the definition of “Permitted Lien.”

(b) Incurrence of Indebtedness. So long as this Note is outstanding, the Company
shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness.

(c) Existence of Liens. So long as this Note is outstanding, the Company shall not,
and the Company shall not permit any of its Subsidiaries to, directly or indirectly, allow or
suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or
in any property or assets (including accounts and contract rights) owned by the Company or any of
its Subsidiaries (collectively, “Liens”) other than Permitted Liens.

(d) Restricted Payments. The Company shall not, and the Company shall not permit any
of its Subsidiaries to, directly or indirectly, (i) redeem, defease, repurchase, repay or make any
payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by
way of open market purchases, tender offers, private transactions or otherwise), all or any portion
of any Permitted Indebtedness (other than the Senior Indebtedness), whether by way of payment in
respect of principal of (or premium, if any) or interest on, such Permitted Indebtedness if at the
time such payment is due or is otherwise made or, after giving effect to such payment, an event
constituting, or that with the passage of time and without being cured would constitute, an Event
of Default has occurred and is continuing, (ii) declare or pay any cash dividend or distribution on
the Common Stock, (iii) redeem, repurchase or otherwise acquire or retire for value any shares of
Common Stock (as defined in the Note Purchase Agreement), (iv) pay any settlement on account of
litigation pending against the Company or to satisfy any judgment entered against the Company or
(v) make payments on account of the Senior Indebtedness, excluding any payment or portion thereof
required to be paid in cash in accordance with the terms of the Senior Indebtedness;
provided, however, that if the Company consummates the reverse stock split (the
"Reverse Stock Split”) described in its Definitive Proxy Statement on Schedule 14A filed with the
SEC on April 12, 2006, in connection with the Company’s 2006 annual meeting of shareholders, the
Company may use up to $350,000 of the proceeds of the Notes to pay in cash the first amortization
payment due under the Senior Indebtedness after the Reverse Stock Split. Notwithstanding the
foregoing, the Company shall be permitted to use the proceeds from the sale of the Notes for
payments made pursuant to the Settlement Agreement and Release dated May 9, 2006, between
CombineNet, Inc. and the Company and for the payment described on Schedule 4(d) to the Note
Purchase Agreement.

(e) Sale of Assets. So long as this Note is outstanding, the Company shall not, and
the Company shall not permit any of its Subsidiaries to, make or permit to be made any transfer of
any assets other than the sale of inventory in the ordinary course of business and the sale of
obsolete or unnecessary equipment without the express written consent of the Holder.

(f) Nature of Business. So long as this Note is outstanding, the Company shall not,
and the Company shall not permit any of its Subsidiaries to, make any change in the principal
nature of its or their business.

(g) The Company shall use commercially reasonable efforts to obtain, within 30 days of the
date hereof, the consent of the required holders of the Senior Indebtedness to permit the Company
to grant subordinated Liens and security interests to the Holders in all assets of the Company and
of its Subsidiaries. Any such Liens or security interests shall not be granted and effective until
the consent of the holders of the Senior Indebtedness has been obtained in accordance with the
foregoing sentence or shall be deemed to have been obtained due to the removal of the restriction
on granting such Liens and security interests as set forth in that certain Security Agreement dated
as of August 16, 2005 made by the Company in favor of the holders of the Senior Indebtedness (the
“Security Agreement”). If the Company fails to obtain such consent of the required holders of the
Senior Indebtedness and to act in accordance therewith within 30 days of the date hereof, the
Interest Rate shall automatically increase to a rate of 12.00% per annum. If the Company fails to
obtain such consent of the required holders of the Senior Indebtedness and to act in accordance
therewith on or before January 31, 2007, the Holder may declare the outstanding Principal of, all
accrued Interest on, and any other amounts due under this Note immediately due and payable.
Notwithstanding any provision of this Section 14(e), nothing in this Note shall be deemed to
constitute the granting of a “Lien”, as such term is defined in the Security Agreement.

(15) [Reserved.]

(16) [Reserved]

(17) TRANSFER. This Note may be offered, sold, assigned or transferred by the Holder
without the consent of the Company, subject only to the provisions of Section 2(f) of the Note
Purchase Agreement.

(18) REISSUANCE OF THIS NOTE.

(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note
to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder
a new Note (in accordance with Section 18(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less then the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 18(d)) to the Holder
representing the outstanding Principal not being transferred. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree following redemption of any portion of this Note,
the outstanding Principal represented by this Note may be less than the Principal amount stated on
the face of this Note.

(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note,
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon surrender and cancellation of
this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with
Section 18(d)) representing the outstanding Principal.

(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon
the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes
(in accordance with Section 18(d) and in principal amounts of at least $100,000) representing in
the aggregate the outstanding Principal of this Note, and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

(d) Issuance of New Notes. Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii)
shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or
in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal
designated by the Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining outstanding under
this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv)
shall have the same rights and conditions as this Note, and (v) shall represent accrued Interest
and Late Charges on the Principal and Interest of this Note, from the Issuance Date.

(19) REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The remedies provided in this Note shall be cumulative and in addition to all other remedies
available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the Holder’s right to pursue actual and consequential damages for any failure by the Company to
comply with the terms of this Note. The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly provided herein. Amounts set
forth or provided for herein with respect to payments and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Holder and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be
entitled, in addition to all other available remedies, to an injunction restraining any breach,
without the necessity of showing economic loss and without any bond or other security being
required.

(20) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed
in the hands of an attorney for collection or enforcement or is collected or enforced through any
legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to
enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization,
receivership of the Company or other proceedings affecting Company creditors’ rights and involving
a claim under this Note, then the Company shall pay the costs incurred by the Holder for such
collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

(21) CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the
Company and the Holder and shall not be construed against any person as the drafter hereof. The
headings of this Note are for convenience of reference and shall not form part of, or affect the
interpretation of, this Note.

(22) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder
in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.

(23) [Reserved.]

(24) NOTICES; PAYMENTS.

(a) Notices. Whenever notice is required to be given under this Note, unless
otherwise provided herein, such notice shall be given in accordance with Section 8(f) of the Note
Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Note, including in reasonable detail a description of such action and the
reason therefore.

(b) Payments. Whenever any payment of cash is to be made by the Company to any Person
pursuant to this Note, such payment shall be made in lawful money of the United States of America
by wire transfer of immediately available funds in accordance with the Holder’s wire transfer
instructions provided to the Company by the Holder. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a Business Day, the same shall instead be due on
the next succeeding day which is a Business Day and, in the case of any Interest Date which is not
the date on which this Note is paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of Interest due on such date. Any amount
of Principal, Interest or other amounts due under the Transaction Documents which is not paid when
due shall result in a late charge being incurred and payable by the Company in an amount equal to
interest on such amount at the rate of 14% per annum from the date such amount was due until the
same is paid in full (“Late Charge”).

(25) CANCELLATION. After all Principal, accrued Interest and other amounts at any
time owed on this Note have been paid in full, this Note shall automatically be deemed canceled,
shall be surrendered to the Company for cancellation and shall not be reissued.

(26) WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note and the Note Purchase Agreement.

(27) GOVERNING LAW. This Note shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Note
shall be governed by, the internal laws of the Commonwealth of Pennsylvania, without giving effect
to any choice of law or conflict of law provision or rule (whether of the Commonwealth of
Pennsylvania or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the Commonwealth of Pennsylvania.

(28) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have
the following meanings:

(a) "Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain closed.

(b) "Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto.

(c) "Eligible Market” means the Nasdaq National Market, The Nasdaq Capital Market, The New
York Stock Exchange, Inc., the American Stock Exchange or the OTC Bulletin Board.

(d) "Fundamental Transaction” means: (i) a transaction or series of related transactions
pursuant to which the Company: (A) sells, conveys or disposes of all or substantially all of its
assets (the presentation of any such transaction for stockholder approval being conclusive evidence
that such transaction involves the sale of all or substantially all of the assets of the Company);
(B) merges or consolidates with or into, or engages in any other business combination with, any
other person or entity, in any case that results in the holders of the voting securities of the
Company immediately prior to such transaction holding or having the right to direct the voting of
50% or less of the total outstanding voting securities of the Company or such other surviving or
acquiring person or entity immediately following such transaction; or (C) sells or issues, or any
of its stockholders sells or transfers, any securities to any person or entity, in either case
acting individually or in concert with others, such that, following the consummation of such
transaction(s), such person(s) or entity(ies) (together with their respective affiliates, as such
term is used under Rule 12b-2 of the Exchange Act) would own or have the right to acquire by
contract or through convertible securities of the Company greater than 50% of the outstanding
shares of Common Stock or securities having the right to vote 50% or greater of the voting
securities of the Company; (ii) any reclassification or change of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination or as a result of the Reverse Stock
Split); or (iii) any event, transaction or series of related transactions that results in
individuals serving on the Board of Directors on the date hereof (the “Incumbent Board") ceasing
for any reason to constitute at least a majority of the Board of Directors; provided, however, that
any individual becoming a director subsequent to the date hereof whose appointment, election, or
nomination for election by the Company’s stockholders was approved by a vote of at least a
two-thirds majority of the directors then comprising the Incumbent Board (other than an
appointment, election, or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the election of the directors
of the Company) shall be considered as though such person were a member of the Incumbent Board.

(e) "GAAP” means United States generally accepted accounting principles, consistently applied.

(f) "Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed
money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) “capital leases” in accordance with generally
accepted accounting principles (other than trade payables entered into in the ordinary course of
business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles, consistently
applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness
referred to in clauses (i) through (vi) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness, and (viii) all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (i) through (vii) above.

(g) "Note Purchase Agreement” means the Note Purchase Agreement dated as of May 15, 2006 by
and among the Company and Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible
Crossover Segregated Portfolio pursuant to which the Company issued the Notes.

(h) "Permitted Indebtedness” means (A) Senior Indebtedness, (B) unsecured Indebtedness
incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness
evidenced by this Note, as reflected in a written agreement acceptable to the Holder and approved
by the Holder in writing, and which Indebtedness does not provide at any time for (1) the payment,
prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or
premium, if any, thereon until 91 days after the Maturity Date or later and (2) total interest and
fees at a rate in excess of the Interest Rate hereunder, (C) the obligations of the Company or its
Subsidiaries under any lease of real or personal property by such Person as lessee which is
required under GAAP to be capitalized on such Person’s balance sheet (D) Indebtedness permitted by
clause (v) of the definition of “Permitted Lien” and (E) Indebtedness incurred by the Company in
connection with the financing of insurance premiums in the ordinary course of business.

(i) "Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being
contested in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or delinquent, (iii)
any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other
similar liens, arising in the ordinary course of business with respect to a liability that is not
yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv)
any Lien incurred to secure Senior Indebtedness, (v) Liens securing the purchase price of assets
purchased or leased by the Company or Subsidiaries in the ordinary course of business; provided
that such Liens shall not extend to or cover any other property of the Company or its Subsidiaries
and provided further that such Liens do not exceed an aggregate value of $500,000, and (vi) Liens
securing the Company’s obligations under the Note.

(j) "Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.

(k) "Senior Indebtedness” means the principal of (and penalty or premium, if any), interest
on, and all fees and other amounts (including, without limitation, any reasonable out-of-pocket
costs, enforcement expenses (including reasonable out-of-pocket legal fees and disbursements),
collateral protection expenses and other reimbursement or indemnity obligations relating thereto)
payable by Company under or in connection with the Senior Secured Convertible Promissory Notes due
to July 2, 2007 issued by the Company on August 16, 2005.

(29) [Reserved.]

(30) CONSENT TO JURISDICTION; JURY TRIAL WAIVER. The Company and the Holder
irrevocably consent to the exclusive jurisdiction of the United States federal courts and the state
courts located in the County of Philadelphia, Commonwealth of Pennsylvania, in any suit or
proceeding based on or arising under this Note and irrevocably agree that all claims in respect of
such suit or proceeding may be determined in such courts. The Company irrevocably waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding in such forum. The
Company further agrees that service of process upon the Company mailed by first class mail shall be
deemed in every respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the right of the Holder to serve process in any other
manner permitted by law. The Company agrees that a final non-appealable judgment in any such suit
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

(31) CONFESSION OF JUDGMENT.

(a) THE FOLLOWING SETS FORTH A WARRANT OF AUTHORITY FOR ANY ATTORNEY TO CONFESS JUDGMENT
AGAINST THE COMPANY. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE COMPANY,
THE COMPANY, FOLLOWING CONSULTATION WITH COUNSEL, AND WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF,
HEREBY WAIVES ANY AND ALL RIGHTS THE COMPANY HAS, OR MAY HAVE, TO PRIOR NOTICE AND AN OPPORTUNITY
FOR HEARING BEFORE ENTRY OF JUDGMENT UNDER THE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE
JURISDICTION SET FORTH IN SECTION 30.

(b) THE COMPANY HEREBY EMPOWERS ANY CLERK, OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR
THE COMPANY AFTER ANY EVENT OF DEFAULT IN ANY AND ALL ACTIONS WHICH MAY BE BROUGHT HEREUNDER IN THE
JURISDICTION SET FORTH IN SECTION 30 OR ELSEWHERE AND CONFESS JUDGMENT AGAINST THE COMPANY FOR ALL,
OR ANY PART OF, THE UNPAID PRINCIPAL AND ACCRUED INTEREST, TOGETHER WITH OTHER EXPENSES INCURRED IN
CONNECTION THEREWITH AND ATTORNEYS’ FEES, AND FOR SUCH PURPOSE THE ORIGINAL OR ANY PHOTOCOPY OF
THIS NOTE AND AN AFFIDAVIT OF THE HOLDER OR THE HOLDER’S COUNSEL AVERRING TO THE EVENT OF DEFAULT
SHALL BE A GOOD AND SUFFICIENT WARRANT OF ATTORNEY. SUCH AUTHORIZATION SHALL NOT BE EXHAUSTED BY
ONE EXERCISE THEREOF, BUT JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME. THE COMPANY
HEREBY WAIVES ALL ERRORS AND RIGHTS OF APPEAL, AS WELL AS RIGHTS TO STAY OF EXECUTION AND EXEMPTION
OF PROPERTY, IN ANY ACTION TO ENFORCE ITS LIABILITY HEREON.

[Signature Page Follows]

1

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance
Date set forth above.

	 
	 

	VERTICALNET, INC.

	 

	By: /s/ Gene S. Godick

	 

	Name: Gene S. Godick

	Title: Executive Vice President and Chief

Financial Officer

	 

2

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