Public Offering Registration - ONVIA INC - 12-21-1999 by ONVI-Agreements

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									As filed with the Securities and Exchange Commission on December 21, 1999 Registration 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ONVIA.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) 7375 (Primary Standard Industrial Classification Code Number) 91-1859172 (I.R.S. Employer Identification Number)

1000 Dexter Avenue, Suite 400 Seattle, Washington 98109 (206) 282-5170 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Glenn Ballman President and Chief Executive Officer Onvia.com, Inc. 1000 Dexter Avenue, Suite 400 Seattle, Washington 98109 (206) 282-5170 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to:
Mark J. Handfelt David R. Young David T. Sobota Gordon Empey Venture Law Group A Professional Corporation 4750 Carillon Point Kirkland, Washington 98033 (425) 739-8700 Mark A. Bertelsen Jose F. Macias Don S. Williams Burke Norton Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities

Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]

CALCULATION OF REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------------------------------------------Proposed Maximum Title Of Each Class Of Securities To Be Aggregate Amount Of Registered Offering Price(1) Registration Fee -----------------------------------------------------------------------------Common Stock, $0.0001 par value........... $100,000,000.00 $26,400.00 -----------------------------------------------------------------------------------------------------------------------------------------------------------

(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating the amount of the registration fee.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be changed. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities, and we are not soliciting offers to buy these + +securities, in any state where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED DECEMBER 21, 1999 Shares [LOGO OF ONVIA.COM] Common Stock Prior to this offering, there has been no public market for our common stock. The initial public offering price of the common stock is expected to be between $ and $ per share. We have applied to list our common stock on the Nasdaq Stock Market's National Market under the symbol "ONVI." The underwriters have an option to purchase a maximum of additional shares to cover over-allotments of shares. Investing in the common stock involves risks. See "Risk Factors" on page 6.
Underwriting Price to Discounts and Proceeds to Public Commissions Onvia.com -------- ------------- ----------Per Share.................................... $ $ $ Total........................................ $ $ $

Delivery of the shares of common stock will be made on or about , 2000. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Credit Suisse First Boston Hambrecht & Quist Robertson Stephens E*OFFERING William Blair & Company The date of this Prospectus is , 2000.

"Helping small businesses succeed by saving time, making money and working smarter." ONVIA.com Work. Wisely./TM/

ONVIA.com...THE SMALL BUSINESS EMARKETPLACE "What do I need to set up my network?" "I spend $500 per month on long distance, what's the best plan for me?" "Help me find the right 401(k) plan" "I need to set up payroll" [ARTWORK] [The artwork is a circle with an arrow pointing into the left side labeled "buyer" and an arrow pointing into the right side labeled "seller." Outside of the circle is a ring with arrows pointing counter-clockwise. The top of the ring reads "Exchange Services and Products" and the bottom of the ring reads "Exchange Information." The circle itself is divided into five equal segments which read in a clockwise direction: "Request for Quotes," "Buy and Sell Services and Products," "News and Advice," "Efficiency Tools" and "Additional Transaction Types." The center of the circle reads "Small Businesses Save Time and Make Money."] Onvia.com is providing a single online resource where small businesses can buy and sell services and products, and exchange valuable information.

"How do I find qualified leads for my business?" "Help me find new customers" "How do I increase my company's revenue?" "How do I expand geographically?" Onvia.com aggregates a large and targeted audience of small businesses to provide a powerful sales, distribution and marketing channel to small business buyers.

TABLE OF CONTENTS
Page ---3 6 16 17 17 18 19 20 21 29 Page ---41 50 53 55 57 59 61 62 62 62 F-1

Prospectus Summary....................................................... Risk Factors............................................................. You Should Not Rely On Forward-Looking Statements........................ Use of Proceeds.......................................................... Dividend Policy.......................................................... Capitalization........................................................... Dilution................................................................. Selected Consolidated Financial Data..................................... Management's Discussion and Analysis of Financial Condition and Results of Operations........................................................... Business.................................................................

Management................................................................. Related Party Transactions................................................. Principal Stockholders..................................................... Description of Capital Stock............................................... Shares Eligible for Future Sale............................................ Underwriting............................................................... Notice to Canadian Residents............................................... Legal Matters.............................................................. Experts.................................................................... Where To Find Additional Information....................................... Index to Consolidated Financial Statements.................................

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of the prospectus or of any sale of the common stock. Dealer Prospectus Delivery Obligation Until , 2000 (25 days after the commencement of this offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions. OnviaMail, Work. Wisely. and OnviaFlash are our trademarks, and we have filed for trademark registration for chaperoned access CheckPoint, the Onvia checkmark logo, Onvia and Onvia.com. This prospectus also includes trade dress, trade names, trademarks and service marks of other companies. Use or display by Onvia.com of other parties' trademarks, trade dress or products is not intended to and does not imply a relationship with, or endorsement or sponsorship of Onvia.com by, the trademark or trade dress owners.

PROSPECTUS SUMMARY You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering and our financial statements and notes to those statements appearing elsewhere in this prospectus. Onvia.com, Inc. We are the leading business-to-business emarketplace for small business buyers and sellers. Our emarketplace is designed to help small businesses succeed by providing a single online destination where small businesses can buy and sell services and products, exchange valuable information and access productivity tools. We have designed our emarketplace to incorporate all of these functions so that small businesses can conduct e-commerce and exchange information without leaving our web site. By aggregating a large and targeted audience of small businesses, our emarketplace provides a new and powerful sales channel for both small and large vendors to the small business market. Businesses are increasingly using the Internet to communicate and transact commerce with their partners, suppliers and customers. According to Forrester Research, the U.S.-based business-to-business e-commerce market is expected to grow from $109 billion in 1999 to $1.3 trillion in 2003. To facilitate the electronic exchange of information, services and products, businesses are beginning to form electronic marketplaces, or emarketplaces, that aggregate buyers and sellers in a central Internet destination. As small businesses, which we define as businesses with fewer than 100 employees and income-generating home offices, increasingly rely on the Internet, we believe that a significant market opportunity exists to provide small businesses with an emarketplace specifically catered to their needs. According to International Data Corporation, or IDC, there are approximately 29.6 million small businesses in North America today. Small businesses account for roughly half of the United States gross domestic product, according to the U.S. Small Business Association. We believe that the growth in the number of small businesses, which IDC estimates will reach 38.5 million by 2002, and in the volume of small business e-commerce, which IDC estimates will reach approximately $107 billion in 2002, will drive the need for an emarketplace that offers sellers a channel to reach the large, fragmented market of small business buyers and provides these buyers with a single Internet location to meet all of their needs. Our emarketplace currently consists of: . a small business services trading hub, which includes more than 6,500 businesses that act as suppliers across 50 services in our request for quote network, a network which enables buyers to submit electronically requests for quotes for various business services and sellers to respond with pricing and fulfillment information; . more than 25,000 products and nine critical business services selected for the particular needs of small businesses that can be purchased quickly and conveniently through our "Buy Now" system; and . a collection of timely news, information, editorial content and business tools designed to help small businesses enhance their operations. We intend to build on our leadership position as the first comprehensive emarketplace for small businesses by expanding our service, product and information offerings to become the single source for all small business needs. We believe that by expanding our offerings we will attract more small businesses to our emarketplace, creating additional marketing opportunities for our sellers. We believe that this will create a network effect in which the value of our emarketplace increases with the addition of each participant. Onvia.com was incorporated as MegaDepot, Inc. in Washington in March 1997. In February 1999, we changed our name to MegaDepot.com, Inc., and in May 1999 we changed our name to Onvia.com, Inc. We intend to reincorporate in Delaware prior to the closing of this offering. Our principal executive offices are located at 1000 Dexter Avenue, Suite 400, Seattle, Washington 98109, and our telephone number is (206) 282-5170. Our web site is located at www.onvia.com. The information contained on our web site is not part of this prospectus. 3

The Offering
Common stock offered................................ Common stock to be outstanding after the offering... Use of proceeds..................................... shares shares For general corporate purposes, including working capital. See "Use of Proceeds." ONVI

Proposed Nasdaq National Market symbol..............

This table is based on shares outstanding as of September 30, 1999 and excludes the following shares: . 631,319 shares issuable upon exercise of warrants outstanding as of September 30, 1999 at a weighted average exercise price of $1.85 per share; . 4,478,016 shares issuable upon exercise of options outstanding as of September 30, 1999 at a weighted average exercise price of $0.30 per share; . 4,008,872 shares of common stock available for future grant under our 1999 stock option plan; . 300,000 shares of common stock available for issuance under our 2000 directors' stock option plan; . 300,000 shares of common stock available for issuance under our 2000 employee stock purchase plan; and . 1,689,701 shares of Series C preferred stock issued in December 1999.

Unless otherwise indicated, the information in this prospectus reflects the number of shares outstanding on September 30, 1999 assuming: . the conversion of all outstanding shares of preferred stock into common stock upon the closing of this offering; . our reincorporation into Delaware which will be effected prior to the closing of this offering; . the filing of our amended and restated certificate of incorporation; . the exercise of warrants to purchase 384,624 shares of our common stock that will expire if not exercised before the closing of this offering; and . no exercise of the underwriters' over-allotment option. 4

Summary Consolidated Financial Data
March 25, 1997 Nine Months (inception) Ended September to Year Ended 30, December 31, December 31, ---------------1997 1998 1998 1999 ------------ ------------ ------ -------(in thousands, except per share data) $ 62 15 146 (130) $ (130) $(0.03) 4,000 $1,037 (45) 623 (669) $ (672) $(0.17) 4,000 653 $ 13,168 45 (2,540) 323 13,337 (279) (15,877) $ (281) $(16,202) $(0.07) $ 4,000 (2.84) 5,695 $

Consolidated Statements of Operations Data: Revenue........................... Gross margin...................... Total operating expenses.......... Loss from operations.............. Net loss.......................... Basic and diluted net loss per common share..................... Basic and diluted weighted average shares outstanding...............

Consolidated Balance Sheet Data: Cash and cash equivalents................................... $26,037 Total assets................................................ 38,199 Long-term debt.............................................. 5,465 Total stockholders' equity.................................. 22,878

September 30, 1999 ------------------Pro Forma Actual As Adjusted ------- ----------(in thousands) $

The pro forma as adjusted information in the above consolidated balance sheet data table is adjusted to reflect the sale of shares of common stock offered by us at an assumed initial public offering price of $ per share, after deduction of the estimated underwriting discounts and commissions and estimated offering expenses, and the exercise of warrants to purchase 384,624 shares of our common stock that will expire if not exercised before the closing of this offering. See note 1 of the notes to our consolidated financial statements for an explanation of the determination of the number of weighted average shares used to compute net loss per share amounts. 5

RISK FACTORS This offering and an investment in our common stock involve a high degree of risk. You should carefully consider the following risk factors and the other information in this prospectus before investing in our common stock. Our business and results of operations could be seriously harmed by any of the following risks. The trading price of our common stock could decline substantially due to any of these risks, and you may lose all or part of your investment. Risks Related to Our Business We have a limited operating history of less than three years, making it difficult to evaluate our future prospects We were incorporated in March 1997. In July 1997, we launched the initial version of our emarketplace, targeted at the Canadian market. In July 1998, we introduced our emarketplace for U.S. small businesses. We have a limited operating history upon which an investor may evaluate our business and prospects. Our potential for future profitability must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets, such as emarketplaces in general and those catering to small businesses in particular. We may not successfully address any of these risks. If we do not successfully address these risks, our business will be seriously harmed. We have incurred losses in each quarter since inception, and we expect to incur significant operating losses for the foreseeable future We have incurred net losses from operations in each quarter since inception and, as of September 30, 1999, had an accumulated deficit of $17.0 million. We expect to continue to incur losses for the foreseeable future. Most of our revenue to date has been generated by selling products at or below cost. We expect to increase significantly our operating expenses in the near future as we attempt to build our brand, expand our customer base and improve our technology infrastructure. To become profitable, we must increase revenue substantially and achieve and maintain positive gross margins. To increase revenue, we will need to continue to attract customers and suppliers to our emarketplace and expand our service and product offerings. To improve our gross margins, we will need to increase the proportion of revenue generated from higher-margin services, reduce service and product discounts and lower service and product costs. We may not be able to increase revenue and gross margins sufficiently to achieve profitability. Our quarterly financial results are subject to fluctuations which may make it difficult to forecast our future performance We expect our revenue and operating results to vary significantly from quarter to quarter making it difficult to formulate meaningful comparisons of our results between quarters. Our limited operating history and new and unproven business model further contribute to the difficulty of making meaningful quarterly comparisons. Factors that may affect our quarterly results include the following: . limited or delayed customer acquisition or increases in customer acquisition costs; . our ability to retain existing customers, sellers and suppliers and attract new customers, sellers and suppliers cost-effectively; . changes in our pricing policies or those of our competitors or suppliers; . our ability to obtain adequate capital to effect our marketing and acquisition strategies; . changes in our mix of revenue generated from sales of services and products; 6

. our ability to introduce new services and products; . delays in developing and introducing new emarketplace capabilities; . introduction of new services or products by our competitors; . our, or our suppliers', ability to maintain adequate supplies of services and products; and . changes in accounting standards, including standards relating to revenue recognition, business combinations and stock-based compensation. Substantially all of our revenue for a particular quarter is derived from transactions that are initiated and completed during that quarter. Our current and future levels of operating expenses and capital expenditures are based largely on our growth plans and estimates of future revenue. These expenditure levels are, to a large extent, fixed in the short term. We will not be able to adjust spending in a timely manner to compensate for any unexpected revenue shortfall, and any significant shortfall in revenue relative to planned expenditures could harm our business and results of operations. Our limited operating history and rapid growth make it difficult to assess the seasonal factors in our business. Nevertheless, we expect there to be seasonal fluctuations in our business, reflecting a combination of seasonal trends for the services and products we offer, seasonal trends in the buying habits of our target small business customers and seasonal trends reflecting Internet usage. For example, small businesses tend to purchase fewer supplies during December when budgets have been exhausted and business activity slows for the holidays. Also, Internet use generally declines during the summer months. The development of our brand is essential to our future success and requires significant expenditures We believe that development of the Onvia.com brand is crucial to our future success. The importance of brand recognition will increase as more companies engage in commerce over the Internet. Because the online commerce aspects of our business model have limited legal, technological and financial barriers to entry, if we are unable to establish a trusted brand name, our business will suffer. We currently intend to invest significant capital resources to develop our brand, including spending significant amounts of money on advertising and promotions. Furthermore, the cost of advertising and promotions is growing rapidly. In addition, if our competitors significantly increase their advertising and promotions spending, we may be forced to increase our expenditures accordingly. We cannot be certain that our efforts to promote our brand will be successful or that we will have adequate financial resources to continue to promote our brand. If we fail to increase traffic to our web site and the proportion of visitors who purchase services or products, our business will not grow as we expect To generate revenue, we must drive traffic to our web site and convert visitors into purchasers of services and products. We use a number of techniques to increase traffic to our web site, including developing relationships with third parties, advertising, e-mail and contests. Currently, we are using a variety of techniques to increase customer conversion rates, including using discounts on selected items and other incentives. Many of these techniques are new and unproven, and we cannot be certain that any of them will be successful in helping us increase traffic or conversion rates. If we are unable to draw significantly higher traffic to our web site and convert a significant number of web site visitors into customers, our business will not grow as we expect. Intense competition could impede our ability to gain market share and harm our financial results Emarketplaces are new, rapidly evolving and intensely competitive. In addition, the traditional non-Internet-based markets for business products such as computer hardware and software, office furniture, office 7

equipment and office supplies are also intensely competitive. We compete with both traditional distribution channels as well as other online services. Our current and potential competitors include: . Internet sites that target the small business market with a full-line offering of products or services; . Internet sites that offer specific products used by the small business market or that target the consumer market, but also sell to small business customers; and . traditional retailers that sell or resell business services, either through storefronts or through the Internet. There are minimal barriers to entry to our market, and new competitors could launch a competitive web site offering services and products targeted to the small business market. To compete successfully and to gain market share, we must significantly increase awareness of our brand name and our web site. In addition, we must increase our customer base and the volume of services and products we sell through our web site. Our failure to achieve these objectives could cause our revenue to decline and limit our ability to achieve profitability. We may not compete successfully against current or future competitors, many of which have substantially more capital, longer operating histories, greater brand recognition, larger customer bases and significantly greater financial, technical and marketing resources than we do. These competitors may also be more successful than we in engaging in more extensive development of their technologies, adopting more aggressive pricing policies and establishing more comprehensive marketing and advertising campaigns. Our competitors may develop web sites that are more sophisticated than ours with better online tools, and that have service and product offerings superior to ours. For these or other reasons, our competitors' web sites may achieve greater acceptance than ours, limiting our ability to gain market share and customer loyalty and to generate sufficient revenue to achieve profitability. Our business model is new, unproven and evolving and may not prove to be viable in the long run Our business model is new, unproven and continues to evolve. In particular, our business model is based on several assumptions, any one of which may not prove to be true, including the following: . a significant number of small businesses will be willing to purchase their business services and products online; . a significant number of small businesses and small business service providers will use our emarketplace to buy and sell services and products; or . small business customers will provide us data about themselves. If any of these assumptions does not prove to be true, our business may not be viable in the long run. In addition, to date we have sold many of our products at or below our cost, causing us to incur negative gross margins. We cannot assure you that if, in the future, we choose to increase the prices at which we sell our products, we will be able to retain existing customers and attract new customers. If we are unable to retain and grow our existing customer base, our business model may not prove to be viable. If we fail to increase sales of services, our gross margins will not improve In general, we derive higher gross margins from the sale of services than from the sale of products. If we are to improve gross margins, we must increase the proportion of revenue generated from sales of services. To date, our sales of services have been minimal, and the sale of services over the Internet has not yet achieved broad market acceptance. The sale of services through the Internet may not achieve broad market acceptance, and, even if it does, we may not achieve significant sales of services. 8

If we do not develop additional and maintain existing relationships with third parties, we may be unable to increase traffic to our web site We depend on relationships with third parties to direct traffic to our web site. Most of these agreements call for the third party to be paid a monthly fee. Some of these relationships require us to pay the third party a percentage of revenue generated from customers who make a purchase after linking through from the third party's web site. Most of these relationships are for terms of six months or less and many of them are cancelable by either party without cause upon limited notice. We must maintain our existing relationships and develop new relationships on terms acceptable to us to continue to increase traffic to our web site. The termination of any of these existing agreements, or the failure to secure similar relationships with new third parties would limit the growth in traffic to our web site or cause it to decline, and would likely impede our ability to attract a large enough customer base to make our business viable. Additionally, we do not know if we will be able to renew any or all of these agreements on acceptable terms. Even if we maintain our existing relationships, because most of them have been formed recently and several of them have not yet been fully established, we do not have sufficient historical data to assess accurately whether they will be successful in drawing sufficient traffic to our web site. Any unexpected decline in traffic to the web sites of the third parties with whom we have relationships could have a negative impact on the traffic to our web site. If we are unable to maintain our relationships on commercially favorable terms with the small number of suppliers of the products we sell, our business will suffer We purchase substantially all of our products from only major vendors: Ingram Micro, TechData, Merisel and United Stationers. For the nine months ended September 30, 1999, approximately 78% of our revenue was derived from sales of products supplied by Ingram Micro. We do not typically maintain physical inventory but may do so for scarce resources or when otherwise appropriate. We do not have long-term arrangements with any of our suppliers and transact with them through purchase orders. Our suppliers could: . discontinue service to us at any time with little or no notice, in which case we may be unable to obtain alternate supply sources on comparable or acceptable terms; . raise prices above the level at which we can profitably sell products to our customers; . establish more favorable pricing structures for our competitors; or . establish strict payment terms that constrain our working capital. Any unfavorable action or event concerning our supplier relationships that hinders our ability to fulfill orders quickly, accurately and on competitive terms would harm our business. We have grown very quickly and if we fail to manage this growth, our ability to increase revenue and achieve profitability will be harmed We have rapidly and significantly expanded our operations, and we need to grow quickly in the future. From January 1, 1999 to December 15, 1999, we increased our employee base from 15 to 196. This growth has placed a significant strain on our employees, management systems and other resources and will continue to do so. If we do not manage our growth effectively, our revenue may not grow as we expect, and we may never achieve profitability. Effectively managing our expected future growth will require, among other things, that we successfully upgrade our operating systems, improve our management reporting capabilities and strengthen internal controls. For example, we are currently migrating our accounting and control systems to a new software package. We 9

will also need to attract, hire and retain highly skilled and motivated officers and employees. We must also maintain close coordination among our marketing, operations, engineering and accounting departments. We may not succeed in achieving any of these objectives. Our business will suffer if we are unable to hire and retain highly qualified employees Our future success depends on our ability to identify, hire, train and retain highly qualified sales and marketing, technical, managerial and administrative personnel. As we continue to introduce new services, products and features on our web site, and as our customer base and revenue continue to grow, we will need to hire a significant number of qualified personnel. Competition for qualified personnel, especially those with Internet experience, is intense, and we may not be able to attract, train, assimilate or retain qualified personnel in the future. Our failure to attract, train, assimilate and retain qualified personnel could seriously disrupt our operations and could increase our costs as we would be required to use more expensive outside consultants. Our executive officers and key employees are critical to our business, and these officers and key employees may not remain with us in the future Our business and operations are substantially dependent on the performance of our executive officers and key employees, all of whom are employed on an at- will basis and have worked together for only a short period of time. We do not maintain "key person" life insurance on any of our executives other than Glenn Ballman, our founder, President and Chief Executive Officer. The loss of Mr. Ballman or other key executives would likely harm our business. We will require significant additional capital in the future, which may not be available on suitable terms, or at all The expansion and development of our business will require significant additional capital, which we may be unable to obtain on suitable terms, or at all. If we are unable to obtain adequate funding on suitable terms, or at all, we may have to delay, reduce or eliminate some or all of our advertising, marketing, co-branding relationships, engineering efforts, general operations or any other initiatives. We will require substantial additional funds to carry out and expand our planned advertising and marketing activities and to continue to develop and upgrade our technology. During the next 12 months, we expect to meet our cash requirements with existing cash, cash equivalents and the net proceeds from this offering. However, if our capital requirements vary materially from those currently planned, we may require additional funding sooner than anticipated. If we issue convertible debt or equity securities to raise additional funds, our existing stockholders will be diluted. If we fail to expand our current technology infrastructure, we will be unable to accommodate our anticipated growth To be successful, we must continue to increase substantially traffic to our web site and convert web site visitors into customers. Accommodating this potential growth in web site traffic and customer transactions will require us to continue to develop our technology infrastructure. To maintain the necessary technological platform in the future, we must continue to expand and stabilize the performance of our web servers, improve our transaction processing system, optimize the performance of our network servers and ensure the stable performance of our entire network. We may not be successful in our ongoing efforts to upgrade our systems, or if we do successfully upgrade our systems, we may not do so on time and within budget. If we fail to achieve a stable technological platform in time to handle increasing web site traffic or customer order volume, potential customers could be discouraged from using our emarketplace, our reputation could be damaged and our business could be harmed. The performance of our web site is critical to our business and our reputation Any system failure that causes an interruption in the service of our web site or a decrease in its responsiveness could result in reduced user traffic and reduced revenue. Further, prolonged or ongoing performance problems on our web site could damage our reputation and result in the permanent loss of 10

customers to our competitors' web sites. We have occasionally experienced system interruptions that have made our web site totally unavailable, slowed its response time or prevented us from efficiently fulfilling orders, and these problems may occur again in the future. In April 1999, we entered into an agreement with Exodus Communications to maintain all of our web servers and database servers at Exodus's Seattle location. Our operations depend on Exodus's ability to protect its and our systems against damage from fire, power loss, water damage, telecommunications failures, vandalism and similar unexpected adverse events. Any disruption in the services provided by Exodus could severely disrupt our operations. Our backup systems may not be sufficient to prevent major interruptions to our operations, and we do not have a formal disaster recovery plan. We may not have sufficient business interruption insurance to cover losses from major interruptions. Our customers and visitors to our web site depend on their own Internet service providers, online service providers and other web site operators for access to the Onvia.com web site. Each of these providers has experienced significant outages in the past, and could experience outages, delays and other difficulties due to system failures unrelated to our systems. We expect to engage in future acquisitions or investments, which may harm our operating results Although we have no current agreements relating to acquisitions or investments in other companies, we expect in the future to make acquisitions or investments designed to increase our customer base, broaden our offerings and expand our technology platform. We have not made acquisitions or investments in the past, and therefore our ability to conduct acquisitions and investments is unproven. If we fail to evaluate and to execute successfully acquisitions or investments, they may seriously harm our business. To complete successfully an acquisition, we must: . properly evaluate the technology; . accurately forecast the financial impact of the transaction, including accounting charges and transaction expenses; . integrate and retain personnel; . combine potentially different corporate cultures; and . effectively integrate services and products and technology, sales, marketing and support operations. If we fail to do any of these, we may suffer losses or our management may be distracted from our day-to-day operations. In addition, if we conduct acquisitions using convertible debt or equity securities, existing stockholders may be diluted, which could affect the market price of our stock. We may be harmed by issues related to the "Year 2000" problem Many computer programs have been written using two digits rather than four digits to define the applicable year. This could pose a problem at the end of the century because these computer programs may recognize a date using "00" as the year 1900, rather than the year 2000. This in turn could result in major system failures or miscalculations and is generally referred to as the Year 2000 problem. As an e-commerce company, we are dependent, to a very substantial degree, on the proper functioning of our computer systems and on those of all of our customers and suppliers. Any problems associated with the Year 2000 problem that impede our systems or those of our customers or suppliers could seriously harm our business. Although we have made an assessment of our Year 2000 state of readiness and have made the changes we consider necessary, we may experience significant unanticipated problems caused by undetected errors or defects. We also cannot assure that customers will be able to access our web site without serious disruptions arising from the Year 2000 problem. Given the pervasive nature of the Year 2000 problem, we cannot assure 11

that disruptions will not occur to the Internet as a whole or to specific industries or market segments in the entire economy. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-- Impact of Year 2000." Our services and products depend upon the continued availability of licensed technology from third parties We license and will continue to license technology integral to our services and products from third parties. If we are unable to acquire or retain key third-party product licenses or integrate the related third-party products into our services and products, our service and product development may be delayed. We also expect to require new licenses in the future as our business grows and technology evolves. We may not be able to obtain these licenses on commercially reasonable terms, if at all. If we expand our international sales and marketing activities, our business will be susceptible to numerous risks associated with international operations We intend to expand our international operations and hire additional personnel abroad. Therefore, we may commit significant resources to expand our international sales and marketing activities. If successful, we will be subject to a number of risks associated with international business activities. These risks generally include: . currency exchange rate fluctuations; . seasonal fluctuations in purchasing patterns; . unexpected changes in regulatory requirements; . tariffs, export controls and other trade barriers; . longer accounts receivable payment cycles and difficulties in collecting accounts receivable; . difficulties in managing and staffing international operations; . potentially adverse tax consequences, including restrictions on the repatriation of earnings; . burdens of complying with a wide variety of foreign laws; . risks related to the recent global economic turbulence; and . political instability. Risks Related to the Internet and Our Industry We will not be able to grow our business unless small businesses increase their use of the Internet to conduct commerce and the Internet is able to support the demands of this growth Our success depends on the increasing use of the Internet by small businesses. If use of the Internet as a medium for consumer and business communications and commerce does not continue to increase, demand for our services and products will be limited and our financial results will suffer. Even if small businesses increase their use of the Internet, the Internet infrastructure may not be able to support the demands of this growth. The Internet infrastructure must be continually improved and expanded in order to alleviate overloading and congestion. If the Internet's infrastructure is not improved or expanded, the Internet's performance and reliability will be degraded. Internet users may experience service interruptions as a result of outages and other delays occurring throughout the Internet. Frequent outages or delays may cause consumers and businesses to slow or stop their use of the Internet as a transaction-based medium. 12

We may not be able to keep up with rapid technological and industry changes The Internet and online commerce markets are characterized by rapid technological change, frequent introductions of new or enhanced hardware and software products, evolving industry standards and changes in customer preferences and requirements. We may not be able to keep up with any of these or other rapid technological changes, and if we do not, our business will be harmed. These changes and the emergence of new industry standards and practices could render our existing web site and operational infrastructure obsolete. The widespread adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to modify or adapt our operating practices or infrastructure. To be successful, we must enhance our web site responsiveness, functionality and features, acquire and license leading technologies, enhance our existing service and product offerings, and respond to technological advances and emerging industry standards and practices in a timely and cost effective manner. Our network and software are vulnerable to security breaches and similar threats which could result in our liability for damages and harm our reputation Our network infrastructure is vulnerable to computer viruses, break-ins, network attacks and similar disruptive problems. This could result in our liability for damages, and our reputation could suffer, thus deterring potential customers from transacting with us. Security problems caused by third parties could lead to interruptions and delays or to the cessation of service to our customers. Furthermore, inappropriate use of the network by third parties could also jeopardize the security of confidential information stored in our computer systems. In July 1999, our former web site in Canada, MegaDepot.com, was subject to a security breach in which an outside party was able to gain access to the private account information, including credit card numbers, of some of our customers. This security breach occurred when we inadvertently provided a few of our customers with the URL link to our internal database, and also inadvertently left the password protection for our internal database turned off. Information about this security breach was forwarded to a newspaper reporter in Toronto, Canada, prior to our becoming aware of the breach. This resulted in negative publicity concerning our former web site for several days in several Canadian newspapers. Even though we have taken steps to prevent the recurrence of this specific security breach, a security breach could occur again in the future. We intend to continue to implement industry-standard security measures, but we cannot assure you that the measures we implement will not be circumvented. The costs and resources required to alleviate security problems may result in interruptions, delays or cessation of service to our customers, which could harm our business. Future regulations could be enacted that either directly restrict our business or indirectly impact our business by limiting the growth of e-commerce As e-commerce evolves, federal, state and foreign agencies could adopt regulations covering issues such as privacy, content and taxation of services and products. If enacted, government regulations could limit the market for our services and products. Although many regulations might not apply to our business directly, we expect that laws regulating the collection or processing of personal or consumer information could indirectly affect our business. It is possible that legislation could expose companies involved in e-commerce to liability, which could limit the growth of e-commerce generally. Legislation could hinder the growth in Internet use and decrease its acceptance as a medium for communication and commerce. 13

Risks Related to Our Offering You may not be able to resell your stock at or above the initial public offering price Before this offering, there has not been a public trading market for our common stock, and an active trading market for our common stock may not develop or be sustained after this offering. For this reason and for various other reasons listed throughout these risk factors, the market price of our common stock may decline below the initial public offering price. The initial public offering price will be determined by negotiations between the representatives of the underwriters and us. See "Underwriting" for a discussion of the factors to be considered in determining the initial public offering price. Our stock price may be volatile The stock market and specifically the stock prices of Internet-related companies have been very volatile. This broad market and industry volatility may reduce the price of our common stock, without regard to our operating performance. Due to this volatility, the market price of our common stock could significantly decrease. Our principal stockholders, officers and directors will own a controlling interest in our voting stock Upon completion of this offering, our officers, directors and stockholders with greater than 5% holdings will, in the aggregate, beneficially own approximately % of our outstanding common stock. As a result, these stockholders, acting together, will have the ability to control substantially all matters submitted to our stockholders for approval, including: . election of our board of directors; . removal of any of our directors; . amendment of our certificate of incorporation or bylaws; and . adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us. These stockholders will thus have substantial influence over our management and our affairs. Accordingly, this concentration of ownership may have the effect of impeding a merger, consolidation, takeover or other business consolidation involving us, or discouraging a potential acquiror from making a tender offer for our shares, thereby causing our stock price to decline. Substantial future sales of shares may impact the market price of our common stock If our stockholders sell substantial amounts of our common stock, including shares issued upon the exercise of outstanding options and warrants, the market price of our common stock may fall. Such sales might also make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. See "Shares Eligible for Future Sale." We have broad discretion in using the proceeds from this offering, which may increase the risk that the proceeds will not be applied effectively The net proceeds of this offering are not allocated for specific purposes. We will have broad discretion in determining how to spend the proceeds of this offering and may spend proceeds in a manner that our stockholders may not deem desirable. We cannot assure you that our investments will yield favorable returns or results. See "Use of Proceeds." 14

You will experience immediate and substantial dilution The initial public offering price of our common stock is substantially higher than the book value per share of the outstanding common stock immediately after this offering. At the estimated initial public offering price of $ per share, dilution to new investors will be $ per share. Accordingly, if you purchase shares of our common stock in this offering, you will suffer immediate and substantial dilution. We have implemented anti-takeover provisions that may discourage takeover attempts and depress the market price of our stock Provisions of our amended and restated certificate of incorporation and by- laws, provisions of Delaware law as well as a stockholders' rights plan we intend to adopt before the closing of this offering, will make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. See "Description of Capital Stock" for a discussion of such anti-takeover provisions. We do not intend to pay dividends, you will not receive funds without selling shares and you may lose the entire amount of your investment We have never declared or paid any cash dividends on our capital stock and do not intend to pay dividends in the foreseeable future. We intend to invest our future earnings, if any, to fund our growth. Therefore, you will not receive any funds without selling your shares. We further cannot assure you that you will receive a return on your investment when you sell your shares or that you will not lose the entire amount of your investment. 15

YOU SHOULD NOT RELY ON FORWARD-LOOKING STATEMENTS Some of the statements under "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and in other sections of this prospectus are forward- looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These factors are described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of this prospectus. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this prospectus, we cannot guarantee future results, levels of activity, performance or achievements. 16

USE OF PROCEEDS We estimate that our net proceeds from the sale of the shares of common stock we are offering will be $ million, assuming an initial public offering price of $ per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses. If the underwriters' over-allotment option is exercised in full, we estimate that our net proceeds will be approximately $ million. The principal purposes of this offering are to increase our working capital, fund our operating expenses, create a public market for our common stock, facilitate our future access to the public capital markets and fund potential acquisitions. We have no current agreements relating to any acquisitions or investments. We will retain broad discretion in allocating the net proceeds of this offering. Pending the use of the net proceeds, we will invest them in shortterm, interest-bearing, investment grade securities. DIVIDEND POLICY We have never declared or paid dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any dividends in the foreseeable future. Our existing borrowing agreements prohibit the payment of dividends. 17

CAPITALIZATION The following table sets forth our capitalization as of September 30, 1999: . on an actual basis; . on a pro forma basis after giving effect to the conversion of all outstanding shares of preferred stock into common stock and the exercise of warrants to purchase 384,624 shares of common stock which will expire if not exercised prior to this offering; and . on a pro forma as adjusted basis after giving effect to our receipt of the net proceeds from the sale of shares of common stock in this offering at an assumed initial public offering price of $ per share. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included elsewhere in this prospectus.
As of September 30, 1999 ---------------------------Pro Pro Forma As Actual Forma Adjusted -------- -------- -------(in thousands, except share data) $ 5,465 $ 5,465 $ 5,465

Long-term debt................................... Stockholders' equity: Convertible preferred stock, par value $ per share; shares authorized: 20,000,000 actual and 15,000,000 pro forma and pro forma as adjusted; shares outstanding: 17,381,833 actual and none pro forma and pro forma as adjusted........................... Common stock, par value $ per share; shares authorized: 62,000,000 actual and 150,000,000 pro forma and pro forma as adjusted; shares outstanding: 12,024,232 actual, 29,790,689 pro forma and pro forma as adjusted... Unearned stock compensation...................... Accumulated deficit.............................. Total stockholders' equity...................... Total capitalization...........................

37,695

--

5,391 (3,203) (17,005) -------22,878 -------$ 28,343 ========

43,087 (3,203) (17,005) -------22,879 -------$ 28,344 ========

(3,203) (17,005) --------------$ ========

This table excludes the following shares: . 631,319 shares issuable upon exercise of outstanding warrants at a weighted average exercise price of $1.85 per share; . 4,478,016 shares issuable upon exercise of outstanding options at a weighted average exercise price of $0.30 per share; . 4,008,872 shares of common stock available for future grant under our 1999 stock option plan; . 300,000 shares of common stock available for issuance under our 2000 directors' stock option plan; . 300,000 shares of common stock available for issuance under our 2000 employee stock purchase plan; and . 1,689,701 shares of Series C preferred stock issued in December 1999. 18

DILUTION Our pro forma net tangible book value as of September 30, 1999 was $22.9 million, or approximately $0.78 per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less total liabilities divided by the number of shares of common stock outstanding. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of common stock immediately after the completion of this offering, assuming the conversion of all outstanding shares of preferred stock into common stock and the exercise of warrants to purchase 384,624 shares of common stock which will expire if not exercised prior to this offering. After giving effect to the sale of the shares of common stock in this offering at an assumed initial public offering price of $ per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses, our net
tangible book value at September 30, 1999 would have been approximately $ per share. This represents an net tangible book value of $ per share to existing immediate dilution of $ per share to new investors $ million, or immediate increase in stockholders and purchasing shares in

this offering. The following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share.................. Pro forma net tangible book value per share as of September 30, 1999.......................................................... Increase per share attributable to new investors............... Net tangible book value per share after this offering............ Dilution per share to new investors.............................. $ $0.78 ------$ ===

The following table sets forth, as of September 30, 1999, the differences between the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by existing stockholders and by new investors:
Shares Purchased Total Consideration Average --------------------- ---------------------Price Number Percentage Amount Percentage Per Share ---------- ---------- ----------- ---------- --------29,406,065 % $36,593,423 % $1.24 ---------========== ----100.0% ===== ----------$ =========== ----100.0% ===== -----

Existing stockholders .. New investors........... Total.................

The above table excludes the following shares: . 631,319 shares issuable upon exercise of outstanding warrants at a weighted average exercise price of $1.85 per share; . 384,624 shares issuable upon exercise of outstanding warrants at a weighted average exercise price of $0.005 per share that expire if not exercised prior to the closing of this offering; . 4,478,016 shares issuable upon exercise of outstanding options at a weighted average exercise price of $0.30 per share; . 4,008,872 shares of common stock available for future grant under our 1999 stock option plan; . 300,000 shares of common stock available for issuance under our 2000 directors' stock option plan; . 300,000 shares of common stock available for issuance under our 2000 employee stock purchase plan; . 1,689,701 shares of Series C preferred stock issued in December 1999. 19

SELECTED CONSOLIDATED FINANCIAL DATA This section presents our historical financial data. You should read the following selected consolidated financial data in conjunction with our consolidated financial statements and the related notes and with Management's Discussion and Analysis of Financial Condition and Results of Operations included in this prospectus. The selected data in this section is not intended to replace the financial statements. The consolidated statements of operations data set forth below for the period from March 25, 1997 (inception) to December 31, 1997, the year ended December 31, 1998 and the nine months ended September 30, 1999 and consolidated balance sheet data as of December 31, 1998 and September 30, 1999 have been derived from our audited financial statements included elsewhere in this prospectus, which have been audited by Deloitte & Touche LLP. The consolidated balance sheet data as of December 31, 1997 have been derived from our audited financial statements not included in this prospectus. The consolidated statements of operations data for the nine months ended September 30, 1998 are derived from our unaudited consolidated financial statements which, in the opinion of management, have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our results of operations and financial position. The historical results do not necessarily indicate the results you should expect in any future period.
March 25, 1997 (inception) Nine Months Ended to Year Ended September 30, December 31, December 31, -----------------------1997 1998 1998 1999 ------------ ------------ --------- ------------$ 62,174 46,894 --------15,280 41,321 12,707 91,624 ---------145,652 --------(130,372) ---------$(130,372) ========= $ (0.03) ========= $1,037,271 $ 653,232 1,082,448 608,691 ---------- --------(45,177) 44,541 206,436 191,968 224,941 ----------623,345 ---------(668,522) (3,608) ---------$ (672,130) ========== 74,646 97,123 151,612 ---------323,381 --------(278,840) (2,039) --------$(280,879) ========= $ 13,168,472 15,708,812 -----------(2,540,340) 6,320,734 2,576,634 2,725,017 1,714,252 -----------13,336,637 -----------(15,876,977) (325,372) -----------$(16,202,349) ============

Consolidated Statements of Operations Data: Revenue.................... Cost of goods sold......... Gross margin............... Operating expenses: Sales and marketing....... Technology and development.............. General and administrative........... Amortization of unearned stock-based compensation............. Total operating expenses............... Loss from operations....... Interest expense, net...... Net loss................... Basic and diluted net loss per common share.......... Basic and diluted weighted average shares outstanding...............

$ (0.17) $ (0.07) $ (2.84) ========== ========= ============ 5,695,076 ============ September 30, 1999 ------------$ 26,036,867 22,544,115 38,198,858 5,464,670 22,877,721

Consolidated Balance Sheet Data: Cash and cash equivalents.. Working (deficit) capital.. Total assets............... Long-term debt............. Total stockholders' (deficit) equity..........

4,000,400 4,000,400 4,000,400 ========= ========== ========= December 31, ------------------------1997 1998 ------------ -----------$ 5,607 (120,302) 11,910 -(120,302) $ 44,659 (813,357) 180,072 -(792,432)

20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis together with our consolidated financial statements, including the notes, appearing elsewhere in this prospectus. Some information contained in the discussion and analysis set forth below and elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risk and uncertainties. See "Risk Factors" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this prospectus. Overview We are the leading business-to-business emarketplace for small business buyers and sellers. Since inception, we have devoted our resources to expanding our technology infrastructure, incorporating new services and products into our emarketplace, attracting suppliers and acquiring new customers. In particular, during this period we developed the infrastructure that allows us to integrate our systems with those of our suppliers. This enables us to monitor inventory levels and prices from multiple suppliers, thereby facilitating an efficient order process. Our operations are currently focused in the United States and Canada. Our Canadian operations consist primarily of sales and marketing personnel. See note 10 of the notes to our consolidated financial statements for segment information relating to our U.S. and Canadian operations. Our Sources of Revenue We generate revenue from product sales and fees from sales of services. Through September 30, 1999, we have derived substantially all of our revenue from product sales. Product revenue includes sales of computer hardware and software and other office machines and products. Product revenue is reported as the aggregate value of the products we sell and is recognized upon receipt by the customer. Orders are initiated directly from our customers through our web site. We take title to products from shipment until receipt by the customer and assume economic risk related to collections, customer service and returns. Product orders are received on our web site, forwarded to a specific supplier based on product availability and price and then shipped directly to our customers with Onvia.com packaging. We do not typically maintain physical inventory but may do so for scarce resources or when otherwise appropriate. We have fulfillment relationships with several large suppliers, such as Ingram Micro, Merisel, TechData and United Stationers. One of our important strategies is to encourage our customers to begin to participate more actively in our service offerings, such as long distance and cellular phone services, credit card processing and payroll services, and custom services that can be obtained through our request for quote program. Because of the insignificant costs of goods sold associated with these services, which are primarily commission-based, they carry significantly higher margins. As a result, if we are successful in our strategy, we anticipate that gross margin from service revenue will account for a greater portion of total gross margin in the future. Our Costs and Expenses Cost of goods sold primarily consists of the cost of products sold to customers, shipping charges and credit card fees. We acquire customers and drive traffic to our web site in part by offering our customers competitive prices, in some cases below cost and often with shipping discounts. We intend to use competitive pricing to attract customers. As a result of our aggressive customer acquisition strategies, we had a negative gross margin for the nine- month period ended September 30, 1999. However, one of our primary strategies is to increase sales of higher-margin services. To the extent we are successful in this strategy, we expect our gross margins to increase. A substantial proportion of our total operating expenses in the nine months ended September 30, 1999 was related to marketing and advertising programs designed to build our brand and drive customer acquisition. We 21

believe that our future growth will depend on our ability to increase brand awareness and establish a large and sustainable customer base. As a result, we expect that sales and marketing expenses will increase significantly and continue to account for a significant portion of our total operating expenses. In addition, we believe that we must continue to expand our service and product offerings if we are to become the primary purchasing hub for small businesses. We also plan to invest significantly in technology and development. As a result, we anticipate increasing losses for at least the next twelve months. We have incurred net losses and negative operating cash flow in each quarterly period since our inception, and, as of September 30, 1999, our accumulated deficit was $17.0 million. Amortization of Unearned Stock-based Compensation We record unearned stock-based compensation in connection with the grant of stock options and other equity instruments. This charge represents the difference between the deemed value of our common stock for accounting purposes and the exercise price of the options or sale price of other equity instruments. This amount is presented as a reduction of stockholders' equity and is amortized on an accelerated basis over the vesting period of the option, typically four years. In addition, we have issued securities to some non- employees which vest over various service periods. The charge related to these securities is variable and is recorded as the securities vest. At September 30, 1999, unearned stock-based compensation was $3.2 million, and we amortized $1.7 million of stock-based compensation expense in the nine months ended September 30, 1999. Results of Operations In view of the rapidly changing nature of our business and our limited operating history, we believe that a historical comparison of revenue and operating results is not necessarily meaningful and should not be relied upon as an indication of future performance. This is particularly true of companies such as ours that operate in new and rapidly evolving markets. As a result, our prospects must be considered in light of the risks, expenses and difficulties encountered by companies in their early state of development, particularly companies in new and rapidly evolving markets, such as ours. See "Risk Factors" for a more complete description of the many risks we face. 22

Quarterly Results of Operations The following table sets forth our consolidated statement of operations data for the three quarters ended September 30, 1999. This information has been derived from our unaudited financial statements which, in the opinion of management, include all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such information in accordance with generally accepted accounting principles. The results of operations for any quarter should not be deemed necessarily indicative of the results of operations for any future period.
Quarter Ended --------------------------June March 31, 30, Sept. 1999 1999 30, 1999 --------- ------- -------(in thousands) Revenue....................................... $ 1,476 $ 3,565 $ 8,128 Cost of goods sold............................ 1,826 4,226 9,657 ------- ------- -------Gross margin.................................. (350) (661) (1,529) Operating expenses: Sales and marketing......................... 163 1,150 5,008 Technology and development.................. 75 361 2,141 General and administrative.................. 506 970 1,249 Amortization of unearned stock-based compensation............................... 431 759 524 ------- ------- -------Total operating expenses...................... 1,175 3,240 8,922 ------- ------- -------Loss from operations.......................... (1,525) (3,901) (10,451) Interest income (expense), net................ (75) 124 (374) ------- ------- -------Net loss...................................... $(1,600) $(3,777) $(10,825) ======= ======= ========

Revenue Revenue increased sequentially on a quarterly basis from $1.5 million for the quarter ended March 31, 1999 to $8.1 million for the quarter ended September 30, 1999. Growth in revenue was primarily attributable to increased sales of products to new and existing customers. Cost of Goods Sold Cost of goods sold increased in each quarter from $1.8 million for the quarter ended March 31, 1999 to $9.7 million for the quarter ended September 30, 1999. The increases in cost of goods sold were attributable almost entirely to the corresponding increases in revenue during the respective periods. In addition, we have sold many products, inclusive of shipping, at prices at or below cost to attract customers. As a result, we continued to experience negative gross margins during this period. However, gross margin improved from negative 24% for the quarter ended March 31, 1999 to negative 19% for the quarter ended September 30, 1999. We expect to continue to experience negative gross margins for the foreseeable future. Sales and Marketing Sales and marketing expenses consist primarily of advertising, including payments related to our co-branding relationships, and salaries and related costs of personnel. Sales and marketing expenses increased in each quarter from $163,000 for the quarter ended March 31, 1999 to $5.0 million for the quarter ended September 30, 1999. The increases in sales and marketing expenses were due primarily to higher advertising expenses and increases in advertising and marketing personnel. In particular, we launched a major advertising campaign and initiated numerous co-branding relationships during the second and third quarters of 1999. We anticipate that sales and marketing expenses will increase significantly in absolute dollars for the foreseeable future, particularly in the near term, as we implement new advertising, branding and marketing campaigns. 23

Technology and Development Technology and development expenses consist primarily of fees paid to third parties for consulting services, salaries and related costs of engineering and operations personnel and amortization of costs for purchased software. Technology and development expenses increased in each quarter from $75,000 for the quarter ended March 31, 1999 to $2.1 million for the quarter ended September 30, 1999. The increases in technology and development expenses were due primarily to a large consulting project we initiated to enhance our information systems and related architecture. We expect technology and development expenses to increase in absolute dollars for the foreseeable future as we hire additional personnel and incur consulting costs to enhance and upgrade our technology infrastructure. General and Administrative General and administrative expenses consist primarily of salaries, recruiting and related costs for general corporate functions including executive, accounting and administrative personnel, lease expenses, professional fees including legal expenses, facilities costs and other miscellaneous general corporate expenses. General and administrative expenses increased in each quarter from $506,000 for the quarter ended March 31, 1999 to $1.2 million for the quarter ended September 30, 1999. Increases in general and administrative expenses were primarily attributable to the increase in administrative personnel and higher office occupancy costs associated with our new lease. We expect to incur higher general and administrative expenses as we hire additional personnel and incur additional costs to support our growth and our obligations as a public company. Amortization of Unearned Stock-based Compensation Amortization of unearned stock-based compensation was $431,000 in the quarter ended March 31, 1999, $759,000 in the quarter ended June 30, 1999 and $524,000 in the quarter ended September 30, 1999. Unearned stock-based compensation resulted from the issuance of options and non-vested common stock to employees and non-employees. Additionally, based on the options granted through September 30, 1999, we expect to record additional unearned stock-based compensation after September 30, 1999. Interest Income (Expense), Net Interest income (expense), net typically consists of interest income earned on average cash balances, offset by interest expense on outstanding convertible notes and subordinated debt. Interest expense increased significantly in the quarter ended September 30, 1999 due primarily to higher interest expense on equipment loans and subordinated debt. Nine Months Ended September 30, 1998 and 1999 Revenue Revenue increased from $653,000 for the nine months ended September 30, 1998 to $13.2 million for the nine months ended September 30, 1999. Growth in revenue was primarily attributable to increased product sales to new and existing customers. Cost of Goods Sold Cost of goods sold increased from $609,000 for the nine months ended September 30, 1998 to $15.7 million for the nine months ended September 30, 1999. The increase in cost of goods sold was attributable almost entirely to the corresponding increase in revenue during the respective periods. Sales and Marketing Sales and marketing expenses increased from $75,000 for the nine months ended September 30, 1998 to $6.3 million for the nine months ended September 30, 1999, due primarily to higher advertising expenses associated with the launch of a major advertising campaign, the initiation of numerous co-branding relationships and increases in advertising and marketing personnel. 24

Technology and Development Technology and development expenses increased from $97,000 for the nine months ended September 30, 1998 to $2.6 million for the nine months ended September 30, 1999. This increase was primarily due to a large consulting project we initiated in the third quarter of 1999 to enhance our information systems and related architecture and to increases in technology and development personnel. General and Administrative General and administrative expenses increased from $152,000 for the nine months ended September 30, 1998 to $2.7 million for the nine months ended September 30, 1999. This increase in general and administrative expenses was primarily attributable to the increase in administrative personnel and higher office occupancy expenses related to the relocation to our new corporate offices. Amortization of Unearned Stock-based Compensation We had no amortization of unearned stock-based compensation for the nine months ended September 30, 1998, and amortization of unearned stock-based compensation was $1.7 million for the nine months ended September 30, 1999. This increase was due to the issuance of options and non-vested common stock to employees and non-employees. Interest Income (Expense), Net Interest income (expense), net increased from ($2,000) for the nine months ended September 30, 1998 to ($325,000) for the nine months ended September 30, 1999. This net increase was primarily attributable to higher outstanding amounts on convertible notes, subordinated debt and equipment loans. Provision for Income Taxes We incurred net operating losses from inception through September 30, 1999, and therefore have not recorded a provision for income taxes. We have recorded a valuation allowance for the full amount of our net deferred tax assets, as the future realization of the tax benefit is not currently likely. As of September 30, 1999, we had net operating loss carryforwards of $16.8 million. These loss carryforwards are available to reduce future taxable income and expire at various dates beginning in 2017 through 2019. Under the provisions of the Internal Revenue Code, certain substantial changes in our ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset taxable income. Inception to December 31, 1997 and Year Ended December 31, 1998 Revenue Revenue increased from $62,000 in 1997 to $1.0 million in 1998. Growth in revenue was attributable to increased sales of products to new and existing customers. Cost of Goods Sold Cost of goods sold increased from $47,000 in 1997 to $1.1 million in 1998. The increase in cost of goods sold was attributable to an increase in product sales during the respective periods. Sales and Marketing Sales and marketing expenses increased from $41,000 in 1997 to $206,000 in 1998. This increase was primarily due to the hiring of additional sales and marketing personnel. Technology and Development Technology and development expenses increased from $13,000 in 1997 to $192,000 in 1998. This increase was primarily attributable to the hiring of technology and development personnel. 25

General and Administrative General and administrative expenses increased from $92,000 in 1997 to $225,000 in 1998. This increase in general and administrative expenses was primarily attributable to the increase in administrative personnel and general corporate expenses. Interest Income (Expense), Net We had no interest income (expense), net in 1997 and interest expense of $4,000 in 1998. The increase was due to the issuance of convertible notes in 1998. Liquidity and Capital Resources Since our inception, we have financed our operations primarily through the issuance of equity and debt securities and, during 1998, through advances from SunCommerce Corporation, a web hosting company co-owned by Glenn Ballman, our founder, President and Chief Executive Officer. Through September 30, 1999, equity issuances have yielded gross proceeds of $36.5 million. In December 1999, we issued 1,689,701 shares of Series C preferred stock, resulting in gross proceeds to us of $23.2 million. Additionally, we have issued subordinated notes and have entered into capital equipment term loans to finance our operations. As of September 30, 1999, we had $26.0 million of cash and cash equivalents on hand and $9.2 million outstanding under existing subordinated debt and equipment loans. See note 4 of the notes to our consolidated financial statements for more information on outstanding long-term debt. Net cash used in operating activities totaled $10.7 million for the nine months ended September 30, 1999 and approximately $276,000 in 1998. Net cash provided by operating activities totaled approximately $6,000 in 1997. Net cash used in operating activities for the nine months ended September 30, 1999 was primarily attributable to net operating losses, increases in prepaid expenses and other assets, partially offset by non-cash charges and increases in accounts payable and accrued expenses. Net cash used in operating activities in 1998 was primarily attributable to net operating losses partially offset by increases in accounts payable and accrued expenses. Net cash provided by operating activities in 1997 was primarily attributable to net operating losses offset by increases in accrued expenses. Net cash used in investing activities totaled $4.1 million for the nine months ended September 30, 1999 and approximately $23,000 for the year ended December 31, 1998. We did not use or generate any funds from investing activities in 1997. Net cash used in investment activities for the nine months ended September 30, 1999 and in 1998 related primarily to the acquisition of computer hardware and software and other equipment. Net cash provided by financing activities totaled $40.9 million for the nine months ended September 30, 1999 and approximately $344,000 in 1998. Net cash provided by financing activities for the nine months ended September 30, 1999 was primarily attributable to the sale of equity securities and proceeds from long-term borrowings. Net cash provided by financing activities in 1998 was attributable to proceeds from the issuance of convertible debt. We generated insignificant cash in 1997 from the sale of common stock. We believe that the net proceeds from this offering and the issuance of Series C preferred stock, together with existing cash and cash equivalents, will be sufficient to satisfy our cash requirements for at least the next 12 months. Depending on our growth rate and cash requirements, we may require additional equity or debt financing to meet future working capital needs, which may have a dilutive effect on our then current stockholders. We cannot assure you that additional financing will be available or, if available, that such financing can be obtained on satisfactory terms. Quantitative and Qualitative Disclosures About Market Risk Due to the operations of our wholly-owned subsidiary in Canada, our results of operations, financial position and cash flows can be materially affected by changes in the relative values of the Canadian dollar to the U.S. dollar. However, due to the relative stability of these two currencies in relation to one another, our past 26

results of operations have not been materially affected by fluctuations in exchange rates. We do not use derivative financial instruments to limit our foreign currency risk exposure. Our investments are classified as cash and cash equivalents with original maturities of three months or less. As of September 30, 1999, we consider the reported amounts of these investments to be reasonable approximations of their fair values. Therefore, changes in the market interest rates will not have a material impact on our financial position. Through September 30, 1999, our interest expense was not sensitive to the general level of U.S. interest rates because all of our debt arrangements were based on fixed interest rates. Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, or SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS No. 133, which will be effective for us for the fiscal years and quarters beginning after June 15, 2000, requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. We do not expect the potential effect of adopting the provisions of SFAS No. 133 to have a significant impact on our financial position, results of operations and cash flows. Impact of Year 2000 Many computers, software and other equipment are coded to accept or recognize only two-digit entries in the date code field and thus can not distinguish 21st century dates from 20th century dates. Due to this design decision, some of these systems could fail to operate or fail to produce correct results if "00" is interpreted to mean 1900, rather than 2000. As a result, many companies' software and computer systems may need to be upgraded or replaced to comply with Year 2000 requirements or risk system failure or miscalculations causing disruptions of normal business activities. We are exposed to the risk that the systems on which we depend, plus those of our suppliers, customers and the Internet as a whole, are not Year 2000 compliant. State of Readiness The Year 2000 problem may affect the network infrastructure, computers, software and other equipment that we use, operate or maintain for our operations. The key milestones to our Year 2000 program have been internal and external assessment and testing. We have substantially completed both our internal and external Year 2000 compliance assessment. We believe that we have identified and reviewed substantially all of the internally and externally developed software that supports the development and delivery of our services and products or is necessary to maintain our normal operating functions. We have substantially completed our assessment of this software and have made the changes we consider necessary. We are also assessing the potential effect and costs of remediating the Year 2000 problem on our office equipment and facilities but are not aware of any significant operational Year 2000 issues or costs associated with our non-information technology systems. However, we may experience significant unanticipated problems and costs caused by undetected errors or defects in the technology used in these systems. Costs to Address Year 2000 Issues We estimate the total cost of completing any required assessments, modifications, upgrades or testing of our internal systems will not exceed $100,000, all of which will be incurred during 1999. Most of these expenses are related to the operating costs associated with time spent by employees in the evaluation process and Year 2000 compliance matters. If future expenses related to Year 2000 compliance are higher than anticipated, this could harm our business. Most Reasonably Likely Worst Case Scenarios A business disruption caused by the Year 2000 problem could interrupt our operations and damage our relationships with our customers. An internal disruption unique to us could give our competitors a comparative 27

advantage. Failure of our internal systems to be Year 2000 ready could delay order processing as well as hinder the functionality of our web site and could require us to devote significant resources to correcting such problems. Further, our customers' purchasing plans could be affected by Year 2000 preparation and remediation of the need to expend significant resources to fix their existing systems. Based on the activities described above, we do not believe that the Year 2000 problem will significantly harm our business, without taking into account our efforts to avoid or fix such problems. In addition, we have not deferred any material information technology projects, nor equipment purchases, as a result of our Year 2000 problem activities. Contingency Plans As discussed above, we are engaged in an ongoing Year 2000 assessment and have substantially completed this assessment. We have not developed a Year 2000 specific contingency plan. If Year 2000 compliance issues are discovered, we then will evaluate the need for contingency plans relating to such issues. If the need arises, the cost of implementing any of these contingency plans could harm our business. 28

BUSINESS Overview We are the leading business-to-business emarketplace for small business buyers and sellers. By aggregating a large and targeted audience of small businesses, we provide a new and powerful sales channel for small and large vendors that serve the highly fragmented small business community. Our emarketplace also helps small businesses succeed by providing a single online destination where they can buy services and products, access and exchange valuable information and obtain productivity tools. These mutual benefits reinforce a network effect that increases the value of our emarketplace with the addition of each participant. Our emarketplace has experienced significant growth since it was introduced, and, as of December 21, 1999, we had attracted over nine service suppliers and 1,000 product vendors. In addition, our small business services trading hub, which allows customers to submit requests for quotes from a network of service suppliers, had over 6,500 service suppliers at December 21, 1999. Industry Background The Growth of Business-to-Business E-commerce The Internet is fundamentally changing the way businesses interact with other businesses. According to International Data Corporation, or IDC, by 2003 Internet users are expected to reach 510 million users, up from 159 million users at the end of 1998. To capitalize on this potential opportunity, companies of all sizes have adopted Internet strategies to drive revenue, increase efficiencies and reduce costs. Forrester Research estimates that the U.S.-based business-to-business e-commerce market, which encompasses the conduct of electronic transactions over Internet protocols between businesses and their partners and suppliers, is expected to account for more than 90% of the dollar value of e-commerce in the United States by 2003, growing to $1.3 trillion from $109 billion in 1999. The growth in business-to-business e-commerce is being fueled in large part by the recurring nature of business needs and transactions, which offers businesses the opportunity to create loyal and valuable long-term relationships with other businesses. Business-to-business e-commerce solutions provide buyers and suppliers with opportunities to increase revenue by reaching a broader customer base and realize operating efficiencies by reducing the costs of accessing information and streamlining complex purchasing and distribution processes. These benefits have spurred the creation of electronic marketplaces, or emarketplaces, that aggregate buyers and sellers in a centralized trading hub. Emarketplaces are most well-suited for large, highly fragmented markets where buyers and sellers have limited access to information and high procurement costs. The Growth of Small Business E-commerce The small-business market, which we define as businesses with fewer than 100 employees and income-generating home offices, is large and rapidly growing. IDC estimates that by 2002, the North American small business market will grow to 38.5 million businesses from 29.6 million today. Small businesses are increasingly relying on the Internet to access information, communicate and transact commerce. According to Access Media International, by the end of 2002, 75% of small businesses will use the Internet, as compared to 52% at the end of 1999. In addition, IDC estimates that small businesses will account for about $106.8 billion in e-commerce in 2002, increasing from $6.2 billion at the end of 1998. The Need for Small Business Emarketplaces Several factors are driving the growth in business-to-business e-commerce in the small business market. Currently, small businesses have difficulty in cost- effectively reaching a large percentage of their potential customers through traditional marketing channels, since most small businesses are located outside of major metropolitan areas and possess limited resources. As a result, small businesses are using the Internet to expand significantly their market reach, procure services and products and become more competitive. Additionally, small businesses often have limited time, resources and access to expertise. The Internet addresses these constraints by allowing small businesses to access and exchange information quickly and inexpensively among trading partners. 29

Despite the significant growth of small business Internet use, existing Internet-based and software-based offerings targeting this market have not provided a comprehensive solution that addresses the e-commerce and informational needs of small businesses. Web sites that aggregate small business news and information, for example, often do an inadequate job of enabling e-commerce. Similarly, companies with web sites that focus on e- commerce often have limited or inconsistent content offerings. As a result, small businesses are forced to use multiple, distinct web sites to conduct commerce, interact with other businesses and suppliers and obtain targeted, business-specific news and content. The Onvia.com Solution Our emarketplace is designed to help small businesses succeed by providing a single online destination where small businesses can buy and sell services and products, exchange valuable information and access productivity tools. Our emarketplace provides numerous benefits to small business buyers and sellers. Sellers are able to expand cost-effectively their reach and customer base, without incurring the significant sales and marketing costs typically associated with traditional efforts. Because our services and products are dedicated exclusively to small businesses, our emarketplace provides sellers targeted access to the small business market. Ultimately, as we continue to collect information on buyer purchasing patterns, we expect to be able to offer sellers the ability to personalize and target further their service and product offerings. Buyers benefit from access to a single source for service, product and price comparisons, helping to drive greater efficiency in the procurement process. Because we offer multiple vendors in most service and product categories, we provide context and choice for small business purchasing decisions. Complementing our broad service and product offerings, we provide small businesses with information, news and business tools to enhance business operations. Using our soon-to-be-introduced seller ratings system, buyers will also be able to discover which sellers have garnered the highest ratings for service and availability. Our news, expert advice and other content also provides resource-constrained small businesses with timely and valuable information and expertise. Key elements of our solution include: . Comprehensive array of pre-selected services and products and interactive purchasing tools. Our emarketplace offers more than 25,000 products from more than 1,000 manufacturers. In addition, we offer nine critical business services, including Internet access, telecommunications plans, business credit cards and payroll processing. We also offer over 50 services in our request for quote, or RFQ, network. We have selected these services and products based on their ability to meet the specific needs of small businesses. Our interactive purchasing tools, which facilitate real-time service and product comparisons, also help small businesses make more informed purchasing decisions. By providing access to numerous suppliers as well as valuable information, our emarketplace helps small businesses lower their procurement costs and affords greater choice and convenience. . Complete on-site transaction processing capabilities. Our emarketplace provides all necessary transaction processing capabilities to allow small businesses to purchase and sell services and products without ever leaving our web site. This feature enables small businesses to accomplish all of their purchasing needs from a single location and to rely on a single source for service- and product-related order tracking and customer support. We also offer multiple transaction processing capabilities. For example, small businesses may purchase commodity services and products based on published selling prices or request quotes for more complex services and products from more than 6,500 companies that sell to small businesses. Because we allow customers to establish personalized accounts, they do not need to enter shipping and billing information each time they transact commerce through our emarketplace. We have implemented these personalized accounts to help maximize our customer retention efforts. . Integrated product and service fulfillment. We source products from multiple service providers, such as AT&T Wireless, Qwest, and Verio, and suppliers, such as Ingram Micro, Merisel and Tech Data. Our order processing systems are integrated with those of our service providers and suppliers. This integration allows us to provide our customers with information on service plans and pricing. In 30

addition, we are able to verify product pricing and availability at each of our suppliers' warehouses before forwarding an order for fulfillment, which helps facilitate the timely delivery of products. . Efficient small business seller channel. We have designed our emarketplace to aggregate small businesses into a single Internet destination. As a result, our emarketplace provides an efficient distribution channel to help sellers to small businesses reach a very targeted audience. In addition to selling existing services or products through this channel, sellers can use our emarketplace to test market new services and products targeted to small business. As we continue to aggregate buyer information in our emarketplace, we expect to be able to enable sellers to personalize their offerings using our chaperoned access program. . Proprietary value-added information and business tools and relationships with leading content providers. In addition to our broad service and product offerings, our emarketplace provides small businesses with proprietary information, news and business tools that enhance the utility of our emarketplace. Our staff of journalists, working in Seattle and Washington, D.C., publishes daily stories and two newsletters tailored to the interests of small businesses. We also offer "how-to" advice and business tools designed to help small businesses enhance their operations. In addition to the content that we develop internally, we provide small businesses additional content from third parties, such as Business 2.0, Business Week, Fast Company and Reuters News Service. . Comprehensive customer service and support. We maintain a trained customer service staff, including vendor-certified professionals, that provides multiple levels of customer service, ranging from site usage to post-sales technical support. This provides our customers with a single source for support, allowing them to avoid having to deal individually with the many suppliers from which they purchase servi ces and products. In addition, by providing customer service in-house we maintain a direct relationship with our customers. These services help us maintain high levels of customer satisfaction, foster customer loyalty and tailor our offerings to meet customer needs and preferences. Strategy We intend to continue to enhance our position as the leading business-to- business emarketplace for small businesses. Key elements of our strategy include to: . Increase brand awareness and credibility. We believe that we are the first provider of a comprehensive emarketplace providing content, commerce and community for small businesses, and we intend to capitalize on this position. We are committed to becoming the best known and most trusted brand for small businesses on the Internet by investing aggressively using traditional and innovative methods of advertising and promotions. We also intend to continue to align ourselves with well- known, respected brands and enter into only those relationships that are consistent with the Onvia.com brand image. For example, we have developed a co-branding relationship with DowJones.com where we are the exclusive provider of small business services and products on the DowJones.com web site. . Aggressively pursue customer acquisition and retention strategies. We seek to drive customer acquisition through a combination of marketing initiatives, continued focus on customer service and the provision of services, products and information that meet our customers' business needs. For example, we intend to continue to establish strategic relationships with major online portals and develop joint marketing arrangements with additional small business associations. In addition, we intend to increase our customer base through direct advertising campaigns, co-branding initiatives with leading web sites that cater to small businesses and viral-marketing programs. By continuously enhancing and syndicating our service, product and information offerings, we seek to expand our customer base and encourage repeat use of our emarketplace. . Become a single source for all small business needs. We intend to become a single source for all small business needs by continuing to expand our service, product and information offerings and the functionality of our web site. We also intend to introduce additional methods of conducting e-commerce transactions and develop additional tools that will allow small businesses to reach new 31

customers, become more competitive and improve operating efficiencies. We believe these expanded offerings will attract more small businesses to our emarketplace, creating additional value and marketing opportunities for our sellers. This will help attract a growing number and greater diversity of sellers which, in turn, will attract more buyers, creating a network effect in which the value of our emarketplace increases with the addition of each participant. . Maintain our commitment to customer service. We maintain a strong commitment to providing the highest level of customer service. We will continue to invest significant resources in delivering high-quality customer service to maintain our high levels of customer satisfaction and to drive customer retention. For example, we plan to develop an in- bound sales force for account management, continue to augment our multitiered customer service processes and expand our training programs to provide additional levels of support for our service and product offerings. . Enable more effective direct marketing to small businesses. By tracking the demographic and purchasing data on our small business customers, we intend to become an intelligent electronic-marketing channel to help sellers cost-effectively reach small businesses. Our large and growing customer base positions our emarketplace as a gateway for communicating with the small business community. For example, we intend to facilitate targeted marketing through which sellers can communicate special promotions and sales to a select audience. We do not now, and do not intend to, share attributed customer information with third parties absent the explicit permission of our small business customers. We intend all facilitated marketing to be permission-based. . Pursue strategic alliances and acquisitions. We intend to pursue aggressively strategic alliances and acquisitions designed to increase our customer base, broaden our offerings and expand our technology platform. We also intend to use alliances and acquisitions to facilitate our entry into new domestic and international markets. By aggressively pursuing strategic relationships and acquisitions, we believe we can significantly enhance our core business and secure and extend our position as the leading small business emarketplace. The Onvia.com Emarketplace Our emarketplace provides a single online destination where small businesses can buy and sell services and products and exchange valuable information and productivity tools. The Onvia.com emarketplace includes: . our small business services trading hub, which currently consists of more than 6,500 businesses that act as suppliers across 50 services in our RFQ network; . our broad array of more than 25,000 products, ranging from office supplies to computer systems, and nine critical business services selected for the particular needs of small businesses that can be purchased quickly and conveniently through our "Buy Now" system; and . our content and business tools selections, which provide timely news, information, editorial content and business tools designed to help small businesses enhance their operations. The Onvia.com Small Business Services Trading Hub We have established relationships with more than 6,500 businesses that function as suppliers within our small business services trading hub. Currently our primary trading mechanism is our RFQ network, which we launched in November 1999. Our emarketplace enables small business customers to specify their needs across 50 services through an electronic questionnaire that is formulated into a request for quote, or RFQ. The RFQ is then filtered and routed to qualified suppliers of the desired service. Suppliers within our network can evaluate the RFQ, respond to requests with specific pricing and fulfillment information and establish relationships with qualified buyers. We believe that our RFQ network provides numerous benefits to sellers, including: . enhanced revenue opportunities by providing access to new customers and new markets; 32

. the ability to reach efficiently their target market without incurring the marketing and sales costs traditionally associated with broader advertising campaigns, particularly for providers of niche or specialized services and products; and . a greater understanding of the dynamics involved in purchasing decisions. We believe that our RFQ network also provides numerous benefits to buyers, including: . the ability to reach efficiently and cost-effectively multiple service providers, particularly for time-sensitive requests and for services that might not otherwise be available in the buyer's geographic area; . the ability to compare competitive quotes and pricing; and . the ability to make more informed buying decisions with immediate information about the marketplace. We believe that our RFQ services form the basis of a small business trading community that we intend to expand significantly. We intend to grow this trading community by providing additional transactional processing capabilities and by using our knowledge of our customers to create sub-communities based upon, for example, vertical industry specialization, regionalization and job specifications. We categorize our RFQ services into "business centers" for convenient presentation to the buyer. We currently provide RFQ services in the following business centers:
Business Center Features -----------------------------------------------------------------------------Accounting Payroll, merchant processing, general accounting, tax accounting and collection services -----------------------------------------------------------------------------Finance Business loans, business plan services and financial consulting -----------------------------------------------------------------------------Hospitality Convention services and facilities and event planning -----------------------------------------------------------------------------Human Resources 401(k) plans, recruiting services, temporary staffing, administrative staffing and human resources and personnel consulting -----------------------------------------------------------------------------Insurance Health insurance and property and casualty insurance -----------------------------------------------------------------------------Internet Services Internet access, web site hosting and web design -----------------------------------------------------------------------------Legal Services Legal services relating to general business law, tax law and incorporation -----------------------------------------------------------------------------Marketing Market research, public relations, corporate gifts, banner advertisement design and placement, prospect lists, promotional products, telemarketing services, e-mail marketing and advertising and direct mail service -----------------------------------------------------------------------------Office Services Security systems and storage -----------------------------------------------------------------------------Printing Printing of marketing materials, business cards, stationery and signs -----------------------------------------------------------------------------Shipping and Logistics Freight forwarding and customs brokerage services -----------------------------------------------------------------------------Support Software technical support, hardware technical support, cable installation and PC hardware installation -----------------------------------------------------------------------------Telecommunications Telephone systems and conference calling services -----------------------------------------------------------------------------Training Computer training and technical certification

"Buy Now" Services and Products--Overview Our emarketplace offers a broad range of nine services and 25,000 products selected specifically to meet the needs of small businesses. Our emarketplace enables the customer to effectively screen services and products and contains interactive tools designed to help small businesses make more informed service and product selections. 33

Information. We provide detailed information about most of the services and products we feature in our emarketplace. This information, together with full- color photographs of most of our offered products, allows our customers to compare features among different services and products and helps them make informed buying decisions. Search capabilities. Our web site features sophisticated but easy-to-use search tools. This allows customers to find quickly and easily specific products. The search function is directly accessible on most pages of our web site. Companion products. Our web site highlights optional companion products to complement products selected by the customer. Selection wizards. Our emarketplace features numerous selection wizards, or guides, which allow customers to directly compare and contrast competing services in a specific category without having to move back and forth between multiple pages of our web site. Making a purchase. By clicking the "Buy Now!" or "Add" buttons located next to our service and product descriptions, customers can add a service or product to their shopping cart. Customers can continue browsing and adding services and products for as long as they wish before heading to a convenient checkout process. Security and privacy. We designed our systems to maintain the confidentiality and security of our customers' personal and financial information. We use powerful encryption technology to prevent information piracy or theft. When customers establish accounts with us, they are assigned a confidential password that only they can use to gain information about their account. As an added protection, customers returning to our web site who use the same billing information are not asked to provide credit card numbers a second time. We do not now, and do not intend to, share attributed customer information with third parties absent the explicit permission of our small business customers. We intend all facilitated marketing to be permission-based. "Buy Now" Services Our emarketplace offers a wide variety of common business services typically used by small businesses, including long distance telephone service, payroll service and merchant credit card processing. Our goal is to aggregate the most common business services and offer the most competitive rates among a variety of alternatives. Our selection wizard technology is designed to ease the service-selection process by helping small businesses choose the provider that best suits their individual needs. We group our services into "business centers" organized around specific functional tasks. We currently provide the following business centers:
Business Center Features -----------------------------------------------------------------------------Accounting Web-based payroll services -----------------------------------------------------------------------------Finance Business credit cards -----------------------------------------------------------------------------Internet Dial-up, DSL, T1 line and T3 line Internet access and web-hosting services provided by Verio and EarthLink -----------------------------------------------------------------------------Support 1-800 phone support from DecisionOne, which provides telephone-based tech support for a variety of computer hardware, software and network problems -----------------------------------------------------------------------------Telecommunications Long distance telephone service, wireless phone service, and paging service through service providers such as Qwest, Cable & Wireless USA, TTI National, AT&T Wireless and SkyTel Paging

34

"Buy Now" Products We offer a wide range of competitively priced products selected to meet the needs of small businesses. Our team of product managers works closely with manufacturers and suppliers to select quality brands and products to feature on our emarketplace. We have selected the products that appear on our emarketplace based upon their utility to small businesses, and we supplement our selections on an ongoing basis based upon customer feedback. We organize our products into the following categories:
Product Category Description -----------------------------------------------------------------------------Computer Hardware . We offer more than 8,000 computers and related accessories from leading manufacturers, such as IBM, Compaq, Hewlett Packard and Toshiba . Product offerings include: complete computer systems, notebook computers, handheld computers, printers, monitors, memory upgrades, storage devices and a wide variety of accessories such as cables, modems and system components -----------------------------------------------------------------------------Computer Software . We offer more than 3,500 software titles conveniently categorized by function from leading software developers, such as Microsoft, IBM, Intuit and Lotus . Product offerings include: general business, operating systems, development tools and databases -----------------------------------------------------------------------------Network Products . We offer more than 2,500 network products from leading vendors, such as 3Com, Cisco and Nortel Networks . Product offerings include: complete network systems as well as individual components such as adapters, hubs, switches and routers -----------------------------------------------------------------------------Office Furniture . We offer more than 3,000 pieces of office furniture from leading manufacturers, such as Hon, Global and Superior Chaircraft . Product offerings include: desks, chairs, tables, printer stands, file cabinets, desk lamps and bookcases, as well as a full line of accessories, including chair mats, foot rests and coat racks -----------------------------------------------------------------------------Office Supplies . We offer more than 15,000 office supply products from leading manufacturers, such as Pentel, Epson, 3M and Universal Office Products . Product offerings include: paper products, toner cartridges, writing instruments, file folders, staplers and paper fasteners and a broad array of office supplies, including calendars, personal organizers, business forms, break-room supplies and janitorial supplies -----------------------------------------------------------------------------Other Business Machines . We offer more than 2,000 business machines from leading manufacturers, such as Fellowes, Brother and Ibico . Product offerings include: copiers, fax machines, shredders, calculators and typewriters -----------------------------------------------------------------------------Phone Systems . We offer more than 500 phone systems and components from leading manufacturers, such as AT&T, Plantronics, Nortel and Polycom . Product offerings include: phone systems, individual phones, multi-line systems and related equipment and accessories including answering machines and accessories

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Information and Business Tools We provide a broad offering of editorial content targeting small business owners. Our journalistic staff publishes editorial content that is developed from multiple sources, including items that are created in-house, contracted to freelancers, picked up from wire services or provided by regular columnists and contributors. We also offer Small Business Today and Washington Wire, which are focused newsletters that deliver actionable small business news. Our reporters also write daily features, case studies, trend stories, personality profiles, brief capsules of news and other relevant information and industry-specific or regional information. We supplement our own coverage with news and feature stories from Business Week, Business 2.0, FastCompany and Reuters News Service. We also offer a variety of how-to advice and business tools designed to help small business owners grow their businesses. We have exclusive rights in the small business field to Successful Entrepreneur's interactive road map and toolkit, a step-by-step guide to starting, marketing, growing and selling a small business. Our business tools are designed to enable small businesses to benchmark themselves against other companies in their industry based on key metrics, such as profitability, customer base and cost structure. In addition, we offer information regarding local, state and federal rules and regulations applicable to small businesses, as well as contacts and content relating to various small business associations and groups of interest to small business owners. We intend to add community and opinion components to our editorial offering, including political and economic commentary, bulletin boards and chat rooms. Strategic Relationships We pursue strategic relationships to increase our reach to small businesses, increase traffic to our web site and improve the content and functionality of our emarketplace. Our principal strategic relationships include the following: Small business trade associations. We have established and seek additional strategic relationships with several vertical and horizontal industry associations representing small businesses. These relationships are a key component of our brand-building and customer acquisition strategies. These strategic relationships take numerous forms, but in general they: .provide us with grassroots marketing access to large, targeted small business audiences; . give us a "seal of approval" through our relationships with them that helps us market our services, products and information and business tools to the associations' members in a trusted manner and establish long-term customer loyalty; . provide us with new resources by leveraging marketing dollars spent by the association; and . allow us to develop vertical market opportunities in specific market niches. Working closely with these associations, we develop marketing campaigns targeted to each association's members, which may include the following elements: . direct mail, telemarketing, newsletters, conferences, e-mail, broadcast fax, advertisements, editorial placement, speaking opportunities and additional communications vehicles; and . link placement on the associations' web sites, which link to a co- branded purchasing center using our emarketplace technologies. We have established relationships with a broad range of business and special interest associations, including American Business Women's Association, American Management Association International, California Small Business Association, National Small Business United, Society of American Florists, Small Business Legislative Council, Home Based Business Owners Association and American Subcontractors Association. These associations have a combined membership of approximately 420,000 small businesses. 36

We have established a strategic relationship with the Service Corps of Retired Executives, or SCORE, which is funded by the U.S. Small Business Administration and provided more than 350,000 individuals with business advice, counseling, mentoring and workshop sessions in 1998. We are featured on the SCORE web site and in numerous SCORE publications and press releases. Co-branding relationships. We host co-branded web site pages with a number of different Internet sites targeted toward entrepreneurs and small business owners. These co-branded pages look and operate similar to Onvia.com web pages except they may have a banner advertisement at the top of each screen featuring the logos of both companies. Some of our relationships include: . Dow Jones & Company. We have a relationship with Dow Jones & Company to integrate our business-focused service and products solutions into the DowJones.com web site. Onvia.com is featured as an e-commerce provider to DowJones.com users, and DowJones.com users have access to our emarketplace. . Bloomberg.com. We have a relationship with Bloomberg.com to provide Bloomberg.com users access to business-focused service and products solutions. Our small business-related advice and articles are also featured prominently on the Bloomberg Small Business Center site. . Business Week. We have a relationship with Business Week to provide Business Week Online users with a co-branded site offering businessfocused service and products solutions. The Business Week Online/Onvia.com co-branded site is accessible from the Business Week Online web site. Media and content relationships. We syndicate our proprietary content to businesses, such as Bloomberg, that desire to offer their users a broader content offering. In addition, we have relationships with various parties that provide media and other content to our web site, including Business Week, Fast Company and Business 2.0. Sponsorship relationships. For a fee, a business may sponsor a specific Onvia.com service or product. These sponsors are able to target their marketing efforts by placing their respective logos on web pages they believe their customers are likely to visit. Sales and Marketing We have designed our marketing strategy to build brand awareness, increase traffic to our web site, build our customer base, encourage repeat business and develop incremental sales opportunities. We target the small business owner who wants to save time and money by using the Internet to conduct routine transactions as well as special purchases. Advertising. We have traditionally used highly focused advertising programs to reach our target audience, including leveraging our relationships with small business trade associations to reach their members through special promotions or newsletters. We use traditional media to build brand loyalty among our very targeted market. We also use niche media to reach the small business audience. We anticipate using both traditional and targeted media in the future to reach our core audience. Online marketing relationships. We have established online marketing relationships with leading web sites which feature an integrated link to our web site. These links allow users of these web sites to access our emarketplace. We currently have online marketing relationships with ZDNet, USA Today, Infospace and About.com. OnviaFlash. Every week we send out "OnviaFlash," an e-mail newsletter alerting our customers of discounts, special offerings, editorial content on our web site and other items of interest to our customers. Our customers voluntarily subscribe to OnviaFlash and may unsubscribe at any time. Promotions and contests. We use an array of promotions to drive traffic and transactions. In the past, these have included free shipping, coupons, free RFQ trial periods and special pricing on key items. We also periodically conduct contests which offer entrants the opportunity to win free products or other prizes. These contests are typically advertised on co-branded web sites or through other means and are designed 37

to attract the awareness and attention of potential customers. Contest entrants are required to submit data such as their name, e-mail address, job title and number of employees. This information is retained in our customer database. Customer Service We believe that a high level of customer service is critical to retaining and expanding our customer base. Our customer service representatives, including vendor-certified professionals, are available to respond to any customer inquiry via phone or e-mail. Our customer service representatives help customers with issues such as the use of our web site, product availability, order status and billing questions. If needed, our customer service representatives can direct product-specific questions directly to our product managers for assistance. We offer all of our customers a "Satisfaction Guarantee" that allows them to return any product within 30 days of purchase for any reason for a full refund. Our web site features a Returns Policies & Procedures page that makes it easy for a customer to arrange for a return and refund. Distribution and Order Fulfillment Integrated product distribution. We have established order fulfillment relationships with several of the largest suppliers in the telecommunications, computer hardware and software and business products industries. This allows us to verify product pricing and availability at each of our suppliers' warehouses before forwarding an order for fulfillment. The supplier drop-ships the product with Onvia.com packaging directly to the customer via UPS, FedEx or other common carrier. We bill the customer's credit card when the order is placed on our web site, and our suppliers invoice us under standard negotiated payment terms. Orders are initiated directly from our customers through our web site. We take title to products from shipment until receipt by the customer and assume the economic risk related to collections, customer service and returns. We do not typically maintain physical inventory but may do so for scarce resources or when otherwise appropriate. We do not have long-term relationships with any of our suppliers and transact with them through purchase orders. We currently source all of our product orders from multiple suppliers. Our primary supplier in the computer hardware and software, networking products and phone systems categories is Ingram Micro. If Ingram Micro does not carry or is out of stock of a particular item, the order is automatically directed to one of our two current secondary suppliers, TechData and Merisel. Most product orders in the office supplies, office furniture and business machines categories are fulfilled by United Stationers. For the nine months ended September 30, 1999, approximately 78% of our revenue was derived from sales of products supplied by Ingram Micro. Fulfillment of orders for business services. All of the business services we feature are provided by third-party service providers. Each service we offer has its own unique order process, but in general customers fill out a custom application form directly on our web site. We then electronically submit the application to the service provider for fulfillment. Technology We support our emarketplace using an advanced technology platform designed to serve a large volume of web traffic and customer transactions in a reliable, efficient, scalable and fault-tolerant manner. We designed and programmed our own proprietary core systems for customer interaction, order processing, order fulfillment and back-end systems. Our systems have been designed to: . provide fast, secure and uninterrupted visitor access to our web site; . validate and process customer orders promptly and accurately; . provide accurate order placement with vendors to allow prompt fulfillment of customer orders; . store large amounts of historical data; . provide timely, comprehensive and accurate management-reporting capabilities easily; 38

. update products, prices and other information on our web site; . accommodate upgrades to tools and features on our web site; . scale to accommodate growth in our operations; and . provide redundancy in case of component system failures. Our systems use a combination of our own proprietary technologies and commercially available licensed technologies. The backbone of our technology infrastructure consists of database servers running on an Oracle database with Sun hardware. The front end consists of multiple redundant web servers which are expandable as our operations grow. These systems interact with our own proprietary system for customer interaction, order processing, order fulfillment and other assorted functions. Our web servers use Verisign digital certificates to help ensure secure transactions and communications over the Internet. We designed the system to scale easily to support rapid growth, as well as to sustain multiple failures by various components without down-time. Our web servers, database servers, transaction-processing servers and other core systems that conduct our essential business operations are physically housed at Exodus Communications in Seattle. Exodus provides professional housing and hosting services along with 24-hour monitoring and engineering support in a climate-controlled and physically secure environment. Exodus provides redundant communications lines from multiple Internet connectivity providers and has its own generator and other emergency backup systems. We house all non-critical systems such as development servers, quality assurance servers, and internal network servers at our headquarters in Seattle. We also maintain redundant backup equipment and systems in our office headquarters in the event of a failure of our systems at Exodus. In addition to maintaining responsibility for the technical architecture, security and up-time of our emarketplace, our technology department works closely with our sales and marketing department to ensure that customer feedback for new technology features is incorporated into our emarketplace offerings. Competition The e-commerce market is new, rapidly evolving and intensely competitive. The e-commerce market targeting small business customers is still undeveloped and fragmented. The industry is characterized by minimal barriers to entry, and new competitors can launch, at relatively low cost, a competitive web site offering service and products targeted to the small business market. We believe that several other e-commerce competitors are developing business strategies similar to ours targeting the small business market. We compete with both Internet-based as well as traditional providers of business services and products. Our current and potential competitors include: . Internet sites that target the small business market including AllBusiness.com, BizBuyer.com, Digitalworks.com and Works.com; . Internet sites targeting the consumer market that also sell to small business customers, including Beyond.com, Buy.com and Onsale.com; . companies such as Microsoft, America Online and Yahoo! that offer a broad array of Internet-related services and either offer business-tobusiness e-commerce services presently or have announced plans to introduce such services in the future; and . traditional non-Internet-based retailers that sell or resell business service and products such as AT&T Wireless, Circuit City and CompUSA. Many of our current and potential competitors have longer operating histories, greater brand recognition, larger market presence and greater financial, marketing and other resources than we do. Our competition may be able to respond more quickly to new or emerging technologies and changes in customer requirements. Competitive pressures could reduce our market share or require us to reduce the price of our services or products, any of which could harm our business. 39

We compete on the basis of several factors, including: . brand recognition and loyalty; . mix and depth of products, services, information and interactive business tools; . reliability and speed of order fulfillment; . quality of customer service; . timeliness and relevance of news, editorials and advice offerings; . web site performance; and . pricing. We believe that we currently compete favorably with respect to each of these factors. However, our market is still rapidly evolving, and we may not be able to compete successfully against current and potential competitors. Intellectual Property Rights Our future success depends in part on our proprietary rights and technology. We rely on a combination of copyright, trademark and trade secret laws, employee and third-party nondisclosure agreements and other methods to protect our proprietary rights. We license and will continue to license certain products integral to our services and products from third parties, including products which are integrated with internally developed products and used jointly to provide key content and services. These third-party product licenses may not continue to be available to us on commercially reasonable terms and we may not be able to successfully integrate such third-party products into our solutions. Employees As of December 15, 1999 we had 196 full-time employees. Of the total, 53 were in sales and marketing, 45 were in customer support, 75 were in technology and development and 23 were in finance and administration. Of these, 33 were employees of our Canadian subsidiary, including 15 in sales and marketing, 11 in customer support, one in technology and development and six in finance and administration. None of our employees is represented by a union or collective bargaining agreement, and we have never had a work stoppage. We consider our relations with our employees to be good. Facilities Our headquarters are located in Seattle, Washington, where we lease three locations totaling approximately 95,000 square feet of office space under three leases. These leases expire between 2001 and 2008. Our Canadian subsidiary company in Vancouver, British Columbia also leases two locations totaling approximately 6,900 square feet of office space under leases which expire in 2001. One of the leases is renewable at our option for up to three periods of three years each. The leases generally require us to pay insurance, utilities, real estate taxes and repair and maintenance expenses. We believe that these leased facilities will be sufficient to meet our growth and space requirements for approximately the next year. After that, or possibly sooner, we may be required to seek additional facilities. Legal Proceedings From time to time, we may be involved in legal proceedings and litigation incidental to the normal conduct of our business. We are not currently involved in any material legal proceedings or litigation. 40

MANAGEMENT Executive Officers, Directors and Other Key Employee Our executive officers, directors and other key employee and their ages as of December 21, 1999 are as follows:
Name Age Position ------ -------Glenn S. Ballman........ 28 President, Chief Executive Officer and Director Mark T. Calvert......... 41 Vice President, Chief Financial Officer and Secretary Kristen M. Hamilton..... 29 Vice President and Chief Strategy Officer Douglas H. Kellam....... 41 Vice President of Marketing Mark A. Pawlosky........ 42 Vice President and Editor-in-Chief Arthur R. Paul.......... 30 Vice President of Engineering Clayton W. Lewis........ 40 Vice President of Business Affiliations Louis T. Mickler........ 53 Vice President of IT Operations Robert D. Ayer.......... 34 Vice President of Products and Services J. Gary Meehan.......... 41 President of Onvia.com Canada Michael D. Pickett...... 51 Chairman and Director Jeffrey C. Ballowe (1)(2)................. 43 Director William W. Ericson...... 41 Director Kenneth A. Fox (1)(2)... 29 Director Nancy J. Schoendorf (1)(2)................. 45 Director Anton R. Simunovic...... 34 Director

(1) Member of our Compensation Committee (2) Member of our Audit Committee Glenn S. Ballman founded Onvia.com and has served as our President and Chief Executive Officer since February 1997. Mr. Ballman has also served as a director of Onvia.com since February 1999. Mr. Ballman served as Chief Executive Officer at SunCommerce Corporation, an e-commerce consulting firm to small and medium sized businesses, from March 1997 to November 1997. From February 1996 to October 1996, Mr. Ballman was Project Director for e-commerce applications deployment at Axion Internet Communications, an electronic commerce solutions provider. Mr. Ballman holds an Honors Bachelor of Arts in Business Administration from the University of Western Ontario. Mark T. Calvert was a consultant to Onvia.com from July 1998 to February 1999 and has been our Vice President, Chief Financial Officer and Secretary since February 1999. Prior to joining Onvia.com, Mr. Calvert was Executive Vice President, Chief Financial Officer, Secretary and Treasurer at Treasure Bay Gaming and Resorts, Inc., an emerging market gaming corporation, from 1994 to 1997. From 1990 to 1994, Mr. Calvert served as Managing Director at Alexander Hutton Advisors Inc. Prior to Alexander Hutton Advisors Inc., Mr. Calvert was employed by Ernst & Young in the Entrepreneurial Division from 1982 to 1990. Mr. Calvert holds a Bachelor of Arts in Business Administration from the University of Washington. Mr. Calvert is a CPA and a CTP. Kristen M. Hamilton has served as our Vice President and Chief Strategy Officer since December 1999. From June 1998 to December 1999, Ms. Hamilton served as our Vice President of Business Development. Prior to joining Onvia.com, Ms. Hamilton was co-founder of Technology Solutions Network, a provider of vertical technology solutions to small businesses, from July 1997 to May 1998. From February 1998 to May 1998, Ms. Hamilton also served as an independent consultant to various clients. Prior to working at Technology Solutions Network, Ms. Hamilton was Director of Consulting at MSI Consulting Group, a technology marketing consulting firm, from August 1994 to June 1997. Ms. Hamilton holds an Honors Bachelor of Arts in Business Administration from the University of Western Ontario. Douglas H. Kellam has served as our Vice President of Marketing since August 1999. Prior to joining Onvia.com, Mr. Kellam was Vice President of Marketing and General Manager at First Alert Inc., a manufacturer of home safety products, from March 1997 to February 1999. Prior to working at First Alert Inc., 41

Mr. Kellam was a Vice President of Sales and Marketing at Austin Nichols, a Division of Pernod Ricard Group, a beverage company, from June 1995 to February 1997. From January 1988 to June 1995, Mr. Kellam held various positions at Pepsi Cola Company, including Field Marketing Manager, Director of Marketing and General Manager. Mr. Kellam holds a Bachelor of Science in Business Administration from the University of Minnesota and a Master of Business Administration from Northwestern University's Kellogg School. Mark A. Pawlosky has served as our Vice President and Editor-in-Chief since August 1999. Prior to joining Onvia.com, Mr. Pawlosky was an Executive Producer of MSNBC on the Internet, an Internet news site, from July 1996 to August 1999. Prior to working at MSNBC, Mr. Pawlosky was Senior and Chief Editor for MSN News, the online news service for Microsoft and forerunner to MSNBC.com, from September 1995 to July 1996. Prior to working at MSN News, Mr. Pawlosky was a reporter for the Wall Street Journal, from April 1995 to September 1995. Prior to working at the Wall Street Journal, Mr. Pawlosky was Editor-in-Chief of Biz Magazine, a small business magazine published by Dow Jones and American City Business Journals, from September 1993 to February 1995. Mr. Pawlosky holds a Bachelor of Journalism from the University of Missouri. Arthur R. Paul has served as our Vice President of Engineering since October 1997. Prior to joining Onvia.com, Mr. Paul was Application Development Manager at Internet Stock Market, a real-time web-based financial and market information site, from May 1997 to October 1997. Prior to working at Internet Stock Market, Mr. Paul was Lead Engineer at MultiActive Education Inc., an online interactive education web site, from January 1997 to May 1997. Prior to working at MultiActive Education Inc., Mr. Paul was Lead Engineer at Axion Internet Communications, an e-commerce solutions provider, from April 1996 to January 1997. Mr. Paul holds an Associate Degree in Information Technology from Kwantlen College. Clayton W. Lewis joined Onvia.com in March 1999 and has served as our Vice President of Business Affiliations since July 1999. Prior to joining Onvia.com, Mr. Lewis was an independent consultant for e-commerce start-ups from April 1998 to February 1999. Prior to being an independent consultant, Mr. Lewis was Executive Vice President of ETC, a subsidiary of Tele-Communications, Inc., from October 1995 to March 1998. Prior to working at ETC, Mr. Lewis was senior Vice President of Business Development at RXL Pulitzer, the multimedia arm of Pulitzer Publishing Company, from January 1990 to September 1995. Mr. Lewis holds a Bachelor of Arts in Business Administration from the University of Washington. Louis T. Mickler has served as our Vice President of IT Operations since August 1999. Prior to joining Onvia.com, Mr. Mickler was Vice President of IS Systems Operations at Bear Creek Corporation, a direct marketer via catalog, stores and the Internet, from January 1996 to August 1999. Prior to working at Bear Creek Corporation, Mr. Mickler was Director of IS Operations at Eddie Bauer, another direct marketing company with channels via catalog, stores and the Internet, from August 1994 to January 1996. Mr. Mickler holds a Bachelor of Science from Jones College. Robert D. Ayer has served as our Vice President of Products and Services since February 1997. Prior to joining Onvia.com, Mr. Ayer was Vice President of Sales and Marketing at Axion Internet Communications, an e-commerce solutions provider, from March 1995 to February 1997. Prior to working at Axion Internet Communications, Mr. Ayer was a shipping and logistics specialist for Pitney Bowes Inc. from September 1991 to September 1994. Mr. Ayer holds a Bachelor of Arts in Economics from the University of Waterloo. J. Gary Meehan has served as an officer of Onvia.com Canada since June 1998 and was appointed as President of Onvia.com Canada in December 1999. Prior to joining Onvia.com Canada, Mr. Meehan served in a variety of positions at Doppler Industries, Inc., a reseller of computer equipment, from 1992 to 1998, most recently as Vice President of Inventory. Prior to that, Mr. Meehan worked at Safety Supply Canada where he served in a variety of positions including Operations Manager. Mr. Meehan received a Business Administration Certificate from the British Columbia Institute of Technology. Michael D. Pickett has served as our Chairman and as a director of Onvia.com since February 1999. Since August 1999, Mr. Pickett has served as Chief Executive Officer of Hardware.com, Inc., an online retailer. From July 1997 to March 1999, Mr. Pickett was Chairman and Chief Executive Officer of 42

Technology Solutions Network, LLC. From October 1983 to February 1996, Mr. Pickett served in a variety of positions and most recently as Chairman, Chief Executive Officer and President of Merisel, Inc., wholesale distributor of computer products. Mr. Pickett has served as a director of many companies, including Digital Archeology and Optimum Yield Inc. Mr. Pickett holds a Bachelor of Arts in Business Administration from the University of Southern California. Jeffrey C. Ballowe has served as a director of Onvia.com since December 1999. In August 1999, Mr. Ballowe became Chairman of deja.com where he had been a member of the board of directors since March 1998. Since 1997, Mr. Ballowe has been self-employed. From 1986 until 1997, Mr. Ballowe held various management positions at Ziff-Davis, an international media company, including President of the Interactive Media and Development Group. Mr. Ballowe also serves as a director of Drkoop.com, GiveMeTalk.com, Jupiter Communications, VerticalNet, NBCi, and ZDTV, and on the advisory board of Internet Capital Group. Mr. Ballowe holds a Bachelor of Arts from Lawrence University, a Master of Arts in French from the University of Wisconsin and a Master of Business Administration from the University of Chicago. William W. Ericson has served as a director of Onvia.com since September 1999. Since August 1995, Mr. Ericson has been an attorney at Venture Law Group, A Professional Corporation, a law firm specializing in the representation of technology companies. Mr. Ericson is the managing director and founder of Venture Law Group's Pacific Northwest Office located in Kirkland, Washington. Prior to joining Venture Law Group, Mr. Ericson was an associate in the Palo Alto, California office of the law firm of Brobeck, Phleger and Harrison, LLP from October 1992 through August 1995. Mr. Ericson holds a Bachelor of Science in Foreign Service from Georgetown University and a Juris Doctor from the Northwestern University School of Law. Kenneth A. Fox has served as a director of Onvia.com since February 1999. In 1996, Mr. Fox co-founded Internet Capital Group, an Internet company primarily engaged in managing and operating a network of business-to-business e-commerce companies. Mr. Fox has served as one of Internet Capital Group's Managing Directors since its inception in March 1996. Mr. Fox has also served as a director of Internet Capital Group since February 1999. Prior to forming Internet Capital Group, Mr. Fox was the Director of West Coast Operations for Safeguard Scientifics, Inc. and Technology Leaders II, LP, a venture capital partnership, from 1994 to 1996. Mr. Fox serves as a director of deja.com and several privately held companies. Mr. Fox holds a Bachelor of Science in Economics from Pennsylvania State University. Nancy J. Schoendorf has served as a director of Onvia.com since January 1999. Ms. Schoendorf has been a general partner of Mohr, Davidow Ventures, a venture capital firm, since 1993, and Managing Partner since 1997. Prior to joining Mohr, Davidow, Ms. Schoendorf spent seventeen years in the computer industry including management positions with Hewlett-Packard, Software Publishing Corporation and Sun Microsystems, Inc. Ms. Schoendorf currently serves as a director of Actuate Corporation, Agile Software Corporation, Broadbase Software, Inc. and several privately held companies. Ms. Schoendorf holds a Bachelor of Science in Computer Science from Iowa State University and a Master of Business Administration from Santa Clara University. Anton R. Simunovic has served as a director of Onvia.com since February 1999. Mr. Simunovic has served as Senior Vice President and Group Head of the Business-to-Business E-Commerce and Internet Infrastructure effort at GE Equity, a subsidiary of GE Capital since December 1998. From August 1996 to December 1998, Mr. Simunovic was a Vice President at GE Equity responsible for equity investments in the Enterprise Software sector. From June 1993 through August 1996, Mr. Simunovic served as Manager of Barents Group LLC. Mr. Simunovic holds a Bachelor of Science in Mechanical Engineering from Queen's University in Canada and a Master of Business Administration from the Harvard Business School. Board Composition Our bylaws currently provide for a board of directors consisting of seven members. Ms. Schoendorf and Mr. Fox were elected to the board of directors pursuant to a voting agreement among Onvia.com and some of 43

its principal stockholders. This voting agreement will terminate upon completion of this offering. Each of our current directors will continue to serve on the board of directors upon completion of this offering. Upon consummation of this offering, our certificate of incorporation will provide for a classified board of directors consisting of three classes of directors, each serving staggered three-year terms. As a result, a portion of our board of directors will be elected each year. To implement the classified structure, prior to the consummation of the offering, two of the nominees to the board will be elected to one-year terms, two will be elected to two-year terms and three will be elected to a three-year term. After that, directors will be elected for three-year terms. Mr. Fox and Mr. Simunovic have been designated Class I directors whose term expires at the 2001 annual meeting of stockholders. Mr. Pickett and Ms. Schoendorf have been designated Class II directors whose term expires at the 2002 annual meeting of stockholders. Mr. Ballman, Mr. Ballowe and Mr. Ericson have been designated Class III directors whose term expires at the 2003 annual meeting of stockholders. See "Description of Capital Stock--Anti-Takeover Provisions." Executive officers are appointed by the board of directors and serve until their successors have been duly elected and qualified. There are no family relationships among any of our directors, officers or key employees. Board Compensation We do not currently compensate our directors, but they are reimbursed for out-of-pocket expenses incurred in connection with activities as directors, including attendance at meetings of the board of directors or its committees. Our directors are generally eligible to participate in our 1999 stock option plan and, if a director is an employee of Onvia.com, to participate in our 2000 employee stock purchase plan. Directors who are not employees will also receive periodic stock option grants under our 2000 directors' stock option plan. The 2000 directors' stock option plan provides for an initial grant of an option to purchase 20,000 shares of common stock to each non-employee director on the effective date of this offering and to each person who first becomes a non-employee director after that. These options become exercisable in four equal installments on the first, second, third and fourth anniversaries of the grant. On the date of each annual stockholders' meeting, each non-employee director who has served on our board of directors for at least six months will be granted an additional option to purchase 5,000 shares of common stock, which will become exercisable in full on the day before the first anniversary of the date of grant. The exercise price of all stock options granted under the directors' stock option plan will be equal to the fair market value of a share of our common stock on the date of grant of an option. See "Benefit Plans--2000 Directors' Stock Option Plan." Board Committees The compensation committee currently consists of Mr. Ballowe, Mr. Fox and Ms. Schoendorf. The compensation committee: . reviews and makes recommendations to the board regarding all forms of compensation and benefits provided to our officers; and . establishes and reviews general policies relating to the compensation and benefits of all of our employees. The audit committee currently consists of Mr. Ballowe, Mr. Fox and Ms. Schoendorf. The audit committee: . reviews and monitors our internal accounting procedures, corporate financial reporting, external and internal audits, the results and scope of the annual audit and other services provided by our independent accountants; and . makes recommendations to the board of directors regarding the selection of independent auditors. 44

Compensation Committee Interlocks and Insider Participation The members of the compensation committee of our board of directors are currently Mr. Ballowe, Mr. Fox and Ms. Schoendorf. Mr. Pickett, our Chairman of the Board, served on our Compensation Committee until December 1999. None of Mr. Ballowe, Mr. Fox or Ms. Schoendorf has at any time been an officer or employee of Onvia.com. No executive officer of Onvia.com serves as a member of the board of directors or compensation committee of an entity that has one or more executive officers serving on our board of directors or compensation committee. See "Related Party Transactions." Executive Compensation Summary Compensation. The following table sets forth the compensation received for the year ended December 31, 1998 by our Chief Executive Officer. No other executive officers earned more than $100,000 in salary and bonus during that year. Summary Compensation Table
Long-Term Compensation Awards ------------

Name and Principal Position -----------------Glenn S. Ballman President and Chief Executive Officer....... $47,807

Annual Compensation Securities ------------- Other Annual Underlying All Other Salary Bonus Compensation Options (#) Compensation ------ ----- ------------ ------------ ----------------

Includes $18,407 paid to Mr. Ballman by our Canadian subsidiary prior to the purchase of its outstanding shares by us from Mr. Ballman. This amount assumes an average exchange rate of one U.S. dollar for each 0.680222 Canadian dollar over the period this Canadian income was earned. Option Grants in Last Fiscal Year No stock options were granted to the executive officer named in the summary compensation table during the year ended December 31, 1998. Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values No options were exercised by the executive officer named in the summary compensation table during the year ended December 31, 1998, nor did this officer hold any options as of December 31, 1998. Benefit Plans 1999 Stock Option Plan Our 1999 stock option plan provides for the grant of incentive stock options to employees and nonstatutory stock options to employees, directors and consultants to acquire shares of our common stock. The purposes of the 1999 stock option plan are to attract and retain the best available personnel, provide additional incentives to our employees and consultants and promote the success of our business. Our board of directors originally adopted the 1999 stock option plan in February 1999 and our stockholders approved the plan in August 1999. There were 6,654,415 total shares of common stock reserved for issuance under our 1999 stock option plan at September 30, 1999, and this amount was increased to a total of 9,000,000 in December 1999. Our 1999 stock option plan was amended in December 1999 to provide for an automatic annual increase on the first day of each of our fiscal years beginning in 2001 and ending in 2009 equal to the lesser of 1,600,000 shares, 4% of our outstanding common stock on the last day of the immediately preceding fiscal year or a lesser number of shares as the board of directors determines. The 1999 stock option plan will terminate in 45

February 2009 unless the board of directors terminates it earlier. As of September 30, 1999, options to purchase 4,478,016 shares of common stock were outstanding at a weighted average exercise price of $0.30 per share, 513,112 shares had been issued upon exercise of outstanding options or pursuant to stock purchase agreements and 1,663,287 shares remained available for future grant. The administrator of the 1999 stock option plan may be either the board of directors or a committee of the board. The administrator determines the terms of options granted under the 1999 stock option plan, including the number of shares subject to the option, exercise price, term and exercisability. In no event, however, may an individual employee receive option grants for more than 1,000,000 shares under the stock plan in any fiscal year. Incentive stock options granted under the 1999 stock option plan must have an exercise price of at least 100% of the fair market value of the common stock on the date of grant and at least 110% of the fair market value in the case of an optionee who holds more then 10% of the total voting power of all classes of our stock. Nonstatutory stock options granted under the 1999 stock option plan must have an exercise price of at least 110% of the fair market value in the case of an optionee who holds more than 10% of the total voting power of all classes of our stock. Payment of the exercise price may be made in cash or other consideration as determined by the administrator. The administrator determines the term of options, which may not exceed ten years, except in the case of an incentive stock option granted to a holder of more than 10% of the total voting power of all classes of our stock for which the term may not exceed five years. No option may be transferred by the optionee other than by will or the laws of descent or distribution. Each option may be exercised during the lifetime of the optionee only by the optionee or a permitted transferee. The administrator determines when options become exercisable. Options granted under the 1999 stock option plan generally must be exercised: . no later than three months after the termination of the optionee's status as an employee, director or consultant of Onvia.com; . within six months if the termination is due to the death of the optionee; . within 12 months if the termination is due to the total disability of the optionee; and . within six months if the termination is due to the less than total and permanent disability of the employee. In no event may an option be exercised later than the expiration of the option's term. In the event of our merger with or into another corporation, the successor corporation may assume each option or may substitute an equivalent option. To the extent the outstanding option is not assumed by the successor corporation, the vesting of the option shall automatically be accelerated so that 25% of the unvested shares covered by the option shall be fully vested upon the consummation of the merger. Each outstanding option held by an optionee who is an executive officer will be accelerated completely so that 100% of the unvested shares covered by the option are fully vested if within 12 months of the change of control, the executive officer is terminated other than for cause or by the optionee for good reason. The board of directors has the authority to amend or terminate the 1999 Stock option plan, except that the board may not take any action that impairs the rights of any holder of an outstanding option without the holder's consent. 2000 Directors' Stock Option Plan We have reserved a total of 300,000 shares of common stock for issuance under our 2000 directors' stock option plan. The directors' plan provides for the grant of nonstatutory stock options to non-employee directors of Onvia.com. The directors' plan is designed to work automatically without administration; however, to the extent administration is necessary, it will be performed by the board of directors. To the extent that conflicts of interest arise, it is expected that conflicts will be addressed by having any interested director abstain from both deliberations and voting regarding matters in which the director has a personal interest. Unless terminated earlier, the directors' plan will terminate ten years after effectiveness of this offering. 46

The directors' plan provides that each person who is or becomes a non- employee director of Onvia.com will be granted a nonstatutory stock option to purchase 20,000 shares of common stock on the later of the date on which he or she first becomes a non-employee director of Onvia.com or the date of the effectiveness of this offering. After that, on the date of our annual stockholders' meeting each year, each non-employee director of Onvia.com will be granted an additional option to purchase 5,000 shares of common stock if, on that date, he or she has served on our board of directors for at least six months. The initial option grant under the directors' plan becomes exercisable in installments of 25% of the total number of shares subject to the option on the first, second, third and fourth anniversaries of the date of grant. The annual grants become exercisable in full on the day before the first anniversary of the date of grant. No option granted under the directors' plan is transferable by the option holder other than by will or the laws of descent or distribution or under a domestic relations order, and each option will be exercisable during the lifetime of the option holder only by that option holder. The exercise price of all stock options granted under the directors' plan is set equal to the fair market value of a share of Onvia.com common stock on the date of grant of the option. Options granted under the directors' plan have a term of ten years. However, unvested options terminate when the optionee ceases to serve as a directors and vested options terminate if they are not exercised within 12 months after the director's death or disability or within 90 days after the director ceases to serve as a director for any other reason. In the event of a merger or acquisition of Onvia.com in which there is not greater than 50% change in ownership, each option outstanding under the directors' plan will be assumed or equivalent options will be substituted by our acquiror, unless our acquiror does not agree to such assumption or substitution, in which case the options will terminate to the extent not previously exercised. In the event of a merger or acquisition of Onvia.com in which there is greater than 50% change in ownership, each director holding options under the directors' plan will have the right to exercise his or her options immediately before the consummation of the merger or acquisition as to all shares underlying the options, including previously unvested shares. Our board of directors will be able to amend or terminate the 2000 directors' option plan as long as the amendment does not adversely affect any outstanding option and we obtain stockholder approval to the extent required by law. 2000 Employee Stock Purchase Plan We have reserved a total of 300,000 shares of common stock for issuance under the 2000 employee stock purchase plan. The number of shares reserved for issuance under the 2000 employee stock purchase plan is subject to an automatic annual increase on the first day of each of our fiscal years beginning in 2001 and ending in 2010 equal to the lesser of 300,000 shares, 1% of our outstanding common stock on the last day of the immediately preceding fiscal year or such lesser number of shares as the board of directors determines. The employee stock purchase plan becomes effective upon the date of this offering. Unless terminated earlier by the board of directors, the 2000 employee stock purchase plan will terminate ten years after the effectiveness of this offering. The 2000 employee stock purchase plan, which is intended to qualify under Section 423 of the Internal Revenue Code, is implemented by a series of overlapping offering periods of approximately 24 months' duration, with new offering periods, other than the first offering period, commencing on May 1 and November 1 of each year. Each offering period generally consists of four consecutive purchase periods of six months' duration, at the end of which an automatic purchase will be made for participants. The initial offering period is expected to commence on the date of this offering and end on April 30, 2002. The initial purchase period is expected to begin on the date of this offering and end on October 31, 2000, with subsequent purchase periods ending on April 30, 2001, October 31, 2001 and April 30, 2002. The 2000 employee stock purchase plan is administered by the board of directors or by a committee appointed by the board. Our employees, including officers and employee directors, or of a subsidiary designated by the board, are eligible to participate in the 2000 employee stock purchase plan if they are employed by us or the designated subsidiary for at least 20 hours per week and more than five months per year. The 2000 employee stock purchase plan permits eligible employees to purchase common stock through payroll deductions, which may not exceed 15% of an employee's base salary. The purchase price is equal to the lower of 85% of the fair market value of the 47

common stock at the beginning of each offering period or at the end of each purchase period, subject to adjustments as provided in the plan. Employees are able to end their participation in the 2000 employee purchase plan at any time during an offering period, and participation will end automatically on termination of employment. An employee will not be granted an option under the 2000 employee stock purchase plan if immediately after the grant the employee would own stock and/or hold outstanding options to purchase stock equaling 5% or more of the total voting power or value of all classes of our stock or stock of our subsidiaries, or if the option would permit an employee's rights to purchase stock under the 2000 employee stock purchase plan at a rate that exceeds $25,000 of fair market value of such stock for each calendar year in which the option is outstanding. In addition, no employee is allowed to purchase more than 1,000 shares of common stock under the 2000 employee stock purchase plan in any one purchase period. If the fair market value of the common stock on a purchase date is less than the fair market value at the beginning of the offering period, each participant in that offering period will automatically be withdrawn from the offering period as of the end of the purchase date and reenrolled in the new 24-month offering period beginning on the first business day following the purchase date. If we merge or consolidate with or into another corporation or sell all or substantially all of our assets, each right to purchase stock under the 2000 employee stock purchase plan will be assumed or an equivalent right substituted by our acquiror. If our acquiror does not agree to assume or substitute stock purchase rights, any offering period and purchase period then in progress will be shortened and a new exercise date occurring prior to the closing of the transaction will be set. Our board of directors will have the power to amend or terminate the 2000 employee stock purchase plan and to change or terminate offering periods as long as this action does not adversely affect any outstanding rights to purchase stock under the plan. However, the board of directors will be able to amend or terminate the 2000 employee stock purchase plan or an offering period even if it would adversely affect outstanding options to avoid our incurring adverse accounting charges. Limitations on Directors' Liability and Indemnification Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that a director of a corporation will not be personally liable for monetary damages for breach of the director's fiduciary duties except for liability: . for any breach of the director's duty of loyalty to us or to our stockholders: . for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; . for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or . for any transaction from which a director derives an improper personal benefit. Our bylaws provide that we shall indemnify our directors and executive officers and may indemnify our other officers and employees and other agents to the fullest extent permitted by law. We believe that indemnification under our bylaws covers at least negligence and gross negligence on the part of indemnified parties. Our bylaws also permit us to obtain insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in his or her capacity, regardless of whether the bylaws would permit indemnification. In addition to the indemnification provided for in our articles of incorporation and bylaws, we have entered into indemnification agreements with some of our directors and officers. These agreements provide for indemnification of our directors and officers for specified expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by any of these people in any action or proceeding arising out of their services as a director or officer of Onvia.com, any subsidiary of Onvia.com or any other company or enterprise to which 48

the person provides services at the request of Onvia.com. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers. We also expect to obtain directors' and officers' liability insurance. At present we are not aware of any pending litigation or proceeding involving any director, officer, employee or agent of Onvia.com where indemnification will be required or permitted. Furthermore, we are not aware of any threatened litigation or proceeding that might result in a claim for indemnification. 49

RELATED PARTY TRANSACTIONS Benefits to Related Parties in Private Placement Transactions Since our inception in March 1997, we have issued and sold shares of our capital stock and warrants to purchase our capital stock, not including warrants issued to our creditors, in private placement transactions as follows: . 11,479,068 shares of restricted common stock at a price of $0.0025 per share in January 1999; . 513,112 shares of restricted common stock at a price of $0.025 per share in April 1999; . 60,000 shares of restricted common stock at a price of $2.50 per share in December 1999; . 10,109,748 shares of Series A preferred stock at a price of $1.1692 per share in February 1999; . warrants to purchase up to 416,676 shares of common stock at an exercise price of $0.005 per share in connection with the sale of notes convertible into shares of Series A preferred stock from September 1998 through February 1999; . 7,272,085 shares of Series B preferred stock at a price of $3.4378 per share in September 1999; and . 1,689,701 shares of Series C preferred stock at a price of $13.7100 per share in December 1999. All shares of our preferred stock will convert into common stock on a 1-for- 1 basis upon the closing of this offering. The following table summarizes the shares of capital stock purchased by executive officers, directors and 5% stockholders and their affiliates in these private placement transactions, although this table does not necessarily reflect the currently outstanding securities:
Investor -------Entities Affiliated with Mohr, Davidow Ventures....... Internet Capital Group, Inc.................... GE Capital Equity Investments............ Glenn S. Ballman........ Robert D. Ayer.......... Kristen M. Hamilton..... Arthur R. Paul.......... Michael D. Pickett...... VLG Investments 1999.... Wendy L. Ayer........... William W. Ericson...... Mark T. Calvert......... Jeffrey C. Ballowe...... Series A Series B Series C Common Stock Preferred Stock Preferred Stock Preferred Stock ------------ --------------- --------------- -----------------5,000,000 2,800,000 740,000 600,000 513,112 256,948 120,000 93,602 32,052 60,000 4,661,478 4,276,486 -4,784 ---42,766 21,382 -8,554 21,382 -2,327,064 2,617,953 2,036,185 ----------270,530 364,633 108,315 -----3,647 -1,823 7,293 --

Affiliate Relationships Ms. Schoendorf, one of our directors, is a member of Mohr, Davidow Venture Partners. Mr. Fox, one of our directors, is a managing director of Internet Capital Group, Inc. Mr. Ballowe, one of our directors, is on the advisory board of Internet Capital Group, Inc. Wendy L. Ayer is married to Robert D. Ayer, our Vice President of Products and Services. Mr. Ericson, one of our directors, is a director at Venture Law Group, our principal legal counsel. VLG Investments 1999 is an investment partnership affiliated with Venture Law Group. The shares of Series C preferred stock attributed to Mark T. Calvert in the above table are held of record by Mark and Norma Calvert, the parents of Mr. Calvert. 50

Debt Financing Between October 1998 and February 1999, we issued and sold convertible promissory notes to the following executive officers, directors and 5% stockholders and persons and entities associated with them, in the amounts set forth opposite each of these parties' names. The promissory notes were cancelled and converted into shares of our Series A preferred stock at $1.1692 per share on February 25, 1999.
Annual Amount of Stockholder Interest Rate Promissory Note ----------------------- --------------Mark T. Calvert................. 8% $25,000 Michael D. Pickett.............. 6% $50,000 VLG Investments 1999............ 6% $25,000 William W. Ericson.............. 6% $10,000 Glenn S. Ballman................ 6% $ 5,593 Date Issued ----------October 26, 1998 February 12, 1999 February 17, 1999 February 17, 1999 February 17, 1999

We issued Mark T. Calvert, along with other investors who bought convertible notes in 1998, a warrant to purchase 32,052 shares of common stock at an exercise price of $0.005 per share. Mr. Calvert exercised his warrant to purchase 32,052 shares of common stock in October 1999. Loans to Officers In October 1999, we loaned Mr. Ballman, our President and Chief Executive Officer, $350,000 at 6% annual interest. Mr. Ballman pledged his Onvia.com common stock as security for the note. The note is due on the earlier of the following: . October 2004; . after a public offering of Onvia.com's common stock in which Mr. Ballman is a selling stockholder; and . the expiration of any lock-up period imposed by contract or the securities laws following an acquisition of Onvia.com. In addition, in December 1999, our board of directors authorized loans to our senior executives in an aggregate amount of up to $1,000,000, collateralized by shares of our common stock held by them. When issued, the loans will bear interest at 6% per annum and will be due on similar terms as the loan to Mr. Ballman. Option Plan Acceleration for Executive Officers Upon a Change of Control Our 1999 stock option plan provides that each outstanding option held by an executive officer will be accelerated completely so that 100% of the unvested shares covered by the option are fully vested if, within 12 months of a change of control, the employment of the executive officer is terminated other than for cause or by the executive officer for good reason. Indemnification Agreements We have entered into indemnification agreements with some of our officers and directors containing provisions requiring us to indemnify them against liabilities that may arise by reason of their status or service as officers or directors, and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. These indemnification agreements do not cover liabilities arising from willful misconduct of a culpable nature. 51

Employment Agreements The following executive officers are individually parties to offer letter agreements with Onvia.com that provide for at-will employment, standard medical and dental benefits, and salary as listed below:
Shares Date of Letter Annual Potential Underlying Officer Agreement Salary Bonus Options Other --------------------- -------- --------- ---------- -----------------------Mark T. Calvert......... March 25, 1999 $150,000 -272,560 Severance equal to twelve months of full salary and benefits upon termination for any reason Douglas H. Kellam....... August 25, 1999 170,000 $42,500 250,000 Up to $50,000 in moving expenses and 24 roundtrip air tickets from Seattle to Chicago Louis T. Mickler........ July 27, 1999 110,000 20,000 35,000 Relocation expenses from Oregon to Seattle Mark A. Pawlosky........ July 23, 1999 130,000 30,000 50,000 -Clayton W. Lewis........ March 15, 1999 80,000 10,000 50,000 --

Some of these officers have been granted options in addition to those set forth in the offer letters. In addition, our board of directors has granted to each of our executive officers six months salary and six months COBRA benefits as severance upon termination of employment with us for any reason or no reason. Other Related Party Transactions We have paid SunCommerce Corporation approximately $195,000 from March 25, 1997 (inception) through September 30, 1999 for software development, consulting and other services. In addition, we entered into a lease agreement with SunCommerce Corporation in July 1999 under which we sublease office space in Seattle, Washington to SunCommerce Corporation. The lease calls for monthly payments of $2,212 and expires in May 2001. We are a guarantor of the primary lease and will be liable if SunCommerce Corporation fails to meet its obligations under the sublease. Mr. Ballman is a majority stockholder of SunCommerce Corporation. We entered into an agreement with Broadbase Software, Inc., in September 1999 pursuant to which we purchased software for our management information system. We have paid Broadbase Software, Inc. approximately $201,500 under this agreement through December 20, 1999. Mohr, Davidow Ventures, one of our principal stockholders, is an investor in Broadbase Software, Inc. Ms. Schoendorf, one of our directors, is a partner of Mohr, Davidow Ventures. See "Principal Stockholders." Our Canadian subsidiary was incorporated as M-Depot Internet Superstore, Inc. in British Columbia, Canada in June 1997 and was wholly owned by Glenn Ballman, our founder, President and Chief Executive Officer. In January 1999, we issued 400 shares of our common stock to Mr. Ballman in exchange for all of the outstanding shares of M-Depot Internet Superstore, Inc, which subsequently changed its name to Onvia.com, Inc. We entered into a marketing agreement with ZDNet in March 1999. We have incurred costs of approximately $167,000 under this agreement as of December 20, 1999. Mr. Ballowe, one of our directors, served as the President, Interactive Media and Development Group, of Ziff-Davis until December 1997 and is a director of ZDTV. Ziff-Davis and ZDTV are affiliates of ZDNet. Mr. Ballowe, one of our directors, is on the advisory board of Internet Capital Group, Inc. Mr. Fox, also one of our directors, has served as a Managing Director of Internet Capital Group, Inc. since March 1996. In December 1999, we accelerated the vesting of and eliminated our repurchase option with respect to the unvested portion of the 256,948 shares of common stock held by VLG Investments 1999. We have granted options to purchase common stock to our executive officers, and, in December 1999, we allowed these officers to exercise the previously unvested portion of these options, subject to a repurchase option by us which lapses as the shares vest. The aggregate number of these previously unvested options was 1,335,777. 52

PRINCIPAL STOCKHOLDERS The following table sets forth information regarding the beneficial ownership of our common stock as of September 30, 1999, giving effect to the sale of 1,689,701 shares of our Series C preferred stock in December 1999, appointment of new directors, assuming conversion of all outstanding shares of preferred stock into common stock and as adjusted to reflect the sale of shares of common stock offered by Onvia.com in this offering, as to: . each person or entity (or group of affiliated persons or entities) known by us to own beneficially more than 5% of our common stock; . each of our directors; . the executive officer named in the summary compensation table; and . all of our directors and executive officers as a group. Except as indicated in the footnotes to this table and under applicable community property laws, to our knowledge, the persons named in the table have sole voting power and investment power with respect to all shares of common stock. For the purposes of calculating percent ownership, the denominator includes 29,406,065 shares issued and outstanding as of September 30, 1999, 1,689,701 shares of our Series C preferred stock issued in December 1999 and, for any individual who beneficially owns shares represented by options exercisable on or before November 29, 1999, these shares are counted in the denominator for that person, but not for any other person. Options held by our executive officers were made immediately exercisable by our board of directors in December 1999 and are reflected as outstanding in this table. These shares are subject to a repurchase option by us which lapses as the shares vest. Unless otherwise indicated, the address of each of the individuals named below is: c/o Onvia.com, Inc., 1000 Dexter Avenue North, Suite 400, Seattle, Washington 98109.
Percentage of Ownership Shares -----------------------Beneficially Prior to This After This Owned Offering Offering ------------ ------------- ----------

Name and Address of Beneficial Owner -----------------------------------Entities affiliated with Mohr, Davidow Ventures (1)........................... 2775 Sand Hill Road, Suite 240 Menlo Park, California 94025 Internet Capital Group, Inc. (2)........ 44 Montgomery Street, Suite 3705 San Francisco, California 94014 GE Capital Equity Investments (3)....... c/o Capital Equity Investments, Inc. 120 Long Ridge Road Stamford, Connecticut 06927 Glenn S. Ballman........................ Robert D. Ayer (4)...................... Nancy J. Schoendorf (1)................. c/o Mohr, Davidow Ventures 2775 Sand Hill Road, Suite 240 Menlo Park, California 94025 Kenneth A. Fox (2)...................... c/o Internet Capital Group, Inc. 44 Montgomery Street, Suite 3705 San Francisco, California 94014 Anton R. Simunovic (3).................. c/o Capital Equity Investments, Inc. 120 Long Ridge Road Stamford, Connecticut 06927

7,259,072 7,259,072 2,144,500

23.3% 23.3 6.9

5,004,784 2,920,000 7,259,072

16.1 9.4 23.3

7,259,072

23.3

2,144,500

6.9

53

Name and Address of Beneficial Owner -----------------------------------Michael D. Pickett...................... 4640 Admiralty Way, Fifth Floor Marina Del Ray, California 90292 William W. Ericson (5).................. c/o Venture Law Group 4750 Carillon Point Kirkland, Washington 98033 Jeffrey C. Ballowe...................... 85 Estrada Calabasa Santa Fe, New Mexico 87501 All directors and officers as a group (16 persons) (6).......................

Percentage of Ownership Shares -----------------------Beneficially Prior to This After This Owned Offering Offering ------------ ------------- ---------555,878 385,956 1.8% 1.2

60,000

*

29,170,562

88.3%

*Less than 1% of the outstanding shares of common stock (1) Consists of 5,011,485 shares held by Mohr, Davidow Ventures V, L.P., 1,890,740 shares held by Mohr, Davidow Ventures V-L, L.P. and 356,847 shares held by Mohr, Davidow Ventures V, L.P. as nominee for Mohr, Davidow Ventures Entrepreneurs' Network Fund II (A), L.P. and Mohr, Davidow Ventures Entrepreneurs' Network Fund II (B), L.P. Ms. Schoendorf is a director of Onvia.com and a member of Mohr, Davidow Ventures, the general partner of Mohr, Davidow Ventures V, L.P. Ms. Schoendorf disclaims beneficial ownership of shares held by these entities except to the extent of her pecuniary interest in them. (2) Mr. Fox is a director of Onvia.com and managing director of Internet Capital Group, Inc. Mr. Fox disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them. (3) Mr. Simunovic is a director of Onvia.com and Senior Vice President of GE Equity, a subsidiary of GE Capital. Mr. Simunovic disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them. (4) Consists of 2,800,000 shares held by Mr. Ayer and 120,000 shares held by his spouse Wendy Ayer. (5) Consists of 103,979 shares held by Mr. Ericson and 281,977 shares held by VLG Investments 1999. Mr. Ericson is a director of Onvia.com and a director of Venture Law Group. VLG Investments 1999 is an investment partnership affiliated with Venture Law Group. Mr. Ericson disclaims beneficial ownership of the shares held by VLG Investments 1999 except to the extent of his pecuniary interest in them. (6) Includes an aggregate of 1,925,560 shares subject to options outstanding as of September 30, 1999 that were made immediately exercisable by our board in December 1999 subject to a repurchase option by us which lapses as the shares vest. Also includes shares of which the applicable officer or director may disclaim beneficial ownership. 54

DESCRIPTION OF CAPITAL STOCK As of the closing of this offering, our authorized capital stock will consist of 150,000,000 shares of common stock, par value $ per share, and 15,000,000 shares of preferred stock, par value $ per share. Common Stock As of September 30, 1999, there were 29,790,689 shares of common stock outstanding, assuming the conversion of all outstanding shares of preferred stock into common stock and the exercise of warrants to purchase 384,624 shares of our common stock that will expire if not exercised prior to the offering. This excludes 1,689,701 shares of Series C preferred stock we sold in December 1999 which will convert into common stock upon closing of this offering. The holders of common stock are entitled to one vote per share on all matters to be voted on by the stockholders. There are no cumulative voting rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared by the board of directors out of funds legally available for dividends. In the event of a liquidation, dissolution or winding up of Onvia.com, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. The common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and nonassessable. Preferred Stock We are authorized to issue 15,000,000 shares of undesignated preferred stock. The board of directors has the authority, without vote or action by the stockholders, to designate and issue preferred stock in one or more series and to designate the rights, preferences and privileges of each series, any or all of which may be greater than the rights of the common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of the common stock until the board of directors determines the specific rights of the holders of the preferred stock. However, the effects might include restricting dividends on the common stock, diluting the voting power of the common stock, impairing the liquidation rights of the common stock and delaying or preventing a change in control of Onvia.com without further action by the stockholders and may adversely affect the rights of the holders of common stock. We intend to reserve shares of preferred stock in connection with the adoption of a stockholders' rights plan. We have no other present plans to issue any shares of preferred stock. Warrants As of September 30, 1999, warrants were outstanding to purchase an aggregate of 1,015,943 shares of common stock with exercise prices ranging between $0.005 and $2.47 per share. Of these, warrants to purchase 384,624 shares of common stock with an exercise price of $0.005 per share will automatically expire if not exercised upon completion of this offering. Registration Rights As of September 30, 1999, the holders of approximately 31,727,085 shares of common stock, including shares of common stock issuable upon exercise of warrants and upon conversion of shares of Series C preferred stock we issued in December 1999, are entitled to certain rights with respect to registration of these shares under the Securities Act. We refer to these shares as the "registrable securities," although some of these shares that are held by holders of shares of our common stock are only considered to be registrable securities for purposes of participation in registrations undertaken by us. These rights are provided under the terms of an agreement between us and the holders of these securities. Under these registration rights, beginning on the earlier of February 24, 2003 or six months after the effective date of this offering, holders of at least a majority 55

of the then-outstanding registrable securities may require on two occasions that we register their shares for public resale. In addition, any holder or holders of then-outstanding registrable securities may require that we register their shares for public resale on Form S-3 or similar short-form registration, provided we are eligible to use Form S-3 or similar short-form registration statement and that the value of the securities to be registered is at least $5,000,000. In the event Onvia.com elects to register any of its shares of common stock in a public offering, the holders of registrable securities are entitled to include their shares of common stock in the registration, subject to the right of the underwriters of the offering to reduce the number of shares proposed to be registered in view of market conditions. We are required to pay all expenses in connection with any of these registrations other than underwriting discounts and commissions. All registration rights will terminate five years after the date of this offering or, with respect to each holder of registrable securities, at the time as the holder is entitled to sell all of its shares in any three-month period under Rule 144 of the Securities Act. Anti-Takeover Provisions We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, the statute prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date that the person became an interested stockholder unless, with some exceptions, the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Generally, a "business combination" includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the stockholder, and an "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years prior, did own) 15% or more of the corporation's outstanding voting stock. This provision may have the effect of delaying, deferring or preventing a change in control of Onvia.com without further action by the stockholders. In addition, upon completion of this offering, we will have in place the following provisions which may have the effect of delaying or preventing changes in control of Onvia.com: . we will have a classified board of directors where only approximately one-third of our directors will be up for election by the stockholders each year; . we will have provisions in our charter documents that will limit the ability of our stockholders to call meetings of the stockholders; . we will eliminate the ability of our stockholders to take action by written consent; and . we will have authorized 15,000,000 shares of preferred stock that, without further vote or action by the stockholders, may be issued by the board of directors to impede the success of any attempt to change control of Onvia.com. We intent to use a portion of these shares of preferred stock as part of a stockholders' rights plan, which will give our board significant power in avoiding unwanted takeovers of Onvia.com. Our stock option plan, employee stock purchase plan and directors' stock option plan generally provide for assumption of these plans or substitution of an equivalent option of a successor corporation or, alternatively, at the discretion of the Board of Directors, exercise of some or all of the options stock, including non-vested shares, or acceleration of vesting of shares issued pursuant to stock grants, upon a change of control or similar event. Transfer Agent and Registrar The transfer agent and registrar for the common stock is U.S. Stock Transfer Corporation. Listing We have applied for approval for quotation on the Nasdaq Stock Market's National Market under the symbol "ONVI" for our common stock. 56

SHARES ELIGIBLE FOR FUTURE SALE Prior to this offering, there has been no market for our common stock. Future sales of substantial amounts of our common stock in the public market could adversely affect its market price and impair our ability to raise equity capital in the future. Only a limited number of shares will be available for sale shortly after this offering because of contractual and legal restrictions on resale as described below; however, after these restrictions lapse, sales of substantial amounts of our common stock in the public market are possible. Upon completion of the offering, we will have outstanding shares of common stock. Of these shares, the shares sold in the offering, plus any shares issued upon exercise of the underwriters' over-allotment option, will be freely tradable without restriction under the Securities Act, unless purchased by our "affiliates" as that term is defined in Rule 144 under the Securities Act. Affiliates are generally our officers, directors and 10% stockholders. The remaining 31,480,390 shares outstanding, which includes the 1,689,701 shares of Series C preferred stock that we issued in December 1999, are "restricted securities" within the meaning of Rule 144 under the Securities Act. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144, 144(k) or 701 under the Securities Act, which are summarized below. Sales of the restricted shares in the public market or the availability of these shares for sale could adversely affect the market price of the common stock. Our directors, officers and securityholders have entered into lock-up agreements in connection with this offering generally providing that they will not offer, sell, contract to sell or grant any option to purchase or otherwise dispose of our common stock or any securities exercisable for or convertible into our common stock owned by them for a period of 180 days after the date of this prospectus without the prior written consent of Credit Suisse First Boston Corporation, the representative of the underwriters. Taking into account the lock-up agreements, and assuming Credit Suisse First Boston Corporation does not release stockholders from these agreements, the following shares will be eligible for sale in the public market at the following times: . Beginning on the effective date of this prospectus, only the shares sold in the offering will be immediately available for sale in the public market. . Beginning 180 days after the effective date, approximately 22,518,604 shares will be eligible for sale pursuant to Rule 701 and Rule 144, assuming no exercise of options. In addition, warrants to purchase an aggregate of 631,319 shares will be outstanding after this offering, which, if exercised pursuant to net-exercise provisions, may be sold beginning 180 days after the effective date. . An additional 7,272,085 shares will be eligible for sale pursuant to Rule 144 after September 2000, and an additional 1,689,701 shares will be eligible for sale pursuant to Rule 144 after December 2000. Under Rule 144, the number of shares that may be sold by our affiliates are subject to volume restrictions. In general, under Rule 144, and beginning after the expiration of the lock-up agreements 180 days after the date of this prospectus, a person who has beneficially owned restricted securities for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of the following: . one percent of the number of shares of common stock then outstanding (which will equal approximately shares immediately after the offering); . the average weekly trading volume of the common stock during the four calendar weeks preceding the sale. Sales under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. Under Rule 144(k), a person who is not deemed to have been our affiliate at any time during the three months preceding a sale and who has beneficially owned the 57

shares proposed to be sold for at least two years, is entitled to sell these shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Rule 701, as currently in effect, permits resales of shares in reliance upon Rule 144 but without compliance with some of its restrictions, including the holding period requirement. Any of our employees, officers, directors or consultants who purchased shares pursuant to a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 144. Rule 701 permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirement of Rule 144. Rule 701 further provides that non-affiliates may sell these shares in reliance on Rule 144 without having to comply with the holding period, public information, volume limitation or notice provisions of Rule 144. In addition, we intend to file one or more registration statements under the Securities Act promptly after the effective date to register shares to be issued pursuant to our employee benefit plans. As a result, any options exercised under the 1999 stock option plan, the 2000 employee stock purchase plan, the 2000 directors' stock option plan or any other benefit plan after the effectiveness of a registration statement will also be freely tradable in the public market, except that shares held by affiliates will still be subject to the volume limitation, manner of sale, notice and public information requirements of Rule 144. As of September 30, 1999, there were outstanding options for the purchase of 4,478,016 shares of our common stock under the 1999 stock option plan. No shares have been issued to date under the 2000 employee stock purchase plan or the 2000 directors' stock option plan. 58

UNDERWRITING Under the terms and subject to the conditions contained in the underwriting agreement dated , 1999, we have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston Corporation, Hambrecht & Quist LLC, FleetBoston Robertson Stephens Inc., E*OFFERING Corp. and William Blair & Company, L.L.C. are acting as representatives, the following respective number of shares of common stock:
Number Underwriter of Shares ------------------Credit Suisse First Boston Corporation............................. FleetBoston Robertson Stephens Inc. ............................... Hambrecht & Quist LLC.............................................. E*OFFERING Corp. .................................................. William Blair & Company, L.L.C. ................................... --------Total............................................................ =========

The underwriting agreement provides that the underwriters are obligated to purchase all of the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering of common stock may be terminated. We have granted to the underwriters a 30-day option to purchase on a pro rata basis up to additional shares at the initial offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock. The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a concession of $ per share. The underwriters and the selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering, the public offering price and concession and discount to dealers may be changed by the representatives. The following table summarizes the compensation and expenses we will pay.
Per Share Total ----------------------------- ----------------------------Without With Without With Over-Allotment Over-Allotment Over-Allotment Over-Allotment -------------- -------------- -------------- -------------$ $ $ $ $ $ $ $

Underwriting discounts and commissions paid by us..................... Expenses payable by us..

The underwriters have informed us that they do not expect discretionary sales to exceed 5% of the shares of common stock being offered. We and our officers and directors and all of our stockholders have agreed that we and they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to any additional shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing without the prior written consent of Credit Suisse First Boston Corporation for a period of 180 days after the date of this prospectus, except, in our case, issuances pursuant to the exercise of employee stock options outstanding on the date hereof. 59

At our request, the underwriters have reserved up to shares of common stock offered hereby for sale at the initial public offering price to our customers, consultants and others with whom we do business, existing stockholders and friends of Onvia.com. As a result, the number of shares available for sale to the general public will be reduced to the extent that persons purchase these reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same basis as the other shares of common stock offered hereby. We have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments which the underwriters may be required to make in respect to those liabilities. We have applied to list our common stock on The Nasdaq Stock Market's National Market under the symbol "ONVI." In December 1999, we sold shares of our Series C preferred stock in a private placement at a purchase price of $13.71 per share. In this private placement, Credit Suisse First Boston Corporation purchased 72,927 shares, FleetBoston Robertson Stephens Inc. purchased 36,463 shares, Hambrecht & Quist LLC purchased 36,463 shares, E*OFFERING Corp. purchased 7,293 shares and William Blair & Company, L.L.C. purchased 36,463 shares. These organizations purchased theses shares of Series C preferred stock on the same terms as the other investors in the private placement. Prior to this offering, there has been no public market for the common stock. The initial public offering price will be determined by negotiation between us and the representatives. The principal factors to be considered in determining the public offering price include the following: . the information set forth in this prospectus and otherwise available to the representatives; . market conditions for initial public offerings; . the history and the prospects for the industry in which we will compete; . the ability of our management; . our prospects for future earnings; . the present state of our development and our current financial condition; . the general condition of the securities markets at the time of this offering; and . the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies. The representatives may engage in over-allotment, stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934. . Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. . Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. . Syndicate covering transactions involve purchases of common stock in the open market after the distribution has been completed in order to cover syndicate short positions. . Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing transaction or a syndicate covering transaction to cover syndicate short positions. These stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the common stock to be higher than it would otherwise be in the absence of these transactions. These transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time. 60

NOTICE TO CANADIAN RESIDENTS Resale Restrictions The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are effected. Accordingly, any resale of the common stock in Canada must be made in accordance with applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with available statutory exemptions or pursuant to a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock. Representations of Purchasers Each purchaser of common stock in Canada who receives a purchase confirmation will be deemed to represent to us and the dealer from whom such purchase confirmation is received that (i) such purchaser is entitled under applicable provincial securities laws to purchase such common stock without the benefit of a prospectus qualified under these securities laws, (ii) where required by law, that such purchaser is purchasing as principal and not as agent; and (iii) such purchaser has reviewed the text above under "Resale Restrictions." Rights of Action Applicable to Ontario Purchasers The securities being offered are those of a foreign issuer and Ontario purchasers will not receive the contractual right of action prescribed by Ontario securities law. As a result, Ontario purchasers must rely on other remedies that may be available, including common law rights of action for damages or rescission or rights of action under the civil liability provisions of the federal securities laws. Enforcement of Legal Rights All of the issuer's directors and officers as well as the experts named in this prospectus may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon the issuer or such persons. All or a substantial portion of the assets of the issuer and such persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the issuer or such persons in Canada or to enforce a judgment obtained in Canadian courts against such issuer or persons outside of Canada. Notice to British Columbia Residents A purchaser of common stock to whom the Securities Act (British Columbia) applies is advised that such purchaser is required to file with the British Columbia Securities Commission a report within ten days of the sale of any common stock acquired by such purchaser in this offering. This report must be in the form attached to British Columbia Securities Commission Blanket Order BOR #95/17, a copy of which may be obtained from us. Only one report must be filed in respect of common stock acquired on the same date and under the same prospectus exemption. Taxation and Eligibility for Investment Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and with respect to the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation. 61

LEGAL MATTERS The validity of the common stock offered hereby will be passed upon for Onvia.com by Venture Law Group, A Professional Corporation, Kirkland, Washington. An investment partnership affiliated with Venture Law Group owns an aggregate of 281,977 shares of our common stock, Mr. Ericson, a director of Onvia.com and a director of Venture Law Group, owns 103,979 shares of our common stock, and other attorneys at Venture Law Group own an aggregate of 32,364 shares of our common stock. The underwriters have been represented by Wilson Sonsini Goodrich & Rosati, Palo Alto, California. EXPERTS The consolidated financial statements as of December 31, 1998 and September 30, 1999 and for the period from March 25, 1997 (inception) through December 31, 1997, for the year ended December 31, 1998, and for the nine months ended September 30, 1999 included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing in this prospectus, and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. WHERE TO FIND ADDITIONAL INFORMATION We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act of 1933 with respect to the shares of common stock offered hereby. This prospectus does not contain all the information set forth in the registration statement or in the exhibits and schedules to the registration statement. For more information about us and the common stock we are offering, you should review the registration statement and the exhibits and schedules filed with the registration statement. Statements contained in this prospectus regarding the contents of any contract or other document to which reference is made are not necessarily complete, and in each instance you should review the copy of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement may be inspected by anyone without charge at the Public Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain copies of all or any portion of the registration statement from that office at prescribed rates. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public reference room. The SEC maintains a web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC. 62

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page ---Independent Auditors' Report.............................................. F-2 Consolidated Balance Sheets............................................... F-3 Consolidated Statements of Operations..................................... F-4 Consolidated Statements of Changes in Stockholders' (Deficit) Equity...... F-5 Consolidated Statements of Cash Flows..................................... F-6 Notes to Consolidated Financial Statements................................ F-7

F-1

INDEPENDENT AUDITORS' REPORT Board of Directors and Stockholders of Onvia.com, Inc. Seattle, Washington We have audited the accompanying consolidated balance sheets of Onvia.com, Inc. and subsidiary (the Company) as of December 31, 1998 and September 30, 1999, and the related consolidated statements of operations, changes in stockholders' (deficit) equity, and cash flows for the period from March 25, 1997 (inception) through December 31, 1997, for the year ended December 31, 1998, and for the nine months ended September 30, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 1998 and September 30, 1999, and the results of their operations and their cash flows for the period from March 25, 1997 (inception) through December 31, 1997, for the year ended December 31, 1998, and for the nine months ended September 30, 1999, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP Seattle, Washington November 18, 1999 (December 20, 1999 as to Note 12)

F-2

ONVIA.COM, INC. Consolidated Balance Sheets December 31, 1998 and September 30, 1999
Pro Forma Stockholders' Equity at September 30, 1999 (Note 8) -----------------(Unaudited)

December 31, September 30, 1998 1999 ------------ ------------Assets Current assets: Cash and cash equivalents...... Accounts receivable............ Inventory...................... Prepaid expenses............... Stock subscription receivable..

$ 26,036,867 192,827 531,942 1,638,946 4,000,000 -------------------Total current assets......... 159,147 32,400,582 Property and equipment, net...... 20,925 4,826,993 Other assets..................... 971,283 -------------------Total assets................. $ 180,072 $ 38,198,858 ========= ============ Liabilities and Stockholders' (Deficit) Equity Current liabilities: Accounts payable............... $ 219,852 $ 3,137,379 Accrued expenses............... 365,820 2,699,175 Unearned revenue............... 42,425 253,721 Convertible notes.............. 344,407 Current portion of long-term debt.......................... 3,766,192 -------------------Total current liabilities.... 972,504 9,856,467 Long-term debt................... 5,464,670 -------------------Total liabilities............ 972,504 15,321,137 -------------------Commitments and contingencies (Note 6) Stockholders' (deficit) equity: Convertible preferred stock; no par value: Series A; 12,000,000 shares authorized; 10,109,748 shares issued and outstanding; ($11,819,991 liquidation preference)..... 12,724,961 Series B; 8,000,000 shares authorized; 7,272,085 shares issued and outstanding; ($25,000,000 liquidation preference)................. 24,969,851 Common stock; no par value: 62,000,000 shares authorized; 4,000,400 and 12,024,232 shares issued and outstanding................... 10,070 5,390,468 Unearned stock compensation.... (3,202,708) Accumulated deficit............ (802,502) (17,004,851) -------------------Total stockholders' (deficit) equity...................... (792,432) 22,877,721 -------------------Total liabilities and stockholders' (deficit) equity........................ $ 180,072 $ 38,198,858 ========= ============

$

44,659 47,072 65,204 2,212

$

--

--

43,085,280 (3,202,708) (17,004,851) ----------$22,877,721 ===========

See Notes to Consolidated Financial Statements. F-3

ONVIA.COM, INC. Consolidated Statements of Operations Period from March 25, 1997 (inception) through December 31, 1997, Year Ended December 31, 1998 and Nine Months Ended September 30, 1998 and 1999
Nine months March 25, 1997 ended (inception) to Year ended September 30, December 31, December 31, 1998 1997 1998 (unaudited) -------------- ------------ ------------$ 62,174 $1,037,271 $ 653,232 46,894 1,082,448 608,691 ---------------------------15,280 (45,177) 44,541 41,321 12,707 91,624 206,436 191,968 224,941 74,646 97,123 151,612 Nine months ended September 30, 1999 ------------$ 13,168,472 15,708,812 -----------(2,540,340) 6,320,734 2,576,634 2,725,017 1,714,252 -----------13,336,637 -----------(15,876,977) 182,463 (507,835) -----------$(16,202,349) ============ $ (2.84) ============ $ (1.18) ============ 4,000,400 ========== 5,695,076 ============

Revenue................. Cost of goods sold...... Gross margin............ Operating expenses: Sales and marketing... Technology and development.......... General and administrative....... Amortization of unearned stock-based compensation......... Total operating expenses........... Loss from operations.... Other income (expense): Interest income....... Interest expense...... Net loss................ Basic and diluted net loss per common share.. Pro forma net loss per common share (unaudited)............ Basic and diluted weighted average shares outstanding............ Pro forma weighted average shares outstanding (unaudited)............

---------145,652 ---------(130,372)

---------623,345 ---------(668,522) (3,608) ---------$ (672,130) ========== $ (0.17) ========== $ (0.17) ==========

---------323,381 ---------(278,840) (2,039) ---------$ (280,879) ========== $ (0.07) ==========

---------$ (130,372) ========== $ (0.03) ==========

4,000,400 ==========

4,000,400 ==========

4,000,400 ==========

13,731,030 ============

See Notes to Consolidated Financial Statements. F-4

ONVIA.COM, INC. Consolidated Statements of Changes in Stockholders' (Deficit) Equity Period from March 25, 1997 (inception) through December 31, 1997, Year Ended December 31, 1998 and Nine Months Ended September 30, 1999
M-Depot Internet Series A Series B Onvia.com, Inc. Superstore, Inc. preferred stock preferred stock common stock common stock ---------------------- --------------------- ---------------------- -----------------Shares Amount Shares Amount Shares Amount Shares Amount ---------- ----------- --------- ----------- ---------- ---------- -------- -------BALANCE, March 25, 1997 (inception)...... Issuance of common stock.... Net loss........ BALANCE, December 31, 1997......... Exchange of MDepot Internet Superstore, Inc. common stock for Onvia.com, Inc. common stock.... Net loss........ BALANCE, December 31, 1998......... Cancellation of inception shares.......... Issuance of nonvested common stock........... Conversion of notes payable into Series A preferred stock........... Issuance of Series A preferred stock, net of offering costs of $232,580........ Issuance of common stock warrants........ Issuance of Series A preferred warrants........ Exercise of common stock warrants........ Issuance of Series B preferred stock, net of offering costs of $30,149......... Unearned compensation relating to issuance of stock options... Change in unearned compensation for non-employees... Amortization of unearned compensation on nonvested common stock........... Amortization of unearned compensation on stock options... Net loss........ BALANCE, September 30, 1999............. -$ --$ -4,000,000 $ 10,000 -400 ---------- ----------- --------- ----------- ---------4,000,000 ---------10,000 ------400 $ -70 -------70 -----------

Unearned compensation -----------$ --

400 ---------- ----------- --------- ----------- ---------4,000,400 (4,000,400) 11,992,180

70 ---------10,070

(400) -------

(70) ------------------

697,569

(476,144)

1,129,018

1,319,997

8,980,730

10,251,821 241,853

1,153,143 32,052 160

7,272,085

24,969,851

3,569,221

(3,569,221)

871,595

(871,595)

331,235

1,383,017 ---------- ----------- --------- ----------- ---------10,109,748 $12,724,961 7,272,085 $24,969,851 12,024,232 ========== =========== ========= =========== ========== Accumulated deficit Total ------------- -----------$ -$ 10,000 ---------$5,390,468 ========== -------======= -------$ -======== ----------$(3,202,708) ===========

BALANCE, March 25, 1997 (inception)...... Issuance of common stock.... Net loss........ BALANCE, December 31, 1997......... Exchange of MDepot Internet

70 (130,372) (130,372) ------------- -----------(130,372) (120,302)

Superstore, Inc. common stock for Onvia.com, Inc. common stock.... Net loss........ BALANCE, December 31, 1998......... Cancellation of inception shares.......... Issuance of nonvested common stock........... Conversion of notes payable into Series A preferred stock........... Issuance of Series A preferred stock, net of offering costs of $232,580........ Issuance of common stock warrants........ Issuance of Series A preferred warrants........ Exercise of common stock warrants........ Issuance of Series B preferred stock, net of offering costs of $30,149......... Unearned compensation relating to issuance of stock options... Change in unearned compensation for non-employees... Amortization of unearned compensation on nonvested common stock........... Amortization of unearned compensation on stock options... Net loss........ BALANCE, September 30, 1999.............

(672,130) (672,130) ------------- -----------(802,502) (792,432)

221,425

1,319,997

10,251,821 241,853

1,153,143 160

24,969,851

331,235

1,383,017 (16,202,349) (16,202,349) ------------- -----------$(17,004,851) $22,877,721 ============= ============

See Notes to Consolidated Financial Statements. F-5

ONVIA.COM, INC. Consolidated Statements of Cash Flows Period from March 25, 1997 (inception) through December 31, 1997, Year Ended December 31, 1998 and Nine Months Ended September 30, 1998 and 1999
Nine months March 25, 1997 ended Nine months (inception) to Year ended September 30, ended December 31, December 31, 1998 September 30, 1997 1998 (unaudited) 1999 -------------- ------------ ------------- ------------$(130,372) $(672,130) $(280,879) $(16,202,349)

Cash flows from operating activities: Net loss.............. Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization......... Amortization of unearned stock-based compensation......... Amortization of debt discount............. Noncash interest expense related to issuance of common stock warrants....... Change in certain assets and liabilities: Accounts receivable......... Inventory........... Prepaid expenses.... Other assets........ Accounts payable.... Accrued expenses.... Unearned revenue.... Net cash provided (used) by operating activities........... Cash flows from investing activities: Additions to property and equipment........ Cash flows from financing activities: Proceeds from convertible debt..... Proceeds from issuance of long-term debt.... Repayments on longterm debt............ Proceeds from issuance of common stock...... Proceeds from issuance of Series A preferred stock, net........... Proceeds from issuance of Series B preferred stock, net........... Net cash provided by financing activities........... Effect of exchange rate changes on cash........ Net increase in cash and cash equivalents....... Cash and cash equivalents, beginning of year................ Cash and cash equivalents, end of year...................

10,000

2,158

1,114

636,680 1,714,252 70,218

241,853

(2,873) (3,631) 9,130 121,871 2,148 --------6,273

(48,268) (64,116) 1,177 216,784 246,798 41,644 --------(275,953)

(16,194) (7,629) 1,226 228,224 88,709 5,294 --------19,865

(142,279) (463,368) (1,235,845) (1,018,634) 2,901,854 2,539,667 208,594 -----------(10,749,357)

(23,083)

(10,629)

(4,133,365)

344,407

975,590 9,163,888 (508,715)

70

12,828 10,251,821 20,969,851 -----------40,865,263 (6,066) --------3,170 5,607 --------$ 8,777 ========= 9,667 -----------25,992,208 44,659 -----------$ 26,036,867 ============

--------70 (736) --------5,607

--------344,407 (6,319) --------39,052 5,607 --------$ 44,659 =========

---------

--------$ 5,607 =========

See Notes to Consolidated Financial Statements. F-6

ONVIA.COM, INC. Notes to Consolidated Financial Statements Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 Note 1: Summary of Significant Accounting Policies Description of business Onvia.com, Inc., formerly known as MegaDepot.com, Inc., (the "Company") was incorporated on March 25, 1997 as MegaDepot, Inc. in the State of Washington. M-Depot Internet Superstore, Inc., a company owned by the majority stockholder of the Company, was incorporated in British Columbia, Canada on June 6, 1997. In June 1998, the Company moved its headquarters from Vancouver, B.C. to Seattle, Washington. On December 28, 1998, MegaDepot, Inc. exchanged shares of its common stock for all of the outstanding common stock of M-Depot Internet Superstore, Inc. (the "Subsidiary"). In February 1999, the Company changed its name from MegaDepot, Inc. to MegaDepot.com, Inc., and in May 1999, changed its name from MegaDepot.com, Inc. to Onvia.com, Inc. The Company is an online supplier of goods and services to the small business market. Through its web site customers can order a wide variety of products commonly used by small businesses, such as computer hardware and software, office supplies, office machines, office furniture and phone systems. In addition, customers can order a variety of services commonly used by small businesses, such as long distance phone service, cellular phone service, credit card processing and payroll service. The Company also provides an online business exchange service that connects small business buyers and sellers. Basis of consolidation The financial statements include the accounts of the Company and its wholly owned subsidiary. As the companies were under common control from inception of the Company, the financial statements are presented on a consolidated or combined basis for all periods presented. All significant intercompany accounts and transactions have been eliminated. Unaudited interim financial information The interim financial information for the nine months ended September 30, 1998 is unaudited and has been prepared on the same basis as the audited financial statements. In the opinion of management, such unaudited financial information includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the interim information. Fair value of financial instruments The Company's financial instruments consist of cash and cash equivalents, accounts receivable, prepaid expenses, other assets, accounts payable, accrued liabilities, convertible notes and long-term debt. Except for long-term debt and convertible notes, the carrying amounts of financial instruments approximate fair value due to their short maturities. The fair values of long- term debt and convertible notes are not materially different from their carrying amounts, based on interest rates available to the Company for similar types of arran gements. Significant vendors Approximately 78% of inventory purchases were from one supplier in the nine months ended September 30, 1999. Three suppliers comprised 50%, 21%, and 21%, respectively of total inventory purchases for the nine months ended September 30, 1998. Three suppliers comprised 41%, 29% and 25%, respectively, of F-7

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 total inventory purchases for the year ended December 31, 1998. Two suppliers comprised 69% and 31%, respectively, of total inventory purchases for the period from March 25, 1997 (inception) to December 31, 1997. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Inventory Inventory is stated at the lower of cost or market. Inventory represents product shipped by the Company's suppliers, which has not been received by customers. The Company does not stock its own inventory or maintain warehouse locations, however, the Company does take ownership at the time of shipment from the supplier until the product is received by the customer. In addition, the Company assumes economic risk related to returned or damaged products. Property and equipment Equipment is stated at cost. Depreciation expense is recorded using the straight-line method over estimated useful lives ranging from three to five years. Leasehold improvements are depreciated over the lesser of the useful lives or term of the lease. Revenue recognition Revenue from product sales is recognized upon receipt of product by the customer. The Company acts as principal in those transactions, as orders are initiated directly on the Company's web site, the Company takes title to the goods during shipment, and has economic risk related to collection, customer service and returns. Unearned revenue consists of payments received from customers for product in transit to the customer. Revenue from exchange services provided to customers was insignificant for all periods presented. Income taxes The Company accounts for income taxes using the asset and liability method under which deferred tax assets, including the tax benefit from net operating loss carryforwards and liabilities are determined based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance has been established for the full amount of the deferred tax assets. Valuation of long-lived assets The Company periodically evaluates the carrying value of its long-lived assets, including, but not limited to, property and equipment and other assets. The carrying value of a long-lived asset is considered impaired F-8

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 when the undiscounted net cash flow from such asset is estimated to be less than its carrying value. Management does not believe that there were any long- lived assets, which were subject to impairment at September 30, 1999. Detachable stock purchase warrants Proceeds from debt issued with detachable stock purchase warrants are allocated between the debt and the warrants based on their relative fair values. The value ascribed to the warrants is recorded as a debt discount and amortized to interest expense over the term of the related debt using the effective interest method. Stock-based compensation The Company's stock option plan is subject to the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). Under the provisions of this standard, employee and director stock-based compensation expense is measured using either the intrinsic-value method as prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), or the fair value method described in SFAS 123. Companies choosing the intrinsic-value method are required to disclose the pro forma impact of the fair value method on net income. The Company has elected to account for its employee and director stockbased awards under the provisions of APB 25. Under APB 25, compensation cost for stock options is measured as the excess, if any, of the fair value of the underlying common stock on the date of grant over the exercise price of the stock option. The Company is required to implement the provisions of SFAS 123 for stock-based awards to those other than employees and directors. Stock-based compensation expense for all equity instruments is recognized on an accelerated basis. Advertising costs The Company expenses advertising costs as incurred. Advertising expense, excluding amounts for co-branding agreements, for the nine months ended September 30, 1999, the nine months ended September 30, 1998 and the year ended December 31, 1998 was $3,533,955, $18,576 and $22,560, respectively. There was no advertising expense for the period from March 25, 1997 (inception) to December 31, 1997. At September 30, 1999, prepaid advertising costs of $1,075,534, which are for future advertising placements, are included in prepaid expenses. Comprehensive income The Company has adopted the provisions of Statements of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130") effective January 1, 1998. SFAS No. 130 requires the presentation of comprehensive income and its components. Comprehensive income is the change in equity from transactions and other events and circumstances other than those resulting from investments by owners and distributions to owners. For the nine months ended September 30, 1999 and the year ended December 31, 1998, the components of other comprehensive income were insignificant. Foreign currency adjustment The functional currency of the Subsidiary in Canada is the Canadian dollar. Realized foreign currency transaction gains and losses are insignificant and are included in cost of sales. Assets and liabilities of the Subsidiary in Canada have been translated to U.S. dollars at year-end exchange rates. Revenues and expenses have been translated at average monthly exchange rates. F-9

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 Commitments and contingencies The Company is subject to various legal proceedings that arise in the ordinary course of business. In the opinion of management, the outcome of these matters is not expected to have a material effect on the consolidated financial position or results of operations of the Company. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period, including contingently issuable shares for which all necessary conditions have been satisfied. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Securities totaling 27,902,354, 16,599 and 294,578 shares for the nine months ended September 30, 1999, the nine months ended September 30, 1998 and for the year ended December 31, 1998, respectively, have been excluded from the computation of diluted net loss per share as their effects would be antidilutive. There were no dilutive common stock equivalents for the period from March 25, 1997 (inception) through December 31, 1997. Pro forma loss per share (unaudited) and pro forma weighted average shares outstanding (unaudited) reflect the assumed conversion of convertible preferred stock, as if such conversion occurred at the original date of issuance (see Note 8). Internally developed software Effective for fiscal years beginning after December 15, 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires all costs related to the development of internal use software other than those incurred during the application development stage to be expensed as incurred. Costs incurred during the application development stage are required to be capitalized and amortized over the estimated useful life of the software. The Company adopted SOP 98-1 on January 1, 1999 and capitalized $198,814 in internally developed software costs. Capitalized software costs are amortized on a straight-line basis over a useful life ranging from one to three years. Amortization related to the capitalized software was $47,381 for the nine months ended September 30, 1999. Start-up costs In April 1998, the AICPA issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-Up Activities." This statement requires companies to expense the costs of start-up activities and organization costs as incurred. The Company adopted SOP 98-5 on January 1, 1999, and there was no material impact on the accompanying financial statements. New accounting pronouncements In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities," which establishes accounting and reporting standards for deri vative instruments and hedging activities. SFAS No. 133, which will be effective for the Company for the fiscal year and quarters beginning after June 15, 2000, requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The Company does not expect the potential effect of adopting the provisions of SFAS No. 133 to have a significant impact on the Company's financial position, results of operations and cash flows. F-10

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 Reclassifications Certain reclassifications of balances have been made for consistent presentation. Note 2: Property and Equipment Property and equipment consists of the following:
December 31, September 30, 1998 1999 ------------ ------------Computer equipment................................ $ 17,921 $2,569,830 Software.......................................... 558 1,797,337 Furniture and fixtures............................ 4,604 587,091 Leasehold improvements............................ 268,995 ----------------23,083 5,223,253 Less: Accumulated depreciation.................... (2,158) (396,260) ----------------$ 20,925 $4,826,993 -----------------

Note 3: Convertible Notes During 1998, the Company issued convertible promissory notes in the amount of $344,407, which accrued interest at 8% and matured one year from issuance. In connection with these notes, the Company issued warrants to the noteholders to purchase up to 416,676 shares of common stock at $0.005 per share upon the closing of the Company's Series A preferred financing on February 25, 1999. Interest expense of $241,853 was recorded upon issuance of the warrants. In February 1999, the Company issued additional convertible promissory notes in the amount of $975,590 to new and existing noteholders. The notes bore interest at 6% and matured one year from issuance. On February 25, 1999, the outstanding principal on the convertible notes of $1,319,997 was converted into 1,129,018 shares of the Company's Series A preferred stock in conjunction with the Series A preferred financing described in Note 8. Note 4: Long-term Debt In August 1999, the Company obtained financing for the purchase of software and post-contract software support in the amount of $1,658,614. The debt bears interest at 13.8% per annum and matures in September 2000. Payments of $110,278, including principal and interest, are to be made monthly through September 2000. In August 1999, the Company also entered into a subordinated debt arrangement with two lenders to provide financing in the amount of $7,000,000. The obligation bears interest at a coupon interest rate of 13.2% with an effective rate of 24.2% per annum and matures in February 2002. Monthly principal payments of $259,259 are scheduled beginning December 1999 through February 2002. The debt is collateralized by all assets of the Company. In conjunction with the debt financing, the Company issued warrants to purchase 582,655 shares of Series A preferred stock at $1.80 per share. The exercise price on these warrants may be reduced based upon certain events to occur in the future. The debt and warrants were recorded at their fair values of $5,905,770 and $1,094,230, respectively. In June 1999, the Company obtained an equipment loan financing in the aggregate amount of up to $3,000,000 for the acquisition of capital equipment. The loan bears interest at an average rate of 8.5% with an effective rate of 19.6% per annum and matures on August 1, 2002. The principal amount is payable in F-11

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 36 monthly payments; the first 35 payments of $68,514 and the last payment of $393,097, which is due in August 2002. The loan is collateralized by the equipment of the Company. In conjunction with the loan, the Company issued warrants to purchase 48,664 shares of Series A preferred stock at $2.47 per share. The debt and warrants were recorded at their fair values of $2,106,045 and $57,843, respectively. As of September 30, 1999, the Company has $836,112 available to borrow on the equipment financing agreement. Debt consists of the following at September 30, 1999:
Note payable.................................................... $ 1,255,863 Subordinated debt obligation.................................... 7,000,000 Equipment term loan............................................. 2,057,924 ----------10,313,787 Less: Unamortized debt discount................................. (1,082,925) ----------$ 9,230,862 ===========

Maturities of long-term debt at September 30, 1999 are as follows:
Year ending September 30, ------------------------2000.......................................................... $ 4,460,714 2001.......................................................... 3,834,893 2002.......................................................... 2,018,180 ----------10,313,787 Less: Unamortized debt discount............................... (1,082,925) ----------9,230,862 Less: Current portion, net of discount........................ (3,766,192) ----------$ 5,464,670 ===========

Note 5: Income Taxes At September 30, 1999, the Company had net operating loss carryforwards of approximately $16,832,860, which may be used to offset future taxable income. These carryforwards expire beginning in 2017. Should certain changes in the Company's ownership occur, there could be a limitation on the utilization of its net operating losses. A reconciliation of taxes on net loss at the federal statutory rate to actual tax expense is as follows:
Period from March 25, 1997 Nine months Nine months through Year ended ended ended December 31, December 31, September 30, September 30, 1997 1998 1998 1999 -------------- ------------ ------------- ------------Tax at statutory rate... (34.0)% (34.0)% (34.0)% (34.0)% Stock-based compensation........... 29.4 % 4.4 % 7.7 % 3.6 % Other................... 0.6 % 0.2 % 0.3 % 0.1 % Change in valuation allowance.............. 4.0 % 29.4 % 26.0 % 30.3 % ------------------------0.0 % 0.0 % 0.0 % 0.0 % ======= ======= ======= =======

F-12

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 The Company's net deferred tax assets consist of the following:
December 31, September 30, 1998 1999 ------------ ------------$ 187,732 $ 5,723,172 -(596,491) 484 46,660 14,920 (63,137) ------------------203,136 5,110,204 (203,136) (5,110,204) ------------------$ -$ -========= ===========

Net operating loss carryforwards.................. Prepaid expenses and other assets................. Other accruals.................................... Fixed assets...................................... Net deferred tax assets........................... Less: Valuation allowance......................... Net deferred tax asset............................

The Company has recorded a 100% valuation allowance equal to the net deferred tax asset balance based upon management's determination that the recognition criteria for realization have not been met. Note 6: Commitments and Contingencies Operating leases: The Company is committed under non-cancelable operating leases for its current and former office space. During 1999, the Company subleased certain office space for amounts equal to the rental obligation, which expire in 2001. Future receipts under the operating subleases are approximately $76,000. Total rent expense was approximately $127,340, $3,937 and $20,330 for the nine months ended September 30, 1999, the nine months ended September 30, 1998 and for the year ended December 31, 1998, respectively. Future minimum lease payments required on non-cancelable operating leases are approximately as follows:
For the years ending September 30, ---------------------------------2000........................................................ $ 551,256 2001........................................................ 545,510 2002........................................................ 515,769 2003........................................................ 515,769 2004........................................................ 506,352 Thereafter.................................................... 852,190 ----------$ 3,486,846 ===========

Lease deposit: The Company's leasing arrangement for its main corporate facilities requires a letter of credit of $650,000 to be issued to the landlord. This letter of credit is secured by a deposit of $650,000, which is recorded in other assets. The letter of credit expires in May 2000; however, the letter of credit is required to be renewed for consecutive one-year periods for the term of the leasing arrangement. Advertising agreement: In 1998, the Subsidiary entered into an agreement to pay 4% of its revenues to a third party in exchange for advertising services. Advertising expenses of $156,775, $17,874 and $22,560 were incurred under this agreement for the nine months ended September 30, 1999, the nine months ended September 30, 1998 and the year ended December 31, 1998, respectively. Co-branding agreements: During 1999, the Company entered into approximately 20 co-branding agreements. These agreements require monthly license fees, and certain agreements require payments based on sales generated on the co-branded site. These agreements typically lapse over a period of three to twelve months or upon 30 days notice by either party to the agreement. The related co- branding royalties are included F-13

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 in sales and marketing expenses. The Company recorded $955,736 in co-branding fees in the nine months ended September 30, 1999. Note 7: Stock Options In February 1999, the Company adopted a combined stock option plan (the "1999 Plan") which provides for the issuance of incentive and nonstatutory common stock options to employees, directors and consultants of the Company. The Board of Directors reserved 5,200,000 shares of common stock to be issued in conjunction with the 1999 Plan. In conjunction with the Series B preferred financing discussed in Note 8, the Board of Directors reserved an additional 1,454,415 shares of common stock for issuance under the 1999 Plan. Pursuant to a common stock purchase agreement described in Note 8, 513,112 shares were issued from the 1999 Plan option pool. Stock options are granted at exercise prices and vesting schedules determined by the Board of Directors. All options granted to employees have been approved by the Board of Directors with four year vesting schedules. Options granted to consultants of the Company have been approved by the Board of Directors with varying vesting schedules of up to four years. Stock options expire ten years after the date of grant. The following table summarizes stock option activity for the nine months ended September 30, 1999:
Weightedaverage Options exercise outstanding price ----------- --------Options granted...................................... 4,572,016 $0.30 Options forfeited.................................... (94,000) $0.30 --------Outstanding at September 30, 1999.................... 4,478,016 $0.30 ========= Options exercisable at September 30, 1999............ 1,103,828 $0.17 =========

There were 1,663,287 shares available for issuance under the 1999 Plan as of September 30, 1999, and the weighted average fair value of options granted during this period was $.84 per share. During the nine months ended September 30, 1999, the Company recorded compensation expense of $172,381 related to the issuance of stock options for services provided by consultants and $1,210,636 on stock options issued to employees. The Company did not issue any stock options during the year ended December 31, 1998 or the period from March 25, 1997 (inception) to December 31, 1997. The following table summarizes information about stock options outstanding and exercisable at September 30, 1999:
Options outstanding -------------------------------------------------------------------------------Weightedaverage Range of remaining exercise Number contractual Options prices of options life exercisable ------------------------------------$0.13 1,756,956 8.91 742,622 $0.25 1,836,560 9.08 361,206 $0.50 69,000 9.71 -$0.75 707,000 9.86 -$1.00 108,500 9.96 -----------------4,478,016 9.17 1,103,828 ========= =========

F-14

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 In accordance with SFAS 123, the fair value of each employee option grant is estimated on the date of grant using the minimum value option-pricing model assuming the following weighted average assumptions: risk free interest rate of 5.60%; volatility of 0%; dividends of $0; and an expected life of four years. Had the Company determined compensation expense based on the fair value of the option at the grant date for all stock options issued to employees, the Company's net loss and net loss per share would have been increased to the pro forma amounts indicated below:
Nine months ended September 30, 1999 ------------$(16,202,349) $(16,307,094) $ $ (2.84) (2.86)

Net loss As reported................................................. Pro forma................................................... Net loss per share As reported-basic and diluted............................... Pro forma-basic and diluted.................................

Note 8: Stockholders' (Deficit) Equity Authorized shares On September 29, 1999, the Articles of Incorporation were amended to increase the number of authorized shares of common stock from 50,000,000 to 62,000,000 and increase the number of authorized shares of preferred stock from 12,000,000 to 20,000,000, of which 12,000,000 are designated as Series A preferred stock and 8,000,000 are designated as Series B preferred stock. Common stock splits On February 16, 1999, the Board of Directors amended the Company's Articles of Incorporation and authorized a two-for-one common stock split. The number of authorized shares of common stock of the Company was increased from 10,000,000 shares to 20,000,000 shares. In addition, on July 29, 1999, the Board of Directors approved an additional two-for-one common stock split. The stock splits were effected in the form of a stock dividend. These stock splits have been presented retroactively in the accompanying financial statements. Convertible preferred stock On February 25, 1999, the Company issued 8,980,730 shares of Series A convertible voting preferred stock at $1.17 per share resulting in proceeds of $10,251,821, net of issuance costs of $232,580 and stock subscription receivables of $15,593. A consulting firm was issued 59,872 shares as a part of this financing round in consideration for past services provided to the Company. Expense of $70,050 was recorded in conjunction with this transaction. The $344,407 of convertible promissory notes outstanding as of December 31, 1998 were converted into 294,576 shares of Series A preferred stock as part of this transaction. In addition, convertible promissory notes for $975,590 issued in February 1999 were converted into 834,442 shares of Series A preferred stock. On September 30, 1999, the Company issued 7,272,085 shares of its Series B preferred stock at $3.44 per share resulting in proceeds of $24,969,851, net of issuance costs of $30,149. Proceeds of $4,000,000 were received by the Company subsequent to period end and are recorded as a stock subscription receivable within total current assets at September 30, 1999. F-15

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 Each share of Series A and Series B preferred stock is convertible on a one for one basis to common stock at the option of the holder, subject to adjustment in certain instances or automatically upon registration of the Company's common stock pursuant to a public offering under the Securities Act of 1933 ("an Offering"). The Series A and Series B preferred stock would be converted upon an Offering at a price of not less than $6.89 per share with aggregate proceeds of not less than $30,000,000, or by the written consent of the holders of seventy-five percent of the outstanding shares of Series B preferred stock. The holder of each share of preferred stock has the right to one vote for each share of common stock into which such preferred stock can be converted. Preferred stockholders have the same voting rights and powers as common stockholders. Holders of the Company's preferred stock and warrants have no registration rights. Dividends are based on a rate of $.105 and $.31 per share per annum on each outstanding share of Series A and Series B preferred stock, respectively, or, if greater, an amount equal to any dividend paid on any other outstanding shares of the Company. Dividends are not cumulative and are payable when and if declared by the Board of Directors. In the event of a liquidation of the Company, the holders of Series B preferred stock will receive a liquidation preference of up to $3.44 per share over the holders of Series A preferred and common stock. Upon satisfaction of Series B preferences, distributions will be made to Series A preferred stockholders in an amount up to $1.17 per share. Upon completion of preference distributions to Series A and Series B preferred stockholders , any remaining amounts will be distributed among the common stockholders on a pro rata basis. Dividend Policy The Company has never declared or paid dividends on its capital stock. The Company's existing borrowing agreements prohibit the payment of dividends. Issuance and cancellation of common stock On March 25, 1997, the Company issued 4,000,000 shares of common stock to the founder in exchange for certain assets with a fair value of $10,000. On January 18, 1999, the Company cancelled all 4,000,400 outstanding shares of the Company's common stock, pursuant to the issuance of 11,479,068 shares of nonvested common stock to employees and other outside parties. Issuance of nonvested common stock Prior to December 31, 1998 the Company entered into agreements with certain employees and other outside parties to perform services, which would be settled in cash or equity securities, at the Company's discretion. The Company recorded a liability for the cost of these agreements for each period through December 31, 1998. In January 1999, the Company issued 11,479,068 shares of nonvested common stock to these employees and outside parties related to these agreements. These shares are subject to a repurchase option, which allows the Company the right to repurchase the shares upon termination of employment. The repurchase option on the nonvested common stock expires ratably over four years from date of hire or commencement of services on a monthly basis. The expiration of the repurchase option may accelerate upon certain change of control transactions. Compensation expense of $44,994, $63,212, $86,084 and $122,673 was recognized during the F-16

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 nine months ended September 30, 1999, the nine months ended September 30, 1998, the year ended December 31, 1998 and the period from March 25, 1997 (inception) through December 31, 1997, respectively, related to these agreements. Expense relating to nonvested common stock to third parties was $136,582 for the nine months ended September 30, 1999. In April 1999, the Company issued 513,112 shares of nonvested common stock under the 1999 Plan to the chairman of the Board of Directors in exchange for $12,828. The issued shares had a fair value of $.79 per share as of the grant date. These shares are subject to a repurchase option which allows the Company the right to repurchase the shares upon termination of employment or consulting services provided. The repurchase option expires over four years with a 25% cliff after the first year and ratably thereafter on a monthly basis, and may accelerate upon certain change of control transactions. Compensation expense in the amount of $149,659 was recognized for these shares for the nine months ended September 30, 1999. Warrants to purchase Series A preferred stock During 1999, the Company issued warrants to purchase up to 582,655 shares of its Series A preferred stock at $1.80 per share in conjunction with its subordinated debt financing. These warrants are exercisable immediately upon grant and expire through the later of ten years after date of grant or five years after the closing of an Offering. The exercise price of the warrants is subject to adjustment upon the occurrence of certain corporate events or the Company meeting specified operating criteria. The Series A preferred stock purchase warrants automatically convert into common stock purchase warrants upon the effectiveness of an Offering. The Company also issued warrants to purchase up to 48,664 shares of its Series A preferred stock at $2.47 per share in conjunction with its equipment line financing. These warrants are exercisable immediately upon grant and expire through the later of nine years after date of grant or four years after the closing of an Offering. The warrants automatically convert into common stock purchase warrants upon the effectiveness of an Offering. Warrants to purchase common stock In February 1999, the Company issued warrants to purchase up to 416,676 shares of its common stock in conjunction with its convertible debt financing in 1998. The warrants are exercisable at $0.005 per share and vest immediately upon issuance. The warrants expire on the earliest of five years from the date of issuance; upon a change of control, as defined; or upon the closing of an initial public offering. In July 1999, a warrant holder exercised warrants to purchase 32,052 shares of common stock. Note 9: Related Party Transactions The Company paid a company owned by the majority stockholder of the Company $92,808, $30,710, $83,761 and $17,497 for the nine months ended September 30, 1999, the nine months ended September 30, 1998, the year ended December 31, 1998 and the period from March 25, 1997 (inception) through December 31, 1997, respectively, for certain services, including wages, benefits, management fees, office expenses and other miscellaneous expenses. As of September 30, 1999 and 1998, and December 31, 1998 and 1997, the Company owed $12,753, $0, $10,880 and $17,497 to this affiliated entity for services performed during the respective periods. For the nine months ended September 30, 1999, the year ended December 31, 1998 and the period from March 25, 1997 (inception) through December 31, 1997, respectively, the Company had sales of $34,916, $0 and $15,132 to this affiliated entity. In February 1999, the Company entered into an agreement F-17

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 with this affiliated entity to pay $3,300 per month for certain shared costs. This agreement was terminated in August 1999. In August 1999, the Company sub- leased its former office space to this affiliated entity. The lease expires in May 2001 with monthly payments of $2,279. The Company is a guarantor of the primary lease in the event that the affiliated entity fails to meet its obligations under the sublease. A director and stockholder provided legal and professional services to the Company in the amount of $247,055 during the nine month period ended September 30, 1999. Additionally, as of December 31, 1998, the Company owed certain employees $44,407 under convertible debt agreements. Note 10: Segment Information Statement of Financial Accounting Standards No. 131 (SFAS No. 131") "Disclosures about Segments of an Enterprise and Related Information" establishes reporting and disclosure standards for an enterprise's operating segments. The Company uses identical principles to account for segment information as used in the accompanying financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available and regularly reviewed by management. Management operates its business based upon geographic area. Operating results by business segment are as follows:
US -----------$ Canada ---------Totals -----------62,174 (130,372) 11,910 1,037,271 (672,130) 180,072 20,925 2,158 (3,608) 23,083 653,232 (280,879) 45,739 9,318 1,114 (2,039) 10,629

Period from March 25, 1997 (inception) to December 31, 1997 Net revenue........................... Net loss.............................. Total assets.......................... Year ended December 31, 1998 Net revenue........................... Net loss.............................. Total assets.......................... Property and equipment................ Depreciation and amortization......... Interest expense...................... Additions to property and equipment... Nine months ended September 30, 1998 (unaudited) Net revenue........................... Net loss.............................. Total assets.......................... Property and equipment................ Depreciation and amortization......... Interest expense...................... Additions to property and equipment... Nine months ended September 30, 1999 Net revenue........................... Net loss.............................. Total assets.......................... Property and equipment................ Other assets.......................... Depreciation and amortization......... Interest income....................... Interest expense...................... Noncash compensation expense.......... Additions to property and equipment... Additions to other assets.............

-$ (112,518) 193

62,174 $ (17,854) 11,717

$

153,356 $ 883,915 $ (406,795) (265,335) 67,402 112,670 17,319 3,606 1,288 870 -(3,608) 19,477 3,606 17,928 $ (186,222) 7,048 4,836 771 -7,607 635,304 $ (94,657) 38,691 4,482 343 (2,039) 3,022

$

$ 9,917,034 $3,251,438 $ 13,168,472 (15,215,774) (986,575) (16,202,349) 37,481,352 717,506 38,198,858 4,605,905 221,088 4,826,993 945,602 25,681 971,283 614,668 22,012 636,680 182,463 -182,463 (507,835) -(507,835) 1,628,324 85,928 1,714,252 5,152,549 236,327 5,388,876 992,953 25,681 1,018,634

F-18

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 Note 11: Supplemental Cash Flow Information Noncash investing and financing activities are as follows: On March 25, 1997, the Company issued 4,000,000 shares of common stock to the founder in exchange for certain assets with a fair value of $10,000. On February 25, 1999, the Company issued warrants to purchase its common stock at $.005 per share. The noncash value allocated to these warrants was $241,853. On February 25, 1999, the outstanding convertible debt of the Company in the amount of $1,319,997 was converted into shares of its Series A preferred stock. On June 15, 1999 and August 5, 1999, the Company issued warrants to purchase its Preferred A stock in conjunction with its debt financings on these dates. The value allocated to the warrants was $1,153,143. In conjunction with its Series B preferred stock financing on September 30, 1999, the Company issued a stock subscription receivable for shares with a value of $4,000,000. The proceeds from this receivable were collected subsequent to September 30, 1999. On August 13, 1999, the Company purchased software of $1,255,511 and post-contract support of $403,103 in exchange for a promissory note. Supplemental cash flow information: Cash paid for interest during the nine months ended September 30, 1999 was $320,684. The Company paid no cash for interest in the year ended December 31, 1998 or the period from March 25, 1997 (inception) to December 31, 1997. Note 12: Subsequent Events On December 20, 1999, the Board of Directors authorized the Company to file a registration statement with the Securities and Exchange Commission for the purpose of an initial public offering of the Company's common stock. Upon the completion of this offering, the Company's preferred stock will be converted into shares of common stock, and all outstanding shares of preferred stock will be cancelled and retired. Further, warrants to purchase 384,624 shares of common stock will expire if not exercised prior to the close of this offering. On December 15, 1999, the Company's Board of Directors approved the acceleration of vesting on all outstanding nonvested common stock and stock options issued to advisors and other outside parties. This acceleration established a measurement date for these equity instruments resulting in a significant charge to the Company's statement of operations in the fourth quarter of 1999. Further, certain stock options to purchase 1,335,777 shares of common stock issued to senior management were converted to common stock which are subject to a repurchase option upon termination of employment. These repurchase options expire over the remaining vesting period of the original stock option agreements. From October 1, 1999 through December 20, 1999, employees exercised options for 748,801 shares of common stock in consideration for $202,124. Non-employees exercised options for 553,956 shares of common stock in consideration for $99,244. F-19

ONVIA.COM, INC. Notes to Consolidated Financial Statements--(Continued) Nine Months Ended September 30, 1998 (unaudited) and 1999, Year Ended December 31, 1998 and Period from March 25, 1997 (inception) through December 31, 1997 On December 16, 1999, the Company signed a lease agreement for new corporate office facilities. Monthly lease payments range from $61,625 to $173,188 through the expiration of the agreement in February, 2007. Total lease obligations under this agreement aggregate to $14,598,750 over the seven year lease period. On December 20, 1999, the Company consummated a sale of convertible Series C preferred stock at $13.71 per share resulting in gross proceeds of $23.2 million. The Company estimates its issuance costs to have been approximately $700,000. The Series C preferred stock is convertible into one share of common stock and has preferences, liquidation and voting rights similar to those of the Series A and B preferred stock. The Company recorded a significant preferred stock dividend immediately upon issuance of the Series C preferred stock for the value of a beneficial conversion feature equal to the difference between the estimated fair value of the Company's common stock and the purchase price. To facilitate the sales of Series C preferred stock, the Board of Directors approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of preferred stock from 20,000,000 to 23,000,000, of which 3,000,000 is designated as Series C preferred stock. On December 20, 1999, the Board of Directors approved an amendment to the Company's Articles of Incorporation to increase the number of authorized common stock from 62,000,000 to 65,000,000. On December 20, 1999, the Board of Directors approved an amendment to the 1999 stock option plan to increase the number of shares reserved for issuance to 9,000,000 to allow for an annual automatic increase in the number of shares reserved. Further, the Board approved a 2000 Directors' Stock Option Plan for issuance of up to 300,000 shares of common stock and a 2000 Employee Stock Purchase Plan for issuance of up to 300,000 shares of common stock. Between October 1, 1999 and December 20, 1999, the Board of Directors granted to employees 755,666 options for common stock, at a weighted average exercise price of $5.10. On December 20, 1999, the Board of Directors authorized the Company to re- incorporate in the State of Delaware. In October 1999, the Company received a promissory note from its majority stockholder in the amount of $350,000, collateralized by shares of the Company's common stock. The note bears interest at 6% per annum. The principal and interest are payable upon demand at the earlier of October 2004 or the expiration of any lock-up period after an Offering. The note also becomes due if certain change of control events take place. In addition, the Board of Directors authorized the issuance of promissory notes to senior executives in an aggregate amount of up to $1,000,000, collateralized by shares of the Company's common stock held by them. When issued, the notes will bear interest at a rate of 6% per annum. The principal and interest are payable upon demand at the earlier of four years from the date of issuance or the expiration of any lock-up period after a public offering. The note becomes due if certain change of control events take place. F-20

WHAT SMALL BUSINESSES SAY ABOUT ONVIA.COM "As a small business owner and as a one-person shop, Onvia.com has really simplified my life-you've allowed me to have the resources at my fingertips to be able to look like I am a larger company-that's very important to me. Thank you for simplifying my life!" --Mark Dyce, principal of Kavacom "We have generated over $15,000 worth of business as a result of Onvia.com's RFQ program in only 1 month. It's an excellent source of great leads!' --David Daniels, Cloud Source "I am very impressed with the OnviaFlash! newsletter I received today. It is absolutely a value-added service. Well done." --Bruce D. Weinberg, Assistant Professor of Marketing and E-commerce, Boston University Graduate School of Management "Starting my business 20 years ago I wish I would have had a service like Onvia.com--I've found it amazing what it can do for me as far as the marketing research, as well as the shopping for my office supplies & equipment, and long distance services. I love how you can actually compare--it's a great service for my business, like having a whole other department!' --Crystal Wilson, founder and owner, Salon Ultimate

[LOGO OF ONVIA.COM]

PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13. Other Expenses of Issuance and Distribution The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by Onvia.com in connection with the sale of common stock being registered. All amounts are estimates except the SEC registration fee and the NASD filing fee.
Amount to be Paid --------$ 26,400 10,500 * 225,000 350,000 250,000 3,000 10,000 * -------* ========

SEC registration fee............................................... NASD filing fee.................................................... Nasdaq National Market listing fee................................. Printing and engraving expenses.................................... Legal fees and expenses............................................ Accounting fees and expenses....................................... Blue Sky qualification fees and expenses........................... Transfer Agent and Registrar fees.................................. Miscellaneous fees and expenses.................................... Total..........................................................

* To be filed by amendment. Item 14. Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporations's Board of Directors to grant, indemnity to directors and officers in terms sufficiently broad to permit indemnification under specific circumstances for liabilities including reimbursement for expenses incurred arising under the Securities Act. Onvia.com's Certificate of Incorporation and Bylaws will provide for indemnification of Onvia.com's directors, officers, employees and other agents to the maximum extent permitted by Delaware law. In addition, Onvia.com has entered into indemnification agreements (Exhibit 10.1) with some of its officers and directors. The Underwriting Agreement (Exhibit 1.1) also provides for cross-indemnification among Onvia.com and the Underwriters with respect to certain matters, including matters arising under the Securities Act. Item 15. Recent Sales of Unregistered Securities (a) Since inception in March 1997, Onvia.com has issued and sold (without payment of any selling commission to any person) the following unregistered securities: (1) In March 1997 Onvia.com issued and sold 4,000,000 shares of its common stock at a price of $0.0025 per share to Glenn Ballman. The issuance of these securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. Based on information supplied by Onvia.com to Mr. Ballman and the relationship between Onvia.com and Mr. Ballman, Mr. Ballman had adequate access to information about Onvia.com. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D under the Securities Act. (2) In January 1999, Onvia.com issued and sold 400 shares of its common stock to Glenn Ballman in consideration for all of the outstanding shares of M- Depot Internet Superstore, Inc., which in December 1999 changed its name to Onvia.com, Inc., a Canadian federal corporation. The issuance of these securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. Based on information supplied by II-1

Onvia.com to Mr. Ballman and the relationship between Onvia.com and Mr. Ballman, Mr. Ballman had adequate access to information about Onvia.com. Mr. Ballman represented his intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and an appropriate legend was affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D under the Securities Act. (3) In January 1999, Onvia.com issued and sold 11,479,068 shares of its common stock at a price of $0.0025 per share to 20 individuals. The issuance of these securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. Based on representations made to Onvia.com by the investors, information supplied by Onvia.com to the investors and the relationship between Onvia.com and the investors, all investors had adequate access to information about Onvia.com. In addition, based on representations made to Onvia.com by the investors, the investors were able to bear the financial risk of their investment. The investors represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (4) In February 1999, Onvia.com issued 10,109,748 shares of Series A preferred stock to a total of 35 investors for an aggregate purchase price of $11,819,991. 1,129,018 of these shares of Series A preferred stock were issued pursuant to conversion of convertible notes sold by Onvia.com between September 1998 and February 1999. The remaining 8,980,730 of these shares were sold for cash. In February 1999 Onvia.com also issued warrants to purchase up to an aggregate of 416,676 shares of common stock at an exercise price of $0.005 per share to six investors who had bought convertible notes between September and December 1998. The issuance of these securities was deemed to be exempt from registration under the Securities Act pursuant to Rule 506 under Regulation D. Based on representations made to Onvia.com by the investors, information supplied by Onvia.com to the investors and the relationship between Onvia.com and the investors, all investors had adequate access to information about Onvia.com. Based on representations made to Onvia.com by the investors, the investors were all accredited investors within the meaning of Rule 501 of Regulation D under the Securities Act and were able to bear the financial risk of their investment. The investors represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (5) In June 1999, in connection with a loan and security agreement between Onvia.com and Dominion Venture Finance L.L.C., Onvia.com issued a warrant to purchase up to 48,664 shares of Series A Preferred Stock at an exercise price of $2.47 per share. The issuance of this security was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. The investor was a lending institution. Based on representations made to Onvia.com by the investor, information supplied by Onvia.com to the investor and the relationship between Onvia.com and the investor, the investor had adequate access to information about Onvia.com The investor represented its intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (6) In August 1999, in connection with a loan and security agreement among Onvia.com, MMC/GATX Partnership No. 1 and Comdisco, Inc., Onvia.com issued a warrant to purchase up to 249,709 shares of Series A preferred stock at an exercise price of $1.80 per share to MMC/GATX Partnership No. 1 and a warrant to purchase up to 332,946 shares of Series A Preferred Stock at an exercise price of $1.80 per share to Comdisco, Inc. The issuance of these securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as transactions by an issuer not involving II-2

any public offering. The investors were lending institutions. Based on representations made to Onvia.com by the investors, information supplied by Onvia.com to the investors and the relationship between Onvia.com and the investors, the investors had adequate access to information about Onvia.com. Based on representations made to Onvia.com by the investors, the investors were accredited investors within the meaning of Rule 501 of Regulation D under the Securities Act and were able to bear the financial risk of their investment. The investors represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (7) In September 1999, Onvia.com issued and sold 7,272,085 shares of Series B preferred stock to a total of 6 investors for an aggregate purchase price of $25,000,000. The issuance of these securities was deemed to be exempt from registration under the Securities Act pursuant to Rule 506 under Regulation D. Based on representations made to Onvia.com by the investors, information supplied by Onvia.com to the investors and the relationship between Onvia.com and the investors, all investors had adequate access to information bout Onvia.com. Based on representations made to Onvia.com by the investors, the investors were all accredited investors within the meaning of Rule 501 of Regulation D under the Securities Act and were able to bear the financial risk of their investment. The investors represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (8) In December 1999, Onvia.com issued and sold a total of 1,689,701 shares of Series C preferred stock to 32 private investors for an aggregate purchase price of $23,165,800. The issuance of these securities was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. These investors were sophisticated venture capital or other funds, corporations and sophisticated individuals. The actual number of investment decisionmakers is smaller than the number of investors due to the splitting out of the allocated investment by the venture capital funds among affiliated entities and individuals. Based on representations made to Onvia.com by the investors, information supplied by Onvia.com to the investors and the relationship between Onvia.com and the investors, all investors had adequate access to information bout Onvia.com. The investors represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities. Onvia.com did not make any offer to sell the securities by means of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D of the Securities Act. (9) Onvia.com has issued an aggregate of 5,317,682 options to purchase its common stock to 210 of its employees, directors and consultants with exercise prices ranging from $0.125 to $12.34 per share and has issued and sold 3,211,646 shares its common stock, net of repurchases, pursuant to the exercise of such options or pursuant to stock purchase agreements. These issuances were made in reliance upon Rule 701 promulgated under the Securities Act in that they were sold either pursuant to written compensatory benefit plans or pursuant to a written contract relating to compensation. (b) There were no underwritten offerings employed in connection with any of the transactions set forth in Item 15(a). Item 16. Exhibits and Financial Statement Schedules (a) Exhibits
Exhibit Number ------1.1* 3.1* Description of Document ----------------------Form of Underwriting Agreement. Amended and Restated Articles of Incorporation of Onvia.com.

II-3

Exhibit Number ------3.2* 3.3 3.4* 4.1* 4.2*

Description of Document ----------------------Amended and Restated Certificate of Incorporation of Onvia.com (proposed). Bylaws of Onvia.com, as amended and restated. Amended and Restated Bylaws (proposed). Form of Onvia.com's common stock certificate. Amended and Restated Investors' Rights Agreement dated December 20, 1999. Form of Common Stock Purchase Warrant issued in connection with the Series A Preferred Stock financing on February 25, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Dominion Capital Management L.L.C. as of June 15, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Comdisco, Inc. as of August 5, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Meier Mitchell & Company as of August 5, 1999. Opinion of Venture Law Group, A Professional Corporation. Form of Indemnification Agreement between Onvia.com and each of its officers and directors. Series A Preferred Stock Purchase Agreement dated February 25, 1999. Series B Preferred Stock Purchase Agreement dated September 30, 1999. Series C Preferred Stock Purchase Agreement dated December 20, 1999. Loan and Security Agreement between Onvia.com and Dominion Venture Finance L.L.C. dated as of June 15, 1999. Loan and Security Agreement among MMC/GATX Partnership No. 1, Comdisco, Inc. and Onvia.com dated as of August 5, 1999. Office Lease between Firdex Associates and MegaDepot.com, Inc. dated as of April 1999. Office Lease among Stratton Properties, Inc., Glenn Ballman and MegaDepot.com, Inc. dated as of May 9, 1998. Lease between Onvia.com and No. 150 Cathedral Ventures Ltd. dated as of June 1, 1999. 1999 Stock Option Plan. Secured Promissory Note issued by Glenn Ballman to Onvia.com dated as of October 14, 1999. Offer Letter dated March 25, 1999 with Mark Calvert. Offer Letter dated August 25, 1999 with Douglas Kellam. Offer Letter dated July 27, 1999 with Louis T. Mickler. Offer Letter dated July 23, 1999 with Mark Pawlosky. Offer Letter dated March 15, 1999 with Clayton Lewis. Common Stock Purchase Agreement with Glenn Ballman dated as of January 9, 1999. Common Stock Purchase Agreement with Glenn Ballman dated as of January 18, 1999. Common Stock Purchase Agreement with Mark Calvert dated as of January

4.3*

4.4

4.5*

4.6*

5.1* 10.1

10.2* 10.3* 10.4* 10.5*

10.6

10.7*

10.8*

10.9*

10.10* 10.11*

10.12* 10.13 10.14 10.15 10.16* 10.17*

10.18*

10.19*

18, 1999. 10.20* Common Stock Purchase Agreement with Rob Ayer dated as of January 18, 1999. Common Stock Purchase Agreement with Kristen Hamilton dated as of January 18, 1999.

10.21*

II-4

Exhibit Number ------10.22*

Description of Document ----------------------Common Stock Purchase Agreement with William W. Ericson dated as of January 18, 1999. Common Stock Purchase Agreement with Mike Pickett dated as of April 9, 1999. Common Stock Purchase Agreement with Jeffrey Ballowe dated as of December 8, 1999. Mercer Yale Building Office Lease Agreement between Onvia.com and Blume Yale Limited Partnership dated as of December 9, 1999. 2000 Employee Stock Purchase Plan. 2000 Directors' Stock Option Plan. List of Subsidiaries. Consent of Deloitte & Touche LLP. Consent of Venture Law Group, A Professional Corporation (see Exhibit 5.1). Power of Attorney (included in signature page to Registration Statement). Financial Data Schedule.

10.23*

10.24*

10.25*

10.26* 10.27* 21.1 23.1 23.2*

24.1

27.1

* To be filed by amendment. (b) Financial Statement Schedules All financial statement schedules are omitted because they are inapplicable or the requested information is shown in the financial statements of the registrant or the related notes to the financial statements. Item 17. Undertakings The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1), or (4), or 497(h) under the Act shall be deemed to be a part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Act, each post- effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5

SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the undersigned Registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Seattle, State of Washington, on December 21, 1999. Onvia.com, Inc.
By: /s/ Glenn S. Ballman ---------------------------------Glenn S. Ballman President and Chief Executive Officer

POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Glenn S. Ballman and Mark T. Calvert, and each one of them, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and any and all registration statements filed pursuant to Rule 462 under the Securities Act of 1933, as amended, in connection with or related to the offering contemplated by this registration statement and its amendments, if any, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated:
Signature --------Title ----Date ---December 21, 1999

/s/ Glenn S. Ballman President, Chief Executive ____________________________________ Officer and Director Glenn S. Ballman (Principal Executive Officer) /s/ Mark T. Calvert Vice President and Chief ____________________________________ Financial Officer Mark T. Calvert (Principal Financial and Accounting Officer) /s/ Kenneth A. Fox Director ____________________________________ Kenneth A. Fox /s/ Michael Pickett Director ____________________________________ Michael Pickett /s/ Nancy J. Schoendorf Director ____________________________________ Nancy J. Schoendorf /s/ William W. Ericson Director ____________________________________ William W. Ericson /s/ Anton Simunovic Director ____________________________________ Anton Simunovic ____________________________________ Jeffrey Ballowe Director

December 21, 1999

December 21 1999

December 21, 1999

December 21, 1999

December 21, 1999

December 21, 1999

December

, 1999

II-6

EXHIBIT INDEX
Exhibit Number ------1.1* 3.1* 3.2* Description of Document ----------------------Form of Underwriting Agreement. Amended and Restated Articles of Incorporation of Onvia.com. Amended and Restated Certificate of Incorporation of Onvia.com (proposed). Bylaws of Onvia.com, as amended and restated. Amended and Restated Bylaws (proposed). Form of Onvia.com's common stock certificate. Amended and Restated Investors' Rights Agreement dated December 20, 1999. Form of Common Stock Purchase Warrant issued in connection with the Series A Preferred Stock financing on February 25, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Dominion Capital Management L.L.C. as of June 15, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Comdisco, Inc. as of August 5, 1999. Warrant to Purchase Shares of Series A Preferred Stock issued by Onvia.com to Meier Mitchell & Company as of August 5, 1999. Opinion of Venture Law Group, A Professional Corporation. Form of Indemnification Agreement between Onvia.com and each of its officers and directors. Series A Preferred Stock Purchase Agreement dated February 25, 1999. Series B Preferred Stock Purchase Agreement dated September 30, 1999. Series C Preferred Stock Purchase Agreement dated December 20, 1999. Loan and Security Agreement between Onvia.com and Dominion Venture Finance L.L.C. dated as of June 15, 1999. Loan and Security Agreement among MMC/GATX Partnership No. 1, Comdisco, Inc. and Onvia.com dated as of August 5, 1999. Office Lease between Firdex Associates and MegaDepot.com, Inc. dated as of April 1999. Office Lease among Stratton Properties, Inc., Glenn Ballman and MegaDepot.com, Inc. dated as of May 9, 1998. Lease between Onvia.com and No. 150 Cathedral Ventures Ltd. dated as of June 1, 1999. 1999 Stock Option Plan. Secured Promissory Note issued by Glenn Ballman to Onvia.com dated as of October 14, 1999. Offer Letter dated March 25, 1999 with Mark Calvert. Offer Letter dated August 25, 1999 with Douglas Kellam. Offer Letter dated July 27, 1999 with Louis T. Mickler. Offer Letter dated July 23, 1999 with Mark Pawlosky.

3.3 3.4* 4.1* 4.2*

4.3*

4.4

4.5*

4.6*

5.1* 10.1

10.2* 10.3* 10.4* 10.5*

10.6

10.7*

10.8*

10.9*

10.10* 10.11*

10.12* 10.13 10.14 10.15

10.16*

Offer Letter dated March 15, 1999 with Clayton Lewis.

Exhibit Number ------10.17*

Description of Document ----------------------Common Stock Purchase Agreement with Glenn Ballman dated as of January 9, 1999. Common Stock Purchase Agreement with Glenn Ballman dated as of January 18, 1999. Common Stock Purchase Agreement with Mark Calvert dated as of January 18, 1999. Common Stock Purchase Agreement with Rob Ayer dated as of January 18, 1999. Common Stock Purchase Agreement with Kristen Hamilton dated as of January 18, 1999. Common Stock Purchase Agreement with William W. Ericson dated as of January 18, 1999. Common Stock Purchase Agreement with Mike Pickett dated as of April 9, 1999. Common Stock Purchase Agreement with Jeffrey Ballowe dated as of December 8, 1999. Mercer Yale Building Office Lease Agreement between Onvia.com and Blume Yale Limited Partnership dated as of December 9, 1999. 2000 Employee Stock Purchase Plan. 2000 Directors' Stock Option Plan. List of Subsidiaries. Consent of Deloitte & Touche LLP. Consent of Venture Law Group, A Professional Corporation (see Exhibit 5.1). Power of Attorney (included in signature page to Registration Statement). Financial Data Schedule.

10.18*

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

10.25*

10.26* 10.27* 21.1 23.1 23.2*

24.1

27.1

* To be filed by amendment.

Exhibit 3.3 AMENDED AND RESTATED BYLAWS OF ONVIA.COM, INC.

Exhibit 3.3 AMENDED AND RESTATED BYLAWS OF ONVIA.COM, INC. SECTION 1. OFFICES The principal office of the corporation shall be located at the principal place of business or such other place as the corporation's board of directors (the "Board of Directors") may designate. The corporation may have such other offices, either within or without the State of Washington, as the Board of Directors may designate or as the business of the corporation may require from time to time. SECTION 2. SHAREHOLDERS 2.1 Annual Meeting Unless another date is selected by the Board of Directors, the annual meeting of the Shareholders shall be held the third week in May of each year in Seattle, Washington for the purpose of electing directors and transacting such other business as may properly come before the meeting. If the day fixed for the annual meeting is a legal holiday at the place of the meeting, the meeting shall be held on the next succeeding business day. 2.2 Special Meetings The Corporation's chairman of the board (the "Chairman of the Board"), the Corporation's president (the "President") or the Board of Directors may call special meetings of the Corporation's Shareholders (the "Shareholders") for any purpose. Further, a special meeting of the Shareholders shall be held if the holders of not less than twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Corporations' secretary (the "Secretary") one or more written demands for such meeting, describing the purpose or purposes for which it is to be held. 2.3 Meetings by Communication Equipment Shareholders may participate in any meeting of the Shareholders by any means of communication by which all persons participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting. 2.4 Date, Time and Place of Meeting Except as otherwise provided herein, all meetings of Shareholders, including those held pursuant to demand by Shareholders as provided herein, shall be held on such date and at such time and place, within or without the State of Washington, designated by or at the direction of the Board of Directors.

2.5 Notice of Meeting Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given by or at the direction of the Board of Directors, the Chairman of the Board, the President or the Secretary to each shareholder entitled to notice of or to vote at the meeting not less than ten (10) nor more than sixty (60) days before the meeting, except that notice of a meeting to act on an amendment to the Corporation's articles of incorporation (the "Articles of Incorporation"), a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporation's assets other than in the regular course of business or the dissolution of the corporation shall be given not less than twenty (20) nor more than sixty (60) days before such meeting. Such notice may be transmitted by mail, private carrier, personal delivery, telegraph, teletype or communications equipment which transmits a facsimile of the notice to like equipment which receives and reproduces such notice. If these forms of written notice are impractical in the view of the Board of Directors, the Chairman of the Board, the President or the Secretary, written notice may be transmitted by an advertisement in a newspaper of general circulation in the area of the corporation's principal office. If such notice is mailed, it shall be deemed effective when deposited in the official government mail, first-class postage prepaid, properly addressed to the shareholder at such shareholder's address as it appears in the corporation's current record of Shareholders. Notice given in any other manner shall be deemed effective when dispatched to the shareholder's address, telephone number or other number appearing on the records of the corporation. Any notice given by publication as herein provided shall be deemed effective five (5) days after first publication. 2.6 Waiver of Notice Whenever any notice is required to be given to any shareholder under the provisions of these amended and restated bylaws (the "Bylaws"), the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Further, notice of the time, place and purpose of any meeting will be deemed to be waived by any shareholder by attendance thereat in person or by proxy, unless such shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting. 2.7 Fixing of Record Date for Determining Shareholders For the purpose of determining Shareholders entitled (a) to notice of or to vote at any meeting of Shareholders or any adjournment thereof, (b) to demand a special meeting, or (c) to receive payment of any dividend, or in order to make a determination of Shareholders for any other purpose, the Board of Directors may fix a future date as the record date for any such determination. Such record date shall be not more than seventy (70) days, and in case of a meeting of Shareholders not less than ten (10) days prior to the date on which the particular action requiring such determination is to be taken. If no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a meeting, the record date shall -2-

be the day immediately preceding the date on which notice of the meeting is first given to Shareholders. Such a determination shall apply to any adjournment of the meeting unless the Board of Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. If no record date is set for the determination of Shareholders entitled to receive payment of any stock dividend or distribution (other than one involving a purchase, redemption, or other acquisition of the corporation's shares), the record date shall be the date the Board of Directors authorizes the stock dividend or distribution. 2.8 Voting Record At least ten (10) days before each meeting of Shareholders, an alphabetical list of the Shareholders entitled to notice of such meeting shall be made, arranged by voting group and by each class or series of shares therein, with the address of and number of shares held by each shareholder. This record shall be kept at the principal office of the corporation for ten (10) days prior to such meeting, and shall be kept open at such meeting, for the inspection of any shareholder or any shareholder's agent. 2.9 Quorum A majority of the votes entitled to be cast on a matter by the holders of shares that, pursuant to the Articles of Incorporation or the Washington Business Corporation Act, are entitled to vote and be counted collectively upon such matter, represented in person or by proxy, shall constitute a quorum of such shares at a meeting of Shareholders. If less than a majority of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice if the new date, time or place is announced at the meeting before adjournment. Any business may be transacted at a reconvened meeting that might have been transacted at the meeting as originally called, provided a quorum is present or represented thereat. Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business thereat, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough Shareholders to leave less than a quorum. 2.10 Manner of Acting If a quorum is present, action on a matter other than the election of Directors shall be approved if the votes cast in favor of the action by the shares entitled to vote and be counted collectively upon such matter exceed the votes cast against such action by the shares entitled to vote and be counted collectively thereon, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes. -3-

2.11 Proxies A shareholder may vote by proxy executed in writing by the shareholder or by his or her attorney-in-fact or agent. Such proxy shall be effective when received by the Secretary or other officer or agent authorized to tabulate votes. A proxy shall become invalid eleven (11) months after the date of its execution, unless otherwise provided in the proxy. A proxy with respect to a specified meeting shall entitle the holder thereof to vote at any reconvened meeting following adjournment of such meeting but shall not be valid after the final adjournment thereof. 2.12 Voting of Shares Except as provided in the Articles of Incorporation or in Section 2.13 hereof, each outstanding share entitled to vote with respect to a matter submitted to a meeting of Shareholders shall be entitled to one vote upon such matter. 2.13 Voting for Directors Each shareholder entitled to vote at an election of Directors may vote, in person or by proxy, the number of shares owned by such shareholder for as many persons as there are Directors to be elected and for whose election such shareholder has a right to vote, or (unless otherwise provided in the Articles of Incorporation) each such shareholder may cumulate such shareholder's votes by distributing among one or more candidates as many votes as are equal to the number of such Directors multiplied by the number of such shareholder's shares. Unless otherwise provided in the Articles of Incorporation, the candidates elected shall be those receiving the largest number of votes cast, up to the number of Directors to be elected. 2.14 Action by Shareholders Without a Meeting Any action which could be taken at a meeting of the Shareholders may be taken without a meeting or a vote if the action is taken by Shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. The taking of action by Shareholders without a meeting or vote must be evidenced by one or more written consents describing the action taken, signed by Shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary in order to take such action by written consent. SECTION 3. BOARD OF DIRECTORS 3.1 General Powers All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board of Directors, except as may be otherwise provided in these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act. -4-

3.2 Number and Tenure The Board of Directors shall be composed of seven (7) directors. The number of Directors may be changed from time to time by amendment to these Bylaws, but no decrease in the number of Directors shall have the effect of shortening the term of any incumbent director. Unless a director dies, resigns, or is removed, his or her term of office shall expire at the next annual meeting of Shareholders; provided, however, that a director shall continue to serve until his or her successor is elected or until there is a decrease in the authorized number of Directors. Directors need not be Shareholders of the corporation or residents of the State of Washington and need not meet any other qualifications. 3.3 Annual and Regular Meetings An annual Board of Directors meeting shall be held without notice immediately after and at the same place as the annual meeting of Shareholders. By resolution the Board of Directors, or any committee thereof, may specify the time and place either within or without the State of Washington for holding regular meetings thereof without notice other than such resolution. 3.4 Special Meetings Special meetings of the Board of Directors or any committee designated by the Board of Directors may be called by or at the request of the Chairman of the Board, the President, the Secretary or, in the case of special Board of Directors meetings, any three Directors and, in the case of any special meeting of any committee designated by the Board of Directors, by the Chairman thereof. The person or persons authorized to call special meetings may fix any place either within or without the State of Washington as the place for holding any special Board of Directors or committee meeting called by them. 3.5 Meetings by Communications Equipment Members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of such Board of Directors or committee by, or conduct the meeting through the use of, any means of communication by which all Directors participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting. 3.6 Notice of Special Meetings Notice of a special Board of Directors or committee meeting stating the place, day and hour of the meeting shall be given to a director in writing or orally. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice of such meeting. -5-

3.6.1 Personal Delivery If notice is given by personal delivery, the notice shall be effective if delivered to a director at least twenty-four (24) hours before the meeting. 3.6.2 Delivery by Mail If notice is delivered by mail, the notice shall be deemed effective if deposited in the official government mail at least five (5) days before the meeting, properly addressed to a director at his or her address shown on the records of the corporation, with postage thereon prepaid. 3.6.3 Delivery by Private Carrier If notice is given by private carrier, the notice shall be deemed effective when dispatched to a director at his or her address shown on the records of the corporation at least three (3) days before the meeting. 3.6.4 Facsimile Notice If notice is delivered by wire or wireless equipment which transmits a facsimile of the notice, the notice shall be deemed effective when dispatched at least two (2) days before the meeting to a director at his or her telephone number or other number appearing on the records of the corporation. 3.6.5 Delivery by Telegraph If notice is delivered by telegraph, the notice shall be deemed effective if the content thereof is delivered to the telegraph company for delivery to a director at his or her address shown on the records of the corporation at least three (3) days before the meeting. 3.6.6 Oral Notice If notice is delivered orally, by telephone or in person, the notice shall be deemed effective if personally given to the director at least two (2) days before the meeting. 3.7 Waiver of Notice 3.7.1 In Writing Whenever any notice is required to be given to any director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, -6-

nor the purpose of, any regular or special meeting of the Board of Directors or any committee designated by the Board of Directors need be specified in the waiver of notice of such meeting. 3.7.2 By Attendance A director's attendance at or participation in a Board of Directors or committee meeting shall constitute a waiver of notice of such meeting, unless the director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business thereat and does not thereafter vote for or assent to action taken at the meeting. 3.8 Quorum A majority of the number of Directors fixed by or in the manner provided in these Bylaws shall constitute a quorum for the transaction of business at any Board of Directors meeting but, if less than a majority are present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice. 3.9 Manner of Acting If a quorum is present when the vote is taken, the act of the majority of the Directors present at a Board of Directors meeting shall be the act of the Board of Directors, unless the vote of a greater number is required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act. 3.10 Presumption of Assent A director of the corporation who is present at a Board of Directors or committee meeting at which any action is taken shall be deemed to have assented to the action taken unless (a) the director objects at the beginning of the meeting, or promptly upon the director's arrival, to holding the meeting or transacting any business thereat, (b) the director's dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) the director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation within a reasonable time after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. 3.11 Action by Board of Directors or Committees Without a Meeting Any action which could be taken at a meeting of the Board of Directors or of any committee created by the Board of Directors may be taken without a meeting if one or more written consents setting forth the action so taken are signed by each of the Directors or by each committee member either before or after the action is taken and delivered to the corporation. Action taken by written consent of Directors without a meeting is effective when the last director signs the consent, unless the consent specifies a later effective date. Any such written consent -7-

shall be inserted in the minute book as if it were the minutes of a Board of Directors or a committee meeting. 3.12 Resignation Any director may resign at any time by delivering written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors. Any such resignation is effective upon delivery thereof unless the notice of resignation specifies a later effective date and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 3.13 Removal At a meeting of Shareholders called expressly for that purpose, one or more members of the Board of Directors, including the entire Board of Directors, may be removed with or without cause (unless the Articles of Incorporation permit removal for cause only) by the holders of the shares entitled to elect the director or Directors whose removal is sought if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. If the Articles of Incorporation permit cumulative voting in the election of Directors, then a director may not be removed if the number of votes sufficient to elect such director if then cumulatively voted at an election of the entire Board of Directors or, if there are classes of Directors, at an election of the class of Directors of which such director is a part, is voted against the director's removal. 3.14 Vacancies Unless the Articles of Incorporation provide otherwise, any vacancy occurring on the Board of Directors may be filled by the Shareholders, the Board of Directors or, if the Directors in office constitute fewer than a quorum, by the affirmative vote of a majority of the remaining Directors. Any vacant office held by a director elected by the holders of one or more classes or series of shares entitled to vote and be counted collectively thereon shall be filled only by the vote of the holders of such class or series of shares. A director elected to fill a vacancy shall serve only until the next election of Directors by the Shareholders. 3.15 Executive and Other Committees 3.15.1 Creation of Committees The Board of Directors, by resolution adopted by the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws, may create standing or temporary committees, including an Executive Committee, and appoint members thereto from its own number and invest such committees with such powers as it may see fit, subject to such conditions as may be prescribed by the Board of Directors, these Bylaws and applicable law. Each committee must have two or more members, who shall serve at the pleasure of the Board of Directors. -8-

3.15.2 Authority of Committees Each committee shall have and may exercise all of the authority of the Board of Directors to the extent provided in the resolution of the Board of Directors creating the committee and any subsequent resolutions pertaining thereto and adopted in like manner, except that no such committee shall have the authority to: (a) authorize or approve a distribution except according to a general formula or method prescribed by the Board of Directors, (b) approve or propose to Shareholders actions or proposals required by the Washington Business Corporation Act to be approved by Shareholders, (c) fill vacancies on the Board of Directors or any committee thereof, (d) adopt, amend or repeal Bylaws, (e) amend the Articles of Incorporation pursuant to RCW 23B.10.020, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares except that the Board of Directors may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the Board of Directors. 3.15.3 Quorum and Manner of Acting A majority of the number of Directors composing any committee of the Board of Directors, as established and fixed by resolution of the Board of Directors, shall constitute a quorum for the transaction of business at any meeting of such committee but, if less than a majority are present at a meeting, a majority of such Directors present may adjourn the meeting from time to time without further notice. Except as may be otherwise provided in the Washington Business Corporation Act, if a quorum is present when the vote is taken the act of a majority of the members present shall be the act of the committee. 3.15.4 Minutes of Meetings All committees shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose. 3.15.5 Resignation Any member of any committee may resign at any time by delivering written notice thereof to the Chairman of the Board, the President, the Secretary or the Board of Directors. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and the acceptance of such resignation shall not be necessary to make it effective. 3.15.6 Removal The Board of Directors may remove any member of any committee elected or appointed by it but only by the affirmative vote of the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws. -9-

3.16 Compensation By Board of Directors resolution, Directors and committee members may be paid their expenses, if any, of attendance at each Board of Directors or committee meeting, or a fixed sum for attendance at each Board of Directors or committee meeting, or a stated salary as director or a committee member, or a combination of the foregoing. No such payment shall preclude any director or committee member from serving the corporation in any other capacity and receiving compensation therefor. SECTION 4. OFFICERS 4.1 Appointment and Term The officers of the corporation shall be those officers appointed from time to time by the Board of Directors or by any other officer empowered to do so. The Board of Directors shall have sole power and authority to appoint executive officers. As used herein, the term "executive officer" shall mean the President, any Vice President in charge of a principal business unit, division or function or any other officer who performs a policy-making function. The Board of Directors or the President may appoint such other officers and assistant officers to hold office for such period, have such authority and perform such duties as may be prescribed. The Board of Directors may delegate to any other officer the power to appoint any subordinate officers and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person. Unless an officer dies, resigns or is removed from office, he or she shall hold office until his or her successor is appointed. 4.2 Resignation Any officer may resign at any time by delivering written notice thereof to the corporation. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 4.3 Removal Any officer may be removed by the Board of Directors at any time, with or without cause. An officer or assistant officer, if appointed by another officer, may be removed by any officer authorized to appoint officers or assistant officers. 4.4 Contract Rights of Officers The appointment of an officer does not itself create contract rights. 4.5 Chairman of the Board If appointed, the Chairman of the Board shall perform such duties as shall be assigned to him or her by the Board of Directors from time to time and shall preside over -10-

meetings of the Board of Directors and Shareholders unless another officer is appointed or designated by the Board of Directors as Chairman of such meetings. 4.6 President If appointed, the President shall be the chief executive officer of the corporation unless some other officer is so designated by the Board of Directors, shall preside over meetings of the Board of Directors and Shareholders in the absence of a Chairman of the Board, and, subject to the Board of Director's control, shall supervise and control all of the assets, business and affairs of the corporation. In general, the President shall perform all duties incident to the office of President and such other duties as are prescribed by the Board of Directors from time to time. If no Secretary has been appointed, the President shall have responsibility for the preparation of minutes of meetings of the Board of Directors and Shareholders and for authentication of the records of the corporation. 4.7 Vice President In the event of the death of the President or his or her inability to act, the Vice President (or if there is more than one Vice President, the Vice President who was designated by the Board of Directors as the successor to the President, or if no Vice President is so designated, the Vice President first elected to such office) shall perform the duties of the President, except as may be limited by resolution of the Board of Directors, with all the powers of and subject to all the restrictions upon the President. Vice Presidents shall perform such other duties as from time to time may be assigned to them by the President or by or at the direction of the Board of Directors. 4.8 Secretary If appointed, the Secretary shall be responsible for preparation of minutes of the meetings of the Board of Directors and Shareholders, maintenance of the corporation records and stock registers, and authentication of the corporation's records and shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board of Directors. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary. 4.9 Treasurer If appointed, the Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws, and in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board of Directors. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer. If required by the Board of -11-

Directors, the Treasurer or any Assistant Treasurer shall give a bond for the faithful discharge of his or her duties in such amount and with such surety or sureties as the Board of Directors shall determine. 4.10 Salaries The salaries of the officers shall be fixed from time to time by the Board of Directors or by any person or persons to whom the Board of Directors has delegated such authority. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation. SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS 5.1 Contracts The Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. Such authority may be general or confined to specific instances. 5.2 Loans to the Corporation No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. 5.3 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, or agent or agents, of the corporation and in such manner as is from time to time determined by resolution of the Board of Directors. 5.4 Deposits All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select. SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER 6.1 Issuance of Shares No shares of the corporation shall be issued unless authorized by the Board of Directors, or by a committee designated by the Board of Directors to the extent such committee is empowered to do so. -12-

6.2 Certificates for Shares Certificates representing shares of the corporation shall be signed, either manually or in facsimile, by the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary and shall include on their face written notice of any restrictions which may be imposed on the transferability of such shares. All certificates shall be consecutively numbered or otherwise identified. 6.3 Stock Records The stock transfer books shall be kept at the principal office of the corporation or at the office of the corporation's transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by each such certificate and the date of issue thereof, shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. 6.4 Transfer of Shares The transfer of shares of the corporation shall be made only on the stock transfer books of the corporation pursuant to authorization or document of transfer made by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificates for a like number of shares shall have been surrendered and canceled. 6.5 Lost or Destroyed Certificates In the case of a lost, destroyed or mutilated certificate, a new certificate may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. SECTION 7. BOOKS AND RECORDS The corporation shall: (a) Keep as permanent records minutes of all meetings of its Shareholders and the Board of Directors, a record of all actions taken by the Shareholders or the Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors exercising the authority of the Board of Directors on behalf of the corporation. (b) Maintain appropriate accounting records. (c) Maintain a record of its Shareholders, in a form that permits preparation of a list of the names and addresses of all Shareholders, in alphabetical order by class of shares -13-

showing the number and class of shares held by each; provided, however, such record may be maintained by an agent of the corporation. (d) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time. (e) Keep a copy of the following records at its principal office: (i) the Articles of Incorporation and all amendments thereto as currently in effect; (ii) the Bylaws and all amendments thereto as currently in effect; (iii) the minutes of all meetings of Shareholders and records of all action taken by Shareholders without a meeting, for the past three (3) years; (iv) the financial statements described in Section 23B.16.200(1) of the Washington Business Corporation Act, for the past three (3) years; (v) all written communications to Shareholders generally within the past three (3) years; (vi) a list of the names and business addresses of the current Directors and officers; and (vii) the most recent annual report delivered to the Washington Secretary of State. SECTION 8. ACCOUNTING YEAR The accounting year of the corporation shall be the calendar year, provided that if a different accounting year is at any time selected by the Board of Directors for purposes of federal income taxes, or any other purpose, the accounting year shall be the year so selected. SECTION 9. SEAL The Board of Directors may provide for a corporate seal which shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation. SECTION 10. INDEMNIFICATION 10.1 Right to Indemnification Each person who was, is or is threatened to be made a named party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (hereinafter a "proceeding"), by reason of the fact that he or she is or -14-

was a director or officer of the corporation or, that being or having been such a director or officer or an employee of the corporation, he or she is or was serving at the request of an executive officer of the corporation as a director, officer, partner, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, employee benefit plan or other enterprise (hereinafter an "indemnitee"), whether the basis of a proceeding is alleged action in an official capacity as such a director, officer, partner, trustee, employee or agent or in any other capacity while serving as such a director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation against all expense, liability and loss (including counsel fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, partner, trustee, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. Except as provided in Section 10.4 of this Section with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if a proceeding (or part thereof) was authorized or ratified by the Board of Directors. The right to indemnification conferred in this Section shall be a contract right. 10.2 Restrictions on Indemnification No indemnification shall be provided to any such indemnitee for acts or omissions of the indemnitee finally adjudged to be intentional misconduct or a knowing violation of law, for conduct of the indemnitee finally adjudged to be in violation of Section 23B.08.310 of the Washington Business Corporation Act, for any transaction with respect to which it was finally adjudged that such indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled or if the corporation is otherwise prohibited by applicable law from paying such indemnification, except that if Section 23B.08.560 or any successor provision of the Washington Business Corporation Act is hereafter amended, the restrictions on indemnification set forth in this Section 10.2 shall be as set forth in such amended statutory provision. 10.3 Advancement of Expenses The right to indemnification conferred in this Section 10.3 shall include the right to be paid by the corporation the expenses incurred in defending any proceeding in advance of its final disposition (hereinafter an "advancement of expenses"). An advancement of expenses shall be made upon delivery to the corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 10.3. 10.4 Right of Indemnitee to Bring Suit If a claim under Section 10.1 or 10.3 of this Section is not paid in full by the corporation within sixty (60) days after a written claim has been received by the corporation, -15-

except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part, in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. The indemnitee shall be presumed to be entitled to indemnification under this Section 10.4 upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled. 10.5 Procedures Exclusive Pursuant to Section 23B.08.560(2) or any successor provision of the Washington Business Corporation Act, the procedures for indemnification and advancement of expenses set forth in this Section 10.5 are in lieu of the procedures required by Section 23B.08.550 or any successor provision of the Washington Business Corporation Act. 10.6 Nonexclusivity of Rights The right to indemnification and the advancement of expenses conferred in this Section 10.6 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws of the corporation, general or specific action of the Board of Directors, contract or otherwise. 10.7 Insurance, Contracts and Funding The corporation may maintain insurance, at its expense, to protect itself and any director, officer, partner, trustee, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Washington Business Corporation Act. The corporation may enter into contracts with any director, officer, partner, trustee, employee or agent of the corporation in furtherance of the provisions of this Section and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Section. 10.8 Indemnification of Employees and Agents of the Corporation The corporation may, by action of the Board of Directors, grant rights to indemnification and advancement of expenses to employees and agents or any class or group of employees and agents of the corporation (a) with the same scope and effect as the provisions of this Section with respect to the indemnification and advancement of expenses of Directors and officers of the corporation; (b) pursuant to rights granted pursuant to, or provided by, the Washington Business Corporation Act; or (c) as are otherwise consistent with law. -16-

10.9 Persons Serving Other Entities Any person who, while a director, officer or employee of the corporation, is or was serving (a) as a director or officer of another foreign or domestic corporation of which a majority of the shares entitled to vote in the election of its Directors is held by the corporation or (b) as a partner, trustee or otherwise in an executive or management capacity in a partnership, joint venture, trust or other enterprise of which the corporation or a wholly owned subsidiary of the corporation is a general partner or has a majority ownership shall be deemed to be so serving at the request of an executive officer of the corporation and entitled to indemnification and advancement of expenses under Sections 10.1 and 10.3 of this section. SECTION 11. AMENDMENTS These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board of Directors, except that the Board of Directors may not repeal or amend any Bylaw that the Shareholders have expressly provided, in amending or repealing such Bylaw, may not be amended or repealed by the Board of Directors. The Shareholders may also alter, amend and repeal these Bylaws or adopt new Bylaws. All Bylaws made by the Board of Directors may be amended, repealed, altered or modified by the Shareholders. The foregoing Bylaws were adopted by the Shareholders as of September __, 1999.
/s/ Glenn Ballman -----------------------------------------Glenn Ballman, Secretary

-17-

Exhibit 4.4 NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF SERIES A PREFERRED STOCK Expires: June 15, 2008 THIS CERTIFIES THAT, for value received, DOMINION CAPITAL MANAGEMENT L.L.C., a Delaware limited liability company, is entitled to subscribe for and purchase up to that number of shares (as adjusted pursuant to the provisions hereof, the "Shares") of Series A Preferred Stock (as hereinafter defined) of ONVIA.COM, INC., a Washington Corporation (the "Company")which, at the time of exercise of this Warrant, is equal to $120,000 divided by the price per share (as adjusted pursuant to the terms hereof, the "Exercise Price") as shall be determined in accordance with Section 1.1 hereof. As used herein, the term "Grant Date" shall mean June 15, 1999. 1. Exercise Price; Preferred Stock; Term. 1.1 Exercise Price. The Exercise Price shall be determined as follows: (a) If, prior to October 31, 1999, the Company completes a private offering of its next authorized series of preferred stock, which next authorized series the Company intends to designate "Series B Preferred Stock," the aggregate gross proceeds from which exceeds $7,000,000 (whether in one transaction or in a series of transactions after the date of this Warrant and excluding the conversion of debt to equity) (the "Financing"), then the Exercise Price shall be determined based on the following formula: Price per share: X + (A/B) x (Y-X). Where: X = Price per share of the last round (2.34). Y = Price per share of the next round. A = Months from the last round (3). B = Months between Series A and Series B closing. (b) If the Company does not complete the Financing prior to October 31, 1999, then the Exercise Price shall be $ 2.34. 1.2 Preferred Stock. The term "Preferred Stock" shall mean as follows: -1-

(a) If the Company completes the Financing prior to October 31, 1999, then the term "Preferred Stock" shall mean the series of the Company's preferred stock issued in the Financing, and any stock into or for which such preferred stock may thereafter be converted or exchanged. (b) If the Company does not complete the Financing prior to October 31, 1999, then the term "Preferred Stock" shall mean the Company's presently authorized Series A Preferred Stock, and any stock into or for which such Series A Preferred Stock may hereafter be converted or exchanged. 1.3 Term. This Warrant is exercisable, in whole or in part, at any time and from time to time from and after the Grant Date and prior to the earlier of (a) the ninth anniversary of the Grant Date, (b) the fourth anniversary of the consummation of the Company's initial public offering of its Common Stock pursuant to a registration statement filed under the Securities Act of 1933, as amended (the "Securities Act"), the aggregate gross proceeds from which exceed $10,000,000 or (c) the occurrence of an event set forth in Section 10.2 below. (i) It is understood and agreed upon the consummation of the Company's initial public offering of its Common Stock under the terms of this Section 1.3, that this Warrant shall simultaneously and automatically convert into a Warrant in the same form and with all the same rights except that it shall be a Warrant to purchase shares of Common Stock. 2. Method of Exercise; Net Issue Exercise. 2.1 Method of Exercise; Payment; Issuance of New Warrant. This Warrant may be exercised by the holder hereof, in whole or in part and from time to time, by either of the following, at the election of the holder hereof: (a) the surrender of this Warrant (with the Notice of Exercise form attached hereto as Exhibit A-1 duly executed) at the principal office of the Company and by the payment to the Company, by cash, check or cancellation of indebtedness, of an amount equal to the Exercise Price per share multiplied by the number of Shares then being purchased; or (b) if in connection with a sale of Shares pursuant to a registered public offering of the Company's securities, the surrender of this Warrant (with the Notice of Exercise form attached hereto as Exhibit A-2 duly executed), which surrender may be made contingent upon the closing of such offering, at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the Exercise Price per share multiplied by the number of Shares then being purchased. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of this Warrant, certificates for the Shares so purchased shall be delivered to the holder hereof as soon as possible and in any event within fifteen (15) days of receipt of such notice (or, following, the Company's initial public offering, within five (5) days of receipt of such notice) and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible thereafter. 2.2 Automatic Exercise. To the extent this Warrant is not previously exercised, and if the fair market value of one share of the Company's Preferred Stock is greater than the Exercise Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 2.3 below (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one share -2-

of the Company's Preferred Stock upon such expiration shall be determined pursuant to Section 2.3 (b) below. To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 2.2, the Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise. 2.3 Right to Convert Warrant into Stock: Net Issuance. (a) In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder may elect to convert this Warrant or any portion thereof (the "Conversion Right") into shares of Preferred Stock, the aggregate value of which shares shall be equal to the value of this Warrant or the portion thereof being converted. The Conversion Right may be exercised by the holder by surrender of this Warrant at the principal office of the Company together with notice of the holder's intention to exercise the Conversion Right, in which event the Company shall issue to the holder a number of shares of the Company's Preferred Stock computed using the following formula: X = Y (A-B) A
Where: X = Y = A = B = The number of shares of Preferred Stock to be issued to the holder. The number of shares of Preferred Stock purchasable under this Warrant subject to the exercise election. The fair market value of one share of the Company's Preferred Stock. Exercise Price (as adjusted to the date of such calculations). (b) For purposes of this Section 2.3, the "fair market value"

per share of the Company's Preferred Stock shall mean: (i) If the Conversion Right is exercised in connection with and contingent upon the Company's initial public offering, and if the Company's registration statement relating to such offering has been declared effective by the Securities and Exchange Commission, then the initial "Price to Public" specified in the final prospectus with respect to such offering; or (ii) If the Conversion Right is not exercised in connection with and contingent upon the Company's initial public offering, then as follows: (A) If the Preferred Stock is traded on a national securities exchange or admitted to unlisted trading privileges on such an exchange, or is listed on the Nasdaq National Market (the "National Market System"), the fair market value shall be the average of the last reported sale prices of the Preferred Stock on such exchange or on the Nasdaq National Market on the last ten (10) trading days (or all such trading days such Preferred Stock has been traded if fewer than 10 trading days) before the effective date of exercise of the Conversion Right or if no such sale is 3

made on any such day, the mean of the closing bid and asked prices for such day on such exchange or on the Nasdaq National Market; (B) If the Preferred Stock is not so listed or admitted to unlisted trading privileges, the fair market value shall be the average of the means of the last bid and asked prices reported on the last ten (10) trading days (or all such trading days such Preferred Stock has been traded if fewer than 10 trading days) before the date of the election (1) by the Nasdaq Stock Market or (2) if reports are unavailable under clause (1) above, by the National Quotation Bureau Incorporated; and (C) If the Preferred Stock is not so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the fair market value shall be the price per share which the Company could obtain from a willing buyer for shares sold by the Company from authorized but unissued shares, as such price shall be determined by mutual agreement of the Company and the holder of this Warrant. 3. Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of this Warrant, and all Common Stock issuable upon conversion of the Shares shall, upon issuance, be validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. During the period within which this Warrant may be exercised, the Company will at all times have duly authorized and reserved, for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Preferred Stock (and Common Stock issuable upon conversion thereof). 4. Adjustments to Exercise Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as set forth in that certain Amended and Restated Articles of Incorporation of the Company, dated February, 23, 1999, (the "Articles of Incorporation"), and in Appendix I hereto upon the occurrence of certain events described therein. The provisions of the Articles of Incorporation, and Appendix I are incorporated by reference herein with the same effect as if set forth in full herein. 5. Notices of Record Date. In the event of any taking by the Company of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed merger or consolidation of the Company with or into any other corporation, or any proposed sale, lease or conveyance of all or substantially all of the assets of the Company, or any proposed liquidation, dissolution or winding up of the Company, then, in connection with each such event, the Company shall mail to the holder of this Warrant at least twenty (20) days prior written notice of the date on which any such record is to be taken for the purpose of such dividend, distribution, right(s) or vote of the shareholders. Each such written notice shall specify the amount and character of any such dividend, distribution or right(s), and shall set forth, in reasonable detail, the matter requiring any such vote of the shareholders. 6. Fractional Shares. No fractional shares of Preferred Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based upon the per share fair market value of the Preferred Stock on the date of exercise. 4

7. Compliance with Securities Act; Disposition of Warrant or Shares of Preferred Stock. (a) Compliance with Securities Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, the Shares to be issued upon exercise hereof and the Common Stock to be issued upon conversion of such Shares are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof (or Common Stock issued upon conversion of such Shares) except under circumstances which will not result in a violation of the Securities Act. This Warrant and all Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED. (b) Disposition of Warrant and Shares. With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant (or Common Stock issued upon conversion of such Shares) prior to registration thereof, the holder hereof and each subsequent holder of this Warrant agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder's counsel, if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Securities Act as then in effect or any federal or state law then in effect) of this Warrant or such Shares or Common Stock and indicating whether or not under the Securities Act certificates for this Warrant or such Shares or Common Stock to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to insure compliance with the Securities Act. Each certificate representing this Warrant or the Shares or Common Stock thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Securities Act unless, in the aforesaid opinion of counsel for the holder, such legend is not required in order to insure compliance with the Securities Act. Nothing herein shall restrict the transfer of this Warrant or any portion hereof by the initial holder hereof to any partnership affiliated with the initial holder, or to any partner of any such partnership provided such transfer may be made in compliance with applicable federal and state securities laws. The Company may issue stop transfer instructions to its transfer agent in connection with the foregoing restrictions. 8. Rights as Shareholders; Information. 8.1 Shareholder Rights. Except as set forth herein, no holder of this Warrant, as such, shall be entitled to vote upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or be deemed the holder of Preferred Stock until this Warrant shall have been exercised and the Shares purchasable upon such exercise shall have become deliverable, as provided herein. 5

8.2 Financial Statements and Information. The Company shall deliver to the registered holder hereof (i) within one-hundred-twenty (120) days after the end of the fiscal year of the Company, a consolidated balance sheet of the Company as of the end of such year and a consolidated statement of income, cash flows and shareholders' equity for such year, which year-end financial reports shall be in reasonable detail and certified by independent public accountants of nationally recognized standing selected by the Company, and (ii) within forty- five (45) days after the end of each fiscal quarter (other than the last fiscal quarter), unaudited consolidated statements of income and cash flows for such quarter and a consolidated balance sheet as of the end of such quarter, certified by the Company's chief financial officer. In addition, the Company shall deliver to the registered holder hereof any other information or data provided generally to the shareholders of the Company. The registered holder hereby acknowledges and agrees that all information delivered in this section 8 shall be held strictly confidential, except to the extent any disclosure of such information is required by auditors, lenders, or a court of competent jurisdiction or governmental authority. The registered holder agrees to sue its commercially reasonable efforts to bind those third parties to whom confidential information is disclosed to the terms of this Section 8. 9. Registration Rights. The rights of the holder of this Warrant and the obligations of the Company with respect to registration under the Securities Act and the applicable rules and regulations thereunder shall be as set forth in that certain Investor Rights Agreement dated February 23, 1999, between the Company and the parties who have executed the counterpart signature pages thereto or are otherwise bound thereby (the "Investor Rights Agreement"), the provisions of which are incorporated by reference herein with the same effect as if set forth in full herein. 10. Additional Rights. 10.1 Mergers. The Company agrees to provide the holder of this Warrant with at least twenty (20) days' prior written notice of the terms and conditions of any proposed transaction, in which the Company would (i) sell, lease, exchange, convey or otherwise dispose of all or substantially all of its property or business, or (ii) merge into or consolidate with any other corporation (other than a wholly-owned subsidiary of the Company), or effect any transaction (including a merger or other reorganization) or series of related transactions, in which more than fifty percent (50%) of the voting power of the Company is disposed of. The Company will cooperate with the holder in arranging the sale of this Warrant in connection with any such transaction. 11. Representations and Warranties. This Warrant is issued and delivered on the basis of the following: (a) This Warrant has been duly authorized, executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms; (b) The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable; (c) The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company's Articles of Incorporation, as amended (the "Charter"), a true and complete copy of which has been delivered to the original holder of this Warrant; 6

(d) The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved and, when issued in accordance with the terms of the Company's Charter, will be validly issued, fully paid and nonassessable; (e) As of the Grant Date, the capitalization of the Company shall be as set forth in the Capitalization Schedule attached hereto as Appendix IV, which indicates the following: (i) the authorized capital stock of the Company (including the authorized number of shares of Common Stock and each series of Preferred Stock); (ii) the number of shares of Common Stock and each series of Preferred Stock issued and outstanding; (iii) the number of shares of Common Stock reserved for issuance upon conversion of any Preferred Stock; (iv) the number of shares for which options have been granted under the Company's Stock Option Plan; and (v) any other securities that are convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for Common Stock or such convertible or exchangeable securities, and the number of shares of Common Stock issuable upon any conversion, exchange or exercise of such securities, options or rights. All issued and outstanding shares of the Company's Common Stock and Preferred Stock have been duly authorized and validly issued, and are fully paid and nonassessable. Except as set forth in Appendix IV, there are no outstanding rights, options, warrants, conversion rights, preemptive rights, rights of first refusal or similar rights for or understandings relating to the purchase or acquisition from the Company of any securities of the Company. (f) The execution and delivery of this Warrant, the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof and the compliance by the Company with the provisions hereof (i) are not and will not be inconsistent with the Company's Charter or Bylaws, (ii) do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and (iii) do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any Federal, state or local government authority or agency or other person. 12. Amendment of Conversion Rights. The Company shall promptly provide the holder of this Warrant with any restatement, amendment, modification or waiver of the Charter promptly after the same has been made. 13. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 14. Notices. Any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered or sent to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant and shall be deemed received by the holder upon the earlier of actual receipt or, if sent by certified mail (postage pre-paid), five (5) days after deposit in the U.S. mail. 15. Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the obligations of the Company relating to the Shares, or the Company's Common Stock issuable upon 7

conversion thereof, shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof. The Company will, at the time of the exercise of this Warrant, in whole or in part, upon request of the holder hereof but at the Company's expense, acknowledge in writing its continuing obligation to the holder hereof in respect of any rights (including, without limitation, any right to registration of the Shares in accordance with Appendix II) to which the holder hereof shall continue to be entitled after such exercise in accordance with this Warrant; provided, that the failure of the holder hereof to make any such request shall not affect the continuing obligation of the Company to the holder hereof in respect of such rights. 16. Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate issued upon exercise thereof and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company shall make and deliver a new Warrant or stock certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 17. No Impairment. The Company will not, by amendment of its Charter or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. 18. Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. 19. Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled. 20. "Market Standoff" Agreement. Each Holder hereby agrees that, during the period of duration (up to, but not exceeding, one hundred eighty (180) days) specified by the Company and an underwriter of Common Stock or other securities of the Company, following the effective date of a registration statement of the Company filed under the Securities Act, it shall not, to the extent requested by the Company and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by it at any time during such period except Common Stock included in such registration; provided, however, that: (a) such agreement shall be applicable only the first such registration statement of the Company which covers Common Stock (or other securities) to be sold on its behalf to the public in an underwritten offering; and 8

(b) all officers and directors of the Company, all one-percent securityholders, and all other persons with registration rights (whether or not pursuant to this Agreement) enter into similar agreements. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period, and each Holder agrees that, if so requested, such Holder will execute an agreement in the form provided by the underwriter containing terms which are essentially consistent with the provisions of this Section 1.14. Notwithstanding the foregoing, the obligations described in this Section 1.14 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to an SEC Rule 145 transaction on Form S-4 or similar forms which may be promulgated in the future. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 9

21. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF CALIFORNIA. Date: June 15, 1999 ONVIA.COM, INC. a Washington corporation
By: /s/ Mark Calvert -------------------------------Name: Mark Calvert -----------------------------Title: CFO ----------------------------Address: 209 1/2 1st Ave S. --------------------------Suite 302 --------------------------Seattle, WA 98104 ---------------------------

10

EXHIBIT A-1 NOTICE OF EXERCISE To: ONVIA.COM, INC. (Company Name) 1. The undersigned hereby: [_] elects to purchase __________ shares of Series A Preferred Stock of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full; or [_] elects to exercise its net issuance rights pursuant to Section 2.3 of the attached Warrant with respect to __________ shares of Series A Preferred Stock. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below:

(Name)

(Address)

(Address) 3. The undersigned represents that the aforesaid shares being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares.

(Date)

(Signature)

EXHIBIT A-2 NOTICE OF EXERCISE To: ONVIA.COM, INC. (Company Name) 1. Contingent upon and effective immediately prior to the closing (the "Closing") of the Company's public offering contemplated by the Registration Statement on Form S-___, filed on ____________, 19___, the undersigned hereby: [_] elects to purchase __________ shares of Series A Preferred Stock of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant; or [_] elects to exercise its net issuance rights pursuant to Section 2.3 of the attached Warrant with respect to __________ shares of Series A Preferred Stock. 2. Please deliver to the custodian for the selling shareholders a stock certificate representing such __________ shares. 3. The undersigned has instructed the custodian for the selling shareholders to deliver to the Company $__________ or, if less, the net proceeds due the undersigned from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior to the Closing.

(Date)

(Signature) 12

APPENDIX I ADJUSTMENT PROVISIONS 1. Reclassification or Merger. In case of any reclassification, change or conversion of securities of the class issuable upon exercise of this Warrant (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 in case of any merger of the Company with or into another corporation or entity (other than a merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation or entity, as the case may be, shall execute a new Warrant (in form and substance satisfactory to the holder of this Warrant) providing that the holder of this Warrant shall have the right to exercise such new Warrant and upon such exercise to receive, in lieu of each share of Preferred Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change or merger by a holder of one share of Preferred Stock. Such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Appendix I. The provisions of this Section 3 shall similarly apply to successive reclassifications, changes, mergers and transfers. -2-

APPENDIX II CAPITALIZATION SCHEDULE

Exhibit 10.1 ONVIA.COM, INC. INDEMNIFICATION AGREEMENT This Indemnification Agreement (this "Agreement") dated as of December __, 1999 is made by and between Onvia.com, Inc., a Washington corporation formerly known as MegaDepot.com, Inc. (the "Company"), and ________________ ("Indemnitee"). RECITALS A. Indemnitee is a director or officer of the Company and in such capacity is performing valuable services for the Company. B. The Company and Indemnitee recognize the difficulty in obtaining directors' and officers' liability insurance and the significant cost of such insurance. C. The Company and Indemnitee further recognize the substantial increase in litigation subjecting directors and officers to expensive litigation risks at the same time that such liability insurance has been severely limited. D. The Company has adopted bylaws (the "Bylaws") providing for indemnification of the officers, directors, agents and employees of the Company to the full extent permitted by the Business Corporation Act of Washington (the "Statute"). E. The Bylaws and the Statute specifically provide that they are not exclusive, and thereby contemplate that contracts may be entered into between the Company and its directors and officers with respect to indemnification of such directors and officers. F. To induce Indemnitee to serve or continue to serve as a director or officer of the Company, the Company desires to confirm the contract indemnification rights provided in the Bylaws and agrees to provide the Indemnitee with the benefits contemplated by this Agreement. AGREEMENT In consideration of the recitals above, the mutual covenants and agreements herein contained, and Indemnitee's continued service as a director or officer, as the case may be, of the Company after the date hereof, the parties to this Agreement agree as follows: 1. Indemnification of Indemnitee. (a) Scope. The Company agrees to hold harmless and indemnify Indemnitee to the full extent provided under the provisions of the Company's Articles of Incorporation, as amended (the "Articles"), and the Bylaws, as amended (the "Bylaws"), and to the full extent permitted by law, notwithstanding that the basis for such indemnification is not specifically enumerated in this Agreement, the Company's Articles, Bylaws, any statute or otherwise. In the event of any change, after the date of this Agreement, in any applicable law, statute or rule

regarding the right of a Washington corporation to indemnify a member of its board of directors or an officer, such change, to the extent that it would expand Indemnitee's rights hereunder, shall be included within Indemnitee's rights and the Company's obligations hereunder, and, to the extent that it would narrow Indemnitee's rights or the Company's obligations hereunder, shall not affect or limit the scope of this Agreement; provided, however, that in no event shall any part of this Agreement be construed so as to require indemnification when such indemnification is not permitted by then applicable law. (b) Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company's Articles, Bylaws, any agreement, any vote of shareholders or disinterested directors, the Statute, or otherwise, whether as to action in Indemnitee's official capacity or otherwise. (c) Included Coverage. If Indemnitee was or is made a party, or is threatened to be made a party, to or is otherwise involved (including, without limitation, as a witness) in any Proceeding (as defined below), the Company shall hold harmless and indemnify Indemnitee from and against any and all losses, claims, damages (compensatory, exemplary, punitive or otherwise), liabilities or expenses, including, without limitation, attorneys' fees, costs, judgments, fines, ERISA excise taxes or penalties, witness fees, amounts paid in settlement and other expenses incurred in connection with the investigation, defense, settlement or approval of such Proceeding (collectively, "Damages"). (d) Definition of Proceeding. For purposes of this Agreement, "Proceeding" shall mean any completed, actual, pending or threatened action, suit, claim, hearing or proceeding, whether civil, criminal, arbitrative, administrative, investigative or pursuant to any alternative dispute resolution mechanism (including an action by or in the right of the Company) and whether formal or informal, in which Indemnitee is, was or becomes involved by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company or that, being or having been such a director, officer, employee or agent, Indemnitee is or was serving at the request of the Company as a director, officer, employee, trustee or agent of another corporation or of a partnership, joint venture, trust or other enterprise (collectively, a "Related Company"), including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action (or inaction) by Indemnitee in an official capacity as a director, officer, employee, trustee or agent or in any other capacity while serving as a director, officer, employee, trustee or agent; provided, however, that, except with respect to an Enforcement Action (defined in Section 3(a) below, an action challenging the Company's determination that Indemnitee is not entitled to indemnification pursuant to Section 1(e), and any other action to enforce the provisions of this Agreement, "Proceeding" shall not include any action, suit, claim or proceeding instituted by or at the direction of Indemnitee unless such action, suit, claim or proceeding is or was authorized by the Company's Board of Directors. (e) Determination Of Entitlement. In the event that a determination of Indemnitee's entitlement to indemnification is required pursuant to Section 23B.08.550 of the Statute or a successor statute or pursuant to other applicable law, the appropriate decision- maker shall make such determination; provided, however, that Indemnitee shall initially be presumed in all cases to be entitled to indemnification, that Indemnitee may establish a conclusive -2-

presumption of any fact necessary to such a determination by delivering to the Company a declaration made under penalty of perjury that such fact is true and that, unless the Company shall deliver to Indemnitee written notice of a determination that Indemnitee is not entitled to indemnification within twenty (20) calendar days after the Company's receipt of Indemnitee's initial written request for indemnification, such determination shall conclusively be deemed to have been made in favor of the Company's provision of indemnification, and that the Company hereby agrees not to assert otherwise. (f) Contribution. If the indemnification provided under Section 1(a) is unavailable by reason of a court decision, based on grounds other than any of those set forth in paragraphs (ii) through (iv) of Section 4(a), then, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Damages (including attorneys' fees) actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and Indemnitee on the other from the transaction from which such Proceeding arose and (ii) the relative fault of the Company on the one hand and of Indemnitee on the other in connection with the events that resulted in such Damages as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of Indemnitee on the other shall be determined by reference to, among other things, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Damages. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 1(f) were determined by pro rata allocation or any other method of allocation that does not take account of the foregoing equitable considerations. (g) Survival. The indemnification and contribution provided under this Agreement shall apply to any and all Proceedings, notwithstanding that Indemnitee has ceased to serve the Company or a Related Company and shall continue so long as Indemnitee shall be subject to any possible Proceeding, whether civil, criminal or investigative, by reason of the fact that Indemnitee was a director or officer of the Company or serving in any other capacity referred to in Section 1(d) of this Agreement. 2. Expense Advances. (a) Generally. The right to indemnification of Damages conferred by Section 1 shall include the right to have the Company pay Indemnitee's expenses in any Proceeding as such expenses are incurred and in advance of such Proceeding's final disposition (such right, an "Expense Advance"). (b) Conditions to Expense Advance. The Company's obligation to provide an Expense Advance is subject to the following conditions: (i) Undertaking. If the Proceeding arose in connection with Indemnitee's service as a director or an officer of the Company (and not in any other capacity in which Indemnitee rendered service, including service to any Related Company), then Indemnitee or Indemnitee's representative shall have executed and delivered to the Company an undertaking, -3-

which need not be secured and shall be accepted without reference to Indemnitee's financial ability to make repayment, by or on behalf of Indemnitee to repay all Expense Advances if it shall ultimately be determined by a final, unappealable decision rendered by a court having jurisdiction over the parties that Indemnitee is not entitled to be indemnified under this Agreement or otherwise. (ii) Cooperation. Indemnitee shall give the Company such information and cooperation as it may reasonably request and as shall be within Indemnitee's legal power to so provide. (iii) Affirmation. Indemnitee shall furnish, upon request by the Company and if required under applicable law, a written affirmation of Indemnitee's good faith belief that any applicable standards of conduct have been met by Indemnitee. 3. Procedures For Enforcement (a) Enforcement. In the event that any claim for indemnification, whether an Expense Advance or otherwise, is made hereunder and is not paid in full within thirty (30) calendar days after written notice of such claim is delivered to the Company, Indemnitee may, but need not, at any time thereafter bring suit against the Company to recover the unpaid amount of the claim (an "Enforcement Action"). (b) Presumptions in Enforcement Action. In any Enforcement Action, the following presumptions (and limitation on presumptions) shall apply: (i) The Company expressly affirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereunder to induce Indemnitee to continue as a director or officer, as the case may be, of the Company; (ii) Neither (1) the failure of the Company (including the Company's Board of Directors, independent or special legal counsel or the Company's shareholders) to have made a determination prior to the commencement of the Enforcement Action that indemnification of Indemnitee is proper in the circumstances nor (2) an actual determination by the Company, its Board of Directors, independent or special legal counsel or shareholders that Indemnitee is not entitled to indemnification shall create a presumption that Indemnitee is not entitled to indemnification hereunder; and (iii) If Indemnitee is or was serving as a director or officer of a corporation of which a majority of the shares entitled to vote in the election of its directors is held by the Company or as a partner, trustee or otherwise in an executive or management capacity in a partnership, joint venture, trust or other enterprise of which the Company or a wholly owned subsidiary of the Company is a general partner or has a majority ownership, then such corporation, partnership, joint venture, trust or other enterprise shall conclusively be deemed a Related Company and Indemnitee shall conclusively be deemed to be serving such Related Company at the Company's request. -4-

(c) Attorneys' Fees and Expenses for Enforcement Action. In the event Indemnitee is required to bring an Enforcement Action, the Company shall pay all of Indemnitee's fees and expenses in bringing and pursuing the Enforcement Action (including attorneys' fees at any stage, including on appeal); provided, however, that the Company shall not be required to provide such payment for such attorneys' fees or expenses if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such Enforcement Action was not made in good faith. 4. Limitations on Indemnity; Mutual Acknowledgment (a) Limitation on Indemnity. No indemnity pursuant to this Agreement shall be provided by the Company: (i) On account of any suit in which a final, unappealable judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company in violation of the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended; (ii) For Damages that have been paid directly to Indemnitee by an insurance carrier under a policy of insurance maintained by the Company; (iii) With respect to remuneration paid to Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; (iv) On account of Indemnitee's conduct which is finally adjudged by a court having jurisdiction in the matter to have been intentional misconduct, a knowing violation of law or the RCW 23B.08.310 or any successor provision of the Statute, or a transaction from which Indemnitee derived an improper personal benefit; or (v) If a final decision by a court having jurisdiction in the matter with no further right of appeal shall determine that such indemnification is not lawful. (b) Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Damages in connection with a Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Damages to which Indemnitee is entitled. (c) Mutual Acknowledgment. The Company and Indemnitee acknowledge that, in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying Indemnitee under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC") has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Furthermore, Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake -5-

with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company's right under public policy to indemnify Indemnitee. 5. Notification and Defense of Claim (a) Notification. Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not, however, relieve the Company from any liability which it may have to Indemnitee under this Agreement unless and only to the extent that such omission can be shown to have prejudiced the Company's ability to defend the Proceeding. If, at the time of the receipt of a notice of a claim pursuant to Section 5(a), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. (b) Defense of Claim. With respect to any such Proceeding as to which Indemnitee notifies the Company of the commencement thereof: (i) The Company may participate therein at its own expense; (ii) The Company, jointly with any other indemnifying party similarly notified, may assume the defense thereof, with counsel satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election so to assume the defense thereof, the Company shall not be liable to Indemnitee under this Agreement for any legal or other expenses (other than reasonable costs of investigation) subsequently incurred by Indemnitee in connection with the defense thereof unless (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company (or any other person or persons included in the joint defense) and Indemnitee in the conduct of the defense of such action, (iii) the Company shall not, in fact, have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the Company's expense, or (iv) the Company is not financially or legally able to perform its indemnification obligations. The Company shall not be entitled to assume the defense of any proceeding brought by or on behalf of the Company or as to which Indemnitee shall have reasonably made the conclusion provided for in (ii) or (iv) above; (iii) The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent; (iv) The Company shall not settle any action or claim in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee's written consent; and -6-

(v) Neither the Company nor Indemnitee will unreasonably withhold its, his or her consent to any proposed settlement. 6. Severability Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or to fail to do any act in violation of applicable law. The Company's inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable, as provided in this Section 6. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify or make contribution to Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms. 7. Governing Law; Binding Effect; Amendment and Termination (a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Washington. (b) This Agreement shall be binding on Indemnitee and on the Company and its successors and assigns (including any transferee of all or substantially all its assets and any successor by merger or otherwise by operation of law), and shall inure to the benefit of Indemnitee and Indemnitee's heirs, personal representatives and assigns and to the benefit of the Company and its successors and assigns. The Company shall not effect any merger, consolidation, sale of all or substantially all of its assets or other reorganization in which it is not the surviving entity, unless the surviving entity agrees in writing to assure all of the Company's obligations under this Agreement. (c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto. 8. Entire Agreement This Agreement is the entire agreement of the parties regarding its subject matter and supersedes all prior written or oral communications or agreements. 9. Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. 10. Amendments; Waivers Neither this Agreement nor any provision may be amended except by written agreement signed by the parties. No waiver of any breach or default shall be considered valid -7-

unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or default. 11. Notices All notices, claims and other communications hereunder shall be in writing and made by hand delivery, registered or certified mail (postage prepaid, return receipt requested), facsimile or overnight air courier guaranteeing next-day delivery:
(a) If to the Company, to: Onvia.com, Inc. 1000 Dexter Ave., Suite 400 Seattle, WA 98104 Attn: Glenn Ballman with a copy to: Venture Law Group 4750 Carillon Point Kirkland, WA 98033 Attn: William W. Ericson

(b) If to Indemnitee, to the address specified on the last page of this Agreement or to such other address as either party may from time to time furnish to the other party by a notice given in accordance with the provisions of this Section 11. All such notices, claims and communications shall be deemed to have been duly given if (i) personally delivered, at the time delivered, (ii) mailed, five days after dispatched, (iii) sent by facsimile transmission, upon confirmation of receipt, and (iv) sent by any other means, upon receipt. 12. Directors' and Officers' Insurance. The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses from wrongful acts, or to ensure the Company's performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's directors, if Indemnitee is a director; or of the Company's officers, if Indemnitee is not a director of the Company but is an officer; or of the Company's key employees, if Indemnitee is not an officer or director but is a key employee. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a parent or subsidiary of the Company. -8-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.
COMPANY: ONVIA.COM, INC. By:_____________________________ Name:___________________________ (print) Title:__________________________ INDEMNITEE: _______________________________________ Print name:______________________________ Address: __________________ __________________ __________________

-9-

Exhibit 10.6 LOAN AND SECURITY AGREEMENT Agreement No. __________ Dated as of August 5, 1999 among MMC/GATX PARTNERSHIP NO. I and COMDISCO, INC. as Lenders and ONVIA.COM, INC. a Washington, Inc. corporation 209 1/2 First Avenue South Suite 302 Seattle, WA 98104 as Borrower CREDIT AMOUNT: $7,000,000
Commitments: MMC/GATX Partnership No. I: Comdisco, Inc.: 30 30 744 months months basis points $3,000,000 $4,000,000

Repayment Period: Treasury Note Maturity: Loan Margin:

Commitment Termination Date: July 31, 1999 The defined terms and information set forth on this cover page are a part of the LOAN AND SECURITY AGREEMENT, dated as of the date first written above (this "Agreement"), entered into by and among MMC/GATX PARTNERSHIP NO. I and COMDISCO, INC. (each individually a "Lender" and collectively, "Lenders") and the borrower ("Borrower") set forth above. The terms and conditions of this Agreement agreed to between Lenders and Borrower are as follows: -1-

ARTICLE I INTERPRETATION 1.01. Certain Definitions. Unless otherwise indicated in this Agreement or any other Operative Document, the following terms, when used in this Agreement or any other Operative Document, shall have the following respective meanings: "Applicable Premium" shall mean an amount equal to the greater of (i) zero and (ii) the excess of (x) the sum of the present values, at the date of prepayment of the amount of each remaining scheduled payment of interest on and principal on a Loan, or portion of such payment, which will not be required to be made as a result of such prepayment (each such payment an "Amount Payable") (each such Amount Payable discounted separately at the Treasury Rate, determined on the date three (3) Business Days before the date of prepayment, compounded monthly, from the date such Amount Payable would be due), over (y) the principal amount of such Note to be prepaid. The "Treasury Rate" shall be the yield (as quoted in The Wall Street Journal on the date which is three (3) Business Days prior to the date of prepayment) on U.S. Treasury securities adjusted to a constant maturity equal to the then remaining number of full months to maturity of the applicable Note. "Borrower's Home State" shall mean Washington, the state in which Borrower's principal place of business is located. "Business Day" shall mean any day other than a Saturday, Sunday or public holiday under the laws of California, Illinois or Borrower's Home State or other day on which banking institutions are authorized or obligated to close in California, Illinois or Borrower's Home State. "Claim" has the meaning given to that term in Section 10.03. "Collateral" has the meaning given to that term in Section 5.01. "Commitment" means, with respect to each Lender, the amount set forth following such term on the cover page of this Agreement and "Commitments" means all such amounts collectively. "Commitment Fee" has the meaning given to that term in Section 2.04. "Commitment Termination Date" shall mean the date specified on the cover page of this Agreement. "Credit Amount" shall mean the maximum aggregate amount of the Loans under this Agreement (if the conditions specified in Schedule 3 are satisfied), which amount is set forth following such term on the cover page of this Agreement. "Default" shall mean any event which with the passing of time or the giving of notice or both would become an Event of Default hereunder. "Default Rate" shall mean the per annum rate of interest equal to the higher of (i) 18% or (ii) the Prime Rate plus 6%, but such rate shall in no event be more than the highest rate permitted by applicable law. "Disclosure Schedule" has the meaning set forth in the definition of the term "Permitted Liens." -2-

"Environmental Law" shall mean the Resource Conservation and Recovery Act of 1987, the Comprehensive Environmental Response, Compensation and Liability Act, and any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree (in each case having the force of law) regulating or imposing liability or standards of conduct concerning any Hazardous Material, as now or at any time hereafter in effect. "Equity Securities" of any Person shall mean (a) all common stock, preferred stock, participations, shares, partnership interests or other equity interests in and of such Person (regardless of how designated and whether or not voting or non-voting) and (b) all warrants, options and other rights to acquire any of the foregoing. "Event of Default" has the meaning given to that term in Section 9.01. "Facility Fee" has the meaning given to that term in Section 2.04. "Funding Date" shall mean a date on which a Loan is made to or on account of Borrower under this Agreement. "GAAP" shall mean generally accepted accounting principles and practices as in effect in the United States of America from time to time, consistently applied. "Hazardous Material" means any hazardous, dangerous or toxic constituent material, pollutant, waste or other substance, whether solid, liquid or gaseous, which is regulated by any federal, state or local governmental authority. "Indebtedness" shall mean, with respect to Borrower or any Subsidiary, the aggregate amount of, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade payables aged less than 180 days), (d) all capital lease obligations of such Person, (e) all obligations or liabilities of others secured by a lien on any asset of such Person, whether or not such obligation or liability is assumed, (f) all obligations or liabilities of others guaranteed by such Person; and (g) any other obligations or liabilities which are required by GAAP to be shown as debt on the balance sheet of such Person. Unless otherwise indicated, the term "Indebtedness" shall include all Indebtedness of Borrower and the Subsidiaries. "Intellectual Property" shall mean all of Borrower's right, title and interest in and to patents, patent rights (and applications and registrations therefor), trademarks and service marks (and applications and registrations therefor), inventions, copyrights, mask works (and applications and registrations therefor), trade names, trade styles, software and computer programs, trade secrets, methods, processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and development, all whether now owned or subsequently acquired or developed by Borrower and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media. "Investment" shall mean the purchase or acquisition of any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person, or the extension of any advance, loan, extension of credit or capital contribution to, or any other investment in, any Person. -3-

"Lien" shall mean any pledge, bailment, lease, mortgage, hypothecation, conditional sales and title retention agreements, charge, claim, encumbrance or other lien in favor of any Person. "Loan" means a Loan advanced by a Lender to Borrower under this Agreement according to the Commitment of such Lender. "Loan Margin" shall mean the number of basis points set forth following such term on the cover page of this Agreement. "Loan Rate" shall mean, with respect to each Loan, the per annum rate of interest (based on a year of twelve 30 day months) equal to the sum of (a) the U.S. Treasury note rate of a term equal to the Treasury Note Maturity as quoted in The Wall Street Journal on the date the Note with respect to each Loan is prepared, plus (b) the Loan Margin. "Note" shall mean one of the secured promissory notes of Borrower substantially in the form of Exhibit A. "Obligations" has the meaning given to that term in Section 5.01. "Operative Documents" shall mean this Agreement, the Notes and the Warrants and all other documents, instruments and agreements executed and delivered in connection herewith or therewith or in respect of the closing of the transactions contemplated hereby or thereby. "Payment Date" has the meaning given to that term in the Note. "Permitted Indebtedness" shall mean and include: (a) Indebtedness of Borrower to Lenders; (b) Indebtedness of Borrower secured by Liens permitted under clause (e) of the definition of Permitted Liens; (c) Indebtedness arising from the endorsement of instruments in the ordinary course of business; (d) Indebtedness existing on the date hereof and set forth on the Disclosure Schedule; (e) Indebtedness in an aggregate principal amount not exceeding $2,500,000.00 consisting of a revolving credit facility in which the loans are limited to less than 100% of Borrower's outstanding accounts receivable and which are secured solely by Borrower's accounts receivable (and general intangibles in the nature of rights to payment) and the proceeds thereof; and (f) Subordinated Indebtedness. -4-

"Permitted Investments" shall mean and include: (a) Deposits with commercial banks organized under the laws of the United States or a state thereof to the extent such deposits are fully insured by the Federal Deposit Insurance Corporation; (b) Investments in marketable obligations issued or fully guaranteed by the United States and maturing not more than one (1) year from the date of issuance; and (c) Investments in open market commercial paper rated at least "A1" or "P1" or higher by a national credit rating agency and maturing not more than one (1) year from the creation thereof. (d) Investments pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course of business; (e) Investments consisting of deposit accounts of Borrower in which Lenders have a perfected security interest; and (f) Other Investments aggregating not in excess of Two Hundred Fifty Thousand Dollars ($250,000) at any time. "Permitted Liens" shall mean (a) the Lien created by this Agreement, (b) Liens for fees, taxes, levies, imposts, duties or other governmental charges of any kind which are not yet delinquent or which are being contested in good faith by appropriate proceedings which suspend the collection thereof (provided, however, that such proceedings do not involve any substantial danger of the sale, forfeiture or loss of any item of equipment and that Borrower has adequately bonded such Lien or reserves sufficient to discharge such Lien have been provided on the books of Borrower), (c) Liens identified on the disclosure schedule attached hereto as Schedule 2 ("Disclosure Schedule"), (d) Liens to secure payment of worker's compensation, employment insurance, old age pensions or other social security obligations of Borrower in the ordinary course of business of Borrower, (e) Liens upon any equipment or other personal property acquired by Borrower after the date hereof to secure (i) the purchase price of such equipment or other personal property or (ii) lease obligations or indebtedness incurred solely for the purpose of financing the acquisition of such equipment or other personal property; provided that (A) such Liens are confined solely to the equipment or other personal property so acquired and the amount secured does not exceed the acquisition price thereof, and (B) no such Lien shall be created, incurred, assumed or suffered to exist in favor of Borrower's officers, directors or shareholders holding five percent (5%) or more of Borrower's Equity Securities, (f) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings; (g) non-exclusive licenses of Intellectual Property entered into in the ordinary course of business and licenses, Liens or similar arrangements entered into in connection with joint ventures and corporate collaborations; and (h) Liens of the type contemplated under clause (e) of the definition of Permitted Indebtedness securing Indebtedness permitted under such clause (e). "Person" shall mean and include an individual, a partnership, a corporation, a business trust, a joint stock company, a limited liability company, an unincorporated association or other entity and any domestic or foreign national, state or local government, any political subdivision thereof, and any department, agency, authority or bureau of any of the foregoing. -5-

"Prime Rate" shall mean the interest rate per annum specified in the "Money Rates" column of The Wall Street Journal, but such rate shall in no event be more than the highest interest rate permitted by applicable law. "Subordinated Indebtedness" shall mean Indebtedness subordinated to the Obligations on terms and conditions acceptable to Lenders in their sole discretion. "Subsidiary" shall mean any corporation of which a majority of the outstanding capital stock entitled to vote for the election of directors (otherwise than as the result of a default) is owned by Borrower directly or indirectly through Subsidiaries. "Term" shall mean the period from and after the date hereof until the payment or satisfaction in full of all Obligations under this Agreement and the other Operative Documents. "Treasury Note Maturity" shall mean the period of months set forth following such term on the cover page of this Agreement. "Warrants" shall mean separate warrants to be issued at the direction of the Lenders to purchase securities of Borrower substantially in the form of Exhibit B. 1.02. Headings. Headings in this Agreement and each of the other Operative Documents are for convenience of reference only and are not part of the substance hereof or thereof. 1.03. Plural Terms. All terms defined in this Agreement or any other Operative Document in the singular form shall have comparable meanings when used in the plural form and vice versa. 1.04. Construction. This Agreement is the result of negotiations among, and has been reviewed by, Borrower and Lenders and their respective counsel. Accordingly, this Agreement shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against Borrower or Lenders. 1.05. Entire Agreement. This Agreement, together with the terms set forth in each of the other Operative Documents, taken together, constitute and, contain the entire agreement of Borrower and Lenders and, with regard to their respective subject matters, supersede any and all prior agreements, term sheets, negotiations, correspondence, understandings and communications among the parties, whether written or oral, with respect to their respective subject matters. 1.06. Other Interpretive Provisions. References in this Agreement to "Articles," "Sections," "Exhibits," "Schedules" and "Annexes" are to articles, sections, exhibits, schedules and annexes herein and hereto unless otherwise indicated. References in this Agreement and each of the other Operative Documents to any document, instrument or agreement shall include (a) all exhibits, schedules, annexes and other attachments thereto, (b) all documents, instruments or agreements issued or executed in replacement thereof, and (c) such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement or any other Operative Document shall refer to this Agreement or such other Operative Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Operative Document, as the case may be. The words "include" and "including" and words of similar import when used in this Agreement or any other Operative Document shall not be construed to be limiting or exclusive. Unless otherwise indicated in this -6-

Agreement or any other Operative Document, all accounting terms used in this Agreement or any other Operative Document shall be construed, and all accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP. ARTICLE II THE CREDIT 2.01. Credit Facility. (a) The Credit Amount. Subject to the terms and conditions of this Agreement and relying upon the representations and warranties herein set forth as and when made or deemed to be made, each Lender severally agrees to lend to Borrower a Loan in the amount of such Lender's Commitment. No Lender shall be required to make a Loan in an amount in excess of its Commitment. The Loans may be prepaid only as set forth in Section 2.01(d). (b) Interest Rates. Borrower shall pay interest on the unpaid principal amount of each Loan from the date of such Loan until such Loan is paid in full, at a per annum rate of interest equal to the Loan Rate for such Loan determined in accordance with the definition of Loan Rate. The Loan Rate applicable to a Loan shall not be subject to change in the absence of manifest error. All computations of interest on a Loan shall be based on a year of twelve 30 day months. If Borrower pays interest on a Loan which is determined to be in excess of the then legal maximum rate, then that portion of each interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of such Loan. (c) Payments of Principal and Interest. Borrower shall make payments of accrued interest only on the outstanding principal amount of each Loan on the first three (3) Payment Dates specified in each Lender's Note, and twenty-seven (27) equal payments of principal plus accrued interest on the outstanding principal amount of such Lender's Loan on each subsequent Payment Date as set forth in such Lender's Note. (d) Optional Prepayment with Premium. Upon ten (10) Business Days' prior written notice to Lenders, Borrower may, at its option, at any time, prepay all, and not less than all, of the Loans in full at a prepayment price equal to the principal amount of each Loan, plus interest accrued on each Loan through and including the date of such prepayment, plus a premium on each Loan equal to the Applicable Premium. If an Event of Default occurs and is continuing, and the Lenders exercise their right under Section 9.02 to accelerate the Loans or the Loans are automatically accelerated, Borrower expressly agrees that the amount then due and payable shall include the Applicable Premium as of the date of such acceleration. 2.02. Use of Proceeds; the Loan and the Notes; Disbursement. (a) Use of Proceeds. The proceeds of the Loans shall be used solely for working capital or general corporate purposes of Borrower. (b) The Loans and the Notes. The obligation of Borrower to repay the unpaid principal amount of and interest on each Lender's Loan shall be evidenced by a Note issued to each Lender and each Lender is authorized to endorse on a grid annexed to its Note appropriate notations regarding payments made -7-

on the Note; provided, however, that the failure to make, or an error in making, any such notation shall not limit or otherwise affect the obligations of Borrower hereunder or thereunder. (c) Disbursement. Each Lender shall disburse its Loan by wire transfer to Borrower unless otherwise directed in writing by Borrower. Notwithstanding anything stated herein to the contrary, no Lender shall have any obligation to advance funds on behalf of the another Lender. (d) Termination of Commitment to Lend. Notwithstanding anything to the contrary in the Operative Documents, Lenders' obligations to advance the Loans hereunder shall terminate on the earliest of (i) the occurrence of any Event of Default hereunder and (ii) the Commitment Termination Date. 2.03. Other Payment Terms. (a) Place and Manner. Borrower shall make all payments due to Lenders in lawful money of the United States, in immediately available funds, at the address for payments and in the manner specified in Section 10.05(b). (b) Date. Whenever any payment due hereunder shall fall due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. (c) Default Rate. If either (i) any amounts required to be paid by Borrower under this Agreement or the other Operative Documents (including principal or interest payable on the Loan, any fees or other amounts) remain unpaid after such amounts are due, or (ii) an Event of Default has occurred and is continuing, Borrower shall pay interest on the outstanding principal balance hereunder from the date due or from the date of the Event of Default, as applicable, until such past due amounts are paid in full or until all Events of Defaults are cured, as applicable, at a per annum rate equal to the Default Rate, such rate to change from time to time as the Prime Rate shall change. All computations of such interest at the Default Rate shall be based on a year of 360 days and twelve 30 day months. 2.04. Facility Fee; Commitment Fee. (a) Facility Fee. Upon the execution and delivery of this Agreement, Borrower will pay to Lenders a facility fee (a "Facility Fee") of $70,000. (b) Borrower has paid a Commitment Fee to the Lenders in the aggregate amount of $25,000 (the "Commitment Fee"). The Commitment Fee, less $10,000 for transaction and due diligence expenses, will be applied pro rata to the Facility Fee due to each Lender. ARTICLE III REPRESENTATIONS AND WARRANTIES 3.01. Representations and Warranties. Except as set forth in the Disclosure Schedule, Borrower makes the following representations and warranties to Lenders as of the date hereof and again on the Funding Date: (a) Organization and Qualification. Borrower is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and is duly qualified to do business -8-

in Borrower's Home State. Borrower has no Subsidiaries other than Onvia.com Channels, Inc., a corporation organized under the laws of British Columbia. (b) Authority. Borrower has all necessary corporate power, authority and legal right and has obtained all approvals and consents and has given all notices necessary to execute and deliver this Agreement and the other Operative Documents and to perform the terms hereof and thereof. Borrower has all requisite corporate power and authority to own and operate its properties and to carry on its businesses as now conducted. (c) Conflict with Other Instruments, etc. Neither the execution and delivery of any Operative Document to which Borrower is a party nor the consummation of the transactions therein contemplated nor compliance with the terms, conditions and provisions thereof will conflict with or result in a breach of any of the terms, conditions or provisions of the charter or the bylaws of Borrower or, to its knowledge, any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality or any material agreement or instrument to which Borrower is a party or by which it or any of its properties is bound or to which it or any of its properties is subject, or constitute a default thereunder or result in the creation or imposition of any Lien, other than Permitted Liens. (d) Properties. Borrower has good and marketable title to the Collateral, free and clear of all Liens, other than Permitted Liens. Borrower has good title and ownership of, or is licensed under, all of Borrower's current Intellectual Property, with no known infringement of the rights of others. Borrower has not received any communications alleging that Borrower has violated, or by conducting its business as proposed, would violate any proprietary rights of any other Person. Borrower has no knowledge of any infringement or violation by it of the intellectual property rights of any third party and has no knowledge of any violation or infringement by a third party of any of its Intellectual Property. The Collateral and the Intellectual Property constitute substantially all of the assets and property of Borrower. (e) Authorization, Governmental Approvals, etc. The execution and delivery by Borrower of each Operative Document, the granting of the security interest in the Collateral, the issuance of the Warrants, the issuance of the securities into which the Warrants are exercisable, the issuance of any securities into which the securities issuable upon exercise of the Warrants are convertible, and the performance of the obligations herein and therein contemplated have each been duly authorized by all necessary action on the part of Borrower. No authorization, consent, approval, license or exemption of, and no registration, qualification, designation, declaration or filing with, or notice to, any Person is, was or will be necessary to (i) the valid execution and delivery of any Operative Document to which Borrower is a party, (ii) the performance of Borrower's obligations under any Operative Document, or (iii) the granting of the security interest in the Collateral, except for filings in connection with the perfection of the security interest in any of the Collateral or the issuance of the Warrants. The Operative Documents have been or will be duly executed and delivered and constitute or will constitute legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement of creditors' rights or by general principles of equity. (f) Litigation. There are no actions, suits, proceedings or investigations pending or, to the knowledge of Borrower, threatened against or affecting Borrower, or the business or any property or asset owned by it, before any court or governmental department, agency or instrumentality which, if adversely determined, could reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower. -9-

(g) Security Interest. Assuming the proper filing of one or more financing statement(s) identifying the Collateral with the proper state and/or local authorities, the security interests in the Collateral granted to Lenders pursuant to this Agreement (i) constitute and will continue to constitute first priority security interests (except to the extent any other Permitted Lien may create any priority to Lenders' Lien under this Agreement) and (ii) are and will continue to be superior and prior to the rights in the Collateral of all other creditors of Borrower (except to the extent of such Permitted Liens). Except as set forth in the Disclosure Schedule, Borrower does not own any right, title or interest in or to any real property (other than leasehold interests), motor vehicles, promissory notes or other property (excluding Intellectual Property) with respect to which a security interest must be perfected by a method other than the filing of a UCC-1 financing statement. (h) Executive Offices. The principal place of business and chief executive office of Borrower, and the office where Borrower will keep all records and files regarding the Collateral, is set forth on the cover page of this Agreement. (i) Solvency, Etc. To Borrower's knowledge, Borrower is Solvent (as defined below) and, after the execution and delivery of the Operative Documents and the consummation of the transactions contemplated thereby, Borrower will be Solvent. "Solvent" shall mean, with respect to any Person on any date, that on such date (a) the fair value of the property of such Person is greater than the fair value of the liabilities (including, without limitation, contingent liabilities) of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature and (d) such Person is not engaged in business or a transaction, and is not about in business or a transaction, for which such Person's property would constitute an unreasonably small capital. (j) Catastrophic Events; Labor Disputes. None of Borrower or its properties is or has been affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or other casualty that could reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower. There are no disputes presently subject to grievance procedure, arbitration or litigation under any of the collective bargaining agreements, employment contracts or employee welfare or incentive plans to which Borrower is a party, and there are no strikes, lockouts, work stoppages or slowdowns, or, to the knowledge of Borrower, jurisdictional disputes or organizing activity occurring or threatened which could reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower. (k) No Material Adverse Effect. To Borrower's knowledge, no event has occurred and no condition exists which could reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower since [date of last audited financial statements]. (l) Accuracy of Information Furnished. None of the Operative Documents and none of the other certificates, statements or information furnished to Lenders by or on behalf of Borrower in connection with the Operative Documents or the transactions contemplated thereby contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Lenders recognize that all financial projections furnished to Lenders by or on behalf of Borrower in connection with the Operative Documents or the transactions contemplated thereby are not to be viewed as facts and that actual results during the period or periods covered by such projections may differ from the projected or forecasted results. -10-

(m) Certain Agreements of Officers, Employees and Consultants. (i) To the knowledge of Borrower, no officer, employee or consultant of Borrower is, or is now expected to be, in violation of any term of any employment contract, proprietary information agreement, nondisclosure agreement, noncompetition agreement, or any other material contract or agreement or any restrictive covenant relating to the right of any such officer, employee or consultant to be employed by Borrower because of the nature of the business conducted or to be conducted by Borrower or relating to the use of trade secrets or proprietary information of others, and to Borrower's knowledge, the continued employment of Borrower's officers, employees and consultants does not subject Borrower to any material liability for any claim or claims arising out of or in connection with any such contract, agreement, or covenant. (ii) To the knowledge of Borrower, no officers of Borrower, and no employee or consultant of Borrower whose termination, either individually or in the aggregate, could reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower, has any present intention of terminating his or her employment or consulting relationship with Borrower. ARTICLE IV REPORTING REQUIREMENTS 4.01. Furnishing Reports. Borrower shall furnish to Lenders: (a) Financial Statements. So long as Borrower is not subject to the reporting requirements of Section 12 or Section 15 of the Securities and Exchange Act of 1934, as amended, promptly as they are available, unaudited quarterly and audited annual financial statements of Borrower and such other financial information as Lenders may reasonably request from time to time. From and after such time as Borrower becomes a publicly reporting company, promptly as they are available and in any event: (i) at the time of filing of Borrower's Form 10-K with the Securities and Exchange Commission after the end of each fiscal year of Borrower, the financial statements of Borrower filed with such Form 10-K; and (ii) at the time of filing of Borrower's Form 10-Q with the Securities and Exchange Commission after the end of each of the first three fiscal quarters of Borrower, the financial statements of Borrower filed with such Form 10-Q. (b) Notice of Defaults. As soon as possible, and in any event within five (5) Business Days after the discovery of a Default or Event of Default provide Lenders with an officer's certificate of Borrower setting forth the facts relating to or giving rise to such Default or Event of Default and the action which Borrower proposes to take with respect thereto. (c) Miscellaneous. Such other information as Lenders may reasonably request from time to time. -11-

ARTICLE V GRANT OF SECURITY INTEREST GENERAL PROVISIONS CONCERNING SECURITY 5.01. Grant of Security Interest. Borrower, in order to secure the payment of the principal and interest with respect to the Loans made pursuant to this Agreement, all other sums due under and in respect hereof and of the other Operative Documents, including fees, charges, expenses and attorneys' fees and costs and the performance and observance by Borrower of all other terms, conditions, covenants and agreements herein and in the other Operative Documents (all such amounts and obligations being herein sometimes called the "Obligations"), does hereby grant to Lenders and their successors and assigns, a security interest in and to the following property (collectively, the "Collateral"): All right, title, interest,claims and demands of Borrower in and to: (a) All goods and equipment now owned or hereafter acquired, including, without limitation, all laboratory equipment, computer equipment, office equipment, machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; (b) All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Borrower's custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower's books relating to any of the foregoing; (c) All contract rights and general intangibles (including Intellectual Property), now owned or hereafter acquired, including, without limitation, goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind; (d) All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower (subject, in each case, to the contractual rights of third parties to require funds received by Borrower to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower's books relating to any of the foregoing; (e) All documents, cash, deposit accounts, letters of credit, certificates of deposit, instruments, chattel paper and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Borrower's books relating to the foregoing; and (f) Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof, including, without limitation, insurance, condemnation, requisition or similar payments and proceeds of the sale or licensing of Intellectual Property. -12-

5.02. Duration of Security Interest. Lenders' security interest in the Collateral shall continue until the payment in full and the satisfaction of all Obligations, whereupon such security interest shall terminate. Lenders, upon payment in full and the satisfaction of the Obligations, shall execute such further documents and take such further actions as may be necessary to effect the release and/or termination contemplated by this Section 5.02, including duly executing and delivering termination statements for filing in all relevant jurisdictions. 5.03. Possession of Collateral. Except as set forth in Section 5.04, so long as no Event of Default has occurred and is continuing, Borrower shall remain in full possession, enjoyment and control of the Collateral (except only as may be otherwise required by Lenders for perfection of its security interest therein) and to manage, operate and use the same and each part thereof with the rights and franchises appertaining thereto; provided, however, that the possession, enjoyment, control and use of the Collateral shall at all times be subject to the observance and performance of the terms of this Agreement. 5.04. Location of Collateral. The Collateral is and shall remain in the possession of Borrower at Borrower's address stated on the cover page of this Agreement. 5.05. Lien Subordination. Lenders agree that the Liens granted to it hereunder shall be subordinate to (i) the Liens existing in connection with Indebtedness permitted by clause (e) of the definition of Permitted Indebtedness, and (ii) the Liens of existing and future lenders providing equipment financing and equipment lessors and/or accounts receivable financing; provided, that, in the case of equipment financings and leasing such Liens are confined solely to the equipment so financed and the proceeds thereof and in the case of accounts receivable financings such Liens are confined solely to the accounts receivable so financed; and provided, further, that the Obligations hereunder shall not be subordinate in right of payment to any obligations to other lenders, equipment lenders or equipment lessors and Lenders' rights and remedies hereunder shall not in any way be subordinate to the rights and remedies of any such lenders or equipment lessors. Lenders agree to execute and deliver such agreements and documents as may be reasonably requested by Borrower from time to time which set forth the lien subordination described in this Section 5.05 and are reasonably acceptable to Lenders. Lenders shall have no obligation to execute any agreement or document which would impose obligations, restrictions or lien priority on Lenders which are less favorable to Lenders than those described in this Section 5.05. 5.06 Intellectual Property. (a) Within 30 days of the date of this Agreement, Borrower shall register or cause to be registered with the United States Copyright Office (i) any software (material to the business of Borrower) developed or acquired by Borrower in connection with any product developed or acquired for sale or licensing. (b) While any Obligations remain outstanding, Borrower shall register or cause to be registered with the United States Copyright Office (i) any software (material to the business of Borrower) developed or acquired by Borrower hereafter from time to time in connection with any product developed or acquired for sale or licensing and (ii) any major revisions or upgrades to any software that has previously been registered with the United States Copyright Office. Borrower shall file for registration within 30 days from the development or acquisition of such software, major revision or upgrade. ARTICLE VI AFFIRMATIVE COVENANTS 6.01. Affirmative Covenants. -13-

(a) Payment of Taxes, etc. Borrower shall pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a Lien upon any of its properties; provided that there shall be no requirement to pay any such tax, assessment, charge, levy or claim (i) which is being contested in good faith and by appropriate proceedings or which presents no risk of seizure, forfeiture, levy or other event which could jeopardize any Collateral or (ii) for which payment in full is bonded or reserved in Borrower's financial statements. (b) Inspection Rights. Borrower shall, at any reasonable time and from time to time, permit Lenders or any of its agents or representatives to inspect the Collateral, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, Borrower and to discuss the affairs, finances and accounts of Borrower with any of its officers or directors relating in each case to Lenders' capacity as lenders and secured party hereunder and with respect to the Collateral. (c) Maintenance of Equipment and Similar Assets. Borrower shall keep and maintain all items of equipment and other similar types of personal property that form any significant portion or portions of the Collateral in good operating condition and repair and shall make all necessary replacements thereof and renewals thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved, ordinary wear and tear excepted. Borrower shall not permit any such material item of Collateral to become a fixture to real estate or an accession to other personal property, without the prior written consent of Lenders. Borrower shall not permit any such material item of Collateral to be operated or maintained in violation of any applicable law, statute, rule or regulation. With respect to items of leased equipment (to the extent Lenders have any security interest in any residual Borrower's interest in such equipment under the lease), Borrower shall keep, maintain, repair, replace and operate such leased equipment in accordance with the terms of the applicable lease. (d) Insurance. Borrower shall, obtain and maintain, at its own expense, insurance of a type and with such limits as are carried by similarly situated companies, including at a minimum: (i) "All risk" insurance against loss or damage to the Collateral. The coverage limit shall be determined to Lenders' reasonable satisfaction. The deductible shall not exceed $25,000. The policy shall name Lenders as loss payees with respect to the Equipment, shall not be invalidated by any action of or breach of warranty by Borrower of any provision thereof and waive subrogation against Lenders. (ii) Commercial general liability insurance (including contractual liability, products liability and completed operations coverages) reasonably satisfactory to Lenders. The limit of liability shall be at least $2,000,000 per occurrence. The policy shall be without deductible, except for products liability coverage which may have a deductible up to $25,000. The policy(ies) shall name Lenders as an additional insured in the full amount of Borrower's liability coverage limits (or the coverage limits of any successor to Borrower or such successor's parent which is providing coverage), be primary and without contribution as respects any insurance carried by Lenders, and contain cross liability and severability of interest clauses. (iii) Such other insurance against risks of loss and with terms as shall be reasonably required by Lenders. All policies of insurance shall be placed with financially sound, commercial insurers reasonably satisfactory to Lenders. All policies of insurance shall provide that Lenders shall be given 30 days notice of cancellation of coverage. This notice provision shall be without qualification. On or prior to the first -14-

Funding Date and prior to each policy renewal, Borrower shall furnish to Lenders certificates of insurance or other evidence satisfactory to Lenders that insurance complying with all of the above requirements is in effect. ARTICLE VII NEGATIVE COVENANTS 7.01. Negative Covenants. So long as the Obligations remain outstanding, Borrower shall not: (a) Name; Location of Chief Executive Office and Collateral. Without thirty (30) days prior written notice to Lenders, change its chief executive office or principal place of business or remove or cause to be removed from the location set forth on the cover page hereof or move any Collateral to a location other than that set forth on the cover page hereof. (b) Liens on Collateral. Create, incur, assume or suffer to exist any Lien of any kind upon any Collateral, whether now owned or hereafter acquired, except Permitted Liens. (c) [reserved] (d) Dispositions of Collateral or Intellectual Property. Convey, sell, offer to sell, lease, transfer, exchange or otherwise dispose of (collectively, a "Transfer") all or any part of the Collateral or Intellectual Property to any Person, other than: (i) transfers of inventory in the ordinary course of business; (ii) transfers which would constitute Permitted Liens under clause (g) of the definition of Permitted Liens; or (iii) transfers of worn-out or obsolete equipment. (e) Distributions. (i) Pay any dividends or make any distributions on its Equity Securities; (ii) purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Securities (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar arrangements in an aggregate amount not to exceed $100,000); (iii) return any capital to any holder of its Equity Securities as such; (iv) make any distribution of assets, Equity Securities, obligations or securities to any holder of its Equity Securities as such; or (v) set apart any sum for any such purpose; provided, however, that Borrower may pay dividends payable solely in Common Stock. (f) Mergers or Acquisitions. Merge or consolidate with or into any other Person or acquire or all or substantially all of the capital stock or assets of another Person. (g) Indebtedness Payments. (i) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof any Indebtedness for borrowed money (other than amounts due or permitted to be prepaid under this Loan Agreement or the Notes or under any revolving credit agreement constituting Permitted Indebtedness under clause (e) of the definition of Permitted Indebtedness) or lease obligations, (ii) amend, modify or otherwise change the terms of any Indebtedness for borrowed money or lease obligations so as to accelerate the scheduled repayment thereof or (iii) repay any notes to officers, directors or shareholders. (h) Indebtedness. Create, incur, assume or permit to exist any Indebtedness except Permitted Indebtedness. (i) Investments. Make any Investment except for Permitted Investments. -15-

ARTICLE VIII CONDITIONS PRECEDENT 8.01. Closing. At the time of execution and delivery of this Agreement, Borrower shall have duly executed and/or delivered to Lenders the items set forth in Part I of Schedule 3. 8.02. Other Conditions. The obligation of the Lenders to make the Loans shall be subject to the execution and/or delivery to such Lenders of each of the items set forth in Part I of Schedule 3 and the satisfaction by Borrower of each condition set forth in Part II of Schedule 3. 8.03. Covenant to Deliver. Borrower agrees (not as a condition but as a covenant) to deliver to Lenders each item required to be delivered to Lenders as a condition to a Loan, if the Loan is advanced. Borrower expressly agrees that the extension of any Loan prior to the receipt by Lenders of any such item shall not constitute a waiver by Lenders of Borrower's obligation to deliver such item. ARTICLE IX DEFAULT AND REMEDIES 9.01. Events of Default. An "Event of Default" shall mean the occurrence of one or more of the following described events: (a) Borrower shall (i) default in the payment of principal of or interest on any Loan when the same is due for five (5) business days after receipt of written notice from a Lender that the same is due, or (ii) default in the payment of any expense or other amount payable hereunder or thereunder for five (5) business days after receipt of written notice from a Lender that the same is due; or (b) Borrower shall breach in any material respect any provision of Section 6.01(d) or Section 7.01; or (c) Borrower shall default in the performance in any material respect of any covenant, agreement or obligation (other than a covenant, agreement or obligation referred to in, Section 9.01(a) or Section 9.01(b)) contained in any Operative Document (other than the Warrants) and Borrower shall fail to cure within thirty (30) days after receipt of written notice from Lenders any default in the performance of any such covenant, agreement or obligation contained therein; or (d) Borrower shall have breached in any material respect the terms of any of the Warrants; or (e) Any representation or warranty made herein or on the Funding Date by Borrower in any Operative Document, or any certificate or financial statement furnished pursuant to the provisions of any Operative Document, shall prove to have been false or misleading in any material respect as of the time made or furnished; or (f) Any Operative Document shall in any material respect cease to be, or Borrower shall assert that any Operative Document is not, a legal, valid and binding obligation of Borrower enforceable in accordance with its terms; or -16-

(g) Defaults shall exist under any agreements of Borrower which consist of the failure to pay any Indebtedness at maturity or which result in a right by such third party or parties, whether or not exercised, to accelerate the maturity of Indebtedness of Borrower in an aggregate amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or a default shall exist under any financing agreement with a Lender or any of such Lender's affiliates; or (h) A proceeding shall have been instituted in a court of competent jurisdiction seeking a decree or order for relief in respect of Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee (or similar official) of Borrower or for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of thirty (30) consecutive days or such court shall enter a decree or order granting the relief sought in such proceeding; or (i) Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian (or other similar official) of Borrower or for any substantial part of its property, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action in furtherance of any of the foregoing; or (j) A final judgment or order for the payment of money in excess of Two Hundred Fifty Thousand Dollars ($250,000) (exclusive of amounts covered by insurance issued by an insurer not an affiliate of Borrower) shall be rendered against Borrower and the same shall remain undischarged for a period of thirty (30) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of Borrower and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within thirty (30) days after issue or levy. 9.02. Consequences of Event of Default. (a) If an Event of Default specified under any of clauses (a) through (g) or (j) of Section 9.01 shall occur and be continuing for ___ days, any Lender may (i) declare all of the Loans, together with interest thereon, plus the Applicable Premium and all other liabilities of Borrower hereunder and under the other Operative Documents to be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived, and (ii) terminate any commitment to make the Loans and terminate any commitment to advance money or extend credit to or for the benefit of Borrower pursuant to any other agreement or commitment extended by a Lender to Borrower. (b) If an Event of Default specified under clause (h) or (i) of Section 9.01 shall occur, then upon Borrower's receipt of written notice specifying in reasonable detail the nature of the Event of Default (i) the Loans, together with interest thereon, plus the Applicable Premium and all other liabilities of Borrower hereunder and under the other Operative Documents shall automatically become due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and (ii) Lenders' commitments hereunder to make the Loans and any other commitment of Lenders to Borrower to advance money or extend credit pursuant to any other agreement or commitment shall be terminated. -17-

(c) Borrower expressly agrees that the amount due and payable upon any such acceleration or prepayment of the Loans contrary to the terms hereof shall include a Applicable Premium as of the date of such acceleration or prepayment. 9.03. Rights Regarding Collateral. Borrower agrees that when any Event of Default has occurred and is continuing, Lenders shall have the rights, options, duties and remedies of a secured party as permitted by law and, in addition to and without limiting the foregoing, Lenders may exercise any one or more or all, and in any order, of the remedies herein set forth, including the following: (a) Lenders, personally or by agents or attorneys, shall have the right (subject to compliance with any applicable mandatory legal requirements) to require Borrower to assemble the Collateral and make it available to Lenders at a place to be designated by Lenders or to take immediate possession of the Collateral, or any portion thereof, and for that purpose may pursue the same wherever it may be found, and may enter any of premises of Borrower, with or without notice, demand, process of law or legal procedure, to the extent permitted by applicable law, and search for, take possession of, remove, keep and store the same, or use and operate or lease the same until sold. In furtherance of Lenders' rights hereunder, Borrower hereby grants to Lenders an irrevocable, non-exclusive license (exercisable without royalty or other payment by Lenders) to use, license or sublicense any patent, trademark, trade name, copyright or other intellectual property in which Borrower now or hereafter has any right, title or interest together with the right of access to all media in which any of the foregoing may be recorded or stored; provided, however, that such license shall only be exercisable in connection with the disposition of Collateral upon Lenders' exercise of their remedies hereunder. (b) Lenders may, if at the time such action may be lawful and always subject to compliance with any mandatory legal requirements, either with or without taking possession and either before or after taking possession, without instituting any legal proceedings whatsoever, having first given notice of such sale by registered or certified mail to Borrower once at least ten (10) days prior to the date of such sale, and having first given any other notice which may be required by law, sell and dispose of the Collateral, or any part thereof, at a private sale or at public auction, to the highest bidder, in one lot as an entirety or in separate lots, and either for cash or on credit and on such terms as Lenders may determine, and at any place (whether or not it be the location of the Collateral or any part thereof) designated in the notice referred to above. To the extent permitted by applicable law, any such sale or sales may be adjourned from time to time by announcement at the time and place appointed for such sale or sales, or for any such adjourned sale or sales, without further published notice, and Borrower, Lenders or the holder or holders of the Notes, or of any interest therein, may bid and become the purchaser at any such sale. (c) Lenders may proceed to protect and enforce this Agreement and the other Operative Documents by suit or suits or proceedings in equity, at law or in bankruptcy, and whether for the specific performance of any covenant or agreement herein contained or in execution or aid of any power herein granted; or for foreclosure hereunder, or for the appointment of a receiver or receivers for any real property security or any part thereof, or for the recovery of judgment for the Obligations or for the enforcement of any other proper, legal or equitable remedy available under applicable law. 9.04. Waiver by Borrower. Upon the occurrence of an Event of Default, to the extent permitted by law, Borrower covenants that it will not at any time insist upon or plead, or in any manner whatsoever claim or take any benefit or advantage of, any stay or extension law now or at any time hereafter in force, nor claim, take nor insist upon any benefit or advantage of or from any law now or hereafter in force providing for the valuation or appraisement of the Collateral or any part thereof prior to any sale or sales thereof to be made pursuant to any provision herein contained, or to the decree, judgment or order of any court of -18-

competent jurisdiction; nor, after such sale or sales, claim or exercise any right under any statute now or hereafter made or enacted by any state or otherwise to redeem the property so sold or any part thereof, and, to the full extent legally permitted, except as to rights expressly provided herein, hereby expressly waives for itself and on behalf of each and every Person, except decree or judgment creditors of Borrower, acquiring any interest in or title to the Collateral or any part thereof subsequent to the date of this Agreement, all benefit and advantage of any such law or laws, and covenants that it will not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any power herein granted and delegated to Lenders, but will suffer and permit the execution of every such power as though no such power, law or laws had been made or enacted. 9.05. Effect of Sale. Any sale, whether under any power of sale available to Lenders or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever, either at law or in equity, of Borrower in and to the property sold, and shall be a perpetual bar, both at law and in equity, against Borrower, its successors and assigns, and against any and all persons claiming the property sold or any part thereof under, by or through Borrower, its successors or assigns. 9.06. Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by Lenders at the time of, or received by Lenders after, the occurrence of an Event of Default hereunder) shall be paid to and applied as follows: (a) First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys' fees, incurred or made hereunder by Lenders; (b) Second, to the payment to Lenders of the amount then owing or unpaid on the Notes, and in case such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid upon the Notes, then first, to the unpaid interest thereon, second, to unpaid principal thereof and third to the remaining balance of the Obligations under the Notes; such application to be made upon presentation of the Notes, and the notation thereon of the payment, if partially paid, or the surrender and cancellation thereof, if fully paid; (c) Third, to the payment of other amounts then payable to Lenders under any of the Operative Documents; and (d) Fourth, to the payment of the surplus, if any, to Borrower, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same. 9.07. Reinstatement of Rights. If Lenders shall have proceeded to enforce any right under this Agreement or any other Operative Document by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then and in every such case (unless otherwise ordered by a court of competent jurisdiction), Lenders shall be restored to their former position and rights hereunder with respect to the property subject to the security interest created under this Agreement. -19-

ARTICLE X MISCELLANEOUS 10.01. Modifications, Amendments or Waivers. The provisions of any Operative Document may be modified, amended or waived only by a written instrument signed by the parties thereto. 10.02. No Implied Waivers; Cumulative Remedies; Writing Required. No delay or failure of Lenders in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder of Lenders are cumulative and not exclusive of any rights or remedies which it would otherwise have. Any waiver, permit, consent or approval of any kind or character on the part of Lenders of any breach or default under this Agreement or any such waiver of any provision or condition of this Agreement must be in writing and shall be effective only in the specified instance and to the extent specifically set forth in such writing. 10.03. Expenses; Indemnification. Borrower agrees upon demand to pay or reimburse Lenders for all liabilities, obligations and out-of-pocket expenses, including reasonable fees and expenses of counsel for Lenders, from time to time arising in connection with the enforcement or collection of sums due under the Operative Documents, and in connection with any amendment or modification of the Operative Documents or any "work-out" in connection with the Operative Documents. Borrower shall indemnify, reimburse and hold Lenders, each of Lenders' partners, and each of their respective successors, assigns, agents, officers, directors, shareholders, servants, agents and employees harmless from and against all liabilities, losses, damages, actions, suits, demands, claims of any kind and nature (including claims relating to environmental discharge, cleanup or compliance), all costs and expenses whatsoever to the extent they may be incurred or suffered by such indemnified party in connection therewith (including reasonable attorneys' fees and expenses), fines, penalties (and other charges of applicable governmental authorities), licensing fees relating to any item of Collateral, damage to or loss of use of property (including consequential or special damages to third parties or damages to Borrower's property), or bodily injury to or death of any person (including any agent or employee of Borrower) (each, a "Claim"), directly or indirectly relating to or arising out of the use of the proceeds of the Loans or otherwise, the falsity of any representation or warranty of Borrower or Borrower's failure to comply with the terms of this Agreement or any other Operative Document during the Term. The foregoing indemnity shall cover, without limitation, (i) any Claim in connection with a design or other defect (latent or patent) in any item of equipment included in the Collateral, (ii) any Claim for infringement of any patent, copyright, trademark or other intellectual property right, (iii) any Claim resulting from the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials on the premises of Borrower, including any Claims asserted or arising under any Environmental Law, or (iv) any Claim for negligence or strict or absolute liability in tort; provided, however, that Borrower shall not indemnify Lenders for any liability incurred by Lenders as a direct and sole result of Lenders' gross negligence or willful misconduct. Such indemnities shall continue in full force and effect, notwithstanding the expiration or termination of this Agreement. Upon Lenders' written demand, Borrower shall assume and diligently conduct, at its sole cost and expense, the entire defense of Lenders, each of its partners, and each of their respective, agents, employees, directors, officers, shareholders, successors and assigns against any indemnified Claim described in this Section 10.03. Borrower shall not settle or compromise any Claim against or involving Lenders without first obtaining Lenders' written consent thereto, which consent shall not be unreasonably withheld. 10.04. Waivers. (a) Borrower shall give Lenders written notice within one hundred eighty (180) days of obtaining knowledge of the occurrence of any claim or cause of action it believes it has, or may seek -20-

to assert to allege against Lenders whether such claim is based in law or equity, arising under or related to this Agreement or any of the other Operative Documents or to the transactions contemplated hereby or thereby, or any act or omission to act by Lenders with respect hereto or thereto, and that if it shall fail to give such notice to Lenders with regard to any such claim or cause of action, Borrower shall be deemed to have waived, and shall be forever barred from bringing or asserting such claim or cause of action in any suit, action or proceeding in any court or before any governmental agency or authority or any arbitrator. (b) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT IT SHALL NOT SEEK FROM LENDERS UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES. 10.05. Notices; Payments. (a) All notices and other communications given to or made upon any party hereto in connection with this Agreement shall be in writing (including telexed, telecopied or telegraphic communication) and mailed (by certified or registered mail), telexed, telegraphed, telecopied or delivered to the respective parties, as follows:
Borrower: Lenders: At the address set forth on the cover page of this Agreement. MMC/GATX PARTNERSHIP NO. I c/o MEIER MITCHELL & COMPANY 4 Orinda Way, Suite 200B Orinda, California 94563 and COMDISCO, INC. 6111 North River Road Rosemont, Illinois 60018 Attention: General Counsel Fax: 847-518-5088

or in accordance with any subsequent written direction from either party to the other. All such notices and other communications shall, except as otherwise expressly herein provided, be effective when received; or in the case of delivery by messenger or overnight delivery service, when left at the appropriate address. (b) Unless Lenders specify otherwise in writing, all payments shall be made by wire transfer to: GATX Capital Corporation
Bank Name: Bank Address: Account No.: ABA Routing No.: Reference: and -21NationsBank Dallas, Texas 75202 3750878673 111-000012 ONVIA.COM Invoice #___________

COMDISCO, INC. Bank Name: Bank Address: Account No.: ABA Routing No.: Reference:

Bank of America 231 South LaSalle Street Chicago, Illinois 60697 81882-00644 071000039 Onvia.com

10.06. Termination. This Agreement shall terminate at the end of the Term; provided, however, that the termination of this Agreement shall not affect any of the rights and remedies of Lenders hereunder, it being understood and agreed that all such rights and remedies shall continue in full force and effect until payment of all amounts owed to Lenders under or in connection with the Operative Documents, whether on account of principal, interest, fees or otherwise. 10.07. Severability. If any provision of any Operative Document is held invalid or unenforceable to any extent or in any application, the remainder of such Operative Document and all other Operative Documents, or the application of such provision to different Persons or circumstances or in different jurisdictions, shall not be affected thereby. 10.08. Survival. All representations, warranties, covenants and agreements of Borrower contained herein or made in writing in connection herewith shall survive the execution and delivery of the Operative Documents, the making of the Loans hereunder, the granting of security and the issuance of the Notes. 10.09. Relationship of Parties. Subject to a separate Intercreditor Agreement between the Lenders, Borrower and each Lender acknowledge, understand and agree that: (a) The relationship between the Borrower, on the one hand, and Lenders, on the other, is, and at all time shall remain solely that of a borrower and lenders. Lenders shall not under any circumstances be construed to be partners or joint venturers of Borrower or any of its Affiliates; nor shall Lenders under any circumstances be deemed to be in a relationship of confidence or trust or a fiduciary relationship with Borrower or any of its Affiliates, or to owe any fiduciary duty to Borrower or any of its Affiliates. Lenders do not undertake or assume any responsibility or duty to Borrower or any of its Affiliates to select, review, inspect, supervise, pass judgment upon or otherwise inform the Borrower or any of its Affiliates of any matter in connection with its or their Property, any Collateral held by any Lender or the operations of Borrower or any of its Affiliates. Borrower and each of its Affiliates shall rely entirely on their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by any Lender in connection with such matters is solely for the protection of Lenders and neither Borrower nor any Affiliate is entitled to rely thereon. (b) The relationship between the Lenders is, and at all time shall remain solely that of co-lenders. Lenders shall not under any circumstances be construed to be partners or joint venturers of each other; nor shall the Lenders under any circumstances be deemed to be in a relationship of confidence or trust or a fiduciary relationship with each other, or to owe any fiduciary duty to each other. Lenders do not undertake or assume any responsibility or duty to each other to select, review, inspect, supervise, pass judgment upon or otherwise inform each other of any matter in connection with Borrower or Borrower's Property, any Collateral held by any Lender or the operations of Borrower. Each Lender shall rely entirely on its own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by any Lender in connection with such matters is solely for the protection of such Lender. -22-

10.10. Governing Law. This Agreement, the other Operative Documents and the rights and obligations of the parties hereto and thereto shall be governed by and construed and enforced in accordance with the laws of the State of Illinois. Any action to enforce this Agreement against Borrower may be brought in Illinois or, with regard to Collateral, may also be brought wherever such Collateral is located. 10.11. Successors and Assigns. This Agreement and the other Operative Documents shall be binding upon and inure to the benefit of Lenders, all future holders of the Notes, Borrower and their respective successors and permitted assigns, except that Borrower may not assign or transfer its rights hereunder or any interest herein without the prior written consent of Lenders. Each Lender may sell to any other financial entity (a "Participant") participation interests in Lender's rights under this Agreement and the other Operative Documents; provided that notwithstanding the sale of participations, such Lender shall remain solely responsible for the performance of its obligations under this Agreement, such Lenders shall remain the holder of its Note for all purposes under this Agreement and Borrower shall continue to deal solely and directly with such Lender in connection with this Agreement and the other Operative Documents. Lenders may disclose the Operative Documents and any other financial or other information relating to Borrower or any Subsidiary to any potential Participant, provided that such Participant agrees to protect the confidentiality of such documents and information using the same measures that it uses to protect its own confidential information. 10.12. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. 10.13. Further Assurances. Borrower will, at its own expense, from time to time do, execute, acknowledge and deliver all further acts, deeds, conveyances, transfers and assurances, and all financing and continuation statements and similar notices, reasonably necessary or proper for the perfection of the security interest being herein provided for in the Collateral, whether now owned or hereafter acquired. 10.14. Power of Attorney in Respect of the Collateral. Borrower does hereby irrevocably appoint Lenders (which appointment is coupled with an interest), the true and lawful attorney-in-fact of Borrower with full power of substitution, for it and in its name (a) to perform (but Lenders shall not be obligated to and shall incur no liability to Borrower or any third party for failure to perform) any act which Borrower is obligated by this Agreement to perform, (b) to ask, demand, collect, receive, receipt for, sue for, compound and give acquittance for any and all rents, issues, profits, avails, distributions, income, payment draws and other sums in which a security interest is granted under Section 5.01 with full power to settle, adjust or compromise any claim thereunder as fully as if Lenders were Borrower itself, (c) to receive payment of and to endorse the name of Borrower to any items of Collateral (including checks, drafts and other orders for the payment of money) that come into Lenders' possession or under Lenders' control, (d) to make all demands, consents and waivers, or take any other action with respect to, the Collateral, (e) in Lenders' discretion, to file any claim or take any other action or institute proceedings, either in its own name or in the name of Borrower or otherwise, which Lenders may reasonably deem necessary or appropriate to protect and preserve the right, title and interest of Lenders in and to the Collateral, and (f) to otherwise act with respect thereto as though Lenders were the outright owner of the Collateral; provided, however, that the power of attorney herein granted shall be exercisable only upon the occurrence and during the continuation of an Event of Default unless in Lenders' reasonable opinion immediate action is necessary to preserve or protect the Collateral. Borrower agrees to reimburse Lenders upon demand for all reasonable costs and expenses, including attorneys' fees and expenses, which Lenders may incur while acting as Borrower's attorney in fact hereunder, all of which costs and expenses are included within the Obligations. -23-

10.15. Confidentiality. All information (other than periodic reports filed by Borrower with the Securities and Exchange Commission) disclosed by Borrower to Lenders in writing or through inspection pursuant to this Agreement shall be held strictly confidential by Lenders. Lenders agree to use at least the same degree of care to safeguard and prevent disclosure of such confidential information as Lenders uses with its own confidential information, but in any event no less than a reasonable degree of care. Lenders shall not disclose such information to any third party (other than Lenders' or Lenders' partner's attorneys and auditors subject to the same confidentiality obligation set forth herein) and shall use such information only for purposes of evaluation of its investment in Borrower and the exercise of Lenders' rights and the enforcement of their remedies under this Agreement and the other Operative Agreements. The obligations of confidentiality shall not apply to any information that (a) was known to the public prior to disclosure by Borrower under this Agreement, (b) becomes known to the public through no fault of Lenders, (c) is disclosed to Lenders by a third party' having a legal right to make such disclosure, or (d) is independently developed by Lenders. 10.16 Integration. This Agreement and the Operative Documents constitute the entire agreement between the Lenders, on the one hand, and the Borrower, on the other, and supercede any prior written or oral agreements or understandings of the parties. Borrower acknowledges that it is not relying on any representation or agreement made by any Lender or any employee, agent or attorney of any Lender, other than the specific agreements set forth in this Agreement and the Operative Documents. -24-

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written. ONVIA.COM, INC.,
By: /s/ Mark Calvert -------------------------------Name: Mark Calvert -----------------------------Title: CFO -----------------------------

MMC/GATX PARTNERSHIP NO. I GATX Capital Corporation, as general partner
By: /s/ Patricia W. Leicher -------------------------------Name: Patricia W. Leicher -----------------------------Title: Vice President -----------------------------

COMDISCO, INC.
By: /s/ James Labe -------------------------------Name: James Labe, President -----------------------------Title: Comdisco Ventures Division -----------------------------

EXHIBIT 10.13 August 25, 1999 Douglas Kellam 3901 Liberty Street Road Aurora, IL 60504 Dear Doug: On behalf of Onvia.com, Inc., a Washington Corporation (the "Company"), I am pleased to offer you the position of Vice President of Marketing of the Company. Speaking for myself, as well as the other members of the Company's management team, we are all very impressed with your credentials and we look forward to your future success in this position. The terms of your new position with the Company are as set forth below: 1. Position. a. You will become the Vice President of Marketing of the Company, working; out of the Company's headquarters office in Seattle, Washington. You will report to the Company's Chief Executive Officer. b. You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company's board of directors, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria, or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange. 2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on August 30, 1999. 3. Proof of right to Work. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

August 23, 1999 Page 2 4. Compensation a. Base Salary. You will be paid a monthly salary of $14,166.66, which is equivalent to $170,000 on an annualized basis. Your salary will be payable in two equal payments per month pursuant to the Company's regular payroll policy (or in the same manner as other employees of the Company). b. Bonus. You will be eligible to receive an annual performance bonus of up to 25% of your base salary payable at year-end. This bonus will be based upon the achievement of mutually agreed upon goals that will be set during your first month with the Company. c. Annual Review. Your base salary will be reviewed at the end of each calendar year as part of the Company's normal salary review process. 5. Stock Options. a. Initial Grant. In connection with the commencement of your employment, the Company will recommend that the Company's board of directors grant you an option to purchase 250,000 shares of the Company's Common Stock ("Shares") with an exercise price equal to the fair market value on the date of the grant. These option shares will vest monthly over a 4-year period (with a 12-month cliff). Vesting will, of course, depend on your continued employment with the Company. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company's 1999 Plan and the Stock Option Agreement between you and the Company. b. Subsequent Option Grants. Subject to the discretion of the Company's Board of Directors, you may be eligible to receive additional grants of stock options or purchase rights from time to time in the future, on such terms and subject to such conditions as the Company's board of directors shall determine as of the date of any such grant. 6. Benefits. a. Insurance Benefits. The Company will provide you with standard medical and dental insurance benefits commencing after the Initial Three Month Period. During the Initial Three Month Period, the Company may agree to pay expenses associated with your current health benefits plan. b. Vacation. You will be entitled to two (2) weeks paid vacation per year, pro-rated for the remainder of this calendar year. c. Relocation Expenses. In connection with your relocation from Chicago to Seattle, the Company will provide you with a $50,000 moving allowance to cover miscellaneous expenses. In addition, the Company will pay for 24 Economy-class round trips from Seattle to Chicago in the first year of employment. Any amounts received by you for relocation expense reimbursement will be reported as taxable income to you in the year received -2-

August 23, 1999 Page 3 as required by applicable tax law. In the event that you terminate your employment with the Company before the end of the second year of employment, you agree to repay the Company 100% of the relocation allowance by personal check or other negotiable instrument. 7. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company's Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the "Confidentiality Agreement"), prior to or on your Start Date. 8. Confidentiality of Terms. You agree to follow the Company's strict policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice. 9. At-Will Employment. Your employment with the Company will be on an "at will" basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability. We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you. Very truly yours, ONVIA.COM,INC., a Washington corporation
By: /s/ Julie Leitner Title: Director of Human Resources

-3-

August 23, 1999 Page 4 ACCEPTED AND AGREED: douglas kellam
Signature /s/ Douglas Kellam Date 8/25/99

Enclosure: Confidential Information and Invention Assignment Agreement -4-

EXHIBIT 10.14 July 27, 1999 Louis T. Mickler 3804 Princeton Way Medford, OR 97504-9732 Dear Lou: On behalf of Onvia.com, Inc., a Washington Corporation (the "Company"), I am pleased to offer you the position of VP of IT Operations. Speaking for myself, as well as the other members of the Company's management team, we are all very impressed with your credentials and we look forward to your future success in this position. The terms of your new position with the Company are as set forth below: 1. Position. a. You will become a VP of IT Operations of the Company, working out of the Company's headquarters office in Seattle, Washington. You will report to the Company's VP of Engineering. b. You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company's board of directors, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria, or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange, without disclosure. 2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on August 2, 1999. 3. Proof of Right to Work. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

July 27, 1999 Page 2 4. Compensation. a. Base Salary. You will be paid a monthly salary of $9,166.67, which is equivalent to $110,000 on an annualized basis. Your salary will be payable in two equal payments per month pursuant to the Company's regular payroll policy (or in the same manner as other employees of the Company). b. Bonus. You will be eligible to receive an annual incentive bonus of up to $20,000. This bonus will be based on achievement of mutually agreed upon performance goals. c. Annual Review. Your base salary will be reviewed at the end of each calendar year as part of the Company's normal salary review process. 5. Stock Options. a. Initial Grant. In connection with the commencement of your employment, the Company will recommend that the Company's board of directors grant you an option to purchase 17,500 shares of the Company's Common Stock ("Shares") with an exercise price equal to the fair market value on the date of the grant. These option shares will vest monthly over a 4-year period (with a 12-month cliff). Vesting will, of course, depend on your continued employment with the Company. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company's 1999 Plan and the Stock Option Agreement between you and the Company. b. Subsequent Option Grants. Subject to the discretion of the Company's Board of Directors, you may be eligible to receive additional grants of stock options or purchase rights from time to time in the future, on such terms and subject to such conditions as the Company's board of directors shall determine as of the date of any such grant. 6. Benefits. a. Insurance Benefits. The Company will provide you with standard medical and dental insurance benefits commencing after the Initial Three Month Period. During the Initial Three Month Period, the Company will pay expenses associated with your current health benefits plan. b. Vacation. You will be entitled to two (2) weeks paid vacation per year, pro-rated for the remainder of this calendar year. c. Relocation Expenses. The Company will reimburse you for your relocation from Oregon to Seattle according to the attached relocation summary. Any amounts received by you for relocation expense reimbursement will be reported as taxable income to you in the year received as required by applicable tax law. -2-

July 27, 1999 Page 3 In the event that you voluntarily terminate your employment with the Company before the end of the second year of employment, you agree to repay the Company 100% of the relocation allowance by personal check or other negotiable instrument. 7. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company's Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the "Confidentiality Agreement"), prior to or on your Start Date. 8. Confidentiality of Terms. You agree to follow the Company's strict policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice. 9. At-Will Employment. Your employment with the Company will be on an "at will" basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability. We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you. Very truly yours, ONVIA.COM, INC., a Washington corporation
By: /s/ Julie Leitner -------------------------------Title: Dir of Human Resources -----------------------------

ACCEPTED AND AGREED: LOUIS T. MICKLER -3-

July 27, 1999 Page 4
/s/ Louis T. Mickler ------------------------Signature 7/31/99 ------------------------Date

Enclosure: Confidential Information and Invention Assignment Agreement -4-

Exhibit 10.15 July 23, 1999 Mark Pawlosky 4260 W. Mercer Way Mercer Island, WA 98040 Dear Mark: On behalf of Onvia.com, Inc., a Washington Corporation (the "Company"), I am pleased to offer you the position of Vice President, Editor In Chief of the Company. Speaking for myself, as well as the other members of the Company's management team, we are all very impressed with your credentials and we look forward to your future success in this position. The terms of your new position with the Company are as set forth below: 1. Position a. You will become a Vice President, Editor In Chief of the Company, working out of the Company's headquarters office in Seattle, Washington. You will report to the Company's Chief Executive Officer. b. You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company's board of directors, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from-accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange. 2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on August 2, 1999. 3. Proof of Right to Work. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

July 23, 1999 Page 2 4. Compensation. a. Base Salary. You will be paid a monthly salary of $10,833.33, which is equivalent to $130,000 on an annualized basis. Your salary will be payable in two equal payments per month pursuant to the Company's regular payroll policy (or in the same manner as other employees of the Company). b. Bonus. You will be eligible to receive an annual incentive bonus of up to $30,000. This bonus will be based upon the achievement of mutually agreed upon goals that will be set during your first month with the Company. c. Annual Review. Your base salary will be reviewed at the end of each calendar year as part of the Company's normal salary review process. 5. Stock Options. a. Initial Grant. In connection with the commencement of your employment, the Company will recommend that the Company's board of directors grant you an option to purchase 25,000 shares of the Company's Common Stock ("Shares") with an exercise price equal to the fair market value on the date of the grant. These option shares will vest monthly over a 4-year period (with a 12-month cliff). Vesting will, of course, depend on your continued employment with the Company. Your annual department budget will be determined during your first month with the Company. If at any time after your first year of employment your annual department budget is reduced by 25% or more, your job duties are significantly altered or your position eliminated, 25% of your unvested options will vest automatically. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company's 1999 Plan and the Stock Option Agreement between you and the Company. b. Subsequent Option Grants. Subject to the discretion of the Company's Board of Directors, you may be eligible to receive additional grants of stock options or purchase rights from time to time in the future, on such terms and subject to such conditions as the Company's board of directors shall determine as of the date of any such grant. 6. Benefits. a. Insurance Benefits. The Company will provide you with standard medical and dental insurance benefits commencing after the Initial Three Month Period. During the Initial Three Month Period, the Company may agree to pay expenses associated with your current health benefits plan. b. Vacation. You will be entitled to two (2) weeks paid vacation per year, pro-rated for the remainder of this calendar year. -2-

July 23, 1999 Page 3 7. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company's Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the "Confidentiality Agreement"), prior to or on your Start Date. 8. Confidentiality of Terms. You agree to follow the Company's strict policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice. 9. At-Will Employment. Your employment with the Company will be on an "at will" basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability. We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you. Very truly yours, ONVIA.COM, INC., a Washington corporation
By: /s/ Julie Leftner -------------------------------Title: Dir of HR ----------------------------

ACCEPTED AND AGREED: MARK PAWLOSKY
/s/ Mark Pawlosky -------------------------Signature

-3-

July 23, 1999 Page 4 July 30, 1999 Date Enclosure: Confidential Information and Invention Assignment Agreement -4-

Exhibit 21.1 SUBSIDIARIES OF ONVIA.COM, INC. M-Depot Internet Superstores, Inc., a corporation incorporated under the laws of British Columbia.

EXHIBIT 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the use in this registration statement of Onvia.com, Inc. on Form S-1 of our report dated November 18, 1999 (December 20, 1999, as to Note 12), appearing in the Prospectus, which is part of this registration statement and to the reference to us under the headings "Selected Consolidated Financial Data" and "Experts" in such Prospectus.
/s/ Deloitte & Touche LLP Seattle, Washington December 20, 1999

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

9 MOS DEC 31 1999 JAN 01 1999 SEP 30 1999 26,036,867 0 192,827 0 531,942 32,400,582 4,826,993 636,680 38,198,858 (9,856,467) 0 0 37,694,812 5,390,468 (3,202,708) (38,198,858) 13,168,472 13,168,472 (15,708,812) (13,336,637) 0 0 (325,372) 0 0 0 0 0 0 (16,202,349) ($2.84) ($2.84)

YEAR DEC 31 1998 JAN 01 1998 DEC 31 1998 44,659 0 47,072 0 65,204 159,147 20,925 2,158 180,072 (972,504) 0 0 0 10,070 0 (180,072) 1,037,271 1,037,271 (1,082,448) (623,345) 0 0 (3,608) 0 0 0 0 0 0 (672,130) ($0.17) (0.17)


								
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