Verticalnet Announces Debt Restructuring.

MALVERN, Pa. -- Verticalnet, Inc. (Nasdaq:VERT), a leading provider of on-demand supply management solutions, today announced material changes to its primary loan agreements.

In an SEC Form 8-K filed today, Verticalnet announced its entry into three new agreements and the amendment of two other agreements relating to its senior secured convertible promissory notes and its senior subordinated discount promissory note, the net impact of which is to shift the maturity of the discount note from January 31, 2007 to April 1, 2008, to re-price warrants previously granted to the holders of the convertible notes, to increase the principal amount of the discount note from $5.3 million to $5.5 million and to provide a subordinated security interest in Verticalnet's assets to the holder of the discount note. As a result of these actions, $4.7 million of debt classified as a current liability on Verticalnet's balance sheet dated September 30, 2006 has been reclassified on a pro-forma basis as a long term obligation. An unaudited condensed consolidated proforma balance sheet is attached hereto.

Details of the agreements are as follows:

* On December 19, 2006, the convertible note holders agreed to permit Verticalnet to grant a subordinated security interest in all of Verticalnet's and its domestic subsidiaries' assets to the discount note holder. In consideration for this agreement, Verticalnet reduced the exercise price of warrants held by convertible note holders from $5.39 to $0.88, the latter reflecting a 10% premium to Verticalnet's closing price of Verticalnet's common stock on December 19, 2006.

* On December 19, 2006, Verticalnet and its domestic subsidiaries entered into a security agreement with the discount note holder and granted the discount note holder a subordinated security interest in all of the assets of Verticalnet and its domestic subsidiaries. Also on this date, Verticalnet, the convertible note holders, and the discount note holder each executed a subordination and intercreditor agreement, which provides, among other things, for the subordination of the discount note to the convertible notes. As a result of granting a security interest for the discount note, the discount note holder's right to declare the note due any time after January 31, 2007 has been eliminated and the resulting maturity date for the discount note became November 18, 2007.

* On December 20, 2006, Verticalnet and the discount note holder entered into an amendment to the discount note, further extending the maturity date of the discount note to April 1, 2008, while increasing the principal due under the note from $5.3 million to $5.5 million.

"Today's announcement was an important step in our efforts to realign our balance sheet to position ourselves financially to support future growth," stated Nathanael V. Lentz, President and CEO of Verticalnet. "By extending the maturity date of our discount note by fourteen months, we gain the flexibility to undertake longer term opportunities to recapitalize our balance sheet. We believe today's announcement demonstrates the willingness of both our convertible note holders and our discount note holder to work with Verticalnet management to support our long term vision for the business and sends a strong message to our customers, prospects, employees, and shareholders."

About Verticalnet

Verticalnet is a leading provider of supply management solutions that enable companies to identify and realize sustained value across the supply management lifecycle. Going beyond traditional spend management and sourcing approaches, Verticalnet's solutions provide the visibility, insight and process control required to maximize the sustained value realization from supply management. Large enough to help customers attain supply management success worldwide, yet nimble enough to provide individual attention and remain focused on customer priorities, Verticalnet is helping leading Global 2000 companies and mid-market enterprises move their supply management efforts to the next level through an optimal blend of software, comprehensive services, and deep category knowledge and domain expertise.

Cautionary Statement Regarding Forward-Looking Information

This announcement contains forward-looking information that involves risks and uncertainties. Such information includes statements about undertaking longer term opportunities to recapitalize our balance sheet, the willingness of both our convertible note holders and our discount note holder to work with Verticalnet management as well as statements that are preceded by, followed by or include the words "believes," "plans," "intends," "expects," "anticipated," "scheduled," or similar expressions. For such statements, Verticalnet claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to, the continued availability and terms of equity and debt financing to fund our business, our reliance on the development of our enterprise software and services business, competition in our target markets, our ability to maintain our listing on The Nasdaq Capital Market, economic conditions in general and in our specific target markets, our ability to use and protect our intellectual property, and our ability to attract and retain qualified personnel, as well as those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2005 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006, which have been filed with the SEC. Verticalnet is making these statements as of December 20, 2006 and assumes no obligation to publicly update or revise any of the forward-looking information in this announcement.

To learn more, please visit us at www.verticalnet.com

Verticalnet is a registered trademark or a trademark in the United States and other countries of Vert Tech LLC 

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