Registration Rights Agreement



 EXHIBIT 10.4 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 2, 2004, by and among eMerge
Interactive, Inc., a Delaware corporation (the “Company”), and the investors signatory hereto (each a “Investor” and collectively, the “Investors”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of November 22, 2004, among the Company and the investor parties hereto (the “Purchase Agreement”). 
  
 The Company and the Investors hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1: 
  
 “Effective Date” means the date that the Registration Statement filed pursuant to Section 2(a) or 2(b) is first declared effective by the
Commission. 
  
 “Effectiveness Date” means (a)
with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of: (a)(i) the 90th day following the Closing Date and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that the initial Registration Statement will not be reviewed or is no longer subject to further
review and comments, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2(b), the 90th day following the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement is required under such Section.. 
  
 “Effectiveness Period” shall have the meaning set forth in
Section 2(a). 
  
 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 “Filing
Date” means (a) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the 30th day following the Closing Date, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2(b), the 30th day following the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement is required under such
Section. 
  
 “Holder” or
“Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 







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

  
 “Proceeding” means an action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means: (i) the Shares, (ii) the Warrant Shares, (iii) the Additional Investment Right Shares, and (iv) any securities issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to any of the securities referenced in (i), (ii) or (iii) above. 
  
 “Registration Statement” means the initial registration statement required to be filed in accordance with Section 2(a) and any additional
registration statement(s) required to be filed under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in such registration statements. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to the Investors pursuant to the Purchase
Agreement. 
  

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 “Trading Market” means whichever of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market or the NASDAQ SmallCap Market, on which the Common Stock is listed or quoted for trading on the date in question. 
  
 “Warrants” means the Warrants issued or issuable pursuant to the Purchase Agreement and to any placement agent identified in Schedule
3.1(t) to the Purchase Agreement in accordance with the terms of the engagement or similar agreements between the Company and any such agents. 
  
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants . 
  
 2. Registration. 
  
 (a) On or prior to the Filing Date, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose) and shall contain
(except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” attached hereto as Annex A. The Company shall cause the Registration Statement
to be declared effective under the Securities Act as soon as possible but, in any event, no later than the Effectiveness Date, and shall use its best efforts to keep the Registration Statement continuously effective under the Securities Act until
the date which is the earlier of (i) five years after the Effective Date, (ii) such time as all of the Registrable Securities have been publicly sold by the Holders, or (iii) such time as all of the Registrable Securities may be sold pursuant to
Rule 144(k) (the “Effectiveness Period”). 
  
 (b)
If for any reason the Commission does not permit all of the Shares and all Warrant Shares to be included in the Registration Statement filed pursuant to Section 2(a), or for any other reason any Registrable Securities are not included in a
Registration Statement filed under this Agreement, then the Company shall prepare and file as soon as possible after the date on which the Commission shall indicate as being the first date or time that such filing may be made, but in any event by
its Filing Date, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415, on
Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose). Each such Registration Statement shall
contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” attached hereto as Annex A. The Company shall use its best
efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act during its entire Effectiveness Period. 
  

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 (c) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a
Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) hereof, the Company shall not be deemed to have satisfied this clause (i)), or (ii) a Registration Statement is not
declared effective by the Commission on or prior to its required Effectiveness Date, or (iii) after its Effective Date, without regard for the reason thereunder or efforts therefore, such Registration Statement ceases for any reason to be effective
and available to the Holders as to all Registrable Securities to which it is required to cover at any time prior to the expiration of its Effectiveness Period, for an aggregate of 20 Trading Days for all such events (any such failure or breach being
referred to as an “Event,” and for purposes of clauses (i), and (ii) or for purposes of clause (iii) the date on which such twenty Trading Day period is exceeded, being referred to as “Event Date”), then, in
addition to any other rights available to the Holders under the Transaction Documents or under applicable law, (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty,
equal to 1.0% of the aggregate Investment Amount of such Holder pursuant to the Purchase Agreement; and (y) on each monthly anniversary of each such Event Date thereof (if the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 2.0% of the aggregate Investment Amount paid by such Holder pursuant to the Purchase Agreement. If the
Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The parties agree that the Company will not be liable for liquidated damages under this
Section in respect of the Warrant Shares or the Additional Investment Right Shares. The liquidated damages pursuant to the terms hereof shall apply on a pro rata basis for any portion of a month prior to the cure of an Event other than with respect
to the initial Event Date thereof. 
  
 3. Registration
Procedures 
  
 In connection with the Company’s
registration obligations hereunder, the Company shall: 
  
 (a)
Not less than four Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall furnish to the Holders copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such document that addresses specifically this transaction or the Selling Stockholders, as proposed to be filed which documents will be subject to the review of such
Holders. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto that does not contain the disclosure containing such Holder as a “Selling Stockholder” as provided to the Company
by such Holder in connection therewith; provided, however, that notwithstanding any provision in this Agreement, all periods under Section 2 of this Agreement shall be tolled for each day more than two Trading Days that the Company does not
receive a fully completed Selling Holder Questionnaire in the form attached to this Agreement as Annex B following the Company’s delivery to the Holder of the Registration Statement, related Prospectus or information request. 

 

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 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to
each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period and prepare and file
with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and,
as promptly as reasonably possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that would not result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities
covered by each Registration Statement. 
  
 (c) Notify the Holders
as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement
and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a Selling Stockholder
or to the Plan of Distribution, but not information which the Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (d) Use its best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment. 
  

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 (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement
and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished) promptly after the filing of such documents with the Commission. 
  
 (f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (g) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of all jurisdictions within the United States reasonably
requested by any Holder proposing to sell securities in such jurisdiction, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or subject the Company to any material tax in any such jurisdiction where it is not then so subject. 
  
 (h) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request. 
  
 (i) Upon the
occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus
or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by
the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to 
  

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 be made with any Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested
by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if
the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for
all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 
  
 5. Indemnification. 
  
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, agents, investment advisors, partners, members and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs
of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement,
any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue
statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the
receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  

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 (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees
of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery requirements
of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement
or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. 
  
 (c)
Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party. 
  
 An Indemnified Party shall have the right
to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a 
  

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 conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding
the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
  

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 The indemnity and contribution agreements contained in this Section are in addition to any liability that
the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the
event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 3.1(u) to the Purchase Agreement, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than
the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders. Except as and to the extent specified in Schedule 3.1(u) of the Purchase Agreement,
the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person which have not been fully satisfied. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. 

 
 (e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 
  

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 Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after
receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered, subject to customary underwriter
cutbacks applicable to all holders of registration rights. 
  
 (f)
Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investors holding a majority of the Registrable Securities. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 
  
 (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time) on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Agreement later than 5:30 p.m. (New York City time) on any date and
earlier than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to
be given. The address for such notices and communications shall be as follows: 
  

			
	If to the Company:	  	eMerge Interactive, Inc.
	 	  	10305 102nd Terrace
	 	  	Sebastian, Florida 32958
	 	  	Attention: Chief Financial Officer
	 	  	(772) 581-9741 (phone)
	 	  	(772) 581-8171 (facsimile)
		
	With a copy to:	  	Hunton & Williams LLP
	 	  	Riverfront Plaza, East Tower
	 	  	Richmond, Virginia 23219-4074
	 	  	Attention: Gary E. Thompson, Esq.
	 	  	(804) 788-8787 (phone)
	 	  	(804) 343-4574 (facsimile)
		
	If to a Investor:	  	To the address set forth under such Investor’s name on the signature pages hereto.

  

 11 









			
	 If to any other Person who is then the registered Holder:

		
	 	  	To the address of such Holder as it appears in the stock transfer books of the Company

  
 or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 
  
 (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its
rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 
  
 (i) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  
 (j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees
that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then
the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  

 12 








 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law. 
  
 (l) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable. 
  
 (m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (n) Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor hereunder is
several and not joint with the obligations of any other Investor hereunder, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor hereunder. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made independently of any other Investor. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Investor pursuant hereto or thereto, shall
be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection
with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and
it shall not be necessary for any other Investor to be joined as an additional party in any Proceeding for such purpose. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES TO FOLLOW] 
  

 13 








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

			
	EMERGE INTERACTIVE, INC.
		
	 By:
	 	 /s/    ROBERT E.
DRURY                


	 Name:
	 	 Robert E. Drury

	 Title:
	 	 CFO



  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES OF INVESTOR TO FOLLOW] 
  

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

			
	STEELHEAD INVESTMENTS, LTD.
		
	 By:
	 	 /s/ DAVID C. HALEY


	 Name:
	 	 David C. Haley

	 Title:
	 	 Authorized Signatory

	
	 Address for Notice:

	
	 Steelhead Investments Ltd.
 c/o Investment Manager
 300 Crescent Court, Suite 700
 Dallas, Texas 75201
 Telephone: 214-758-6107
 Telecopy: 214-758-1207
 Attention: General Counsel

	 	 	 


  

 15 








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

			
	 OMICRON MASTER TRUST
 By: Omicron
Capital L.P., as advisor
 By: Omicon Capital Inc., its general partner

		
	 By:
	 	 /s/ BRIAN DALY


	 Name:
	 	 Brian Daly

	 Title:
	 	 CFO

	 For:
	 	 Bruce Bernstein

	 Title:
	 	 Managing Partner



  

 16 








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

			
	CRANSHIRE CAPITAL, L.P.
		
	 By:
	 	 /s/    MITCHELL KOPIN


	 Name:
	 	 Mitchell Kopin

	 Title:
	 	 President–Downsview Capital
 The General Partner

	
	 Address for Notice:  666 Dundee Rd., Suite 1901
 North Brook. IL 60062

	
	 Facsimile No.:  847-562-9031

	 Attn:
	 	 Mitchell Kopin



  

 17 








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

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

  

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


  

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

  

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

  

	•	privately negotiated transactions; 

  

	•	to cover short sales made after the date that this Registration Statement is declared effective by the Securities and Exchange Commission; 

  

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

  

	•	a combination of any such methods of sale; and 

  

	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. 
  
 Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. 
  

 18 








 Upon the Company being notified in writing by a Selling Stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of Common Stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of Common
Stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a Selling Stockholder that a donee or pledge intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with applicable securities law. 
  
 The Selling Stockholders also may transfer the shares of Common Stock in other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus. 
  
 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In
such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the sale of Securities will be paid by the Selling Stockholder and/or the purchasers. 
  
 Each Selling Stockholder has represented and warranted to the Company that, at the time it acquired the securities subject
to this Registration Statement, it did not have any agreement or understanding, directly or indirectly, with any person to distribute any of such securities. The Company has advised each Selling Stockholder that it may not use shares registered on
this Registration Statement to cover short sales of our Common Stock made prior to the date on which this Registration Statement was declared effective by the Securities and Exchange Commission. 
  
 The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from the sale of the Common Stock. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. 
  

 19 








 Annex B 
  
 EMERGE INTERACTIVE, INC. 
  
 Selling Securityholder Notice and Questionnaire 
  
 The undersigned beneficial owner of common stock (the “Common Stock”), of eMerge Interactive, Inc. (the “Company”) understands that the
Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement, dated as of             , 2004 (the “Registration Rights Agreement”), among the Company and the Investors named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

  
 The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate: 
  
 QUESTIONNAIRE 
 1. Name. 
  

			
	(a)	  	Full Legal Name of Selling Securityholder
	 	  	____________________________________________________________________________________
		
	(b)	  	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
	 	  	____________________________________________________________________________________
		
	(c)	  	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the
questionnaire):
	 	  	____________________________________________________________________________________

  
  
 2. Address for Notices to Selling Securityholder: 
  
 ____________________________________________________________________________________________________________________________________________________________________


	
	
	_____________________________________________________________________________________________________________________
	
	_____________________________________________________________________________________________________________________
	
	_____________________________________________________________________________________________________________________
	 Telephone:_____________________________________________________________________________________________________________________

	
	 Fax:___________________________________________________________________________________________________________________________

	 Contact
Person:__________________________________________________________________________________________________________________


  

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 3. Beneficial Ownership of Registrable Securities: 
  

	
	 Type and Principal Amount of Registrable Securities beneficially owned:

	  
 _____________________________________________________________________________________________________________________

	  
 _____________________________________________________________________________________________________________________

	  
 _____________________________________________________________________________________________________________________


  
 4. Broker-Dealer Status:

  

			
		
	 (a)
	 	Are you a broker-dealer?
		
	 	 	                                       
     Yes   ̈    No   ̈
		
	 Note:
	 	If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
		
	 (b)
	 	Are you an affiliate of a broker-dealer?
		
	 	 	                                       
     Yes   ̈    No   ̈
		
	 (c)
	 	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
		
	 	 	                                       
     Yes   ̈    No   ̈
		
	 Note:
	 	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

  
 5. Beneficial Ownership of Other
Securities of the Company Owned by the Selling Securityholder. 
  
 Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3. 
  

	
	Type and Amount of Other Securities beneficially owned by the Selling Securityholder:
	  
 _____________________________________________________________________________________________________________________

	  
 _____________________________________________________________________________________________________________________

	  
 _____________________________________________________________________________________________________________________


  

 21 








 6. Relationships with the Company: 
  
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity
holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 

 

	
	State any exceptions here:
	
	 ____________________________________________________________________________________

	
	 ____________________________________________________________________________________


  
 The undersigned agrees to promptly
notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the Effective Date for the Registration Statement. 
  
 By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related prospectus. 
  
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. 
  

					
	 Dated:
                                    
	 	 Beneficial Owner:
                                        
                        

			
	 	 	 By:
  
	 	

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  
 PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 
  
 [            ] 
  

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