Document:

Demand Response Purchase Agreement

 *** Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and
Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission. 
 Exhibit
10.34 
 PG&E/AER Demand Response Agreement 
 DEMAND RESPONSE PURCHASE AGREEMENT 
 Between 
 PACIFIC GAS AND ELECTRIC COMPANY 
 (as
“Buyer”) 
 and 
 ALTERNATIVE ENERGY RESOURCES, INC. 
 (as “Seller”) 

 DEMAND RESPONSE PURCHASE AGREEMENT 
 TABLE OF CONTENTS 
  

					
	 ARTICLE 1: GENERAL DEFINITIONS
	  	3
		
	 ARTICLE 2: GOVERNING TERMS AND CONDITIONS
	  	6
	 2.1
	  	 Applicability and Eligibility
	  	6
	 2.2
	  	 Effective Date and Delivery Term
	  	7
	 2.3
	  	 Regulatory Changes
	  	7
	 2.4
	  	 Contractual Arrangement Between Customer and Seller
	  	7
	 2.5
	  	 Representation
	  	7
		
	 ARTICLE 3: OBLIGATIONS AND DELIVERIES
	  	8
	 3.1
	  	 Seller’s and Buyer’s Obligations
	  	8
	 3.2
	  	 Commitment Level
	  	9
	 3.3
	  	 Seller’s Portfolio
	  	10
	 3.4
	  	 Resource Adequacy
	  	11
	 3.5
	  	 Testing
	  	11
	 3.6
	  	 Baseline Calculation
	  	11
	 3.7
	  	 Seller’s Access to Customer Specific Use Data
	  	12
	 3.8
	  	 Forecasting and Scheduling
	  	12
	 3.9
	  	 Metering and Communications Equipment
	  	14
	 3.10
	  	 Notification Equipment and Methods
	  	15
		
	 ARTICLE 4: COMPENSATION; MONTHLY PAYMENTS
	  	15
	 4.1
	  	 Monthly Option Premium Payment
	  	15
	 4.2
	  	 Option Premium Price
	  	15
	 4.3
	  	 Option Premium Payment and Performance Adjustments
	  	16
	 4.4
	  	 Energy Price
	  	17
		
	 ARTICLE 5: EVENTS OF DEFAULT; PERFORMANCE REQUIREMENT; REMEDIES
	  	18
	 5.1
	  	 Events of Default
	  	18
	 5.2
	  	 Additional Events of Default
	  	19
	 5.3
	  	 Declaration of an Early Termination Date and Calculation of Settlement Amounts
	  	19
		
	 ARTICLE 6: PAYMENT
	  	20
	 6.1
	  	 Billing Period
	  	20
	 6.2
	  	 Timeliness of Payment
	  	20
	 6.3
	  	 Disputes and Adjustments of Invoices
	  	20
	 6.4
	  	 Netting of Payments
	  	21
	 6.5
	  	 Right to Offset
	  	21
	 6.6
	  	 Payment Obligation Absent Netting
	  	21
		
	 ARTICLE 7: CREDIT REQUIREMENTS
	  	21
	 7.1
	  	 Collateral
	  	21
	 7.2
	  	 Performance Assurance
	  	22

  

 i 

					
	 7.3
	  	 Return of Performance Assurance
	  	22
	 7.4
	  	 Letters of Credit
	  	22
	 7.5
	  	 Guaranty
	  	23
		
	 ARTICLE 8: LIMITATIONS OF LIABILITY; INDEMNIFICATION; REMEDIES
	  	23
	 8.1
	  	 Limitation of Liability
	  	23
	 8.2
	  	 Indemnification
	  	24
	 8.3
	  	 Remedies
	  	24
		
	 ARTICLE 9: FORCE MAJEURE
	  	24
		
	 ARTICLE 10: REPRESENTATIONS AND WARRANTIES
	  	25
		
	 ARTICLE 11: CONFIDENTIALITY
	  	25
		
	 ARTICLE 12: MISCELLANEOUS
	  	26
	 12.1
	  	 Choice of Law
	  	26
	 12.2
	  	 Compliance with Law
	  	26
	 12.3
	  	 Entire Agreement
	  	26
	 12.4
	  	 Further Assurances
	  	26
	 12.5
	  	 Publicity
	  	26
	 12.6
	  	 No Dedication
	  	27
	 12.7
	  	 Attorney’s Fees
	  	27
	 12.8
	  	 Severability
	  	27
	 12.9
	  	 Alternative Dispute Resolution
	  	27
		
	 ARTICLE 13: NOTICES
	  	29

 APPENDICES 
  

			
	Appendix I:	  	Calculation of Customer Specific Energy Baseline
		
	Appendix II:	  	Service Agreement List
		
	Appendix III	  	Authorization to Receive Customer Information or Act on Customer’s Behalf
		
	Appendix IV:	  	Calculation of Option Premium Payment
		
	Appendix V:	  	Calculation of Energy Payment
		
	Appendix VI	  	Form of Guaranty

  

 ii 

 DEMAND RESPONSE PURCHASE AGREEMENT 
 This Demand Response Purchase Agreement (“Agreement”) is made and entered into by and between Pacific Gas and Electric Company (“PG&E” or
“Buyer”) and Alternative Energy Resources, Inc. (“Seller”), on the latest signature date executed below. Seller and Buyer listed above are each individually considered a “Party” and collectively are considered the
“Parties” to the Agreement. Defined terms not found in this Agreement shall have the meaning found in the most current CAISO tariff. 
 ARTICLE 1: GENERAL DEFINITIONS 
  

	1.1	“Affiliate”: means, with respect to any entity, any other entity (other than an individual) that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under common control with, such entity. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having
ordinary voting power. 

  

	1.2	“Bankrupt”: with respect to any entity, such entity: (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or
cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, with the exception of
debt financing arrangements with senior lenders, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or
any substantial portion of its property or assets, which appointment is not dismissed within sixty (60) days, or (v) is generally unable to pay its debts as they fall due. 

  

	1.3	“Baseline”: the amount of capacity and energy use from Seller’s Portfolio from which demand reduction shall be measured as described in Section 3.6 and Appendix
I. 

  

	1.4	“Business Day”: any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the
relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be
received. 

  

	1.5	“CAISO”: the California Independent System Operator. 

  

	1.6	“Credit Rating”: with respect to any entity, on any date of determination, the respective ratings then assigned to such entity’s unsecured, senior long-term debt or
deposit obligations (not supported by third party credit enhancement) by Standard & Poor’s Rating Group (“S&P”) (a division of McGraw-Hill, Inc.) or its successor , Moody’s Investor Services, Inc. or its successor
(“Moody’s”) or other specified rating agency or agencies or if such entity does not have a rating for its unsecured, senior long-term debt or deposit obligations, then the rating assigned to such entity as its issuer rating by S&P
or Moody’s. 

  

 3 

	1.7	“Commitment Level”: the amount of reduction in electric use by Customers in Seller’s Portfolio that Seller is obligated to provide in each hour relative to Baseline
as further defined in Sections 3.1 and 3.2. 

  

	1.8	“CPUC”: the Public Utilities Commission of the State of California. 

  

	1.9	“CPUC Approval”: a final, non-appealable order issued by the CPUC approving this Agreement, without modification or condition unacceptable to either Party in its sole
discretion, as reasonable and assuring the full recovery by Buyer of all of its costs hereunder, subject only to a review of the reasonableness of Buyer’s administration of this Agreement. 

  

	1.10	“Community Choice Aggregation Service” or “CCA”: .the PG&E service allowing a Customer to 1) purchase electric power, and 2) participate in additional energy
efficiency or conservation programs, from non-utility entities called Community Choice Aggregators, all as defined in Electric Rule 1 of PG&E’s Tariff. 

  

	1.11	“Customer”: a person or entity receiving one of the following energy services from PG&E for final delivery and not for resell: bundled service, Direct Access service,
or CCA Service .(all as defined in Electric Rule 1 of PG&E’s Tariff). 

  

	1.12	“Delivery Point”: NP 15 and/or ZP 26. If the current Delivery Point, which is part of the zonal market structure established by the CAISO that exists as of the date of
this Agreement, is materially modified or replaced by the CAISO as a result of MRTU or a successor program, then the Delivery Point shall be as specified or determined by the CAISO. 

  

	1.13	“Delivery Month”: The period of time beginning on the first day, and ending at the end of the last day, of each month of each year designated in Sections 3.1 and 3.2.

  

	1.14	“Delivery Term”: each calendar year designated in Article 2. 

  

	1.15	“Demand Response” or “DR”: As described more fully in Article 3, an option whereby Buyer has the right to call on and receive a reduction from Baseline.

  

	1.16	“Direct Access”: the service provided by PG&E pursuant to Electric Rule 22 of PG&E’s Tariff which allows any end-use PG&E customer to elect to procure its
electricity, and any other CPUC-authorized energy services, directly from non-utility entities known as electric service providers (as defined in Electric Rule 1 of PG&E’s Tariff). 

  

	1.17	“DR Event”: when buyer determines that system load conditions require a reduction in electric energy usage or a reduction in demand, where such period shall not be less
than four (4) hours. 

  

	1.18	“DR Hours”: the hours ending (“HE”) 1200 to 1900, Pacific Prevailing Time (“PPT”), Monday through Friday, excluding NERC Holidays for the period that
Demand Response must be available to the Buyer during the Delivery Month. 

  

 4 

	1.19	“Effective Date”: the date indicated in Section 2.2. 

  

	1.20	“Interest Rate”: for any date, the lesser of: (a) the per annum rate of interest equal to the prime lending rate as may from time to time be published in The Wall
Street Journal under “Money Rates” on such day (or if not published on such day on the most recent preceding day on which published), plus two percent (2%), and (b) the maximum rate permitted by applicable law.

  

	1.21	“MRTU” or “Market Redesign and Technology Upgrade”: the locational marginal pricing market system to be governed by the CAISO MRTU Tariff approved by the Federal
Energy Regulatory Commission. 

  

	 1.22
	 “NERC Holidays”: the following holidays recognized by the North American Electric Reliability Council, or a
successor organization responsible for establishing reliability criteria and protocols: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Three of these days, Memorial Day, Labor Day, and
Thanksgiving Day, occur on the same day each year. Memorial Day is the last Monday in May; Labor Day is the first Monday in September; and Thanksgiving Day is the fourth (4th) Thursday in November. New Year’s Day, Independence Day, and Christmas Day occur on the same date each year, but in the event any of these holidays
occur on a Sunday, the “NERC Holiday” is celebrated on the Monday immediately following that Sunday; and if any of these holidays occur on a Saturday, the “NERC Holiday” remains on that Saturday. 

  

	1.23	“Notification Period”: the minimum amount of advance notice Buyer is obligated to provide Seller prior to a Dr Event. 

  

	1.24	“Performance Assurance”: the collateral to be provided by Seller in the form of either (i) cash, (ii) a Letter of Credit, or (iii) a guaranty all as more
fully set forth in Article 7, Credit Requirements, or any other form of security acceptable to Buyer. 

  

	1.25	“PG&E Tariff”: the entire body of effective rates, rentals, charges, and rules, collectively, of PG&E, including title page, preliminary statement, rate schedules,
rules, sample forms, service area maps, and lists of contracts and deviations, all as may be revised from time to time, and which can be found at www.pge.com/tariffs. 

  

	1.26	“RA Capacity”: the maximum amount of deliverable Commitment Level that qualifies for Buyer’s RAR. 

  

	1.27	“Resource Adequacy” or “RA”: the Buyer’s energy procurement obligations pursuant to CPUC Decisions 04-10-035 and 05-10-042, as may be amended from time to
time by the CPUC, and/or replaced, and all other RA obligations established by any other entity , including the CAISO. 

  

	1.28	“Resource Adequacy Requirement” or “RAR”: The specific RA obligations or requirements Buyer must meet. 

  

 5 

	1.29	“Seller”: An entity, appointed by a Customer, to act as an aggregator on behalf of said Customer with respect to all aspects of the DR, including but not limited to:
(1) the receipt of notices from Buyer; (2) the receipt of capacity and energy payments from Buyer; and (3) the payment of penalties to Buyer. 

  

	1.30	“Seller’s Portfolio”: “the eligible Customers with electric Service Agreements assembled by Seller for participation under this Agreement.

  

	1.31	“Service Agreement”: An agreement denoted by a unique service identification number between PG&E and Customer to take retail electric service under one of
PG&E’s filed tariffs as listed in the PG&E Tariff. 

 ARTICLE 2: GOVERNING TERMS AND CONDITIONS

  

	2.1	Applicability and Eligibility 

 DR shall only be provided
from Customers in Seller’s Portfolio that have an eligible Service Agreement with PG&E. Customers in Seller’s Portfolio must continue to take service from PG&E under the provisions of their otherwise applicable electric rate
schedule. The Customers in the Seller’s Portfolio under this Agreement shall be allowed to seek TA/TI funding through the PG&E TA/TI programs, which include this Agreement. 
 2.1.1 The following Customers are eligible for participation in this DR Program; they must take service under a PG&E commercial, industrial, or
agricultural electric rate schedule under PG&E’s Tariff: 
 2.1.1.1 Bundled Service Customers; 
 2.1.1.2 Customers with a Service Agreement for Direct Access, or CCA; 
 2.1.1.3 Customers with loads equal to or exceeding 200kW; 
 2.1.1.4 *** 
 2.1.2 The following Customers are not eligible for DR: 
 2.1.2.1 Customers that receive electric power from third parties, other than through Direct Access or CCA; 
 2.1.2.2 Customers billed via net-metering (“NEM”, “NEMFC”, “NEMBIO”, etc.) 
 2.1.2.3 Customers having
Service Agreements for full or partial standby service; 
 2.1.2.4 Customers that are participating in other PG&E tariff or non-tariff DR
programs (except for E-OBMC and E-POBMC); and 
  

 6 

 2.1.2.5 Residential Customers with capacity loads less than ***kW. 
  

	2.2	Effective Date and Delivery Term 

 The Agreement shall be
effective on the latest date executed by the Parties (“Effective Date”) and the Agreement shall continue in full force and effect until the end of the last day of calendar year 2011. *** The foregoing notwithstanding, the Delivery Term
shall not begin and neither Party shall have any obligation under Articles 3, 4, and 7 nor receive any benefit thereunder, until five Business Days subsequent to CPUC Approval of this Agreement, or the Parties having waived in writing the
requirement for CPUC Approval. In the event CPUC approval is received after May 1, 2007, Buyer’s Option Premium Payment for the month in which CPUC approval is received shall be prorated based on the effective date of the Seller’s
obligations as described above. 
  

	2.3	Regulatory Changes 

 If there is an MRTU, or the CPUC or
other regulatory agencies institute regulatory changes that impact the terms of the Agreement, then within forty-five (45) days following the implementation of such changes, Buyer and Seller shall use their best commercial efforts to reach mutual
agreement on all modifications to this Agreement necessary in order to remain compliant with such changes while retaining the original balance of benefits and obligations of the Parties. If, after forty-five (45) days, the Parties are unable to
mutually agree on the changes required to ensure that this Agreement complies with regulatory requirements, then the Parties shall continue to perform under this Agreement and shall seek to reach agreement on the necessary modifications to the
Agreement through the procedures described in the Alternative Dispute Resolution Article of this Agreement. 
  

	2.4	Contractual Arrangement Between Customer and Seller 

 The
terms and conditions of the agreement governing the relationship between the Seller and a Customer with respect to such Customer’s participation in the DR program through such Seller are independent of Buyer. Any disputes arising between Seller
and such Customer shall be resolved solely between Seller and Customer. 
  

	2.5	Representation 

 Seller represents and warrants that any DR
shall be the result of an actual reduction in the Baseline. 
  

 7 

 ARTICLE 3: OBLIGATIONS AND DELIVERIES 
  

	3.1	Seller’s and Buyer’s Obligations 

 3.1.1 Seller
shall provide and make available to Buyer, and Buyer shall purchase and pay for the Product checked in the list below, subject to call and dispatch parameters corresponding to such Product as set forth below: 
 Buyer shall have the right to call on the DR thus creating a DR Event in accordance with the following: 
  

							
	 Check
Appropriate
Box Based on
Election in
Article 3.1
	  	 DR Product
	  	 Buyer’s Minimum Notice to Seller
	  	 Buyer’s Exercise Rights

				
	þ	  	Day-of Product	  	No less than 30 minutes in advance of first hour called	  	At Buyer’s Discretion
				
	 ̈	  	Day-ahead
Product	  	No later than 3:00PM, PPT on the day before the operating day for which a Dr Event has been declared, in accordance with Article 3.8.4.	  	At Buyer’s Discretion
				
	 ̈	  	Emergency Only Product	  	no less than 2 hours in advance of first hour called	  	Exercisable at Buyer’s discretion only in a CAISO Stage 1, 2, or 3 emergency, or local system emergency.

 3.1.2 If Buyer provides timely Notice to Seller that it is implementing a DR Event, then Seller
shall provide DR in accordance with the terms of Paragraph 3.2 below. Buyer and Seller agree that the provision and exercise of DR shall be subject to the following conditions: 
  

	 	•	 	 Buyer may exercise DR no more than once per day. 

  

	 	•	 	 If a DR Event is exercised by Buyer, Seller must provide a minimum of 4 consecutive DR Hours, up to a maximum of 6 DR Hours of reduction per day.

  

	 	•	 	 Buyer may exercise its rights to DR for up to a maximum of 50 DR Hours per calendar year. The 50 DR Hours can be spaced across the months of May through October, in
accordance with the daily minimum/maximum levels noted above. Unused DR Hours in a calendar year cannot be banked and used in future years. 

  

	 	•	 	 Buyer may call on, and Seller shall make available, DR on consecutive days. 

  

	 	•	 	 Buyer shall only schedule the full Commitment Level. 

  

 8 

	3.2	Commitment Level 

 When Buyer exercises a DR Event, Seller
shall cause a reduction in electric demand in Seller’s Portfolio that is equal to or greater than the DR Commitment Level specified in the table below. 
  

											
	 DR Commitment Level Chart
 (all units in MW of demand)

						
	 Delivery Month and Year
	  	2007	 	2008	 	2009	 	2010	 	2011
	May	  	***	 	***	 	***	 	***	 	***
						
	June	  	***	 	***	 	***	 	***	 	***
						
	July	  	***	 	***	 	***	 	***	 	***
						
	Aug.	  	***	 	***	 	***	 	***	 	***
						
	Sept.	  	***	 	***	 	***	 	***	 	***
						
	Oct.	  	***	 	***	 	***	 	***	 	***

 *** 
 Seller may adjust Commitment Levels as set forth in the following chart: 
  

			
	Commitment Level Milestones
		
	 Milestone Due Date
	  	 Milestone

	On or before execution date	  	Seller shall establish the Commitment Levels for all months and years under the Agreement.
		
	***	  	If CPUC Approval has not been received, Seller may revise the Commitment Levels for 2007 by between -***% and +***% from the levels in the table above as necessary to accurately reflect the
composition of Seller’s Portfolio. Notwithstanding the foregoing, Seller may revise the Commitment Level for *** down to zero.
		
	***	  	If CPUC Approval has not been received, Seller may further revise the Commitment Levels for 2007 by between -***% and +***% from the levels in the table above as necessary to accurately
reflect the

  

 9 

			
		  	composition of Seller’s Portfolio, provided that the sum of the adjustments provide for above and in this paragraph do not exceed +/-***% of the Commitment Levels in the DR Commitment
Level Chart above. Notwithstanding the foregoing, Seller may revise the Commitment Level for *** down to zero.
		
	***	  	Seller may revise the Commitment Levels for each of the years 2008, 2009, 2010, and 2011 by between -***% and +***% from the levels ***.
		
	***	  	Seller may revise the 2009 Commitment Levels by between -***% and +***% from the levels in effect on January 1, 2008 as necessary to accurately reflect the composition of Seller’s
Portfolio.
		
	***	  	Seller may revise the 2010 Commitment Levels by between -***% and +***% from the levels in effect on *** as necessary to accurately reflect the composition of Seller’s
Portfolio.
		
	***	  	Seller may revise the 2011 Commitment Levels by between -***% and +***% from the levels in effect on *** as necessary to accurately reflect the composition of Seller’s
Portfolio.

 Notwithstanding the above Commitment Level Milestones, Seller may, with the written consent of the
Buyer, increase its Commitment Levels beyond the amounts shown in the table above, and by amounts exceeding the limits specified in the Commitment Level Milestones table above, by submitting a written request to Buyer. Buyer shall accept or reject
Seller’s request within 30 calendar days of receipt by the Buyer. 
  

	3.3	Seller’s Portfolio 

 Seller must provide a list of
Service Agreements used to create Seller’s Portfolio to the Buyer ***, in the form provided in Appendix II. Seller’s Portfolio shall be a minimum of 1 MW. Seller may revise the list of Service Agreements by providing Notice to Buyer of any
such revision, and by providing Buyer with a fully revised List of Service Agreements ***. If Buyer determines that a Customer is ineligible for inclusion in Seller’s Portfolio under the criteria set forth in Article 2.1, Buyer shall so notify
Seller within 5 business days of receipt of Seller’s written request to include such customer in Seller’s Portfolio. Buyer shall make its best effort to approve changes to Seller’s Portfolio as soon as practical, ***. 
  

 10 

 Seller may submit the list of Service Agreements to Buyer electronically in accordance with Article 13.

  

	3.4	Resource Adequacy 

 Buyer has exclusive rights to all RA or
RA Capacity related products such as capacity tags, capacity credits, or installed capacity (“ICAP”) products, associated with Seller’s DR. Seller shall comply with any CPUC or CAISO requirements for assigning RA associated with DR to
Buyer. Seller and Buyer agree that throughout the Delivery Period the Parties shall consider all commercially reasonable actions, and execute any and all documents or instruments, reasonably necessary to enable Buyer to use the RA Capacity to
satisfy Buyer’s RAR. 
  

	3.5	Testing 

 Buyer may periodically require Seller to
demonstrate its ability to deliver its relevant Commitment Level, by conducting a test, the “DR Event Test”. Buyer may request a DR Event Test no more than twice per year. Each DR Event Test shall be scheduled ***. Upon receipt of Notice
of DR Event Test from Buyer, Seller shall curtail load consistent with the relevant Commitment Level. The number of curtailment hours from DR Event Tests shall count as a part of the maximum available DR hours for a given year. Seller shall be
compensated for a DR Event Test as described in Article 4. 
 If the DR Event Test results in a load curtailment less than the relevant
Commitment Level, Seller shall have *** to correct the cause of such deficiency. Seller shall then request another DR Event Test (“DR Event Re-Test”). If the results of the DR Event Re-Test do not demonstrate that Seller is able to deliver
***% of the Commitment Level, the Seller’s Option Premium payment from the time of the DR Event Test deficiency forward for months in which there is no DR Event shall be based upon the higher of the load curtailment results between the failed
DR Event Test and DR Event Re-Test. Notwithstanding the foregoing, Seller shall not count any curtailment hours resulting from the DR Event Re-Test toward the maximum available DR Hours for a given year. 
  

	3.6	Baseline Calculation 

 No later than *** following a
Delivery Month in which there was a DR Event, Seller shall provide to Buyer a valid accounting of Customer Specific Energy Baseline (“CSEB”) ***, in a form of Appendix I. A CSEB shall be valid for purposes of participation if there are at
least *** of interval data available. The CSEB for Seller’s Portfolio shall be the 

  

 11 

 
*** The hourly load profile for Seller’s Portfolio on any given day during the DR Program shall be determined by ***. 
 The Seller’s CSEB shall be based on the methodology outlined above, and demonstrated in Appendix I. 
  

	3.7	Sellers Access to Customer Specific Use Data 

 For bundled
Customers, or Direct Access Customers where Buyer is the MDMA, Seller shall provide Buyer with an “Authorization to Receive Customer Information or Act on Customer’s Behalf” in the form provided in Appendix III signed by the Customer
for each Service Agreement associated with Seller’s Portfolio. 
  

	3.8	Forecasting and Scheduling 

 3.8.1 Monthly Delivery
Forecast. *** before the beginning of *** during the Delivery Term, Seller shall provide a forecast *** of the Service Agreements that will be used to provide the DR for the following month (“Monthly Delivery Forecast”), broken down by
Congestion Zone (i.e., NP-15 or ZP-26, as currently established by the CAISO) and designated by Customer group type: bundled, Direct Access or CCA. The Monthly Delivery Forecast shall include the amount of DR to be made available at customer meter.
Seller shall provide Buyer with a copy of any and all updates to such forecast indicating a change in forecasted DR from the then-current forecast, or changes in the SC Identification of Customers ***. Such forecasts shall be sent in accordance with
Notice provisions herein to both Buyer’s internet site and Day-Ahead Trading Desk email notification address: 
 Day-Ahead Trading Desk

 Phone: 415-973-6222 
 Fax:
415-973-0400 
 Email: daenergy@pge.com 
 3.8.2 Change in Availability Notice 
 In the event that the Seller is unable to meet the Commitment
Level requirements as set forth in this Agreement (a “Change in Availability”), Seller shall use commercially reasonable efforts to notify Buyer of any Change in Availability as soon as practical after 

  

 12 

 
the occurrence of such change. Buyer’s notice of Change in Availability shall include a written estimate of its expected duration and the causes of such
Change in Availability. Seller shall also notify Buyer in writing upon the return of the DR availability to normal levels so as to meet the Commitment Level requirements set forth in this Agreement. The Change in Availability Notice shall be for
information only and shall not release Seller from its obligations under this Agreement. 
 3.8.3 Bundled Customer Scheduling

 Buyer shall be the Scheduling Coordinator (“SC”) or shall designate a qualified third party to fulfill such role for all portions
of DR delivered to Buyer by Seller from Seller’s Portfolio which result from a bundled Customer; however, Seller shall remain responsible to follow monthly notification requirements as set forth in this Agreement and to cause and ensure that
bundled Customers that are part of Seller’s Portfolio reduce energy use consistent with Seller’s DR obligations to Buyer set forth herein. 
 3.8.4 Direct Access Customer and CCA Customer Scheduling  
 Each of Seller and Buyer shall be its own SC with or shall
designate a qualified third party to fulfill such role for all portions of DR delivered to Buyer by Seller from Seller’s Portfolio which result from a Direct Access Customer. Seller’s SC means the person or entity designated by Seller to
perform the responsibilities and assume the obligations defined for a Scheduling Coordinator in the CASIO Tariff, including but not limited to paying the CAISO for any uninstructed deviation penalties. Buyer shall provide Seller with such data as
may be necessary for Seller to carry out its responsibilities as Scheduling Coordinator. Seller shall be solely responsible for having the appropriate contractual or other arrangements with a SC and/or the ESP for each Direct Access Customer in
Seller’s Portfolio to ensure that Buyer’s SC receives an amount of DR energy that is equal to the amount of energy reduction by the Direct Access Customer in Seller’s Portfolio during a DR Event. Each DR transaction so made shall be
scheduled as a SC-to-SC trade, in accordance with the CAISO Tariff, to the congestion zone in which the Direct Access Customer is located. Seller is responsible for notifying the ESP for each such Direct Access Customer that the ESP will not be
compensated by Buyer for SC-to-SC trades submitted as a result of a DR Event. Seller shall be responsible for any and all Distribution Losses attributable to each Service Agreement. Buyer shall have no obligation or liability of any kind with
respect to any real-time deliveries or any uninstructed deviations. In the real-time market, all schedules by Seller shall be solely for the account of Seller, and shall be settled by Seller. 
 3.8.4.1  
 Direct Access Customer
and CCA Customer — Day-Ahead Exercise: Buyer shall notify Seller either one (1) hour prior to the close of the day-ahead market as defined in the CAISO tariff, or by 3:00PM on the day before to the operating day for which a Dr
Event has been declared. If Buyer notifies Seller one (1) hour prior to the close of the day-ahead market, Seller’s SC shall execute a SC to SC trade with Buyer’s SC for supply equal to Sellers’ Commitment Level associated with

  

 13 

 
Direct Access customers as described in the monthly submission in the Day-Ahead market. If Buyer notifies Seller by 3:00PM on the day before the operating
day for which a Dr Event has been declared, Seller’s SC shall execute a SC to SC trade with Buyer’s SC for supply equal to Sellers’ Commitment Level associated with Direct Access customers as described in the monthly submission in the
hour-ahead market. 
 3.8.4.2 
 Direct Access Customer and CCA Customer — Hour-Ahead Exercise: Buyer shall notify Seller no later than one (1) hour prior to the close of the hour-ahead market as defined in the CAISO tariff. Seller’s SC shall
execute a SC to SC trade with Buyer’s SC for supply equal to Seller’s Commitment Level associated with Direct Access customers as described in the Monthly Delivery Forecast. If Buyer’s notice is less than one (1) hour prior to
the close of the hour-ahead market as defined in the CAISO tariff, Seller has no requirement to schedule a SC to SC trade but will be responsible for reimbursing Buyer, to the extent Seller receives CAISO credits, for the received CAISO credits in
accordance with Article 4.4. 
 3.8.5 Changes in Scheduling Protocol. 
 This Agreement is based on the best knowledge available to the Parties at the time of negotiations. The Parties recognize that electric system
conditions may change and that the scheduling protocols may need modification in order for the benefits of DR to be fully utilized. The Parties agree to meet to discuss amendments to the Agreement to accommodate such changes. The
provisions of this article, however, shall not be construed to modify the provisions of Article 2.3. 
  

	3.9	Metering and Communications Equipment 

 Each
Customer that Seller plans to include in Seller’s Portfolio must have approved interval metering and approved metering communications equipment installed and operating prior to being included in Seller’s Portfolio. Approved interval
metering is capable of recording usage in 15-minute intervals and being read remotely by Buyer. 
 If the Customer is receiving Direct Access
service, then a Meter Data Management Agent (“MDMA”) may also read the Customer’s metering on behalf of the Customer’s ESP. ***. 
 For bundled service Customers with a maximum demand of 200 kW or greater for three consecutive months in the past 12 billing months, Buyer shall provide and install the metering and communication
equipment at no cost to the Customer if metering and communication equipment are required. For other bundled service Customers, PG&E 

  

 14 

 
shall, if required, provide and install the metering equipment at the Customer’s expense pursuant to Electric Rule 2, Special Facilities.

 Installation of approved interval metering and approved metering communications equipment for a Direct Access Customer is the
responsibility of the Seller (in coordination with the Customer’s ESP or its MDMA). The metering and associated equipment must be installed in accordance with Electric Rule 22 of PG&E’s Tariff. If Buyer is the MDMA on behalf of
the Direct Access Customer’s ESP, then no additional fees shall be required. If the Direct Access Customer uses a third-party MDMA, then the Seller shall be responsible for all costs associated with providing Buyer acceptable interval data on a
daily basis, including any additional metering or communication equipment and any additional fees assessed by the Customer’s ESP. Acceptable interval data means “MV90 compatible” Revenue Settlement Quality Metering Data
(“SQMD”) which can be electronically retrieved daily via telephone or modem, an analog or digital phone connection, or an IP address hookup. 
  

	3.10	Notification Equipment and Methods 

 Seller must have:
(1) access to the internet and an e-mail address to receive event notification and (2) an alphanumeric pager that is capable of receiving a test message sent via the Internet. If a DR Event occurs, the Seller shall be notified of the event
using one or more of the above-mentioned systems. Seller is solely responsible to notify its Customers of a DR Event. 
 ARTICLE 4: COMPENSATION; MONTHLY PAYMENTS 
  

	4.1	Monthly Option Premium Payment 

 If Buyer exercises a DR
Event, DR Event Test, or DR Event Re-Test during a Delivery Month, the Option Premium Payment for such month shall be the sum of the Adjusted Hourly Option Premium Payment for such month as determined below and as further illustrated in Appendix IV.
***. If Buyer does not call a DR Event during a month, the Option Premium Payment for such month shall be equal to the product of the Commitment Level and Option Premium Price for such month. 
  

	4.2	Option Premium Price ($/kW-mo.) 

  

											
	 	  	2007	 	2008	 	2009	 	2010	 	2011
	 May
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 June
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 July
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Aug.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Sept.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Oct.
	  	$***	 	$***	 	$***	 	$***	 	$***

 ***. 
  

 15 

	4.3	Hourly Option Premium Payment and Performance Adjustments 

 If Buyer declares a DR Event during a Delivery Month, Buyer shall pay Seller an “Adjusted Hourly Option Premium Payment” or Seller shall pay Buyer an “Adjusted Hourly Option Premium Reduction” based on the Hourly
Delivered DR Capacity Ratio as set forth in the following table: 
  

			
	 Hourly Delivered Capacity Ratio
	  	 Adjusted Hourly Option Premium Payment Reduction Calculation

	 ***
	  	***
		
	 ***
	  	***
		
	 ***
	  	***
		
	 ***
	  	***

 ***. 
  

 16 

 ***. 
  

	4.4	Energy Price: 

 If called on by Buyer, Seller shall be paid
a DR Energy Price, as specified in the table below, for delivered DR. Seller shall not be paid unless a DR Event is declared by Buyer and meter data received by Buyer verifies and demonstrates that Seller’s Portfolio has reduced energy
consumption associated with the DR. 
 The Energy Price in the table below is stated in $/kWh. 
  

											
	 	  	2007	 	2008	 	2009	 	2010	 	2011
	 May
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 June
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 July
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Aug.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Sept.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Oct.
	  	$***	 	$***	 	$***	 	$***	 	$***

 ***. 
  

											
	 	  	2012	 	2013	 	2014	 	2015	 	2016
	 May
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 June
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 July
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Aug.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Sept.
	  	$***	 	$***	 	$***	 	$***	 	$***
						
	 Oct.
	  	$***	 	$***	 	$***	 	$***	 	$***

 If no DR Events were called during the Delivery Month, then the monthly Energy Payment is zero (0).

 If one or more DR Events or a DR Event Test is called during the Delivery Month, the monthly Energy Payment shall be the sum of the Hourly
Energy Payments. For all DR Events other than a Day-of exercise for a Direct Access Customer where an SC to SC trade was not performed due to insufficient notification time, the Hourly Energy Payment will be determined as follows: 
  

	 	i.	*** 

  

 17 

	 	ii.	*** 

 Buyer shall not, without having given its prior consent, pay Seller for Delivered EnergyHR that exceeds
*** percent of the Seller’s Commitment Level in any hour. 
 Should, during a DR Event, an SC to SC trade (due to a Day-of
exercise being supplied from a portion of the Sellers Portfolio supplied from Direct Access Customers) not be performed due to insufficient notification time, the Hourly Energy Payments to the Seller shall be based on the above formula and reduced
to reflect the CAISO credit that would be expected to be paid to the Seller’s SC for generation equal to the portion of the Seller’s Commitment Level that is from Direct Access customers DR reduction. ***. Appendix V contains an
example of how the energy payment is calculated for DR Event for Direct Access transactions where an SC to SC trade was not performed. 
 ARTICLE 5: EVENTS OF DEFAULT; PERFORMANCE REQUIREMENT; REMEDIES 
  

	5.1	Events of Default 

 An “Event of Default” shall
mean, with respect to either Party (a “Defaulting Party”), the occurrence of any of the following: 
  

	 	(a)	failure to make any payment required pursuant to this Agreement when due if such failure is not remedied within three (3) Business Days after written notice;

  

	 	(b)	any representation or warranty made by such Party herein is, or becomes, false or misleading in any material respect when made or when made or repeated; 

  

	 	(c)	failure to perform any material covenant or obligation set forth in this Agreement if such failure is not remedied within three (3) Business Days after written notice;

  

	 	(d)	such Party or its guarantor becomes Bankrupt; or 

  

 18 

	 	(e)	such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation,
amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement
reasonably satisfactory to the other Party. 

  

	5.2	Additional Events of Default 

 ***. 
  

	5.3	Declaration of an Early Termination Date and Calculation of Settlement Amounts 

 (a) If an Event of Default during the initial five (5) year term with respect to Seller (the “Defaulting Party”) shall have occurred and be continuing, the other Party (the “Non-Defaulting
Party”) shall have the right (i) to designate a day, no earlier than the day such notice is effective and no later than 20 days after such notice is effective, as an early termination date (“Early Termination Date”) to accelerate
all amounts owing between the Parties and terminate this Agreement (“Early Termination”), (ii) withhold any payments due to the Defaulting Party under this Agreement and (iii) suspend performance. The Non-Defaulting Party shall
calculate the “Settlement Amount” owed the Non-Defaulting Party as of the Early Termination Date, where: 
 Settlement Amount =
[$***] x [the *** Commitment Level during a year] The Settlement Amount shall only be due and owing to the Non-Defaulting Party if the result of the Settlement Amount calculation is positive. 
 (b) *** 
  

 19 

 ARTICLE 6: PAYMENT 
  

	6.1	Billing Period 

 The calendar month shall be the standard
period for all payments due and owing under this Agreement. As soon as practicable after the end of each month, the Seller shall render Buyer an invoice for the payment obligations, if any, incurred hereunder during the preceding month. 

 

	6.2	Timeliness of Payment 

 (a) Except as provided in
subparagraph (b) or otherwise agreed by the Parties, all invoices under this Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the twentieth (20th) day of each month, or
tenth (10th) day after receipt of the invoice or, if such day is not a Business Day, then on the next Business Day. The charges under applicable PG&E electric rate schedules will not be adjusted for any Customer as a result of actions taken
based upon this Agreement. 
 (b) If Comverge, Inc. is the sole guarantor of Seller’s Performance Assurance as provided in Subsection
7.5(i) Monthly Payments due Seller under Article 4 shall be payable in accordance with Seller’s invoice instructions on or before the later of the *** day after receipt of the invoice or, if such day is not a Business Day, then on the next
Business Day. 
  

	6.3	Disputes and Adjustments of Invoices 

 A Party may, in good
faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an
invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection
given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of
the dispute, any required payment shall be made within two (2) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent overpayments shall be
returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party
receiving such overpayment. Any dispute with respect to an invoice is waived unless the other Party receives Notice within twelve (12) months after the invoice is rendered or any specific adjustment to the invoice is made. If an invoice is not
rendered within two (2) months after the close of the month during for which the invoice was to be calculated, the right to payment for such performance is waived. 
  

 20 

	6.4	Netting of Payments 

 The Parties hereby agree that they
shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party under this Agreement shall be netted so that only the excess amount
remaining due shall be paid by the Party who owes it. 
  

	6.5	Right of Offset 

 To secure its obligations under this
Agreement *** a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral and cash equivalent collateral and any and all proceeds resulting therefrom or the liquidation thereof,
whether now or hereafter held by, on behalf of, or for the benefit of, such Secured Party, and each Party agrees to take such action as the other Party reasonably requires in order to perfect the Secured Party’s first-priority security interest
in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of
Default or an Early Termination Date, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a Secured Party with respect to all Performance Assurance, including any such rights and
remedies under law then in effect; (ii) ***; (iii) draw on any outstanding Letter of Credit issued for its benefit; and (iv) liquidate all Performance Assurance then held by or for the benefit of the Secured Party free from any claim
or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the Defaulting Party. The Secured Party shall apply the proceeds of the collateral realized upon the exercise of any such rights or
remedies to reduce the Pledgor’s obligations under the Agreement (the Pledgor remaining liable for any amounts owing to the Secured Party after such application), subject to the Secured Party’s obligation to return any surplus proceeds
remaining after such obligations are satisfied in full. 
  

	6.6	Payment Obligation Absent Netting 

 If no mutual debts or
payment obligations exist and only one Party owes a debt or obligation to the other during the monthly billing period, that Party shall pay such sum in full when due. 
 ARTICLE 7: CREDIT REQUIREMENTS 
  

	7.1	Collateral 

 Upon or any time after the occurrence and
during the continuation of an Event of Default wherein Seller is the Defaulting Party, Buyer may draw on the Performance Assurance. 
  

 21 

 Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or
remedies to reduce the Seller’s obligations under the Agreement (Seller remaining liable for any amounts owing to Buyer after such application), subject to the Buyer’s obligation to return any surplus proceeds remaining after such
obligations are satisfied in full. 
  

	7.2	Performance Assurance 

 (a) To secure its obligations under
this Agreement during the initial five (5) year term, beginning on the Effective Date and continuing until all amounts due and owing between the Parties at the end of the initial five (5) year term have been paid to the satisfaction of
Buyer, Seller agrees to maintain Performance Assurance in an amount equal to: 
 [$***] times [the *** Commitment Level during the Delivery
Term] 
 (b) *** 
  

	7.3	Return of Performance Assurance 

 Buyer shall promptly
return the unused portion of Performance Assurance, including the payment of any interest due thereon, to Seller after the following have occurred: (a) the Agreement has been terminated; and (b) all payment obligations of the Seller
arising under this Agreement have been met. 
  

	7.4	Letters of Credit 

 If Seller has provided a Letter of
Credit pursuant to this Article 7, then Seller shall renew or cause the renewal of such outstanding Letter of Credit on a timely basis as provided in the Letter of Credit and in accordance with this Agreement. In the event the issuer of such Letter
of Credit: (a) fails to maintain a Credit Rating of at least an *** by Moody’s and at least an *** by S&P, (b) indicates its intent not to renew such Letter of Credit, or (c) fails to honor Buyer’s properly documented
request to draw on an outstanding Letter of Credit by such issuer, then the Seller shall either (i) provide a substitute Letter of Credit that is issued by a qualified bank acceptable to Buyer, other than the bank failing to honor the
outstanding Letter of Credit, or (ii) post cash in each case in an amount equal to the outstanding Letter of Credit within five (5) Business Days after Buyer receives notice of such refusal (“Cure”), as applicable. If Seller
fails to Cure or if such Letter of Credit 

  

 22 

 
expires or terminates without a full draw thereon by Buyer, or fails or ceases to be in full force and effect at any time that such Letter of Credit is
required pursuant to the terms of this Agreement, then Seller shall have failed to meet the creditworthiness/collateral requirements of this Article. In all cases, the reasonable costs and expenses of establishing, renewing, substituting, canceling,
increasing, reducing, or otherwise administering the Letter of Credit shall be borne by Seller. 
  

	7.5	Guaranty 

 If Seller chooses to provide a Guaranty of
Performance Assurance to secure Seller’s obligations under this Agreement, it is to be in the form of Appendix VI executed by (i) Seller’s parent, Comverge, Inc., provided that Comverge, Inc. has a Credit Rating of at least BBB- from
S&P and Baa3 from Moody’s or (ii) a third party that has a Credit Rating of at least BBB- from S&P and Baa3 from Moody’s if Comverge, Inc. does not have a Credit Rating of at least BBB- from S&P and Baa3 from Moody’s
***. If, during the Delivery Term, the guarantor does not maintain a credit rating of at least BBB- from S&P and Baa3 from Moody’s, then Seller is obliged to provide an alternate form of Performance Assurance within 5 days of the de-rating
of the guarantor by either Moody’s or S&P. 
 ARTICLE 8: LIMITATIONS OF LIABILITY; INDEMNIFICATION; REMEDIES

  

	8.1	Limitation of Liability 

 IF NO REMEDY OR MEASURE OF
DAMAGES IS EXPRESSLY SET FORTH HEREIN, EACH PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. 
 THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES
PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE
OBLIGOR’S LIABILITY SHALL BE LIMITED AS 

  

 23 

 
SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. 
  

	8.2	Indemnification 

 Each Party shall be solely responsible
for and shall indemnify, defend and hold harmless the other Party, its parent and Affiliates including its officers, Board of Directors, agents, contractors, and employees thereof, against all losses, costs and expenses (including in-house and
outside attorneys’ fees), claims, enforcement actions, judgments or other obligations or liabilities, resulting from injury to property or person, or a violation of a local, state or federal common law, statute or representation, arising from
the indemnifying Party’s performance or nonperformance of its obligations under this Agreement; provided, however, that neither Party shall be obligated to indemnify the other Party against any losses, however caused, which arise in whole or in
part from the sole negligence, or willful or criminal misconduct of that Party. 
  

	8.3	Remedies 

 The remedies of the Parties under this Agreement
shall be cumulative. The Parties shall have all other rights and remedies not inconsistent herewith as provided by law, or in equity. No exercise by either Party of one right or remedy shall be deemed an election, and no waiver by either Party of
any Event of Default shall be deemed a continuing waiver. 
 ARTICLE 9: FORCE MAJEURE 
 To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under the Agreement and such Party (the
“Claiming Party”) gives notice and details of the Force Majeure to the other Party as soon as practicable, then, unless the terms of the Agreement specify otherwise, the Claiming Party shall be excused from the performance of its
obligations with respect to this Agreement (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure). The Claiming Party shall remedy the Force Majeure with all reasonable dispatch.
The non-Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure. 
 For the purposes of this Agreement “Force Majeure” shall mean, cover and include the following events or circumstances which prevents one Party
from performing its obligations under this Agreement, which event or circumstance is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is
unable to overcome or avoid or cause to be avoided including, without limitation, epidemics, landslides, floods, washouts, lightning, earthquakes. 
  

 24 

 ARTICLE 10: REPRESENTATIONS AND WARRANTIES 
 On the Effective Date, each Party represents and warrants to the other Party that: 
 (a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 
 (b) it has all regulatory authorizations necessary for it to legally perform its obligations in accordance with this Agreement; 
 (c) the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate
any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; 
 (d) this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; 
 (e) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; 
 (f) there is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect
its ability to perform its obligations under this Agreement; 
 (g) no Event of Default with respect to it has occurred and is continuing and
no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement; 
 (h) it is
acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the
other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement; and 
 (i) it has entered into this Agreement in connection with the conduct of its business and it has the capacity or ability to perform hereunder. 
 ARTICLE 11: CONFIDENTIALITY 
 Neither Party shall disclose the terms or conditions of this Agreement to a third party (other than the Party’s or the Party’s Affiliates’ employees, lenders, counsel, accountants, advisors or ratings agencies who have a need
to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable law, regulation, or any exchange, or in connection with any court or regulatory proceeding or request applicable to such Party or
any of its Affiliates, or as Buyer deems necessary in order to demonstrate the reasonableness of its actions to duly authorized governmental or regulatory agencies having jurisdiction over this Agreement, including, without limitation, the CPUC and
Buyer’s Procurement Review Group; provided, however, each 

  

 25 

 
Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. Buyer agrees to take all commercially reasonable efforts
to seek confidential treatment of any information it deems necessary to provide to the CPUC, will in turn treat the information as confidential. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief
in connection with, this confidentiality obligation. The confidentiality obligation hereunder shall not apply to any information that was or hereafter becomes available to the public other than as a result of a disclosure in violation of this
Section. Notwithstanding the foregoing, a Party may disclose the terms and conditions of this Agreement to index publishers that aggregate and report such data to the public in the form of indices. 
 ARTICLE 12: MISCELLANEOUS 
  

	12.1	Choice of Law 

 The formation, interpretation and
performance of this Agreement shall be governed by the laws of the State of California, without reference to principles of conflicts of laws. 
  

	12.2	Compliance with Law 

 This Agreement and the terms and
conditions herein are subject to all present and future valid laws, orders, rules, and regulations of duly constituted authorities having jurisdiction. Buyer shall provide notice to Seller prior to filing any request for a change to its tariffs that
would affect this Agreement. 
  

	12.3	Entire Agreement 

 This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter hereof, supersedes all prior discussions, agreements and understandings, whether oral or written, which the Parties may have in connection herewith and may not be amended or modified
except by written agreement of the Parties, and shall not be modified by course of performance, course of conduct or usage of trade. 
  

	12.4	Further Assurances 

 Each Party shall do all necessary acts
and make, execute, and deliver such written instruments as shall from time to time be reasonably necessary to carry out the terms of this Agreement. 
  

	12.5	Publicity 

 Any public statements, publicity or press
releases concerning this Agreement and the transactions contemplated by this Agreement shall be jointly planned and coordinated by and between the Parties. Neither Party shall act unilaterally regarding such publicity or press releases without
the prior written approval of the other Party, which approval shall not be unreasonably withheld. 
  

 26 

	12.6	No Dedication 

 Nothing in this Agreement shall be
construed as a dedication by any Party of its respective facilities to the other Party or to or for the benefit of any third party. Both Parties may each construct such facilities on their respective systems, as they may deem necessary or
appropriate in their sole discretion. 
  

	12.7	Attorneys’ Fees 

 Should any dispute arise regarding
any term or provision of this Agreement or enforcement of any rights hereunder, or to collect any portion of the amount payable under this Agreement, then all litigation and collection expenses, witness fees, court costs and attorney’s fees
shall be paid to the prevailing Party. 
  

	12.8	Severability 

 Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of that prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or
enforceability of that provision in any other jurisdiction. 
  

	12.9	Alternative Dispute Resolution 

 12.9.1 Intent of the
Parties. Except as provided in the next sentence, the sole procedure to resolve any claim arising out of or relating to this Agreement or any related agreement is the dispute resolution procedure set forth in this Article Twelve. Either Party
may seek a preliminary injunction or other provisional judicial remedy if such action is necessary to prevent irreparable harm or preserve the status quo, in which case both Parties nonetheless will continue to pursue resolution of the dispute by
means of this procedure. 
 12.9.2 Management Negotiations. 
 (a) The Parties will attempt in good faith to resolve any controversy or claim arising out of or relating to this Agreement or any related agreements by
prompt negotiations between each Party’s Authorized Representative, or such other person designated in writing as a representative of the Party (each a “Manager”). Either Manager may request a meeting (in person or telephonically) to
initiate negotiations to be held within ten (10) Business Days of the other Party’s receipt of such request, at a mutually agreed time and place. If the matter is not resolved within fifteen (15) Business Days of their first meeting
(“Initial Negotiation End Date”), the Managers shall refer the matter to the designated senior officers of their respective companies (“Executive(s)”), who shall have authority to settle the dispute. Within five (5) Business
Days of the Initial Negotiation End Date (“Referral Date”), each Party shall provide one another written notice confirming the referral and identifying the name and title of the Executive who will represent the Party. 
  

 27 

 (b) Within five (5) Business Days of the Referral Date, the Executives shall establish a mutually
acceptable location and date, which date shall not be greater than thirty (30) days from the Referral Date, to meet. After the initial meeting date, the Executives shall meet, as often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the dispute. 
 (c) All communication and writing exchanged between the Parties in connection with these
negotiations shall be confidential and shall not be used or referred to in any subsequent binding adjudicatory process between the Parties. 
 (d) If the matter is not resolved within forty-five (45) days of the Referral Date, or if the Party receiving the written request to meet, pursuant to subpart (b) above, refuses or does not meet within the ten (10) Business
Day period specified in subpart (b) above, either Party may initiate mediation of the controversy or claim according to the terms of the following Section 12.3. 
 12.9.3 Mediation. 
 If the dispute cannot be so resolved by negotiation as set forth in
Section 12.2 above, it shall be resolved at the request of any Party through a two-step dispute resolution process administered by the American Arbitration Association (“AAA”). As the first step, the Parties agree to mediate any
controversy before a mediator from the AAA panel, pursuant to AAA’s commercial mediation rules, in San Francisco, California. Either Party may begin mediation by serving a written demand for mediation. The mediator shall not have the authority
to require, and neither party may be compelled to engage in, any form of discovery prior to or in connection with the mediation. If within sixty (60) days after service of a written demand for mediation, the mediation does not result in
resolution of the dispute, then the controversy shall be settled by arbitration conducted by a retired judge or justice from the AAA panel conducted in San Francisco, California, administered by and in accordance with AAA’s Commercial
Arbitration Rules (“Arbitration”). The period commencing from the date of the written demand for mediation until the appointment of a mediator shall be included within the sixty (60) day mediation period. Any mediator(s) and
arbitrator(s) shall have no affiliation with, financial or other interest in, or prior employment with either Party and shall be knowledgeable in the field of the dispute. Either Party may initiate arbitration by filing with the AAA a notice of
intent to arbitrate within sixty days of service of the written demand for mediation. 
 12.9.4 Arbitration. 
 (a) At the request of a Party, the arbitrator shall have the discretion to order depositions of witnesses to the extent the arbitrator deems such
discovery relevant and appropriate. Depositions shall be limited to a maximum of three (3) per Party and shall be held within thirty (30) days of the making of a request. Additional depositions may be scheduled only with the permission of
the arbitrator, and for good cause shown. Each deposition shall be limited to a maximum of six (6) hours duration unless otherwise permitted by the arbitrator for good cause shown. All objections are reserved for the arbitration hearing except
for objections based on privilege and proprietary and confidential information. 

  

 28 

 
The arbitrator shall also have discretion to order the Parties to exchange relevant documents. The arbitrator shall also have discretion to order the Parties
to answer interrogatories, upon good cause shown. 
 (b) Each of the Parties shall submit to the arbitrator, in accordance with a schedule set
by the arbitrator, offers in the form of the award it considers the arbitrator should make. If the arbitrator requires the Parties to submit more than one such offer, the arbitrator shall designate a deadline by which time the Parties shall submit
their last and best offer. In such proceedings the arbitrator shall be limited to awarding only one of the two “last and best” offers submitted, and shall not determine an alternative or compromise remedy. 
 (c) The arbitrator shall have no authority to award punitive or exemplary damages or any other damages other than direct and actual damages and the other
remedies contemplated by this Agreement. 
 (d) The arbitrator’s award shall be made within nine (9) months of the filing of the
notice of intention to arbitrate (demand) and the arbitrator shall agree to comply with this schedule before accepting appointment. However, this time limit may be extended by agreement of the Parties or by the arbitrator, if necessary. The
California Superior Court of the City and County of San Francisco may enter judgment upon any award rendered by the arbitrator. The Parties are aware of the decision in Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal. 4th 362 (1994) and,
except as modified by this Agreement, intend to limit the power of the arbitrator to that of a Superior Court judge enforcing California Law. The prevailing Party in this dispute resolution process is entitled to recover its costs and reasonable
attorneys’ fees. 
 (e) The arbitrator shall have the authority to grant dispositive motions prior to the commencement of or following
the completion of discovery if the arbitrator concludes that there is no material issue of fact pending before him or her. 
 (f) Except as
may be required by Law, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties. 
 ARTICLE 13: NOTICES 
 13.1
Whenever this Agreement requires or permits delivery of a “Notice” (or requires a Party to “notify”), or requires the dissemination of other information, the Party with such right or obligation shall provide a communication to
the other Party’s name and address as shown below, in the manner specified herein. 
  

			
	 Seller:
	 	 Buyer:

	Name: Alternative Energy Resources, Inc.	 	Name: Pacific Gas and Electric Company
		
	All Notices:	 	All Notices:
		
	Delivery Address:	 	Delivery Address:
	120 Eagle Rock Ave, Suite 190	 	77 Beale Street, Mail Code N12E
	East Hanover, NJ 07936	 	San Francisco, CA 94105-1702

  

 29 

			
	Mail Address: (if different from above)	 	Mail Address:
		 	 P.O. Box 770000, Mail Code N12E
 San Francisco, CA
94177

	Attn: Frank Evans (fevans@comverge.com)	 	 Attn: Kelly A. Everidge (kabd@pge.com)
 Director,
Contract Mgmt & Settlements

	Phone: 973-947-6044	 	Phone: (415) 973-0070
	Facsimile: 973-884-3503	 	Facsimile: (415) 973-9176
		
	Duns:	 	Duns: 556650034
	Federal Tax ID Number: 20-8061023	 	Federal Tax ID Number: 94-0742649
		
	Invoices:	 	Invoices:
	 Attn: Kathy Pattillo
 (kpattillo@comverge.com)
	 	 Attn: Dennis Dyc-O’Neal (dwdh@pge.com)

		 	 Supervisor, Electric Settlements Reporting

	 Phone: 770-658-5004
	 	 Phone: (415) 973-4985

	 Facsimile:
	 	 Facsimile: (415) 973-2151

		
	Scheduling:	 	Scheduling:
	 Attn: Frank Evans
 (fevans@comverge.com)
	 	 Attn: Kevin F. Coffee (kfc1@pge.com)
 Manager, Power Trading

	 Phone: 973-947-6044
	 	 Phone: (415) 973-7631

	 Facsimile: 973-884-3503
	 	 Facsimile: (415) 973-0400

		
	Payments:	 	Payments:
	 Attn: Toria Simmons
	 	 Attn: Dennis Dyc-O’Neal (dwdh@pge.com)

		 	 Supervisor, Electric Settlements Reporting

	 Phone: 770-696-7660
	 	 Phone: (415) 973-4985

	 Facsimile: 770-696-7665
	 	 Facsimile: (415) 973-2151

		
	Wire Transfer:	 	Wire Transfer:
	 BNK:
 ABA:
 ACCT:
	 	 BNK: Mellon Trust of New England, N.A.
 ABA: 011001234
 Acct: 059994

		
	Credit and Collections:	 	Credit and Collections:
	 Attn: Matthew Smith
 (msmith@comverge.com)
 Senior Counsel
	 	 Attn: Manager, Credit Risk Management

	 Phone: 770-658-5026
	 	 Phone: (415) 972-5244

	 Facsimile: 770-696-7665
	 	 Facsimile: (415) 973-7301

		
	Contract Manager:	 	Contract Management:
	 Attn: Matthew Smith
 (msmith@comverge.com)
 Senior Counsel
	 	 Attn: Jeannette Woo (jxw7@pge.com)
 Manager, Contract Management

	 Phone: 770-658-5026
	 	 Phone: (415) 973-5097

	 Facsimile: 770-696-7665
	 	 Facsimile: (415) 973-2207

  

 30 

 13.2 A Notice sent by facsimile transmission or e-mail will be recognized and shall be deemed received on
the Business Day on which such Notice was transmitted if received before 5:00 p.m. PPT (and if received after 5:00 p.m. PPT, on the next Business Day) and a notice of overnight mail or courier shall be deemed to have been received two
(2) Business Days after it was sent or such earlier time as is confirmed by the receiving Party. Either Party may periodically change any address, phone number, e-mail, or contact to which Notice is to be given it by providing written notice of
such change to the other Party. 
 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their
authorized representatives. 
  

									
	BUYER: PACIFIC GAS AND ELECTRIC COMPANY	 		 	SELLER: ALTERNATIVE ENERGY RESOURCES, INC.
					
	By:	 	/s/ William T. Morres	 		 	By:	 	/s/ Frank A. Magnotti
					
	Name:	 	William T. Morres	 		 	Name:	 	Frank A. Magnotti
					
	Title:	 	President & CEO	 		 	Title:	 	President & COO AGR Group
					
	Date:	 	2-25-07	 		 	Date:	 	2-22-07

  

 31 

 APPENDIX I 
 CALCULATION OF CUSTOMER SPECIFIC ENERGY BASELINE 
 [EXAMPLE – FOR ILLUSTRATION ONLY] 

 
 Exhibit 1 
 Customer Specific Energy Baseline (CSEB) Calculation 
  

																			
	 DR Event Date:
	  	6/22/2006	  		  		  		  		  		  		  		  	
	 Customer:
	  		  		  		  		  		  		  		  		  	
	 Service Address:
	  		  		  		  		  		  		  		  		  	
	 Account ID:
	  		  		  		  		  		  		  		  		  	
	 Service Agreement:
	  		  		  		  		  		  		  		  		  	
	 Rate Schedule:
	  	E20S	  		  		  		  		  		  		  		  	
			
	 	  	Average Maximum Demands (KW) from 11:00AM to 7:00PM	  	 
	 DATE
	  	11:00-12:00	  	12:00-1:00	  	1:00-2:00	  	2:00-3:00	  	3:00-4:00	  	4:00-5:00	  	5:00-6:00	  	6:00-7:00	  	Check Max kw
	 6/8/06
	  	1,343.52	  	1,349.86	  	1,367.82	  	1,374.03	  	1,378.12	  	1,396.44	  	1,356.48	  	1,338.08	  	10,904
	 6/9/06
	  	1,364.85	  	1,369.40	  	1,404.72	  	1,422.27	  	1,443.56	  	1,430.28	  	1,371.51	  	1,355.94	  	11,163
	 6/12/06
	  	1,310.94	  	1,322.19	  	1,319.49	  	1,320.66	  	1,300.09	  	1,341.68	  	1,334.70	  	1,316.70	  	10,566
	 6/13/06
	  	1,314.14	  	1,339.60	  	1,313.86	  	1,294.56	  	1,307.52	  	1,338.08	  	1,300.23	  	1,301.04	  	10,509
	 6/14/06
	  	1,312.88	  	1,354.46	  	1,389.78	  	1,404.63	  	1,407.33	  	1,395.76	  	1,349.91	  	1,335.46	  	10,950
	 6/15/06
	  	1,347.66	  	1,377.45	  	1.399.82	  	1,426.59	  	1,444.28	  	1,423.04	  	1,412.05	  	1,396.08	  	11,227
	 6/16/06
	  	1,395.99	  	1,460.70	  	1,519.78	  	1,545.98	  	1,542.74	  	1,520.19	  	1,467.50	  	1,445.94	  	11,899
	 6/19/06
	  	1,373.00	  	1,401.89	  	1,427.44	  	1,435.00	  	1,434.78	  	1,421.78	  	1,413.32	  	1,387.26	  	11,294
	 6/20/06
	  	1,462.05	  	1,442.79	  	1,458.36	  	1,504.66	  	1,540.40	  	1,541.48	  	1,534.09	  	1,505.70	  	11,990
	 6/21/2006
	  	1,409.18	  	1,502.82	  	1,536.89	  	1,590.21	  	1,619.60	  	1,613.48	  	1,603.66	  	1,559.30	  	12,435
										
	The 3-highest usage days:	  		  		  		  		  		  		  		  		  	
										
	 HIGHEST KW DATES
	  	11:00-12:00	  	12:00-1:00	  	1:00-2:00	  	2:00-3:00	  	3:00-4:00	  	4:00-5:00	  	5:00-6:00	  	6:00-7:00	  	Check Max kw
	 6/21/2006
	  	1,409.18	  	1,502.82	  	1,536.89	  	1,590.21	  	1,619.60	  	1,613.48	  	1,603.66	  	1,559.30	  	12,435
	 6/20/06
	  	1,462.05	  	1,442.79	  	1,458.36	  	1,504.66	  	1,540.40	  	1,541.48	  	1,534.09	  	1,505.70	  	11,990
	 6/16/06
	  	1,395.99	  	1,460.70	  	1,519.78	  	1,545.98	  	1,542.74	  	1,520.19	  	1,467.50	  	1,445.94	  	11,899
						
	Calculation for the average of the 3-highest usage days:	  		  		  		  		  	
										
	 CSEB 10 Day Rolling Average for the previous 3 Highest Demand Days
	  	1422	  	1469	  	1505	  	1547	  	1568	  	1558	  	1535	  	1504	  	

 Note: 6/10/06, 6/11/06, 6/17/06, 6/18/06 were weekends 
  

 32 

 APPENDIX II 
 SERVICE AGREEMENT LIST 
 Page __ of __ pages 
 Notice by Seller: Service Agreement List 
 Please Print or Type Clearly. If
More Than One Page is Required, Please Continue on a Separate Page. 
 Seller Name:
_______________________________________________________________________________ 
 Effective Date for this List of Service
Agreements: ________________________________ 
 Does this List update a Previous Service Agreement List? Yes  ̈ No  ̈     If yes, attach a completed Additions/Deletions
List 
  

																					
	Line	  	 DR
 (kW)
	  	 Customer Site Name
	  	PG&E Service
Agreement
Number	  	Electric
Meter
Number	  	 Service Address
	  	Direct
Access (DA),
Community
Aggregation
(CCA), or
Bundled
Customer
(B)	  	DA or
CCA
kW	  	Bundled
kW	  	Zone
(NP15
or
ZP26)	  	Eligibility
Verified
by PG&E
(Y/N)
											
	1	  		  		  		  		  		  		  		  		  		  	
											
	2	  		  		  		  		  		  		  		  		  		  	
											
	3	  		  		  		  		  		  		  		  		  		  	
											
	4	  		  		  		  		  		  		  		  		  		  	
											
	5	  		  		  		  		  		  		  		  		  		  	
											
	6	  		  		  		  		  		  		  		  		  		  	
											
	7	  		  		  		  		  		  		  		  		  		  	
											
	8	  		  		  		  		  		  		  		  		  		  	
											
	9	  		  		  		  		  		  		  		  		  		  	
											
	10	  		  		  		  		  		  		  		  		  		  	
											
	11	  		  		  		  		  		  		  		  		  		  	
											
	12	  		  		  		  		  		  		  		  		  		  	
											
	13	  		  		  		  		  		  		  		  		  		  	
											
	14	  		  		  		  		  		  		  		  		  		  	
											
	15	  		  		  		  		  		  		  		  		  		  	

  

 33 

 ADDITIONS/DELETIONS to the SERVICE AGREEMENT LIST 
 Page __ of __ pages 
 Notice by Seller

 Please Print or Type Clearly. If More Than One Page is Required, Please Continue on a Separate Page. 
 Seller Name: _______________________________________________________________________________ 
 Effective Date for this List of Additions/Deletions of Service Agreements: ________________________________ 
  

																					
	Line	  	Add/
Delete	  	 Customer Site Name
	  	PG&E Service
Agreement
Number	  	Electric
Meter
Number	  	 Service Address
	  	Direct
Access (DA),
Community
Aggregation
(CCA), or
Bundled
Customer
(B)	  	DA or
CCA
kW	  	Bundled
kW	  	Zone
(NP15
or
ZP26)	  	For
Additions,
Eligibility
Verified
by PG&E
(Y/N)
											
	1	  		  		  		  		  		  		  		  		  		  	
											
	2	  		  		  		  		  		  		  		  		  		  	
											
	3	  		  		  		  		  		  		  		  		  		  	
											
	4	  		  		  		  		  		  		  		  		  		  	
											
	5	  		  		  		  		  		  		  		  		  		  	
											
	6	  		  		  		  		  		  		  		  		  		  	
											
	7	  		  		  		  		  		  		  		  		  		  	
											
	8	  		  		  		  		  		  		  		  		  		  	
											
	9	  		  		  		  		  		  		  		  		  		  	
											
	10	  		  		  		  		  		  		  		  		  		  	
											
	11	  		  		  		  		  		  		  		  		  		  	
											
	12	  		  		  		  		  		  		  		  		  		  	
											
	13	  		  		  		  		  		  		  		  		  		  	
											
	14	  		  		  		  		  		  		  		  		  		  	
											
	15	  		  		  		  		  		  		  		  		  		  	

  

 34 

 APPENDIX III 
 AUTHORIZATION TO RECEIVE CUSTOMER INFORMATION OR ACT ON 
 CUSTOMER’S BEHALF 
 A copy of the PG&E Form “Authorization to Receive Customer Information or Act On a Customer’s Behalf” is available at the link below. Scroll down to
“Property Managers and Owners” and click on Item #3: “Authorization to Receive Customer Information or Act On a Customer’s Behalf 
 http://www.pge.com/customer_service/english_brochures/ 
  

 35 

 APPENDIX IV 
 CALCULATION OF OPTION PREMIUM PAYMENT 
 Assumptions: 
 *** 
 Calculation: 
 *** 
 Adjusted Hourly Option Premium Payment with Reduction Charge: 
 *** 
 Total Option Premium payments with Reduction Charges for month: 
 *** 
  

 36 

 APPENDIX V 
 CALCULATION OF ENERGY PAYMENT 
 Assumptions: 
 *** 
 Calculation: 
 *** 
 Total Variable Payment = *** 
 CAISO Supply Payment Adjustment *** 
 *** 
 Total Adjustment = *** 
 Total Variable Payment with Adjustments = *** 
  

 37 

 APPENDIX VI 
 FORM OF GUARANTY 
 GUARANTY AGREEMENT 
 1. Guaranty. For valuable consideration, *** without condition guaranty payment to Pacific Gas and Electric Company (“PG&E”), its successors and assigns, of all amounts owed to PG&E by
Alternative Energy Resources, Inc. (“Principal”) pursuant to the Demand Response Purchase Agreement between PG&E and Principal and dated February __, 2007 (“Agreement”) in an aggregate amount set forth in paragraph 2 below
(“Obligations”). The guaranty of Guarantor hereunder is a continuing guaranty of payment and not of performance when any amount is owing or when any of the Agreements is breached, without regard to whether such payment or performance
obligation is contingent or absolute, liquidated or unliquidated. If at any time during the term of this guaranty agreement, Guarantor no longer satisfies the definition of “Credit Rating” (as such term is defined in the Agreement),
PG&E may exercise its remedies under the relevant provisions of the Agreement. 
 2. Guaranty Limit. Except as expressly provided in this
Paragraph 2, the liability of Guarantor hereunder shall not exceed an aggregate amount equal to *** in US dollars for principal, plus all interest that has accrued on any amount owed hereunder, to be paid to PG&E, its successors and assigns, and
Guarantor hereby binds itself, its heirs, executors, administrators, successors and assigns, jointly and severally. In addition to the amounts for which payment is guaranteed hereunder, Guarantor agrees to pay reasonable attorneys’ fees and all
other costs and expenses incurred by PG&E in enforcing this agreement or any action or proceeding arising out of or relating to this agreement. 
 3.
Independent Liability. The liability of Guarantor hereunder is independent of any security for or other guaranty of payment received by PG&E in connection with the Agreement and is not affected or impaired by (a) any indebtedness of
Principal to PG&E that exceeds Guarantor’s liability hereunder, or (b) any other guaranty as to amounts owed to PG&E by Principal, or (c) any partial payment by Principal or any other party acting under a separate guaranty, or
(d) any dissolution, reorganization, or insolvency of Principal, or (e) any payment to PG&E by Principal that PG&E subsequently returns to Principal pursuant to court order in any bankruptcy or other debtor-relief proceeding, or
(f) any indemnity agreement Principal may have from any party, or (g) any insurance that may be available to cover any loss. Guarantor waives any right to the deferral or modification of Guarantor’s obligations hereunder by virtue of
any such debtor-relief proceeding involving Principal. 
 4. Termination. The term of this Guaranty is continuous unless terminated in accordance with
the following requirements. This Guaranty may be terminated with regard to future transactions; provided that, Guarantor must provide PG&E with written notice of such termination, and any such termination shall become effective no earlier
than sixty (60) calendar days from the date PG&E receives such written notice from Guarantor. Unless otherwise agreed in writing by PG&E, no such notice or termination 

  

 38 

 
shall release Guarantor from any liability as to any amount or performance that is at the time or may subsequently become owing under any Agreement entered
into by PG&E and Principal while this Guaranty was in effect. Notwithstanding any other provision of this Guaranty to the contrary, *** shall be entitled to terminate this Guaranty, thereby being released from any obligation hereunder, upon
substituting (i) a guaranty in substantially the same form as this Guaranty and from an entity satisfying the meaning of the term Credit Rating provided in the definitions set forth in the Agreement, or (ii) another form of Performance
Assurance (as such term is defined in the Agreement) otherwise permitted to be substituted pursuant to the terms of the Agreement. 
 5. Waivers of
Defenses by Guarantor. (a) Guarantor waives any right to require PG&E to (i) proceed against Principal (provided PG&E shall have first provided prior written notice of ten (10) days to Principal), (ii) proceed against
or exhaust any security held from Principal or any other party acting under a separate agreement, or (iii) pursue any other remedy available to PG&E. (c) Guarantor waives any defense based on or arising out of any defense of Principal
other than payment in full of the amount(s) owed or full and satisfactory performance of Principal’s obligations under the Agreements, including without limitation any defense based on or arising out of the disability of Principal.
(d) Until all amounts owed by Principal to PG&E are paid in full, even though such amounts may in total exceed Guarantor’s liability hereunder, Guarantor shall have no right of subrogation, waives any right to enforce any remedy that
PG&E has or may have against Principal, and waives any benefit of and any right to participation in any security from Principal now or later held by Guarantor. (e) Guarantor assumes all responsibility for keeping itself informed of
Principal’s financial condition and all other factors affecting the risks and liability assumed by Guarantor hereunder, and PG&E shall have no duty to advise Guarantor of information known to it regarding such risks. 
 6. [LEFT INTENTIONALLY BLANK.] 
 7. No Waiver of Rights By
PG&E. No right or power of PG&E under this agreement shall be deemed to have been waived by any act or conduct on the part of PG&E, or by any neglect to exercise a right or power, or by any delay in doing so, and every right or power
of PG&E hereunder shall continue in full force and effect until specifically waived or released in a written document executed by PG&E. 
 8.
Governing Law. This agreement is made under and shall be governed in all respects by the laws of the State of California, and its provisions may not be waived, altered, modified or amended except in writing executed by an officer of each of
Guarantor and PG&E. If any provision of this agreement is held invalid under the laws of California, this agreement shall be construed as though the invalid provision has been deleted, and the rights and obligations of the parties shall be
construed accordingly. 
 9. Construction. All parties to this agreement are represented by legal counsel. The terms of this agreement and the
language used in this agreement shall be deemed to be the terms and language chosen by the parties hereto to express their mutual intent. This agreement shall be construed without regard to any presumption or rule requiring construction against the
party causing such instrument or any portion thereof to be drafted, or in favor of the party receiving a particular benefit under this agreement. No rule of strict construction will be applied against any person. 
  

 39 

 10. Notice. Any notice given hereunder by either Guarantor or PG&E shall be made by facsimile to the person
and at the address specified by each party below for this purpose. Such notice shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next business day after
receipt if receipt is outside of the recipient’s normal business hours. Either party may periodically change any address to which notice is to be given it by providing notice of such change as provided herein. 
 If to Comverge: 
 Comverge,
Inc. 
 Address: 3950 Shackleford Rd., Suite 400; Duluth, Georgia 30096 
 Attention: Michael Picchi 
 Telephone:
770-658-5042 
 Facsimile: 770-696-7665 
 *** 
 If to PG&E: 
 Pacific Gas and Electric Company 
 77 Beale
Street, MC B28L 
 San Francisco, CA 94105 
 Attention: Credit Risk Management Unit 
 Telephone: 415 972 5188 
 Facsimile: 415 973 7301 
 The Guarantors
hereby execute this Guaranty: 
  

			
	Comverge, Inc.:
		
	By:	 	/s/
		
	Title:	 	  
		
	Date:	 	  

 *** 
  

 40 

 *** 
 Agreed to by PG&E for purposes of establishing the creditworthiness of Principal, as partial security for the Agreements. 
  

			
	For PG&E:
		
	By:	 	/s/
		
	Title:	 	  
		
	Date:	 	  

  

 41Asset Purchase Agreement

 Exhibit 10.1 
 ASSET PURCHASE AGREEMENT 
 BY AND BETWEEN

 BFT ACQUISITION, LLC 
 AS PURCHASER 
 AND 
 EMERGE INTERACTIVE, INC., 
 AS SELLER

 MARCH 1, 2007 

 Table of Contents 
  

					
	 	  	 	  	Page
	 ARTICLE II
	  	 GENERAL DEFINITIONS
	  	3
	 Section 2.1  
	  	 Definitions
	  	3
	 Section 2.2  
	  	 Terms Generally
	  	6
	 ARTICLE III
	  	 PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
	  	6
	 Section 3.1  
	  	 Purchase and Sale of the Purchased Assets
	  	6
	 Section 3.2  
	  	 Assumption of Contracts and Liabilities
	  	7
	 ARTICLE IV
	  	 PURCHASE PRICE
	  	8
	 Section 4.1  
	  	 Payment of Purchase Price
	  	8
	 ARTICLE V
	  	 REPRESENTATIONS AND WARRANTIES AND RELATED UNDERTAKINGS
	  	8
	 Section 5.1  
	  	 Representations and Warranties of Seller
	  	8
	 Section 5.2  
	  	 Representations and Warranties of Purchaser
	  	9
	 Section 5.3  
	  	 “AS IS” TRANSACTION
	  	10
	 ARTICLE VI
	  	 TAX MATTERS
	  	11
	 Section 6.1  
	  	 Transfer Taxes
	  	11
	 Section 6.2  
	  	 Proration of Personal Property Taxes
	  	12
	 Section 6.3  
	  	 Cooperation
	  	12
	 Section 6.4  
	  	 Allocation of Purchase Price
	  	12
	 ARTICLE VII
	  	 COVENANTS AND ADDITIONAL AGREEMENTS
	  	13
	 Section 7.1  
	  	 Approval Proceedings
	  	13
	 Section 7.2  
	  	 Operation of the Business
	  	13
	 Section 7.3  
	  	 Access to Information; Confidentiality
	  	13
	 Section 7.4  
	  	 Notification of Certain Matters
	  	14
	 Section 7.5  
	  	 Further Action
	  	14
	 Section 7.6  
	  	 Litigation
	  	15
	 Section 7.7  
	  	 Filings and Authorizations
	  	15
	 Section 7.8  
	  	 Removal of Purchased Assets
	  	15
	 Section 7.9  
	  	 Cash Collateral
	  	15
	 Section 7.10
	  	 Employees
	  	15
	 ARTICLE VIII
	  	 CONDITIONS TO THE CLOSING
	  	16
	 Section 8.1  
	  	 Conditions to Obligations of Purchaser
	  	16
	 Section 8.2  
	  	 Conditions to Obligations of Seller
	  	16
	 ARTICLE IX
	  	 CLOSING
	  	17
	 Section 9.1  
	  	 Closing
	  	17
	 Section 9.2  
	  	 Documents to be Delivered at Closing by Seller
	  	17
	 Section 9.3  
	  	 Documents to be Delivered at Closing by Purchaser
	  	18
	 ARTICLE X
	  	 TERMINATION, AMENDMENT AND WAIVER
	  	19
	 Section 10.1
	  	 Termination
	  	19
	 Section 10.2
	  	 Effect of Termination
	  	19
	 ARTICLE XI
	  	 MISCELLANEOUS
	  	20
	 Section 11.1
	  	 Survival
	  	20
	 Section 11.2
	  	 Expenses
	  	20

  

 (i) 

					
	Section 11.3	  	 Governing Law; Forum
	  	20
	Section 11.4	  	 Notices
	  	20
	Section 11.5	  	 Headings
	  	20
	Section 11.6	  	 No Assignment; Benefit to Third Parties
	  	21
	Section 11.7	  	 Entire Agreement
	  	21
	Section 11.8	  	 Counterparts
	  	21
	Section 11.9	  	 Waiver
	  	21
	Section 11.10	  	 Amendment
	  	21
	Section 11.11	  	 Severability
	  	21
	Section 11.12	  	 Further Assurances
	  	21

 INDEX OF SCHEDULES AND EXHIBITS 
  

					
	 Schedules:
	  	 	  	 
	 Schedule 3.1(a)(i)
	  	 Accounts Receivable
	  	
	 Schedule 3.1(a)(ii)
	  	 Excluded Assets
	  	
	 Schedule 3.1(b)
	  	 Assumed Contracts
	  	
	 Schedule 5.1(e)
	  	 Seller Consents
	  	
	 Schedule 5.2(e)
	  	 Purchaser Consents
	  	

  

					
	 Exhibits:
	  	 	  	 
	 Exhibit A
	  	 Auction Procedures Order
	  	
	 Exhibit B
	  	 Sale Order
	  	
	 Exhibit C
	  	 Budget
	  	
	 Exhibit D
	  	 Cash Collateral Order
	  	
	 Exhibit E
	  	 Transition Services Agreement
	  	

  

 (ii) 

 ASSET PURCHASE AGREEMENT 
 This ASSET PURCHASE AGREEMENT (as amended, supplemented or modified from time to time, this “Agreement”), dated as of March 1, 2007, by
and between EMERGE INTERACTIVE, INC., a Delaware corporation (the “Seller”), and BFT ACQUISITION, LLC, a Nebraska limited liability company (the “Purchaser”). 
 RECITALS 
 A. The Biegert Family Irrevocable Trust, Dated June 11,
1998 (the “Trust”), and Seller have executed a Letter of Intent, dated February 14, 2007 (the “LOI”), pursuant to which the Trust expressed its desire to purchase the Purchased Assets and the Assumed Contracts, and the
Seller expressed its desire to sell all right, title and interest in, to and under the Purchased Assets and the Assumed Contracts (both as more specifically defined below) relating primarily to Seller’s “Animal Information Systems” or
“CattleLog” businesses and certain related assets and contracts. 
 B. The Trust has caused the Purchaser (with the Trust as the
sole member of Purchaser) to be formed for the purpose of taking title to the Purchased Assets and assuming the Assumed Contracts and Assumed Liabilities. 
 C. The Seller does not have the liquidity to continue pursuing its long-term business plan, and, as a result, filed for voluntary petition under Chapter 11 of the United States Bankruptcy Code in the federal
bankruptcy court for the Southern District of Florida, West Palm Beach division, on February 14, 2007. 
 D. The Purchaser and Seller
have agreed that the sale of the Purchased Assets and the assumption and assignment of the Assumed Contracts and Assumed Liabilities shall be accomplished pursuant to Sections 363 and 365 of the Bankruptcy Code (as defined below) and pursuant to the
terms of this Agreement. 
 E. The Purchaser has agreed that the terms of this Agreement and the Seller’s commitments herein shall be
subject to the Seller receiving approval by the Bankruptcy Court. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

 ARTICLE II 
 General
Definitions 
 Section 2.1 Definitions. The following terms, as used herein, have the following meanings: 

 “Affiliate” means (i) any Person that directly, or indirectly through one or more
intermediaries, controls the Seller or the Purchaser (a “Controlling Person”) or (ii) any Person (other than the Seller or the Purchaser) which is controlled by or is under common control with a Controlling Person. 
 “Agreement” means this Agreement, including the Schedules, as amended from time to time in accordance with its terms. 
 “Assignment and Assumption Agreement” means one or more assignment and assumption agreements in form and substance reasonably satisfactory to
Purchaser and Seller. 
 “Assumed Contracts” has the meaning set forth in Section 3.1(b). 
 “Assumed Liabilities” has the meaning set forth in Section 3.2. 
 “Auction Procedures Order” means the final and non-appealable order entered by the Bankruptcy Court on February 23, 2007, a copy of which
is annexed hereto as Exhibit A, (i) approving the terms of the LOI as the “Stalking-Horse Bid” for the Purchased Assets, (ii) authorizing the Seller to conduct an auction for the Purchased Assets , and
(iii) establishing procedures for the conduct of the Auction. 
 “Bankruptcy Case” means the legal proceeding to be commenced
by the Seller in the Bankruptcy Court (Case Number: 9:07-BK-10932-SHF) seeking to liquidate the Seller’s business pursuant to Chapter 11 of the Bankruptcy Code. 
 “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101-1330, as heretofore and hereafter amended. 
 “Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Florida, West Palm Beach division. 
 “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and Official Forms that govern procedure in cases under the Bankruptcy Code,
as heretofore and hereafter amended. 
 “Bill of Sale” means one or more bills of sale in form and substance reasonably
satisfactory to Purchaser and Seller, which shall include detailed schedules of the Purchased Assets as of the Closing Date. 
 “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the City of West Palm Beach, Florida. 
 “Closing” has the meaning set forth in Section 9.1. 
 “Closing Date” has the meaning set forth in Section 9.1. 
 “Contract” means any
written agreement, arrangement, understanding, lease, license, order, purchase order or instrument or other contractual or similar arrangement. 

 “Control” (including the terms “Controlled by” and “under common Control
with”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of capital stock, including as trustee (other
than a Chapter 11 trustee) or executor, by contract or credit arrangement or otherwise. 
 “Cure Costs” means all monetary
liabilities, including pre-petition monetary liabilities, of Seller that must be paid or otherwise satisfied to cure all of the Seller’s monetary defaults under the Assumed Contracts, if any, at the time of the assumption thereof and assignment
to Purchaser as provided hereunder as such amounts are determined by the Bankruptcy Court. 
 “Encumbrance” means (except for any
lien for Taxes or materialmans, contractors or other similar statutory liens, in each case with respect to amounts not yet due) any claim, liability, charge, lease, covenant, easement, encumbrance, security interest, lien, option, pledge, right of
others, mortgage, hypothecation, conditional sale or restriction (whether on voting, sale, transfer, defenses, set-off or recoupment rights, disposition or otherwise) against or with respect to tangible or intangible property or rights, whether
imposed by agreement, understanding, Law, equity or otherwise, except for any restrictions on transfer generally arising under any applicable federal or state securities Law. 
 “Excluded Assets” has the meaning set forth in Section 3.1. 
 “Governmental Authority” means any United States federal, state or local, or any foreign, government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or
judicial or arbitral body. 
 “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination
or award entered by or with any Governmental Authority. 
 “Law” means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law. 
 “Permitted Encumbrances” means (i) any
Encumbrance for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings, (ii) any statutory Encumbrance arising in the ordinary course of business by operation of Law with respect to a liability that is not
yet due or delinquent, (iii) any minor imperfection of title or similar Encumbrance which individually or in the aggregate with other such Encumbrances could not reasonably be expected to materially adversely affect the condition of the related
Purchased Assets or (iv) any Assumed Liabilities. 
 “Person” means an individual, corporation, partnership, association,
limited liability company, trust, joint venture, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended). 
 “Petition Date” means February 14, 2007, the date on which the Bankruptcy Case commenced. 
 “Purchase Price” has the meaning set forth in Section 4.1(a). 

 “Purchased Assets” has the meaning set forth in Section 3.1. 
 “Purchaser” has the meaning set forth in the Preamble. 
 “Purchaser Representatives” has the meaning set forth in Section 7.3(a). 
 “Sale
Hearing” means the hearing before the Bankruptcy Court to approve this Agreement and the consummation of the transactions contemplated by this Agreement. 
 “Sale Motion” means a motion filed with the Bankruptcy Court on the Petition Date seeking entry of the Sale Order. 
 “Sale Order” means an order of the Bankruptcy Court in substantially the form attached to this Agreement as Exhibit B. 
 “Seller” has the meaning set forth in the Preamble. 
 “Seller’s Knowledge” means the actual knowledge of Susan D. Mermer, David C. Warren, Robert E. Drury or Tim Niedecken. 
 “Tax” or “Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Tax authority. 
 “Tax Return” means any return, declaration, report, claim
for refund, information return, statement or other form relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 
 “Transfer Tax” has the meaning set forth in Section 6.1. 
 Section 2.2 Terms
Generally. As used in this Agreement: (i) words in the singular shall be held to include the plural and vice versa, (ii) words of one gender shall be held to include the other genders as the context requires, (iii) the terms
“hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, (iv) references to
Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement, unless otherwise specified, (v) the word “including” and words of similar import when
used in this Agreement, shall mean “including, without limitation,” unless otherwise specified, and (vi) the word “or” shall not be exclusive. 
 ARTICLE III 
 Purchase And Sale Of Assets; Assumption Of Liabilities 
 Section 3.1 Purchase and Sale of the Purchased Assets. On the Closing Date, Seller shall transfer, sell, assign and deliver to the Purchaser,
and Purchaser shall purchase, accept and assume from Seller, on the terms and subject to the conditions set forth in this Agreement and the Sale Order, all of Seller’s right, title and interest in, to and under the following assets, other than
the Excluded Assets (as hereinafter defined) (all such assets and properties are referred to in this Agreement as the “Purchased Assets”), free and clear of all Encumbrances, other than Permitted Encumbrances including, without limitation,
the following: 

 (a)(i) All of Seller’s right, title and interest in, to and under the following property
relating primarily to Seller’s “Animal Information Solutions” or “CattleLog” businesses, whether now owned, as of the date hereof, or hereafter acquired (each of the following capitalized terms in this Section 3.1(a)
shall have the meanings ascribed to such terms in Article 9 of the Uniform Commercial Code): General Intangibles; Documents; Equipment; Goods; Inventory; trademarks, copyrights and/or patents; and those certain accounts receivable listed on
Schedule 3.1(a)(i) to this Agreement; provided, however, that the Purchased Assets shall not, in any event, include the Excluded Assets. For purposes of this Agreement, “Excluded Assets” means (i) those assets
listed on Schedule 3.1(a)(ii) to this Agreement, which are all of the assets primarily relating to, used in or useful to Seller’s Food Safety Technologies business, and (ii) any and all cash and cash equivalents of Seller as of the
Closing Date; and 
 (b) All of Seller’s right, title and interest in the Assumed Contracts (as defined and described below).
Schedule 3.1(b) sets forth a list of all executory contracts related to Seller’s “Animal Information Solutions” or “CattleLog” businesses (the “Assumed Contracts”). The procedures for assumption and
assignment of the Assumed Contracts shall be mutually acceptable to Purchaser and Seller. Seller shall take all action reasonably necessary in order to assume and assign the Assumed Contracts to Purchaser in accordance with Sections 365(a) and
(f) of the Bankruptcy Code, and Seller shall pay all costs and expenses associated with such assumption and assignment, including without limitation any Cure Cost. Upon entry of the Sale Order, which order shall include provisions authorizing
the assignment and assumption of the Assumed Contracts, such Assumed Contracts shall be assumed by Seller and assigned to Purchaser, and Purchaser shall accept such assignment and assume the Assumed Contracts, and such assumption and assignment
shall be effective as of the Closing of this transaction. The assignment of the Assumed Contracts to Purchaser shall be contemporaneous with the Closing. 
 Section 3.2 Assumption of Contracts and Liabilities. On and as of the Closing Date, in connection with its acquisition of the Purchased Assets, Seller shall assign and transfer, and Purchaser shall accept,
assume, and indemnify, defend and hold Seller harmless with respect to, the following contracts, liabilities and obligations of Seller and no others (collectively, the “Assumed Liabilities”): 
 (a) Assumed Contracts. All rights and obligations of Seller under the Assumed Contracts; provided, however, that Seller shall pay all Cure
Costs owing under any of the Assumed Contracts prior to the Closing. 
 (b) Taxes. Subject to Section 6.2, any liability for Taxes with
respect to the ownership of the Purchased Assets for any taxable period (or portion thereof) beginning on or after the Closing Date. 
 PURCHASER SHALL NOT
ASSUME AND SHALL NOT BE LIABLE FOR ANY LIABILITIES AND OBLIGATIONS OF SELLER, REGARDLESS OF THE TYPE OR NATURE OF SUCH LIABILITIES OR OBLIGATIONS, OTHER THAN THE ASSUMED LIABILITIES. 

 ARTICLE IV 
 Purchase Price 
 Section 4.1 Payment of Purchase Price. 
 (a) The purchase price for the Purchased Assets shall be a sum necessary to satisfy in full, as of the Closing Date, any and all amounts (including
principal, accrued interest and fees) outstanding under the Revolving Loan Agreement, Promissory Note and Security Agreement, dated as of October 16, 2006, by and between Seller and Purchaser (the “Promissory Note”) (the
“Purchase Price”). 
 (b) On the Closing Date, the Purchaser shall deliver to Seller (i) the original Promissory Note marked
“cancelled, paid in full” and (ii) a UCC termination statement terminating UCC financing statement 63597192 filed with the Delaware Secretary of State on October 18, 2006. 
 ARTICLE V 
 Representations And Warranties And Related Undertakings

 Section 5.1 Representations and Warranties of Seller. Seller hereby represents and warrants to Purchaser as follows:

 (a) Organization and Standing. Seller is a corporation duly incorporated, validly existing and in good standing under the Laws of the State
of Delaware. 
 (b) Authorization; Enforceability. The execution, delivery and performance by Seller of this Agreement, and all of the
documents and instruments contemplated hereby to which Seller is a party, are within the corporate power of Seller and have been duly authorized by all necessary corporate action of Seller. This Agreement has been duly executed and delivered by
Seller. This Agreement is, and the other documents and instruments required hereby to which Seller is a party will be, subject to the Bankruptcy Code and the Bankruptcy Rules and approval of the Bankruptcy Court, when executed and delivered by the
parties thereto, the valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms. 
 (c) No
Conflict or Violation. Upon entry of the Sale Order, the execution, delivery and performance of this Agreement, and of all of the documents and instruments contemplated hereby to which Seller is a party, by Seller do not and will not:
(i) conflict with or result in a breach of the certificate of incorporation or bylaws of Seller or (ii) violate any Law or Governmental Order to which Seller is a party or to which Seller is subject. 
 (d) Litigation. Except claims by Micro Beef Technologies, Inc. (“Micro Beef”) that certain of the Purchased Assets infringe on patents held by
Micro Beef, which claims Seller disputes, there is no action, suit, investigation or proceeding pending against, or to Seller’s Knowledge, threatened against Seller before any Governmental Authority which challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement. 

 (e) Consents and Approvals. Except for consents, approvals or authorizations of, or filings with, the
Bankruptcy Court, and except as included on Schedule 5.1(e) to this Agreement, the execution, delivery and performance of this Agreement, and the other documents and instruments required hereby to which Seller is a party, do not and will not:
(i) constitute a violation or breach of any material contract or agreement to which Seller is a party or by which Seller is bound, or require the consent or approval of any party to any such contract or agreement, or give any party to any such
contract or agreement a right of termination, cancellation, acceleration or modification thereunder, except where such violation or breach or the failure to obtain such consent or approval would not, in the aggregate, have a material adverse effect
on Seller’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder, or (ii) result in, require or permit the creation or imposition of any Encumbrance, other than Permitted Encumbrances, upon or
with respect to the Purchased Assets or the Assumed Contracts. 
 (f) Title to Purchased Assets. Seller owns good and valid title to the
Purchased Assets free and clear of any Encumbrances except the Permitted Encumbrances. 
 (g) Sufficiency of Assets. Except for the United
States Department of Agriculture-approved Process Verified Program, the Purchased Assets and Assumed Contracts include all of the assets and contract rights necessary as of the Closing Date for the operation of the Purchased Assets in the ordinary
course in accordance with Seller’s past practice (excluding the Excluded Assets). 
 (h) Brokers. Except for AgriCapital Corporation and
B. Riley & Co., there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Seller who might be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement. Seller shall be responsible for payment of any such fee or commission. 
 (i) Assumed Contracts. Seller is
not in material default under any of the Assumed Contracts, and there do not exist any defaults by Seller, material or otherwise, under any of the Assumed Contracts, which such defaults would prevent any such Assumed Contract from being assumed by,
and assigned to, Purchaser. 
 Section 5.2 Representations and Warranties of Purchaser. Purchaser hereby represents and warrants
to Seller the following: 
 (a) Organization and Standing. Purchaser is a limited liability company duly organized, validly existing and in
good standing under the Laws of Nebraska. The Trust is the sole member of Purchaser. 
 (b) Authorization; Enforceability. The execution,
delivery and performance by Purchaser of this Agreement, and all of the documents and instruments contemplated hereby to which Purchaser is a party, are within the limited liability company power of Purchaser and have been duly authorized by all
necessary limited liability company action of Purchaser. This Agreement has been duly executed and delivered by Purchaser. This Agreement is, and the other documents and instruments required hereby to which Purchaser is a party will be, subject to
the 

 
Bankruptcy Code and the Bankruptcy Rules and approval of the Bankruptcy Court, when executed and delivered by the parties thereto, the valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms. 
 (c) No Conflicts or Violation. The
execution, delivery and performance of this Agreement, and all of the documents and instruments contemplated hereby to which Purchaser is a party, by Purchaser do not and will not: (i) conflict with or result in a breach of the Articles of
Organization or Operating Agreement of Purchaser or (ii) violate any Law or Governmental Order to which Purchaser is a party or to which Purchaser is subject. 
 (d) Litigation. There is no action, suit, investigation or proceeding pending or, to the knowledge of Purchaser, threatened against Purchaser before any Governmental Authority which challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this Agreement. 
 (e) Consents and Approvals. Except for consents,
approvals or authorizations of, or filings with, the Bankruptcy Court, and except as included on Schedule 5.2(e) to this Agreement, the execution, delivery and performance of this Agreement, and the other documents and instruments required
hereby to which Purchaser is a party, do not and will not: (i) constitute a violation or breach of any material contract or agreement to which Purchaser is a party or by which Purchaser is bound, or require the consent or approval of any party
to any such contract or agreement, or give any party to any such contract or agreement a right of termination, cancellation, acceleration or modification thereunder, except where such violation or breach or the failure to obtain such consent or
approval would not, in the aggregate, have a material adverse effect on Purchaser’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder, or (ii) result in, require or permit the creation or
imposition of any Encumbrance, other than Permitted Encumbrances, upon or with respect to the Purchased Assets or the Assumed Contracts. 
 (f) Brokers. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Purchaser who might be entitled to any fee or commission from Seller in connection with the
transactions contemplated by this Agreement. 
 Section 5.3 “AS IS” TRANSACTION. PURCHASER HEREBY ACKNOWLEDGES AND
AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO (AND SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY) REPRESENTATIONS OR WARRANTIES OF ANY KIND, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PURCHASED
ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES OR ANY OTHER MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE
ENFORCEABILITY, VALIDITY OR SCOPE OF ANY OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE VALUE OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE TRANSFERABILITY OR ASSIGNABILITY OF THE PURCHASED ASSETS,
ASSUMED 

 
CONTRACTS OR ASSUMED LIABILITIES, THE TITLE TO THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE MERCHANTABILITY OR FITNESS OF THE
PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY
DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN
INDEPENDENT INSPECTION AND INVESTIGATION OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AS PURCHASER DEEMED
NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION AND ASSUMPTION OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN, PURCHASER IS DOING SO
BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, PURCHASER WILL ACCEPT THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AT THE CLOSING “AS
IS,” “WHERE IS,” AND “WITH ALL FAULTS.” THE PARTIES HEREBY ACKNOWLEDGE THAT MICRO BEEF CLAIMS THAT CERTAIN OF THE PURCHASED ASSETS INFRINGE ON PATENTS HELD BY MICRO BEEF (WHICH CLAIMS SELLER DISPUTES), AND THE PARTIES HEREBY
AGREE THAT SUCH CLAIMS OR ANY RESOLUTION OF SUCH CLAIMS SHALL NOT IN ANY WAY IMPACT THE PARTIES’ RESPECTIVE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, PURCHASER’S OBLIGATIONS TO PAY THE PURCHASE PRICE TO
SELLER BY CANCELING THE PROMISSORY NOTE AT CLOSING. 
 ARTICLE VI 
 Tax Matters 
 Section 6.1 Transfer Taxes. Purchaser and Seller shall cooperate to
obtain an order of the Bankruptcy Court exempting the sale of the Purchased Assets under this Agreement from sales, use, transfer, stamp, duty and value added Taxes, and other similar Taxes and fees which may be payable by reason of the sale of the
Purchased Assets under this Agreement or the transactions contemplated herein, to the extent such Taxes exist and are applicable to the transactions contemplated herein (collectively, “Transfer Taxes”). In the event that Purchaser and
Seller do not obtain such an exemption order of the Bankruptcy Court and any such Transfer Taxes are assessed at any time thereafter, such Transfer Taxes incurred as a result of the transactions contemplated hereby shall be paid by Seller. Purchaser
and Seller agree to provide each other reasonable assistance in the preparation and filing of any and all required Tax Returns for or with respect to such Transfer Taxes with any and all appropriate taxing authorities. Purchaser and Seller shall
cooperate to minimize the amount of any such Transfer Taxes to the extent reasonably feasible and shall cooperate in providing each other with any appropriate resale exemption certifications and other similar documentation. 

 Section 6.2 Proration of Personal Property Taxes. The parties agree that all property Taxes
imposed on or with respect to the Purchased Assets (including, without limitation, property Taxes payable by the tenant or lessee under any lease) will be pro-rated as of the Closing Date and that, notwithstanding any other provision of this
Agreement, the economic burden of any such property Tax will be borne by Seller for all periods (or portions thereof) through the Closing Date (“Pre-Closing Period”) and by Purchaser for all periods (or portions thereof) after the Closing
Date (“Post-Closing Period”). Accordingly, notwithstanding any other provision of this Agreement, (i) if Seller pays any such property Tax with respect to a Post-Closing Period, Purchaser will reimburse Seller upon demand for the
amount of such property Tax; and (ii) if Purchaser pays any such property Tax with respect to a Pre-Closing Period, Seller will reimburse Purchaser upon demand for the amount of such property Tax. Moreover, Seller agrees that any claim or lien
asserted by the Indian River County (Florida) Tax Collector for property taxes owed with respect to the Pre-Closing Period will attach to the Seller’s cash. 
 Section 6.3 Cooperation. 
 (a) Purchaser and Seller agree to furnish or cause to be furnished to
each other, as promptly as practicable, such information and assistance relating to the Purchased Assets, the Assumed Contracts and the Assumed Liabilities as is reasonably necessary for the preparation and filing of any Tax Return or other required
or optional filings relating to Tax matters, for the preparation for and proof of facts relating to any Tax audit, for the preparation for any Tax protest, for the prosecution or defense of any suit or other proceeding relating to Tax matters and
for the answer to any governmental or regulatory inquiry relating to Tax matters. 
 (b) Purchaser agrees to retain possession, at its own
expense, of all accounting, business, financial and Tax records and information (i) relating to the Purchased Assets, the Assumed Contracts or the Assumed Liabilities that are in existence on the Closing Date and transferred to Purchaser
hereunder and (ii) coming into existence after the Closing Date that relate to the Purchased Assets, the Assumed Contracts or the Assumed Liabilities before the Closing Date, for a period of at least three years from the Closing Date;
provided, however, that the Purchaser, until the expiration of a period ending six years after the Closing Date, shall not dispose of any accounting, business, financial and Tax records and information relating to the Purchased Assets,
the Assumed Contracts or the Assumed Liabilities without first notifying the Seller of its intent to do so and giving the Seller a reasonable time to retrieve such records or information. In addition, from and after the Closing Date, Purchaser
agrees that it will provide access to Seller and its attorneys, accountants and other representatives (after reasonable notice, during normal business hours and in a manner so as not to interfere with the normal business operations of Purchaser), to
the books, records, documents and other information relating to the Purchased Assets or the Assumed Liabilities as Seller may reasonably deem necessary to (A) properly prepare for, file, prove, answer, prosecute or defend any Tax Return, Tax
audit, Tax protest, suit or proceeding or (B) administer or complete the Bankruptcy Case. 
 Section 6.4 Allocation of Purchase
Price. The Purchase Price and the amount of the Assumed Liabilities (to the extent they constitute part of the amount realized by Seller for federal 

 
income tax purposes) shall be allocated among the Purchased Assets by the parties as soon as practicable after the Closing Date in compliance with the
allocation method required by Section 1060 of the Internal Revenue Code, and the parties shall cooperate to comply with all procedural requirements of Section 1060 and the regulations thereunder. Purchaser and Seller agree that they will
not take nor will either of them permit any affiliated person to take, for income tax purposes, any position inconsistent with such allocation; provided, however, that (i) Purchaser’s cost for the Purchased Assets may be greater
than the amount allocated to reflect Purchaser’s capitalized acquisition costs not included in the total amount so allocated, and (ii) Seller’s amount realized may be less than the amount allocated to reflect Seller’s costs that
reduce the amount realized. 
 ARTICLE VII 
 Covenants And Additional Agreements 
 Section 7.1 Approval Proceedings. 
 (a) Seller shall use its commercially reasonable efforts to obtain, and shall refrain from knowingly taking any action that would be likely to delay,
prevent, impede or result in the revocation of the entry by the Bankruptcy Court of, the Auction Procedures Order and the Sale Order. 
 (b)
Seller shall provide notice of the proposed sale of the Purchased Assets, in form and substance reasonably acceptable to Purchaser and in such manner as may be required by Law, to Seller’s creditors, all Governmental Authorities that have filed
a notice of appearance in the Bankruptcy Case, all parties to the Assumed Contracts and all parties entitled to notice of the Sale Motion by such date as shall allow sufficient time for the Sale Order to be entered by the Bankruptcy Court on
March 15, 2007. 
 Section 7.2 Operation of the Business. During the period from the execution of this Agreement until the
Closing Date, Seller agrees that it will conduct the businesses supported by the Purchased Assets and the Assumed Contracts in the same manner as would a reasonable person in similar circumstances, subject to applicable bankruptcy and creditor
protection provisions, which such conduct shall take into account Seller’s current business and financial situation but, to the fullest extent possible, shall be in accordance with Seller’s past custom and practice. 
 Section 7.3 Access to Information; Confidentiality. 
 (a) Seller and its officers, employees, auditors and other agents shall afford Purchaser and its Affiliates, officers, employees, auditors, representatives and other agents (collectively, “Purchaser
Representatives”) reasonable access during normal business hours and in a manner so as not to interfere with the normal business operations of Seller to the officers, employees, agents, properties, offices, plants and other facilities of Seller
and to all books and records of Seller, and shall furnish Purchaser with all financial, operating and other data and information with respect to the Purchased Assets and properties of Seller as Purchaser, its respective officers, employees or agents
may reasonably request. 

 (b) Seller shall promptly provide Purchaser with drafts of all documents, motions, orders, filings or
pleadings that Seller proposes to file with the Bankruptcy Court that relate to (i) this Agreement or the transactions contemplated hereunder, (ii) entry of the Auction Procedures Order, (iii) entry of the Sale Order and (iv) the
sale of the Purchased Assets by Seller and assignment and assumption of the Assumed Contracts and Assumed Liabilities by Purchaser, and all such documents, motions, orders, filings, or pleadings shall be in a form and substance reasonably acceptable
to Purchaser. 
 (c) Until the Closing Date, except as may be required by Law, neither Purchaser nor any of Purchaser Representatives will
disclose to any third party the information concerning Seller that it may have acquired from Seller without the prior written consent of Seller; provided, however, that Purchaser Representatives may disclose any such information which
(i) is or becomes generally available to the public other than as a result of a breach of this Agreement by the Purchaser Representatives, (ii) was within the possession of the Purchaser Representatives prior to its being furnished to the
Purchaser Representatives by Seller, provided that the source of such information was not known by the Purchaser Representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality
to Seller or any other party or (iii) is or becomes available to the Purchaser Representatives on a nonconfidential basis from a source other than Seller, provided that such source was not known by the Purchaser Representatives to be bound by a
confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, Seller or any other party with respect to such information. If the transactions contemplated hereby are not consummated, the Purchaser
Representatives will return to Seller or destroy the confidential information. In the event that Purchaser or any Purchaser Representative is required by Law or legal process to disclose all or any part of any such confidential information,
Purchaser shall promptly notify Seller of the existence, terms and circumstances surrounding such a request so that Seller may seek an appropriate protective order, at Seller’s sole cost and expense, prior to Purchaser’s disclosure of such
information. 
 Section 7.4 Notification of Certain Matters. Seller and Purchaser shall give prompt notice to one another of
(i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any representation or warranty contained in this Agreement to be materially untrue or inaccurate or (ii) any failure of
Seller or Purchaser to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. 
 Section 7.5 Further Action. 
 (a) Upon the terms and subject to the conditions hereof, each of the parties hereto shall
use their commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this
Agreement as promptly as practicable. 
 (b) Each party hereto agrees to cooperate in obtaining any other consents and approvals that may be
required in connection with the transactions contemplated by this Agreement; provided, however, that no party hereto shall be required to compensate any third party to obtain any such consent or approval. 

 Section 7.6 Litigation. Seller and Purchaser will promptly supply to the other party copies
of all litigation or legal proceedings pertaining to the Purchased Assets, Assumed Contracts or Assumed Liabilities which may arise subsequent to the execution of this Agreement but prior to the Closing Date and also will advise the other party
promptly in writing of any written threat of litigation or other legal proceeding (including actions or motions in the Bankruptcy Court) which is made between the date of this Agreement and the Closing Date pertaining to the Purchased Assets,
Assumed Contracts or Assumed Liabilities or Seller’s or Purchaser’s ability to perform its obligations under this Agreement. 
 Section 7.7 Filings and Authorizations. Each of Seller and Purchaser, as promptly as practicable, shall (i) make, or cause to be made, all such filings or submissions under Laws applicable to them as may be required for
them to consummate the transactions contemplated herein, (ii) use their commercially reasonable efforts to obtain, or cause to be obtained, all authorizations, approvals, consents and waivers from all Persons and Governmental Authorities
necessary to be obtained by them in order for them to consummate such transactions and (iii) use their commercially reasonable efforts to take, or cause to be taken, all other actions necessary, proper or advisable in order for them to fulfill
their respective obligations hereunder. 
 Section 7.8 Removal of Purchased Assets. Within sixty (60) days after the
Closing, Purchaser shall cause the Purchased Assets to be removed from Seller’s premises at its sole cost and expense; provided, however, that the Purchaser shall pay to the Seller a pro rata portion of the Seller’s monthly
rent expense beginning on the Closing Date and ending on the date on which all of the Purchased Assets are removed from the Seller’s premises (to the Seller’s reasonable satisfaction), for the Seller’s leased office space located at
10305 102nd Terrace in Sebastian, Florida. The Purchaser’s pro rata portion of the Seller’s monthly rent expense shall be no more than $4,000 per month, which is approximately 50% of the Seller’s monthly rent expense (representing the
approximate percentage of the total rental office space that is utilized by the Purchased Assets, including, without limitation, any employees associated therewith); provided, however, that in the event the monthly rent expense with
respect to the office space is discounted at any time, the Purchaser’s pro rata portion of the rent expense shall be reduced accordingly. Purchaser further agrees that from and after the Closing Date risk of loss of the Purchased Assets shall
reside with the Purchaser, and Purchaser shall indemnify and hold harmless Seller, its officers, directors, stockholders and agents, from and against any and all loss, liability or expense (including attorneys’ fees) arising from or related to
the presence of the Purchased Assets on, or the removal of the Purchased Assets from, Seller’s premises. 
 Section 7.9 Cash
Collateral. Purchaser agrees to allow Seller to use Seller’s cash collateral, subject to a budget, attached hereto as Exhibit C, and a cash collateral order, attached hereto as Exhibit D, that are reasonably satisfactory to
Purchaser, until March 15, 2007. 
 Section 7.10 Employees. Seller and Purchaser agree and acknowledge that Purchaser shall
not (except as provided in this Section 7.10), on the Closing Date, be obligated to offer employment to or hire any of Seller’s employees associated with the Purchased Assets and the Assumed Contracts and that Seller may, in its sole and
absolute discretion, terminate, at any time 

 
on or after the Closing Date, any of Seller’s employees associated with the Purchased Assets and the Assumed Contracts. Purchaser hereby agrees that,
prior to the date that is 60 days following the Closing Date, it will consider offering employment to Seller’s employees associated with the Purchased Assets and the Assumed Contracts, at base salaries that are not less than the employees’
base salaries in effect on the date each such employee separates from service from Seller, such that Seller would not have any obligations under Seller’s Severance Plan to those Seller employees offered employment by Purchaser pursuant to this
Section 7.10. 
 ARTICLE VIII 
 Conditions To The Closing 
 Section 8.1 Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the Closing shall be subject to the prior and/or simultaneous satisfaction or written waiver by Purchaser of each of the following conditions: 
 (a) Sale Order. The Sale Order (i) shall have been entered by the Bankruptcy Court, (ii) shall not have been stayed, modified, amended, dissolved, revoked or rescinded without Purchaser’s consent and
(iii) shall be in full force and effect on the Closing Date. 
 (b) Representations and Warranties. The representations and warranties
of Seller set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that to the extent such representations and
warranties expressly speak as of an earlier date, such representations and warranties shall be true and correct in all material respects as of such specified date), and Purchaser shall have received a certificate, dated the Closing Date and signed
by an officer of Seller, to that effect. 
 (c) Covenants. Seller shall have performed in all material respects all of the obligations,
covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and Purchaser shall have received a certificate, dated the Closing Date and signed by an officer of Seller, to that effect. 
 (d) No Governmental Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other Governmental Order (whether temporary, preliminary or permanent) that is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise restraining or prohibiting consummation of such
transactions. 
 (e) Closing Deliveries. Seller shall have delivered or caused to be delivered to Purchaser each of the items listed in
Section 9.2 hereof. 
 (f) No Termination. This Agreement shall not have been terminated pursuant to Section 10.1. 
 Section 8.2 Conditions to Obligations of Seller. The obligations of Seller to effect the Closing shall be subject to the prior and/or
simultaneous satisfaction or written waiver by Seller of each of the following conditions: 

 (a) Sale Order. The Sale Order (i) shall have been entered by the Bankruptcy Court, (ii) shall
not have been stayed, modified, amended, dissolved, revoked or rescinded without Seller’s consent and (iii) shall be in full force and effect on the Closing Date. 
 (b) Representations and Warranties. The representations and warranties of Purchaser set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that to the extent such representations and warranties expressly speak as of an earlier date, such representations and
warranties shall be true and correct in all material respects as of such specified date), and Seller shall have received a certificate, dated the Closing Date and signed by an officer of Purchaser, to that effect. 
 (c) Covenants. Purchaser shall have performed in all material respects all of the obligations, covenants and agreements required to be performed by it
under this Agreement at or prior to the Closing Date, and Seller shall have received a certificate, dated the Closing Date and signed by an officer of Purchaser, to that effect. 
 (d) No Governmental Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other Governmental Order (whether temporary, preliminary or permanent) that is in effect and has the effect of making the transactions contemplated by this agreement illegal or otherwise restraining or prohibiting consummation of such
transactions. 
 (e) Closing Deliveries. Purchaser shall have delivered or caused to be delivered to Seller each of the items listed in
Section 9.3 hereof. 
 (f) No Termination. This Agreement shall not have been terminated pursuant to Section 10.1. 
 ARTICLE IX 
 Closing 

Section 9.1 Closing. The closing (the “Closing”) of the transactions contemplated in this Agreement shall take place no later
than three Business Days following the Sale Hearing provided that the Bankruptcy Court enters an order modifying the ten-day stay contained in Bankruptcy Rule 6004(g), failing which such date shall be on the first Business Day after the stay expires
or on an earlier date as mutually agreed to by Seller and Purchaser (the “Closing Date”) at the offices of Greenberg Traurig, P.A., located at 1221 Brickell Avenue, Miami, Florida 33131 or such other time and place as the parties may
agree. 
 Section 9.2 Documents to be Delivered at Closing by Seller. At the Closing, Seller shall properly execute (if
necessary) and deliver (or cause to be delivered) to Purchaser: 
 (a) A Secretary’s Certificate in customary form. 
 (b) The Bill of Sale, duly executed by Seller. 

 (c) The Assignment and Assumption Agreement with respect to the Assumed Contracts and Assumed
Liabilities, duly executed by Seller. 
 (d) A Transition Services Agreement in the form attached as Exhibit E. 
 (e) Certified copies of the Sale Order and a copy of the docket sheet for the Bankruptcy Case showing its entry and that no order has been entered that
modifies, amends, stays, dissolves, revokes or rescinds such order and that no motion seeking any such relief has been filed. 
 (f) A
certificate of an officer of Seller referred to in Section 8.1(b) and (c) in the form reasonably acceptable to Purchaser. 
 (g) A
cross-receipt for (i) the Purchase Price paid by Purchaser to Seller at the Closing by delivery of the Promissory Note marked “canceled, paid in full” by Purchaser to Seller and (ii) the Purchased Assets, Assumed Contracts and
Assumed Liabilities purchased and assumed by Purchaser at Closing. 
 (h) Such other documents and instruments as are contemplated in this
Agreement or as Purchaser or Purchaser’s counsel may reasonably request in order to evidence or consummate the transactions contemplated by this Agreement or to effectuate the purpose or intent of this Agreement. 
 Section 9.3 Documents to be Delivered at Closing by Purchaser. At the Closing, Purchaser shall properly execute (if necessary) and deliver
(or caused to be delivered) to Seller: 
 (a) A Secretary’s Certificate in customary form. 
 (b) Original Promissory Note marked “canceled, paid in full.” 
 (c) A UCC termination statement terminating UCC financing statement 63597192 filed with the Delaware Secretary of State on October 18, 2006. 
 (d) Prepayment Letter from Purchaser to Seller noting the full amount outstanding (including principal, accrued interest and fees) due under the
Promissory Note as of the Closing Date. 
 (e) The Assignment and Assumption Agreement with respect to the Assumed Contracts and Assumed
Liabilities, duly executed by Purchaser. 
 (f) A Transition Services Agreement in the form attached as Exhibit E. 
 (g) A certificate of an officer of Purchaser referred to in Section 8.2(b) and (c) in the form reasonably acceptable to Seller. 
 (f) A cross-receipt for (i) the Purchase Price paid by Purchaser to Seller at the Closing by delivery of the Promissory Note marked “canceled,
paid in full” by Purchaser to Seller and (ii) the Purchased Assets, Assumed Contracts and Assumed Liabilities purchased and assumed by Purchaser at Closing. 

 (g) Such other documents and instruments as are contemplated in this Agreement or as Seller or
Seller’s counsel may reasonably request in order to evidence or consummate the transactions contemplated in this Agreement or to effectuate the purpose or intent of this Agreement. 
 ARTICLE X 
 Termination, Amendment And Waiver 
 Section 10.1 Termination. Notwithstanding anything herein to the contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing: 
 (a) by Purchaser or Seller if the Closing shall not have occurred on or before
April 15, 2007, (provided that the right to terminate this Agreement under this Section 10.1(a) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or has resulted in, the
failure of the Closing to occur on or before such date). 
 (b) by mutual written consent of Purchaser and Seller; 
 (c) by Purchaser and/or Seller, if Seller obtains, pursuant to the Auction Procedures Order, a binding offer at the Sale Hearing for the Purchased Assets
that is the highest and best offer received, and will enable Seller to pay to Purchaser an amount equal to the entire Purchase Price to Purchaser, in immediately available funds, at the closing with such other bidder; 
 (d) by Purchaser or Seller, if the Bankruptcy Court or any other court of competent jurisdiction in the United States or other Governmental Authority
shall have issued an order, decree, ruling or taken any other action (which order, decree, ruling or other action the parties hereto shall use commercially reasonable efforts to lift) restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action shall have become final and non-appealable; 
 (e) by Purchaser
if there is a material breach by Seller of any representation, warranty or covenant of Seller under this Agreement and Seller is unable or shall fail or refuse to cure such breach within 30 days after written notice from Purchaser specifying such
breach; and 
 (f) by Seller if there is a material breach by Purchaser of any representation, warranty or covenant of Purchaser under this
Agreement and Seller is unable or shall fail or refuse to cure such breach within thirty 30 days after written notice from Seller specifying such breach. 
 Section 10.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 10.1 hereof, this Agreement shall become void and have no effect and there shall be no
liability on the part of any party hereto or its Affiliates, directors, officers, 

 
stockholders or agents; provided, however, that, if this Agreement is terminated because of a breach of this Agreement by the non-terminating
party or because one or more of the conditions to the terminating party’s obligations under this Agreement is not satisfied as a result of the non-terminating party’s failure to comply with its obligations under this Agreement, then the
terminating party’s right to pursue all legal remedies will survive such termination unimpaired. 
 ARTICLE XI 
 Miscellaneous 
 Section 11.1 Survival. Except for the covenants and agreements of the parties that are to be performed after the Closing Date, none of the representations, warranties, covenants and agreements of the parties contained in this
Agreement or in any certificate or other document delivered by the parties prior to or at the Closing shall survive the Closing. 
 Section 11.2 Expenses. Except as otherwise specifically set forth in this Agreement and in the Auction Procedures Order, Seller and Purchaser shall each bear the expenses incurred by them in connection with the preparation and
negotiation of this Agreement and the consummation of the transactions contemplated in this Agreement. Notwithstanding the foregoing, and pursuant to the terms of the Auction Procedures Order, Purchaser may recover fees and costs as part of its
allowed secured claim, as provided under applicable law. 
 Section 11.3 Governing Law; Forum. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of Florida, without regard to conflicts of laws principles, and, to the extent applicable, the Bankruptcy Code. If the Bankruptcy Court does not have subject matter jurisdiction over any
action or proceeding arising out of or relating to this Agreement, then each party (i) agrees that all such actions or proceedings shall be heard and determined in federal court of the United States for the Southern District of Florida,
(ii) irrevocably submits to the jurisdiction of such court in any such action or proceeding, (iii) consents that any such action or proceeding may be brought in such court and waives any objection that such party may now or hereafter have
to the venue jurisdiction or that such action or proceeding was brought in an inconvenient court and (iv) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 11.4 (provided that nothing herein shall affect the right to effect service of process in any other manner permitted by
Florida Law). 
 Section 11.4 Notices. All communications, notices and disclosures required or permitted by this Agreement shall
be in writing and shall be deemed to have been given when delivered personally or by messenger or one Business Day after having been sent by overnight delivery service, or three Business Days after the date when mailed by registered or certified
United States mail, postage prepaid, return receipt requested, or when received via telecopy, telex or other electronic transmission, in all cases addressed to the person for whom it is intended at his address set forth below or to such other
address as a party shall have designated by notice in writing to the other party. 
 Section 11.5 Headings. The headings
contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 

 Section 11.6 No Assignment; Benefit to Third Parties. 
 (a) No party may assign its rights and obligations under this Agreement without the prior written consent of the other party, except that Purchaser may
assign all or any of its rights and obligations hereunder to any Affiliate of Purchaser upon the execution of a written instrument whereby any such assignee agrees to assume all of the assignor’s obligations hereunder and be bound by all the
terms and conditions of this Agreement; provided further that any such assignment shall not relieve the Purchaser of its obligations hereunder. This Agreement shall be binding on and inure to the benefit of the parties and their respective
successors and permitted assigns. 
 (b) The terms and provisions of this Agreement are intended solely for the benefit of the parties hereto
and their respective successors and permitted assigns and are not intended to, and shall not, confer third-party beneficiary rights upon any other Person. 
 Section 11.7 Entire Agreement. This Agreement, including the Exhibits and the Schedules attached to it, is and shall be deemed to be the complete and final expression of the agreement between the parties
as to the matters contained in and related to this Agreement and supersedes any previous agreements between the parties pertaining to such matters, including, without limitation, the Letter of Intent, dated February 14, 2007, between the
parties hereto. 
 Section 11.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, taken together, shall be considered one and the same agreement. 
 Section 11.9 Waiver. At any time
prior to the Closing Date, any party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other party hereto, (ii) waive any inaccuracies in the representations and warranties contained herein
or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall only be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any such rights. The waiver by any party of any breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent or similar breach. 
 Section 11.10 Amendment. This Agreement may only be amended by written
agreement executed by each of the parties hereto. 
 Section 11.11 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof, and this Agreement shall be interpreted so as to most fully give effect to its terms and still be valid
and enforceable; provided, however, that any provision altered pursuant to this Section 11.11 shall not result in a material adverse impairment of the rights or obligations of any party hereto. 
 Section 11.12 Further Assurances. From time to time after the Closing Date, at either party’s request and without further consideration,
the non-requesting party shall execute and deliver or cause to be executed and delivered such further instruments of conveyance, 

 
assignment and transfer and shall take such other action as the requesting party may reasonably request in order more effectively to convey, transfer, reduce
to possession or record title to any of the Purchased Assets purchased pursuant to this Agreement. At either party’s request, the non-requesting party shall cooperate and use its commercially reasonable efforts to have its officers, employees
and agents cooperate with the requesting party on or after the Closing Date by furnishing information, evidence, testimony and other assistance in connection with any actions, proceedings, arrangements or disputes involving the requesting party and
which are based on contracts, leases, arrangements or acts of the non-requesting party which were in effect or occurred on or prior to the Closing Date. 
 [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized representatives under seal as of the day and year first above written. 
  

					
	Seller:	 	 
		
	EMERGE INTERACTIVE, INC.	 	
	10305 102nd Terrace	 	
	Sebastian, Florida 32958	 	
			
	By:	 	 /s/ David C. Warren
	 	[SEAL]
	 Its:
	 	 President & CEO
	 	
			
		 	Seller’s Counsel:	 	
			
		 	Melvin E. Tull, III	 	
		 	Hunton & Williams LLP	 	
		 	Riverfront Plaza, East Tower	 	
		 	951 East Byrd Street	 	
		 	Richmond, Virginia 23219-4074	 	

  

					
	Purchaser:	 	 
		
	BFT ACQUISITION, LLC	 	
	115 S. 14th Street	 	
	Geneva, Nebraska 68361	 	
		
	By:	 	The Biegert Family Irrevocable Trust, Dated June 11, 1998, its sole member
			
	By:	 	 /s/ Judith Ackland
	 	[SEAL]
	Its:	 	 Trustee
	 	
			
		 	Purchaser’s Counsel:	 	
		
		 	Todd A. Richardson
		 	Blackwell Sanders Peper Martin LLP
		 	1620 Dodge St., Suite 2100
		 	Omaha, Nebraska 68102

 Schedule 3.1(a)(i) 
 Accounts Receivable 
 1. Tom L. Tippens - PCC Notes Receivable - dated 8 March 2005

 2. Tim Stump - Agreement to Suspend Enforcement of Judgment - dated 1 March 2004 
 3. Luis Aree Suarez - Note Receivable - dated 3 July 2003 
  

 Schedule 3.1(a)(ii) 
 Excluded Assets 
 The Food Safety Technologies (“FST”) Assets include the following:

  

	 	•	 	 Inventory—raw materials related to CIS and Solo Products 

  

	 	•	 	 Prepaid royalties to both Iowa State University Research Foundation (“ISURF”) and Clare Chemical 

  

	 	•	 	 Fixed assets, including, without limitation: 

  

	 	Ø	Construction in progress for CIS units; 

  

	 	Ø	VerifEYE manufacturing tooling and molds; and 

  

	 	Ø	VerifEYE demo units. 

  

	 	•	 	 CIS units under lease at Plainview and Ft. Morgan 

  

	 	•	 	 Licenses for intellectual property from ISURF and Clare Chemical 

  

	 	•	 	 Equipment leased pursuant the Shimadzu capital lease 

  

 Schedule 3.1(b) 
 Assumed Contracts 
 1. Memorandum of Understanding by and between eMerge Interactive, Inc. and Cattleman’s
Choice Loomix, LLC, dated as of August 29, 2005. 
 2. Memorandum of Understanding by and between eMerge Interactive, Inc. and ADM-Alliance Nutrition,
Inc., dated as of February 25, 2006. 
 3. Memorandum of Understanding by and between eMerge Interactive, Inc. and Beef Marketing Group, dated as of
September 12, 2006. 
 4. Cooperative Marketing Agreement by and between eMerge Interactive, Inc. and Power Genetics, dated as of July 7, 2006.

 5. Contractor Agreement by and between eMerge Interactive, Inc. and Missy Bonds, dated as of August 1, 2006. 
 6. Contractor Agreement by and between eMerge Interactive, Inc. and Larry Roberts, dated as of August 31, 2006. 
 7. Contractor Agreement by and between eMerge Interactive, Inc. and South Texas Animal ID, dated as of October 24, 2006. 
 8. Contractor Agreement by and between eMerge Interactive, Inc. and Steven Searcy, dated as of December 14, 2006. 
 9. Contractor Agreement by and between eMerge Interactive, Inc. and Owen Johnson, dated as of December 15, 2006. 
  

 Schedule 5.1(e) 
 Seller Consents 
 NONE. 
  

 Schedule 5.2(e) 
 Purchaser Consents 
 NONE. 
  

 Exhibit A 
 Auction Procedures Order 
 UNITED STATES BANKRUPTCY COURT 
 SOUTHERN DISTRICT OF FLORIDA 
 WEST
PALM BEACH DIVISION 
 WWW.FLSB.USCOURTS.GOV 
 IN RE: 
  

							
	EMERGE INTERACTIVE, INC.	 	 	  	 	  	CASE NO. 07-10932-BKC-SHF
				
	 Debtor.
	 		  		  	CHAPTER 11
	  
	 	/	  		  	

 ORDER GRANTING, IN PART, AND DENYING, IN PART, DEBTOR’S 
 EMERGENCY MOTION FOR AN ORDER APPROVING BID 
 PROTECTION AND SALE PROCEDURES AND NOTICE OF HEARING 
 THIS CASE came on for hearing on
February 15, 2007 at 2:00 p.m. (the “Hearing”), upon the Emergency Motion of eMerge Interactive, Inc., the debtor-in-possession (“eMerge” or the “Debtor”), for an Order Approving Bid Protection and Sale Procedures
filed with this Court on February 14, 2007 (the “Motion”). 
 The Motion seeks entry of an order: (i) authorizing and
approving a break up fee in the amount of $30,000.00 in favor of the Biegert Family Irrevocable Trust, Dated June 11, 1998 (the “Biegert Trust”), the proposed buyer of the Debtor’s assets; (ii) authorizing and approving an
initial minimum overbid for competing offers in the amount of $10,000.00; and (iii) establishing bidding procedures in connection with the hearing on the sale of substantially all of the Debtor’s assets related to its CattleLog business
(“CattleLog Assets”). 
 The Hearing was scheduled as an emergency hearing, and notice of the Hearing was provided by electronic
transmission, facsimile, and/or United States first class mail to the secured creditors, the twenty largest unsecured creditors, and the United States Trustee. 
  

 1 

 Upon consideration of: (i) the Motion; (ii) the arguments of counsel for the Debtor, counsel
for the Biegert Trust, counsel for MicroBeef Technologies, Inc. (“MicroBeef”) and the United States Trustee; and (iii) other matters of record, the Court issues the following findings of fact and conclusions of law: 
 A. The Court has jurisdiction over this case under 28 U.S.C. § 1334(b). 
 B. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). 
 C. It is in the best interest of the Debtor to sell the CattleLog Assets in accordance with the terms of the Motion. 
 THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 
 1. The Motion is granted, in part, and
denied, in part, to the extent provided herein. 
 2. The Biegert Trust shall not be entitled to a break up fee. This is without prejudice to
the claim of the Biegert Trust to recover fees and costs as part of its allowed secured claim, as provided under applicable law. 
 3. The
Biegert Trust’s offer to purchase the CattleLog Assets is subject to higher and better offers which would result in consideration to the Debtor in an amount at least $10,000.00 greater than the amount offered under that certain letter of intent
by and between the Debtor and the Biegert Trust dated February 14, 2007 (the “LOI”). 
 4. This Court will conduct a
hearing on March 15, 2007 at 1:30 p.m. Eastern Standard Time (“Sale Hearing”) at the following location: Flagler Waterview Building, 1515 N. Flagler Dr., Room 801, Courtroom B, West Palm Beach, FL 33401, to consider the
Debtor’s Motion for an Order Approving Sale of Assets to the Biegert Trust Free and Clear of All Liens, Claims, and Encumbrances (“Sale Motion”) and will consider any higher or better 

  

 2 

 
offers to purchase the CattleLog Assets, provided such offers are made in accordance with the procedures outlined in this Order. 
 5. Any party other than Biegert (“Competing Bidder”) who intends to submit a competing offer to purchase the CattleLog Assets to be considered
at the Sale Hearing must comply with the following procedures: 
  

	 	(a)	Competing Bidders must deliver to eMerge and file with the Court no later than 4:30 p.m. Eastern Standard Time on March 7, 2007 (“Bid Deadline”) a purchase offer
together with a form of definitive agreement similar to the one executed by the Biegert Trust (with a markup indicating changes). The Biegert Trust and Debtor shall finalize the Definitive Agreement on or prior to March 1, 2007. A copy of the
definitive agreement with the Biegert Trust to purchase the CattleLog Assets (“Definitive Agreement”) may be obtained by contacting counsel for the Debtor; 

  

	 	(b)	All purchase offers must equal or exceed the Purchase Price set forth in the LOI, plus $10,000.00. The Purchase Price in the LOI is the amount necessary to satisfy in full, as of
the Closing Date, any and all amounts (including principal, accrued interest and fees, if any) outstanding under that certain Revolving Loan Agreement, Promissory Note and Security Agreement, dated October 16, 2006, by and between eMerge and
Biegert (the “Loan Agreement”). The amount of the Biegert secured claim as of the anticipated Sale Hearing Date of March 15, 2007, is $1,534,744.42 in principal and interest as of March 15, 2007 (plus a per diem of $344.63 from
March 15, 2007 until paid in full), plus attorneys fees and costs in an amount to disclosed by Biegert and approved by the Court at the commencement of the Sale Hearing on March 15, 2007. 

  

 3 

	 	(c)	The Court will conduct an auction at the Sale Hearing among all Competing Bidders who have complied with all aspects of this paragraph 5 (“Qualifying Bidders”);

  

	 	(d)	All Competing Bidders shall pay an escrow deposit of $100,000.00 or put up a letter of credit equivalent, and such deposit shall be submitted prior to the Bid Deadline. Such escrow
deposit shall be held by counsel for the respective Competing Bidder. If a Competing Bidder is not represented by counsel, such Competing Bidder will timely submit the deposit to Debtor’s counsel; 

  

	 	(e)	Other than Debtor’s ability to close and deliver the assets, purchase offers cannot be subject to any conditions, including, but not limited to, any condition based upon the
Competing Bidder’s ability to obtain financing; 

  

	 	(f)	The CattleLog Assets shall be sold without any representations or warranty of any type, except for those specifically enumerated in the Definitive Agreement;

  

	 	(g)	All Competing Bidders conducting due diligence of the Debtor must first execute an agreement acknowledging that all material obtained through such due diligence is confidential and
such shall not be disclosed or used for any purpose other than evaluating an offer as described herein (“Confidentiality Agreement”). 

 THE OBLIGATIONS IMPOSED UPON COMPETING BIDDER THROUGH THE CONFIDENTIALITY AGREEMENT ARE INCORPORATED HERE AS IF FULLY SET FORTH AND, AS SUCH, CONSTITUTE AN ORDER OF THIS COURT. IN ADDITION TO ANY OTHER REMEDIES
AVAILABLE, THE COURT RESERVES JURISDICTION TO ENFORCE THE CONFIDENTIALITY AGREEMENT, INCLUDING AFTER A CLOSING OF THE SALE OF THE CATTLELOG ASSETS. 
  

 4 

 6. Any Competing Bidder who complies with all procedures provided in this Order shall be deemed a
Qualified Bidder and as such will be entitled to increase its bid at the Sale Hearing. Biegert and MicroBeef are Qualified Bidders and will be entitled to increase their respective bids at the Sale Hearing. Notwithstanding the Court’s
recognition of MicroBeef as a Qualified Bidder, MicroBeef must comply with the procedures set forth in this Order. 
 7. The Debtor will
provide all Qualified Bidders twenty-four hours notice of any other person/entity becoming a Qualified Bidder. 
 8. Objections to any
submitted bid or the Sale Motion must be filed with the Court no later than 4:30 p.m. Eastern Standard Time on March 12, 2007. 
 9.
Biegert, MicroBeef, and any Competing Bidder shall keep confidential any information obtained from the Debtor, any other party, or their respective attorneys, representatives, employees, or affiliates in connection with due diligence conducted
related to the sale of the CattleLog Assets. Notwithstanding the sale of the CattleLog Assets, the Court maintains jurisdiction to enforce the provisions of this Order. 
 10. All Competing Bidders shall be permitted to speak with the Debtor’s current employees regarding matters strictly related to the CattleLog Assets as a part of such Competing Bidder’s due diligence,
however, Competing Bidders shall be prohibited from making a binding offer of post-sale employment until such Competing Bidder’s bid is named the highest and best by the Court. Moreover, MicroBeef is prohibited from discussing any claim of
alleged patent infringement by Debtor with such employees . 
 11. To the extent such agreement exists, any confidentiality agreement between
the Debtor and any current or past employee will be included in the CattleLog Assets. 
  

 5 

 12. The Debtor shall disclose to Competing Bidders that it is aware that MicroBeef alleges a claim of
patent infringement by Debtor, and that the Debtor disputes such claim. 
 13. The Debtor is not attempting to sell, and is therefore not
selling, the CattleLog Assets free and clear of any prospective patent or patent infringement claims asserted by MicroBeef. Consequently, any purchaser of the CattleLog Assets takes such assets with notice of a possible future claim of patent
infringement by MicroBeef; provided, however, the purchaser is not assuming any liabilities for alleged damages related to patent infringement which arise on or before closing of the sale of the CattleLog Assets. 
 14. This Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order. 
 Submitted by: 
 Jimmy D. Parrish, Esq. 
 R. Scott Shuker, Esq. 
 Latham, Shuker, Barker, Eden & Beaudine, LLP

 390 North Orange Ave., Suite 600 
 Orlando, FL 32801

 Copy furnished to: 
 R. Scott Shuker, Esq. 

John B. Hutton, Esq. 
 (Attorney Shuker is directed to serve conformed
copies of this Order upon all interested parties immediately upon receipt thereof, and to file a Certificate of Service with the Court confirming such service.) 
  

 6 

 Exhibit B 
 Sale Order 
 UNITED STATES BANKRUPTCY COURT 
 SOUTHERN DISTRICT OF FLORIDA 
 www.flsb.uscourts.gov 
 West Palm Beach Division 
  

									
	IN RE:	 	 	 	 	  	 	  	CASE NO.: 07-10932-BKC-SHF
		 		 		  		  	Chapter 11
	 EMERGE INTERACTIVE, INC.,
	 		 		  		  	
					
	 Debtor.
	 		 		  		  	
	  
	 	/	 		  		  	

 ORDER (I) APPROVING SALE OF ASSETS FREE AND CLEAR OF LIENS, CLAIMS 
 AND ENCUMBRANCES TO BFT ACQUISITION, LLC AND (II) APPROVING 
 ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS 
 THIS CAUSE came before the Court on
March 15, 2007, at 1:30 p.m. in West Palm Beach, Florida (the “Hearing”) upon (1) the Motion of the Debtor-in-Possession for an Order Approving Sale of Assets Free and Clear of Liens, Claims and Encumbrances (the “Sale
Motion”) and (2) the Motion of the Debtor-in-Possession for an Order Approving Assumption and Assignment of Leases and Executory Contracts, as such Motion pertains to the Cattlelog contracts (“Motion to Assume and Assign”), both
filed by the Debtor, eMerge Interactive, Inc. (the “Debtor”). Procedurally, the Sale Motion came before the Court upon the Order Granting, in Part, and Denying in Part, Debtor’s Emergency Motion for an Order Approving Bid Protection
and Sale Procedures and Notice of Hearing, entered by the Court on February 23, 2007 (C.P.             ) (the “Bid Procedures Order”). 
 The Bid Procedures Order provided for, among other things, the Debtor’s Cattlelog assets to be sold, pursuant to the terms of the Asset Purchase
Agreement by and between BFT 

  

 1 

 
Acquisition, LLC1 and
eMerge Interactive, Inc. (the “Purchase Agreement”), as filed with the Court on March 1, 2007, free and clear of liens, claims and encumbrances, with any such liens, claims or encumbrances to attach to the proceeds at an auction sale
(the “Auction”) to be held in open court on March 15, 2007, at 1:30 p.m., should Qualifying Bidders (as such term is defined in the Bid Procedures Order) other than the bid of BFT Acquisition, LLC (the “Purchaser’s
Bid”) be timely received by no later than March 7, 2007, at 4:30 p.m. (prevailing Eastern Time) (the “Bid Deadline”), pursuant to Sections 363(b), (f) and (m), and Sections 365(b) and (f). Capitalized terms not otherwise
defined in this Order shall have the meaning ascribed to such terms in the Bid Procedures Order and Purchase Agreement. 
 At the Hearing,
the Court was advised by the Debtor that no Qualified Bids were received in accordance with the Bid Procedures Order. 
 The Court, having
read and considered the Sale Motion and the Motion to Assume and Assign, the terms of the Purchase Agreement, the Bid Procedures Order, [and any objections filed], having obtained certain proffers on the record, having considered arguments of
counsel, and being otherwise duly advised in the premises, hereby finds and concludes as follows: 
 A. The Court has jurisdiction to hear and
determine the Sale Motion, the Motion to Assume and Assign, and all related matters pursuant to 28 U.S.C. §§ 1334 and 157. The Sale Motion, the Motion to Assume and Assign and the relief requested in both are core proceedings pursuant to
28 U.S.C. §§ 157(b)(2)(A), (N) and (O). The statutory predicates for the relief granted herein are Sections 363(b), (f) and (m) and Sections 365(b) and (f) of the Bankruptcy 

	 1
	 The Beigert Family Irrevocable Trust dated June 11, 1998 (the “Trust”) has caused BFT
Acquisition, LLC (“BFT” or the “Purchaser”) to be formed, with the Trust as the sole member of the Purchaser, for the purpose of taking title to the Purchased Assets and assuming the Assumed Contracts and the Assumed Liabilities.

  

 2 

 
Code, as supplemented by Rules 2002, 6004, 9007 and 9014 of the Federal Rules of Bankruptcy Procedure. 
 B. Notice of the hearing on the Sale Motion and the Motion to Assume and Assign was timely and properly given in compliance with the Bid Procedures Order
entered in this case, Bankruptcy Code Sections 102(1) and 363, Bankruptcy Rules 2002 and 6004, and was reasonable and appropriate under the circumstances. 
 C. Under the circumstances, a reasonable opportunity to object or be heard regarding the relief requested in the Sale Motion and the Motion to Assume and Assign has been afforded to all interested parties, including
without limitation (a) all entities who claim any interest in or lien upon the assets to be sold to the Purchaser at the Closing; (b) all governmental taxing authorities who have, or as a result of the sale of the Debtor’s assets may
have, claims, contingent or otherwise, against the Debtor; and (c) all parties who filed requests for notice under Bankruptcy Rule 2002. 
 D. The Court, after consideration of evidence submitted in the form of proffers at the Hearing, determined that Purchaser’s Bid consisting of a credit bid in the amount of
$                    , which represents the entire amount of its secured claims as of the anticipated Closing Date, on the terms set forth in
the Purchase Agreement, was the highest and the best offer for the Purchased Assets (as such term is defined in the Purchase Agreement”). Accordingly, pursuant to the Bid Procedures Order, BFT is the successful bidder. 
 E. The Debtor has demonstrated that the sale of the Purchased Assets to BFT, pursuant to the terms of the Purchase Agreement and this Order is based on
sound business justification, and such a sale is in the best interests of the Debtor’s estate. 
 F. BFT is not an insider or an
affiliate of the Debtor. 
  

 3 

 G. BFT did not engage in any conduct that would allow the sale of the Purchased Assets to be set aside
pursuant to Bankruptcy Code section 363(n). 
 H. The Purchase Agreement was negotiated and has been and is undertaken by the Debtor and BFT
at arm’s length, without collusion and in good faith within the meaning of Section 363(m) of the Bankruptcy Code. As a result of the foregoing, the Debtor and BFT are entitled to the protections afforded under Bankruptcy Code
Section 363(m). 
 I. The Debtor may sell the Purchased Assets free and clear of all liens, claims and encumbrances against the
Purchased Assets because, as required by Bankruptcy Code Section 363(f), the holders of such liens have consented to the sale, subject to any and all liens against the Debtor’s interests and rights in such Purchased Assets, and any related
rights, attaching to the proceeds of the sale. 
 J. The Debtor has authority to execute the Purchase Agreement, together with such
additional documents and instruments that may be reasonably necessary or desirable to implement the Purchase Agreement, and to take such other and further actions as may reasonably be necessary and requested by BFT for the purpose of assigning,
transferring, granting, conveying and conferring the Purchased Assets to BFT and to effectuate the terms and provisions of this Order. 
 K.
Pursuant to the Motion to Assume and Assign, the Debtor has sought the authority to assume and assign to BFT the CattleLog executory contracts set forth on Exhibit A (the “Assumed Contracts”). As set forth in the Purchase Agreement, the
Cure Costs, if any, for each of the Assumed Contracts shall be paid by the Debtor. Pursuant to the Purchase Agreement, BFT may also elect to assume any other contracts of the Debtor relating to the Purchased Assets that are not executory in nature.
Notice of the Motion to Assume and Assign was provided to all 

  

 4 

 
known creditors and all counter-parties to the Assumed Contracts. The Debtor is able to pay the Cure Costs arising from the Assumed Contracts, and BFT, as
the successful bidder, has furnished adequate assurance of future performance of the Assumed Contracts. 
 L. The transactions contemplated
by the Purchase Agreement are determined to be under or in contemplation of a plan of reorganization or liquidation to be confirmed under Section 1129 of the Bankruptcy Code, and therefore, the transfer of the Purchased Assets to BFT and the
related transactions are exempt under Section 1146(c) of the Bankruptcy Code from any transfer, stamp, sales, use or similar tax or any so-called “bulk-sale” law in all necessary jurisdictions related to the sale and transfer of the
Purchased Assets to BFT . 
 Accordingly, it is hereby, 
 ORDERED AND ADJUDGED as follows: 
 1. The Sale Motion is GRANTED. 
 2. The Motion to Assume and Assign is GRANTED. 
 3. [The objections are overruled]. 
 4. The terms, conditions, and transactions contemplated by the Purchase Agreement (as defined
above), are hereby approved in all respects. The sale of the Purchased Assets is authorized under Sections 105, 363(b) and 365 of the Bankruptcy Code, and the Debtor and BFT are authorized and directed to perform their respective obligations
under the Purchase Agreement and related documents. The transactions contemplated by the Purchase Agreement were undertaken by the Debtor and BFT at arm’s length, without collusion and in good faith within the meaning of Section 363(m) of
the Bankruptcy Code and BFT is entitled to the protections of Section 363(m) of the Bankruptcy Code. The transaction contemplated by the Purchase Agreement shall close pursuant to the terms of Section 9.1 of the Purchase Agreement
regardless 

  

 5 

 
of the pendency of any appeal if no stay pending appeal has been issued by any court of competent jurisdiction. 
 5. In compliance with Section 363(f) of the Bankruptcy Code, the Purchased Assets subject to valid and enforceable liens, claims, interests and
encumbrances, will be sold at the Closing free and clear of all such liens, claims, interests and encumbrances, and the liens, claims, interests and encumbrances will attach to the net proceeds of the sale, if any, with the same validity, priority,
force and effect as such liens, claims, interests and encumbrances had upon the Purchased Assets immediately prior to the Closing. Notwithstanding the foregoing, any statutory tangible personal property tax lien of the Indian River County Tax
Collector shall attach to the cash in the Debtor’s estate, with the same validity, priority, force and effect as any such liens had upon the Purchased Assets immediately prior the closing. 
 6. The transactions contemplated by the Purchase Agreement constitute transfers for reasonably equivalent value and fair consideration under the
Bankruptcy Code, the laws of the State of Florida and all other applicable state laws, including those relating to fraudulent conveyance and fraudulent transfers. 
 7. Purchaser shall not be liable in any way (as successor entity or otherwise) for any present or future claims (as defined in Section 101(5) of the Bankruptcy Code) that any third party may have against the
Debtor, including, without limitation, excluded liabilities, product liability, patent infringement and any environmental liability claims. Purchaser shall not assume any liabilities of the Debtor other than the Assumed Liabilities. Third parties
are permanently enjoined and restrained from asserting and prosecuting against Purchaser or its affiliates such present or future claims, or any claims which such third party has against the Debtor or any of Debtor’s affiliates or in connection
with Debtor’s ownership, conduct and operations of the CattleLog business, other than claims on account of the Assumed Liabilities. Absent such exculpation provisions in favor of Purchaser, the sale could not be 

  

 6 

 
consummated, or could be consummated only on terms substantially less favorable to the Debtor’s estates than those stated in the Purchase Agreement.

 8. Pursuant to Sections 363(b), 363(f), 365(b) and 365(f) of the Bankruptcy Code, the Debtor is hereby authorized to assume and assign
each of the Assumed Contracts to BFT at the Closing (together with any other contracts designated by BFT that are not executory in nature). [BFT may elect at any time prior to closing not to assume any or all of the Assumed Contracts, and, to such
extent, the Debtor may file a motion to withdraw the assumption request as to such Assumed Contracts.] BFT is authorized to receive the assignment of the Assumed Contracts at the Closing in accordance with Sections 363 and 365 of the Bankruptcy Code
as of the Closing. 
 9. The Assumed Contracts (together with any other contracts that are not executory in nature), shall be transferred to,
and shall remain in full force and effect and deemed valid and binding for the benefit of BFT in accordance with their respective terms, notwithstanding any provision in such Assumed Contracts (including those of the type described in 11 U.S.C.
§ 365(b)(2) and (f)) that prohibits, restricts, or conditions such assignment or transfer. 
 10. The Debtor has represented that
there are no amounts due under any of the Assumed Contracts, and none of the counter-parties to the Assumed Contracts has raised an objection. Any party that failed to assert a cure claim in response to the Motion to Assume and Assign has waived any
right to seek any cure amount, and is hereby deemed to have consented to a Cure Cost of $0.00. BFT shall assume all obligations of the Debtor arising from and after the Closing under the Assumed Contracts and shall not assume any obligation under
the Assumed Contracts accruing thereunder prior to the Closing. Debtor is ordered to pay any Cure Costs 

  

 7 

 
payable to the other parties to the Assumed Contracts consistent with the terms of the Purchase Agreement, and all parties to the Assumed Contracts shall
have no claim against BFT for such Cure Costs. Upon assumption and assignment of any of the Assumed Contracts, the Debtor and its estate shall be relieved of any liability for breach of such contract whether occurring before or after such assumption
and assignment in accordance with Section 365(k) of the Bankruptcy Code, subject to the Debtor’s obligation to pay any Cure Costs provided for herein. 
 11. Based upon the absence of objection from any other party to the Assumed Contracts, the Court finds that BFT has provided adequate assurance of future performance under each such Assigned Contract. 
 12. This Order shall be binding upon the Debtor, its estate, all creditors, any other affected third parties, including, but not limited to, parties
asserting a claim or interest in the Purchased Assets, and the respective successors and assigns of any of the foregoing, including, but not limited to, any trustee appointed in the Debtor’s chapter 11 case or any subsequent chapter 7
case. 
 13. The transfer of the Purchased Assets to BFT is deemed to be part of a plan pursuant to Section 1146(c) of the Bankruptcy
Code and does not and will not subject the Debtor or BFT, its affiliates or its designees to any liability for a stamp tax or similar tax, including, without limitation, any transfer tax, or pursuant to any so-called bulk transfer law, to the
fullest extent permitted by Section 1146(c) of the Bankruptcy Code. All filing officers shall be, and they hereby are, directed to accept for recording or filing, and to record or file those documents by which the Purchased Assets will be
assigned and conveyed that are intended to be recorded or filed and that are presented to them for recording or filing, immediately upon presentation 

  

 8 

 
thereof, without payment of such taxes, and all recording officers are hereby directed to comply with the provisions of this Order. 
 14. The provisions of Rules 6004(g) and 6006(d) shall not apply to stay consummation of the sale of the Purchased Assets to BFT under the Purchase
Agreement, as contemplated in the Sale Motion and approved by this Order, and the Debtor and BFT are hereby authorized to consummate the transactions contemplated and approved herein immediately upon entry of this Order. 
 15. This Court retains jurisdiction with respect to all matters arising or related to the construction, interpretation or enforcement of this Order.

 ### 
  

 9 

 Submitted by: 
 Scott Shuker,
Esq. 
 Copies furnished to: 
 Scott Shuker, Esq. 
 Latham, Shuker, Barker, Eden & Beaudine, LLP 
 390 N. Orange Avenue,
Ste. 600 
 Orlando, FL 32801-1684 
 John B. Hutton, Esq.

 Greenberg Traurig, P.A. 
 1221 Brickell Avenue 
 21st Floor 
 Miami, FL 33131 
 (Attorney
Shuker is directed to serve conformed copies of this Order upon all creditors and interested parties immediately upon receipt thereof and to file a Certificate of Service with the Court). 
  

 10 

 Exhibit C 
 Budget 
 WEEKLY CASH FORECAST 
  

															
	 	 	 	 	Weeks Ending	 
	 	 	12 -Feb -2007	 	19 -Feb -2007	 	 	26 -Feb -2007	 	 	2 -Mar -2007	 	 	12 -Mar -2007	 
	 AIS Revenues
	 		 	5,500	 	 	5,500	 	 	6,500	 	 	6,500	 
	 Collection of Note Receivable
	 		 			 			 			 	15,000	 
	 CattleLog Sale
	 		 			 			 			 		
	 VerifEye Sale
	 		 			 			 			 		
	 Interest Income
	 		 			 			 	3,000	 	 		
		 		 	 	 	 	 	 	 	 	 	 	 	 
	 Cash Collections (Revenues)
	 		 	5,500	 	 	5,500	 	 	9,500	 	 	21,500	 
		 		 	 	 	 	 	 	 	 	 	 	 	 
	 Payroll Expense
	 		 	—  	 	 	(83,143	)	 	—  	 	 	(76,097	)
	 Legal H&W
	 		 			 			 	—  	 	 	—  	 
	 Legal Bankruptcy
	 		 			 			 			 		
						
	 D&O Insurance
	 		 			 			 	(12,500	)	 	(12,500	)
						
	 Property Rent
	 		 			 			 	(8,000	)	 		
	 Health Insurance - 2007
	 		 			 			 	(15,000	)	 		
	 Dental Insurance
	 		 			 			 	(1,300	)	 		
	 Prop & Worker’s Comp
	 		 			 			 	(6,815	)	 		
	 Liability Insurance
	 		 			 			 	(11,301	)	 		
						
	 Phone
	 		 	(4,600	)	 			 			 		
						
	 Nebutel
	 		 			 	(900	)	 			 		
						
	 Pitney Bowes
	 		 			 	(173	)	 			 		
						
	 Verizon
	 		 			 			 			 	(1,400	)
						
	 IBM
	 		 			 			 			 	(235	)
						
	 Databazaar
	 		 	—  	 	 	—  	 	 			 		
						
	 Iron Mountain
	 		 			 	(192	)	 			 		

  

 1 

															
	 Water
	 		  			 			 			 	(415	)
	 Speednet
	 		  	—  	 	 	—  	 	 			 		
	 FP&L
	 		  			 	(5,000	)	 			 		
	 Waste Management
	 		  			 			 			 	(235	)
	 AllFlex/Inventory
	 		  	(1,500	)	 	(1,500	)	 	(2,000	)	 	(2,000	)
	 VerifEYE Materials
	 		  	(2,000	)	 	(2,000	)	 	(2,000	)	 	(2,000	)
						
	 Employee Travel
	 		  			 			 			 		
						
	 VerifEYE guys
	 		  	(600	)	 	(600	)	 	(400	)	 	(400	)
						
	 Sales Guys
	 		  	(2,500	)	 	(2,500	)	 	(2,500	)	 	(2,500	)
						
	 Allyn’s Cleaning
	 		  			 			 	(1,550	)	 		
						
	 Shipping
	 		  	(500	)	 	(400	)	 	(500	)	 	(400	)
						
	 ADP
	 		  			 	(305	)	 			 	(725	)
						
	 Mellon
	 		  			 			 			 	(1,200	)
						
	 Other Expenses
	 		  	(1,000	)	 	(2,000	)	 	(1,500	)	 	(1,500	)
		 		  	 	 	 	 	 	 	 	 	 	 	 
						
	 Cash Outlays (Expenses)
	 		  	(12,700	)	 	(98,713	)	 	(65,366	)	 	(101,607	)
		 		  	 	 	 	 	 	 	 	 	 	 	 
						
		 	700,323	  	693,123	 	 	599,910	 	 	637,257	 	 	519,803	 
		 	 	  	 	 	 	 	 	 	 	 	 	 	 

  

 2 

 Exhibit D 
 Cash Collateral Order 
 UNITED STATES BANKRUPTCY COURT 
 SOUTHERN DISTRICT OF FLORIDA 
 West
Palm Beach Division 
 www.flsb.uscourts.gov 
  

							
	In re:	 	 	 	 	  	CASE NO. 9:07-bk-10932-SHF
				
	EMERGE INTERACTIVE, INC.,	 		 		  	CHAPTER 11
		 		 		  	
				
	 Debtor.
	 		 		  	
	  
	 	/	 		  	EMERGENCY RELIEF REQUESTED

 EMERGENCY MOTION OF THE DEBTOR-IN-POSSESSION 
 FOR AUTHORITY TO USE CASH COLLATERAL AND 
 REQUEST FOR EMERGENCY PRELIMINARY HEARING 
 AND 
 CERTIFICATE OF NECESSITY OF 
 REQUEST FOR EMERGENCY PRELIMINARY HEARING

 EMERGE INTERACTIVE, INC. (“eMerge” or the “Debtor”), as the debtor and debtor-in-possession, pursuant
to 11 U.S.C. §§363(c)(2)(A) and 363(e) and Federal Rule of Bankruptcy Procedure 4001(b)(1), move for authority to use cash collateral and provide adequate protection to the Biegert Family Irrevocable Trust (“Biegert Trust”) and
request an emergency preliminary hearing and in support thereof states: 
 Section 1.1 Background 
 1. On February 14, 2007 (the “Petition Date”), the Debtor filed a voluntary petition for relief under Chapter 11 of Title 11 of the United
States Code (“Bankruptcy Code”). No trustee has been appointed. The Debtor continues to operate its business and manage its properties as a debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 
  

 1 

 2. As of the date hereof, no creditors’ committee has been appointed in this case. In addition, no
trustee or examiner has been appointed. 
 3. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157(b) and1334.
Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This matter is a core proceeding pursuant to 28 U.S.C. §157(b). 
 4.
The statutory predicates for the relief requested herein are Sections 361 and 363 of the Bankruptcy Code and Rules 2002 and 4001 of the Federal Rules of Bankruptcy Procedure. 
 The Debtor 
 5. eMerge, a Delaware corporation, is a technology company
focusing on the agricultural and meat processing industries. The Debtor’s technologies focus primarily on information-management, individual animal tracking tools and innovative food safety technologies. 
 6. eMerge’s corporate headquarters and manufacturing facility is located in Sebastian, Florida. eMerge employs approximately 24 individuals.

 7. eMerge’s business is divided into two sectors: (i) VerifEYE Food Safety and Inspection Control Business; and
(ii) CattleLog Animal Information Systems Business. 
 8. VerifEYE technology (“VerifEYE”) uses fluorescence-based imaging to
detect organic contaminates which may harbor E. Coli O157:H7, Listeria, Shigella, Norovirus, Hepatitus-A and others found in meat products. eMerge holds an exclusive license for use of VerifEYE. 
 9. CattleLog Animal Information Systems (“CattleLog”) encompasses a suite of animal information products and services ranging from basic,
manual services to complex 

  

 2 

 
automated software. The system allows cattle producers to verify that their animals meet certain specifications that are desirable in the cattle industry.

 Events Leading to Chapter 11 Filing 
 10. eMerge’s business is dependent on the beef industry and has been negatively affected in 2004, 2005 and 2006 by several factors, including: (i) an ongoing trade dispute between the U.S. and Japan; and
(ii) the close of live cattle trade between the U.S. and Canada in late 2003 through mid 2005. These factors have come together to create poor market conditions in key segments of the U.S. beef industry. Consequently, these industry conditions
have caused key industry segments to reduce discretionary capital spending, which, in turn, have caused a material adverse effect on eMerge’s prospects. 
 11. Throughout the last few years eMerge has struggled to increase the revenues of its VerifEYE business, due to slow adoption of the technology within the marketplace. CattleLog sales have generally increased each
year, but acceptance of data provider systems like CattleLog has been much slower than expected. Moreover, the Debtor’s expectation that a national, mandated animal ID system would be put into place following the discovery of Bovine Spongiform
Encephalopathy (“BSE”) has yet to materialize. eMerge has taken a number of steps to decrease operating costs over the last three years, but has never reached a positive operating cash flow position. 
 12. Ultimately, eMerge determined the best alternative to maximize return to all creditors would be to seek protection under Chapter 11 of the Bankruptcy
Code and facilitate a sale of its VerifEYE and CattleLog businesses. 
 Cash Collateral and the Relief Sought by the Debtor

  

 3 

 13. In order to maximize the going concern value of its VerifEYE and Cattlelog businesses for a sale, the
Debtor must continue operations which will require the use of funds on hand and funds to be received. Those funds may be subject to a lien in favor of the Biegert Trust as discussed below. 
 14. The cash collateral, which the Debtor seeks to use, is comprised in whole or in part of funds on hand, and funds to be received from Debtor’s
receivables from sale of the CattleLog and VerifEYE systems (“Cash Collateral”). 
 15. As a result of that certain revolving Loan
Agreement, Promissory Note and Security Agreement dated October 16, 2006 (“Loan Agreement”), the Biegert Trust asserts that it holds a lien on Cash Collateral. 
 16. Debtor estimates that it owes the Biegert Trust approximately $1,500,000.00 in principal as of the Petition Date. 
 17. As of the Petition Date, the Debtor estimates the value of the Cash Collateral, consisting of cash and accounts receivable to be approximately $
743,123.00. 
 18. The Debtor has approximately $700,623.00 of funds on hand, and will require the use of approximately $278,386.00 of Cash
Collateral to continue and maintain operations for the next four weeks, and, depending on the month, a greater or lesser amount will be required each comparable period thereafter. 
 19. A budget showing estimated income and expenses for the Debtor for the next four weeks (the “Budget”) is attached hereto as
Exhibit “A” and is incorporated herein by reference. 
  

 4 

 20. As adequate protection for the use of Cash Collateral, the Debtor proposes to grant the Biegert Trust
a replacement lien to the same validity, extent, and priority as its prepetition lien. 
 21. The Biegert Trust consents to the Debtor’s
use of Cash Collateral in accordance with the Budget, provided the Debtor agrees to grant it a replacement lien. Consequently, the Debtor satisfies the requirements of Section 363(c)(2) and should be entitled to use Cash Collateral. 

22. If the Debtor is not permitted to use Cash Collateral, it may be forced to halt operations, which will result in loss of the going concern value
of the business, a reduction in the value of the estate’s assets and create an adverse effect on creditors and employees. 
  

 5 

 CERTIFICATE OF NECESSITY OF 
 REQUEST FOR EMERGENCY PRELIMINARY HEARING 
 23. Operation of the
Debtor’s business requires the incurring of expenses on a daily basis. 
 24. The Debtor will be without funds to operate and meet
expenses if an emergency preliminary hearing is not granted. 
 25. Customers, vendors, and employees have been at risk since the Petition
Date and will continue to be at risk until a determination by this Court of the right to use Cash Collateral. 
 26. The Debtor estimates
that approximately 15 minutes will be necessary for a hearing on this Motion and that a similar amount of time may be required for a final hearing. 
 27. A copy of this Motion was served on the Biegert Trust, the secured creditors and on the twenty largest unsecured creditors. Notice of a hearing on this matter will be provided to the same entities. 
 28. The Debtor and counsel are prepared to appear on three hours’ notice at a hearing to demonstrate that the request for an emergency hearing is
not the result of the Debtor’s or counsel’s procrastination or lack of attention. 
 WHEREFORE, the Debtor respectfully
requests this Court enter an order granting the request for an emergency hearing, the request to use Cash Collateral, and for such other and further relief as is just and proper. 
 DATED this 14th day of February 2007.

  

	
	I HEREBY CERTIFY that I am admitted to the Bar of the United States District Court for the Southern District of Florida
and I am in compliance with the additional qualifications to
practice in this Court set forth in Local Rule 2090-1(A)

  

 6 

	
	 /s/ Jimmy D. Parrish

	R. Scott Shuker, Esquire
	Florida Bar No. 984469
	Jimmy D. Parrish, Esquire
	Florida Bar No. 526401
	jparrish@lsbeblaw.com
	LATHAM, SHUKER, BARKER,
	EDEN & BEAUDINE, LLP
	390 N. Orange Avenue, Suite 600
	P. O. Box 3353
	Orlando, Florida 32802-3353
	Telephone: 407-481-5800
	Facsimile: 407-481-5801
	Attorneys for the Debtor

  

 7 

 UNITED STATES BANKRUPTCY COURT 
 SOUTHERN DISTRICT OF FLORIDA 
 West Palm Beach Division 
 www.flsb.uscourts.gov 
  

							
	In re:	 	 	 	 	  	CASE NO. 9:07-bk-10932-SHF
				
	EMERGE INERACTIVE, INC.,	 	 	 	 	  	CHAPTER 11
				
	 Debtor.
	 	 	 	 	  	 
				
	  
	 	/	 		  	

 Certificate of Service 
 I HEREBY CERTIFY that a true copy of DEBTOR-IN-POSSESSION’S EMERGENCY MOTION FOR
AUTHORITY TO USE CASH COLLATERAL AND REQUEST FOR EMERGENCY PRELIMINARY HEARING, together with all exhibits, has been furnished either electronically or by facsimile and by U.S. First Class, postage prepaid mail to: John Hutton, a/f Biegert
Trust, Greenberg Traurig, 1221 Brickell Ave., Miami, FL 33131, the secured creditors and the twenty largest unsecured creditors as shown on the matrices attached to the original motion filed with the Court; and the U.S. Trustee, 51 SW First Avenue,
Room 1204, Miami, FL 33130, this 14th day of February 2007. 
  

	
	 /s/ Jimmy D. Parrish

	Jimmy D. Parrish, Esquire

  

 8 

 Exhibit E 
 TRANSITION SERVICES AGREEMENT 
 This Transition Services Agreement (this “Services
Agreement”) is entered into as of March     , 2007, between BFT Acquisition, LLC, a Nebraska limited liability company (“Purchaser”), and eMerge Interactive, Inc., a Delaware corporation
(“Seller”). 
 R E C I T A L S: 
 A. Concurrently herewith, Seller has sold, and Purchaser has purchased, pursuant to that certain Asset Purchase Agreement between Purchaser and Seller, dated March     , 2007 (“Purchase
Agreement”), the Purchased Assets (as defined in the Purchase Agreement). 
 B. Purchaser and Seller have agreed that Seller will
provide certain services to Purchaser on an interim basis following the Closing Date and, pursuant to the Purchase Agreement, Purchaser and Seller have agreed to enter into this Services Agreement. 
 NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Unless otherwise defined herein, for the purposes of this Services Agreement, capitalized terms shall have the meanings ascribed to them in the Purchase
Agreement and the following terms shall have the definitions hereinafter specified: 
 Section 1.1 “Parties” shall mean
Purchaser and Seller, together. 
 Section 1.2 “Service” or “Services” shall mean those services described on
Schedule A attached hereto to be provided for the terms and in the manner described herein. 
 ARTICLE II 
 AGREEMENT TO SELL AND BUY SERVICES 
 Section 2.1 Provision of Services. During the term of this Services Agreement, Seller shall provide to Purchaser, and shall make adequate Seller personnel and facilities available for the purpose of providing, and Purchaser
shall accept from Seller, the Services listed and described on Schedule A. In every case, all of the aforesaid Services shall be provided in accordance with the terms, limitations and conditions set forth herein and on Schedule A. The
fees charged to Purchaser for the Services shall be as set forth on Schedule A. 
  

 1 

 ARTICLE III 
 SERVICES; PAYMENT; INDEPENDENT CONTRACTOR 
 Section 3.1 Services to be Provided. Unless
otherwise agreed by the Parties, the Services shall be performed by Seller for Purchaser at a quality level and in a manner that is substantially the same as the quality level and manner in which such Services were generally performed by Seller for
the Purchased Assets prior to the date of this Services Agreement, and Purchaser shall use such Services for substantially the same purposes and in substantially the same manner as the Purchased Assets had used such Services prior to the date
hereof. Subject to the preceding sentence, Purchaser shall be entitled to utilize the Services, and the levels thereof, that it needs. There is no obligation of Purchaser to utilize any or all of the Services provided by Seller in accordance with
this Services Agreement. 
 Section 3.2 Independent Contractor. Seller shall act under this Services Agreement solely as an
independent contractor and not as an employee of Purchaser, and nothing in this Services Agreement will be deemed or construed to create a partnership or joint venture between Purchaser and Seller. 
 Section 3.3 Payment. As consideration for the provision of the Services, Purchaser shall pay to Seller the amounts specified on Schedule
A. The amounts set forth on Schedule A shall be invoiced by Seller on a periodic basis not to exceed more than once per calendar week. Purchaser shall pay each invoice no later than five (5) business days after the date such invoice
was delivered to Purchaser. 
 Section 3.4 Warranty; Disclaimer. THE SERVICES SHALL BE PERFORMED BY SELLER FOR PURCHASER AT A
QUALITY LEVEL AND IN A MANNER THAT IS SUBSTANTIALLY THE SAME AS THE QUALITY LEVEL AND MANNER IN WHICH SUCH SERVICES WERE GENERALLY PERFORMED BY SELLER FOR THE PURCHASED ASSETS PRIOR TO THE DATE OF THIS SERVICES AGREEMENT. EXCEPT FOR THE FOREGOING,
THE SERVICES TO BE PURCHASED UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY
IMPLIED WARRANTY OF NON-INFRINGEMENT. 
 ARTICLE IV 
 TERM 
 Section 4.1 General. The term of this Services Agreement shall commence on the
date hereof and shall expire at 5:00 pm,                     ,          time, on
                    , 2007; provided, however, that such term may be extended by Purchaser to no later than
                    , 2007, upon notice to Seller given no later than
                    , 2007. 
  

 2 

 ARTICLE V 
 FORCE MAJEURE 
 Section 5.1 General. Seller shall not be liable for any interruption of
any Service or any delay or failure to perform under this Services Agreement when such interruption, delay or failure results from causes beyond its reasonable control or from any act or failure to act of Purchaser, or as the result of strikes,
lock-outs or other labor difficulties; acts of any government, riot, insurrection or other hostilities; embargo, fuel or energy shortage, fire, flood, acts of God, wrecks or transportation delays; or inability to obtain necessary labor, materials or
utilities from usual sources. In such event, Seller’s obligations hereunder shall be postponed for such time as its performance is suspended or delayed on account thereof. Seller will promptly notify Purchaser, in writing, upon learning of the
occurrence or pendency of such event of force majeure. Upon the cessation of the force majeure event, Seller will use commercially reasonable efforts to resume its performance under this Services Agreement with the least delay that is reasonably
possible. 
 Section 5.2 Alternative Sources of Supply. If Seller’s performance under this Services Agreement is suspended
in whole or in part for any reason, Purchaser shall be entitled at its sole cost and expense to arrange alternative sources for provision of the Services. 
 Section 5.3 Reasonable Efforts. In the event of any failure, interruption or delay in performance of the Services, whether excused or unexcused, Seller shall use its commercially reasonable efforts to
restore the Services as soon as may be reasonably possible in accordance with its existing contingency plans for such Services. 
 ARTICLE VI

 MISCELLANEOUS 
 Section 6.1 Notices. Any notice, request, instruction, consent or other document to be given hereunder by either Party hereto to the other Party shall be given in the same manner and to the same persons provided in the Purchase
Agreement. 
 Section 6.2 Waiver. Any of the terms or conditions of this Services Agreement may be waived in writing at any time
by the Party which is entitled to the benefits thereof. No waiver of any of the provisions of this Services Agreement shall be deemed or shall constitute a waiver of such provision at any time in the future or a waiver of any other provision hereof.

 Section 6.3 Assignment. No party may assign its rights and obligations under this Agreement without the prior written consent
of the other party, except that Purchaser may assign all or any of its rights and obligations hereunder to any wholly owned subsidiary of Purchaser; provided that any such assignment shall not relieve the Purchaser of its obligations hereunder. This
Agreement shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 
  

 3 

 Section 6.4 Enforceability. If any provision of this Services Agreement as applied to any
Party or to any circumstance shall be adjudged by a court to be invalid or unenforceable, the same shall in no way affect any other provision of this Services Agreement, the application of such provision in any other circumstances, or the validity
or enforceability of this Services Agreement. The Parties intend this Services Agreement to be enforced as written. If any such provision, or part thereof, however, is held to be unenforceable because of the duration thereof or the area covered
thereby, the Seller and the Purchaser agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and/or to delete the specific words or phrases, and in its amended form such provision
shall then be enforceable and shall be enforced. If any provision of this Services Agreement shall otherwise finally be determined to be unlawful, then such provision shall be deemed to be severed from this Services Agreement and every other
provision of this Services Agreement shall remain in full force and effect. 
 Section 6.5 No Third-Party Beneficiaries or Right to
Rely. Notwithstanding anything to the contrary in this Services Agreement, nothing in this Services Agreement is intended to or shall create for or grant to any third party any rights hereunder. 
 Section 6.6 Counterparts. This Services Agreement may be executed in more than one counterpart, each of which shall for all purposes be
deemed to be an original and all of which shall constitute one and the same agreement. A signature to this Services Agreement delivered by telecopy or other artificial means shall be deemed valid. 
 Section 6.7 Governing Law. This Services Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida,
without regard to conflicts of laws principles, and, to the extent applicable, the United States Bankruptcy Code, 11 U.S.C. §§ 101-1330 (as heretofore and hereafter amended). 
 Section 6.8 Entire Agreement; Amendment This Services Agreement, and all schedules and exhibits hereto constitute the sole understanding of
the Parties with respect to the matters contemplated hereby and supersede and render null and void all other prior agreements and understandings between the Parties with respect to such matters including, but not limited to, that certain letter of
intent by and between Purchaser and Seller dated as of February 14, 2007. No amendment, modification or alteration of the terms or provisions of this Services Agreement shall be binding unless the same shall be in writing and duly executed by
the Party against whom such would apply. 
 [SIGNATURE PAGE TO IMMEDIATELY FOLLOW.] 
  

 4 

 IN WITNESS WHEREOF, each Party by its duly authorized officer has caused this Services Agreement to be
executed as of the date first above written. 
  

			
	EMERGE INTERACTIVE, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	BFT ACQUISITION, LLC
	 By: The Biegert Family Irrevocable Trust, Dated
 June 11, 1998, its sole member

		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 5 

 SCHEDULE A 
 The following monthly expenses are required to maintain the CattleLog business unit and all ongoing business activities. 
  

				
	 Rent (half of Sebastian facility, includes server room use and utilities expense):
	  	$	4,000
		
	 Sales (4 FTEs):
	  	$	41,600
	 n Travel
	  		
	 n Communications (cell phones, internet)
	  		
		
	 Information Technology (2 FTEs):
	  	$	26,000
	 n Colocation hosting facility
	  		
	 n Email and web page service
	  		
	 n Maintenance of existing hardware (fixed assets list)
	  		
	 n Backup system
	  		
	 n CattleLog system
	  		
	 o CattleLog Pro source code
	  		
	 o CattleLog Lite source code
	  		
	 o CattleLog databases structure and code
	  		
	 o CattleLog Reports code
	  		
	 o O and S drive content
	  		
	 o Web site hosting (includes Listing Service)
	  		
	 o Reports hosting
	  		
		
	 Management/Customer Service (3 FTEs):
	  	$	26,000
	 n Travel
	  		
	 n Communications (toll-free numbers, eFax, cell phones, internet)
	  		
	 n Transition PVP services
	  		
	 n Salesforce.com
	  		
		
	 Accounting/Human Resources (1 FTE):
	  	$	4,500
	 n Accounts payable/receivable
	  		
	 n Payroll
	  		
	 n Insurance administration
	  		
	 Total:
	  	$	102,100

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