Document:

Securities Resolution No. 6

 Exhibit 4.48 
  
 CERTIFIED COPY 
 OF 
 SECURITIES RESOLUTION NO. 6 
 OF 
 WISCONSIN ELECTRIC POWER COMPANY 
  
 I, KEITH H. ECKE, Assistant Corporate Secretary of WISCONSIN ELECTRIC POWER COMPANY (the “Company”), do hereby certify that the attached is a
true and correct copy of Securities Resolution No. 6 under the Indenture dated as of December 1, 1995 between the Company and U.S. Bank National Association, as successor to Firstar Trust Company, as Trustee, which has been duly adopted by the
Treasurer of the Company pursuant to authorization delegated to him by the Board of Directors of the Company at a meeting duly called and held on the 11th day of February, 2004; that a quorum of said Board was present at said meeting and voted throughout; and I do further certify that said resolution has not been rescinded and remains in full force and
effect. 
  
 IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the corporate seal of said WISCONSIN ELECTRIC POWER COMPANY this 23rd day of November, 2004. 
  

	
	
	/s/ Keith H. Ecke
	 Keith H. Ecke
 Assistant Corporate
Secretary

  
 (CORPORATE SEAL) 

 3.50% DEBENTURES DUE DECEMBER 1, 2007 
  
  
 SECURITIES RESOLUTION NO. 6 
 OF 
 WISCONSIN ELECTRIC POWER COMPANY

  
 The actions described below are taken by the Board (as defined
in the Indenture referred to below) of WISCONSIN ELECTRIC POWER COMPANY (the “Company”), or by an Officer or committee of Officers pursuant to Board delegation, pursuant to resolutions adopted by the Board of Directors of the Company as of
February 11, 2004 and Section 2.01 of the Indenture dated as of December 1, 1995 (the “Indenture”) between the Company and U.S. Bank National Association (as successor to Firstar Trust Company), as trustee. Terms used herein and not
defined have the same meaning as in the Indenture. 
  
 RESOLVED,
that a new series of Securities is authorized as follows: 
  

	1.	The title of the series is 3.50% Debentures due December 1, 2007 (“3.50% Debentures”). 

  

	2.	The form of the 3.50% Debentures shall be substantially in the form of Exhibit 1 hereto. 

  

	3.	The 3.50% Debentures shall have the terms set forth in Exhibit 1. 

  

	4.	The 3.50% Debentures shall have such other terms as are set forth in Exhibit 2 hereto. 

  

	5.	The 3.50% Debentures shall be sold to the underwriter(s) named in the Prospectus Supplement dated November 17, 2004 on the following terms: 

  
 Aggregate Principal Amount: $250,000,000 
 Price to Public: 99.977% 
 Underwriting Discount: 0.350% 
 Closing Date: November 23, 2004 
  
 This Securities Resolution shall be effective as of November 17, 2004.

 EXHIBIT 1 
  

			
	No.                         	  	$                        

  
 WISCONSIN ELECTRIC
POWER COMPANY 
 3.50% Debentures due December 1, 2007 
  

 
 WISCONSIN ELECTRIC POWER COMPANY 
  
 promises to pay to
                                        
                                        

  
 or registered assigns 
 the principal sum of
                                        
                                        
Dollars 
 on December 1, 2007 
  

			
	Interest Payment Dates:	  	June 1 and December 1
	Record Dates:	  	May 15 and November 15

  

									
	 	 	 	 	 Dated:

	 	 	 	 	 
	 U.S. BANK NATIONAL
 ASSOCIATION
 Transfer Agent and Paying Agent
	 	 	 	 WISCONSIN ELECTRIC POWER COMPANY

			
	 	 	 	 	By:
			
	 	 	 	 	 
	 Authenticated:
	 	 	 	 [Title of Authorized Officer]

			
	 U.S. BANK NATIONAL
 ASSOCIATION
 Registrar, by
	 	 	 	 (CORPORATE SEAL)

			
	 	 	 	 	 
			
	 Authorized Signature
	 	 	 	 [Assistant] Secretary

 WISCONSIN ELECTRIC POWER COMPANY 
 3.50% Debentures due December 1, 2007 
  

	1.	Interest. 

  
 Wisconsin Electric Power Company (the “Company”), a Wisconsin corporation, promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on June 1 and December 1 of each year commencing June 1, 2005. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from November 23, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
  

	2.	Method of Payment. 

  
 The Company will pay interest on the Securities to the persons who are registered holders of Securities at the close of business on the record date for
the next interest payment date, except as otherwise provided in the Indenture. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder’s registered address. 
  

	3.	Securities Agents. 

  
 Initially, U.S. Bank National Association will act as Paying Agent, Transfer Agent and Registrar. The Company may change any Paying Agent or Transfer
Agent without notice. The Company or any Affiliate may act in any such capacity. Subject to certain conditions, the Company may change the Trustee. 
  

	4.	Indenture. 

  
 The Company issued the securities of this series (the “Securities”) under an Indenture dated as of December 1, 1995 (the “Indenture”)
between the Company and U.S. Bank National Association (as successor to Firstar Trust Company) (the “Trustee”). The terms of the Securities include those stated in the Indenture and in the Securities Resolution establishing the Securities
and those made part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb). Securityholders are referred to the Indenture, the Securities Resolution and such Act for a statement of such terms. 
  

	5.	Redemption. 

  
 The Securities will be redeemable as a whole at any time, or in part from time to time, at the Company’s option, at a redemption price equal to the
greater of (a) 100% of the principal amount of the Securities being redeemed or (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate 
  

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 applicable to the Securities plus 10 basis points, plus accrued interest to the redemption date.

  
 “Treasury Rate” means with respect to any redemption
date, the rate per year equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date; provided that, if the Reference Treasury Dealers shall determine that there is no such Comparable Treasury Issue, such rate per year shall be equal to the estimated
semiannual equivalent yield to maturity that a United States Treasury security having a maturity comparable to the remaining term of the Securities to be redeemed would bear, if such security were available, such estimate to be made by the Reference
Treasury Dealers on the basis of interpolation, extrapolation and other accepted financial practices, taking into account (a) the yields to maturity of United States Treasury securities of other maturities, (b) yields to maturity of other U.S.
dollar denominated debt securities having a maturity comparable to the remaining term of the Securities to be redeemed and (c) applicable interest rate spreads between United States Treasury securities and such other debt securities, all as of 5:00
p.m., New York City time, on the third business day preceding such redemption date. 
  
 “Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term
of the Securities being redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such
Securities. 
  
 “Independent Investment Banker” means
one of the Reference Treasury Dealers appointed by the Trustee after consultation with the Company. 
  
 “Comparable Treasury Price” means, with respect to any redemption date, (a) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 
  
 “Reference Treasury Dealer Quotations” means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding such redemption date. 
  
 “Reference Treasury Dealer” means each of Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, Wachovia Capital Markets, LLC,
their respective successors, and three other primary U.S. Government securities dealers in The City of New York (a “Primary Treasury Dealer”), selected by the Company. If any Reference 
  

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 Treasury Dealer shall cease to be a Primary Treasury Dealer, the Company will select another Primary
Treasury Dealer which will be substituted for that dealer. 
  
 Procedures for the redemption of the Securities will be governed by Article 3 of the Indenture. 
  

	6.	Denominations, Transfer, Exchange. 

  
 The Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The Transfer Agent may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a
selection of Securities to be redeemed. 
  

	7.	Persons Deemed Owners. 

  
 The registered holder of a Security may be treated as its owner for all purposes. 
  

	8.	Amendments and Waivers. 

  
 Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of a majority in principal amount of the
securities of all series affected by the amendment. Subject to certain exceptions, a default on a series may be waived with the consent of the holders of a majority in principal amount of the series. 
  
 Without the consent of any Securityholder, the Indenture or the Securities
may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to Securityholders; or to make any change that does not materially adversely affect the rights of any
Securityholder. 
  

	9.	Restrictive Covenants. 

  
 The Securities are unsecured general obligations of the Company initially limited to $250,000,000 principal amount. The Company may from time to time
without notice to, or the consent of, the holders of the Securities, create and issue further securities of the same series, equal in rank to the Securities in all respects (or in all respects except for the payment of interest accruing prior to the
issue date of the new securities or except for the first payment of interest following the issue date of the new securities) so that the new securities may be consolidated and form a single series with the Securities and have the same terms as to
status, redemption or otherwise as the Securities. The Indenture does not limit other unsecured debt. Section 4.07 of the Indenture, which if applicable limits certain mortgages and other liens, will apply with respect to the Securities. The
limitations are subject to a number of important qualifications and exceptions. 
  

 - 4 - 

	10.	Successors. 

  
 When a successor assumes all the obligations of the Company under the Securities and the Indenture, the Company will be released from those obligations.

  

	11.	Defeasance Prior to Redemption or Maturity. 

  
 Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity. U.S. Government Obligations are securities backed by the full faith and credit of the United States
of America or certificates representing an ownership interest in such Obligations. 
  

	12.	Defaults and Remedies. 

  
 An Event of Default includes: default for 60 days in payment of interest on the Securities; default in payment of principal on the Securities; default for
60 days in the payment of any sinking fund obligation with respect to the Securities; default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities; certain events of
bankruptcy or insolvency; and any other Event of Default provided for in the series. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Securities may declare the principal of all
the Securities to be due and payable immediately. 
  
 Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations,
holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 
  

	13.	Trustee Dealings with Company. 

  
 U.S. Bank National Association, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with those persons, as if it were not Trustee. 
  

	14.	No Recourse Against Others. 

  
 A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each 
  

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 Securityholder by accepting a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities. 
  

	15.	Authentication. 

  
 This Security shall not be valid until authenticated by a manual signature of the Registrar. 
  

	16.	Abbreviations. 

  
 Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors Act), and U/T/M/A (=Uniform Transfers to Minors Act). 
  
 The Company will furnish to any Securityholder upon written request and without charge a
copy of the Indenture and the Securities Resolution, which contains the text of this Security in larger type. Requests may be made to: Corporate Secretary, Wisconsin Electric Power Company, 231 West Michigan Street, P.O. Box 2046, Milwaukee, WI
53201. 
  

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 EXHIBIT 2 
  

 
 3.50% Debentures 
  
 Supplemental Terms 
  
 In addition to the terms set forth in Exhibit 1 to Securities Resolution No.
6, the 3.50% Debentures shall have the following terms: 
  
 Section 1. Definitions. Capitalized terms used and not defined herein shall have the meaning given such terms in the Indenture. The following is an additional definition applicable to the 3.50% Debentures: 
  
 “Depositary” means, with respect to the 3.50% Debentures,
issued as one or more global Securities, The Depository Trust Company, New York, New York, or any successor thereto registered under the Securities Exchange Act of 1934 or other applicable statute or regulation. 
  
 Section 2. Securities Issuable as Global Securities. 
  
 (a) The 3.50% Debentures shall be issued in the form of one or more permanent
global Securities and shall, except as otherwise provided in this Section 2, be registered only in the name of the Depositary or its nominee. Each global Security shall bear a legend substantially to the following effect: 
  
 “Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”), to the Company or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.” 
  
 (b) If at any time (i) the Depositary with respect to the 3.50% Debentures notifies the Company that it is unwilling or unable to continue as Depositary
for such global Security or (ii) the Depositary for the 3.50% Debentures shall no longer be eligible or in good standing under the Securities Exchange Act of 1934 or other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to such global Security. If a successor Depositary for such global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Transfer Agent
shall register the exchange of such global Security for an equal principal amount of Registered Securities in the manner provided in Section 2.07 of the Indenture. 

 (c) The Transfer Agent shall register the transfer or exchange of a global Security for Registered
Securities pursuant to Section 2.07 of the Indenture if (i) a Default or Event of Default shall have occurred and be continuing with respect to the 3.50% Debentures, or (ii) the Company determines that the 3.50% Debentures shall no longer be
represented by global Securities. 
  
 (d) In any exchange provided
for in the preceding paragraphs (b) or (c), the Company will execute and the Registrar will authenticate and deliver Registered Securities. Registered Securities issued in exchange for a global Security shall be in such names and denominations as
the Depositary for such global Security shall instruct the Registrar. The Registrar shall deliver such Registered Securities to the persons in whose names such Securities are so registered. 
  
 (e) The 3.50% Debentures will trade in the Depositary’s Same-Day Funds
Settlement System. All payments of principal and interest on global Securities will be made by the Company in immediately available funds. 
  

 - 2 -Securities Purchase Agreement

  
 Exhibit 10.1

  
 SECURITIES PURCHASE AGREEMENT 
  
 This Securities Purchase Agreement (this “Agreement”) is
dated as of November 22, 2004, among eMerge Interactive, Inc., a Delaware corporation (the “Company”), and the investors identified on the signature pages hereto (each, an “Investor” and collectively, the
“Investors”). 
  
 WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Investor, and each Investor, severally and not
jointly, desires to purchase from the Company certain securities of the Company, as more fully described in this Agreement. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement,
the following terms shall have the meanings indicated in this Section 1.1: 
  
 “Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting
the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility. 
  
 “Additional Investment Rights” means the
additional investment rights in the form of Exhibit C, which are issuable to the Investors on the Closing Date. 
  
 “Additional Investment Right Shares” means the shares of Common Stock issuable upon exercise of Additional Investment
Rights. 
  
 “Affiliate” means
any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144. 
  
 “Business Day” means any day except
Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 
  

 “Closing” means the closing of the purchase and sale of the Securities
pursuant to Article II. 
  
 “Closing
Date” means the Business Day immediately following the date on which all the conditions set forth in Sections 5.1 and 5.2 hereof satisfied. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Common Stock” means the Class A common stock of the Company, par value $0.008 per share,
and any securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company which entitle the holder thereof to acquire Common Stock
at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common Stock. 
  
 “Company Counsel” means Hunton & Williams LLP. 
  
 “Effective Date” means the date that the Registration Statement required by Section 2(a) of
the Registration Rights Agreement is first declared effective by the Commission. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Investment Amount” means, with respect to
each Investor, the investment amount indicated below such Investor’s name on the signature page of this Agreement. 
  
 “Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions of any kind.

  
 “Per Unit Purchase Price”
equals $1.60. 
  
 “Person” means
an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
  
 “Proceeding” means an action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Investors of the Shares, the Warrant Shares and the Additional Investment Right Shares. 
  

 2 

 “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date of this Agreement, among the Company and the Investors, in the form of Exhibit B hereto. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities” means the Shares, the Additional Investment Rights, the Additional Investment Right Shares, the Warrants and
the Warrant Shares. 
  
 “Securities
Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to the Investors pursuant to this Agreement. 
  
 “Short Sales” include, without limitation, all “short sales” as defined in Rule 3b-3 of the Exchange Act and
Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps and similar arrangements (including on a total return basis), and
sales and other transactions through non-US broker dealers or foreign regulated brokers. 
  
 “Steelhead Investments Ltd.” means Steelhead Investments Ltd. and its Affiliates and managed funds. 
  
 “Subsidiary” means any “significant
subsidiary” as defined in Rule 1-02(w) of the Regulation S-X promulgated by the Commission under the Exchange Act. 
  
 “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 
  
 “Transaction Documents” means this Agreement, the Additional Investment Rights, the
Registration Rights Agreement, the Warrants and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  

 3 

 “Warrants” means the common stock purchase warrants in the form of
Exhibit A, which are issuable to the Investors at the Closing. 
  
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and each Investor shall, severally and not jointly, purchase from the Company, the Shares and the Warrants representing such Investor’s Investment Amount. The Closing
shall take place at the offices of Bryan Cave LLP, 1290 Avenue of the Americas, New York, NY 10104 on the Closing Date or at such other location or time as the parties may agree. 
  
 2.2 Closing Deliveries. (a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the
following: 
  
 (i) a certificate evidencing a
number of Shares equal to such Investor’s Investment Amount divided by the Per Unit Purchase Price, registered in the name of such Investor; 
  
 (ii) a Warrant, registered in the name of such Investor, pursuant to which such Investor shall have the right to acquire the number of
shares of Common Stock equal to the product of (a) .35 and (b) the quotient obtained by dividing such Investor’s Investment Amount by the Per Unit Purchase Price; 
  
 (iii) an Additional Investment Right, registered in the name of such Investor, pursuant to which such
Investor shall have the right to acquire Additional Investment Right Shares equal to the product of (a) .50 and (b) the quotient obtained by dividing such Investor’s Investment Amount by the Per Unit Purchase Price; 
  
 (iv) the legal opinion of Company Counsel, in agreed form,
addressed to the Investors; and 
  
 (v) the
Registration Rights Agreement, duly executed by the Company. 
  
 (b) At the Closing, each Investor shall deliver or cause to be delivered to the Company the following: 
  
 (i) its Investment Amount, in United States dollars and in immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose; and 
  

 4 

 (ii) the Registration Rights Agreement, duly executed by such Investor. 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. Except as set forth under the corresponding section of the disclosure schedules delivered to the Investors concurrently herewith (the parties agreeing that a
disclosure in a particular section of the disclosure schedule shall only modify and qualify the specific representations and warranties therein specified in such section) the Company hereby makes the following representations and warranties to each
Investor: 
  
 (a) Subsidiaries. The
Company has no direct or indirect Subsidiaries. 
  
 (b) Organization and Qualification. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The Company is not in violation of any of the provisions of its certificate of incorporation or bylaws. The Company is duly qualified to conduct business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be,
could not, individually or in the aggregate, have or reasonably be expected to result in (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of
operations, assets, prospects, business or condition (financial or otherwise) of the Company, taken as a whole, or (iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”). 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions 

  

 5 

 
contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s certificate of incorporation or bylaws, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding or agreement to which the Company is a party or by which any property or asset of the Company is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect. 
  
 (e) Filings, Consents and
Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements Registration
Rights Agreement, (ii) filings required by state securities laws, (iii) the filing of a Notice of a Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filings required in accordance with Section 4.5,
and (v) those that have been made or obtained prior to the date of this Agreement. 
  
 (f) Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens, other than restrictions on transfer under applicable securities laws. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement, the Additional Investment Rights and the Warrants in order to issue the Shares, the Additional Investment Right Shares and the Warrant Shares (as applicable).

  
 (g) Capitalization. The number of
shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company’s various option and incentive plans, is set forth in Schedule 3.1(g). Except
as set forth in Schedule 3.1(g), no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and except as disclosed in Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as set 

  

 6 

 
forth in Schedule 3.1(g), the issue and sale of the Securities will not, immediately or with the passage of time, obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. 
  
 (h) SEC Reports; Financial Statements. The Company
has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials being collectively
referred to herein as the “SEC Reports” and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or has timely filed a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations
of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  
 (i) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements
pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  

(j) Litigation. There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of
the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports or on Schedule 3.1(j), could, if there were 

  

 7 

 
an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any
director or officer thereof is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, except as specifically disclosed in the SEC Reports.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act. 
  
 (k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company. 
  
 (l)
Compliance. The Company (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company
received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other material agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is not in violation of any order of any court, arbitrator or governmental body, or (iii) is not and has not been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could
not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company is in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, except where such noncompliance could not have or reasonably be expected to result in a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct its business as described in the SEC Reports, except where the failure to possess such permits would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit. 
  
 (n) Title to Assets. The Company owns no real
property and has good and defensible title in all personal property owned by it that is material to its business, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company. Any real property and facilities held under lease by the Company are held by them under valid, subsisting and enforceable leases of which the Company is in
compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
  

 8 

 (o) Patents and Trademarks. The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports
and which the failure to so have could, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except as set forth on Schedule
3.1(o), the Company has not received a written notice that the Intellectual Property Rights used by the Company violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
  
 (p) Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which the Company is engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 
  
 (q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
  
 (r) Internal Accounting Controls. The Company has established disclosure controls and procedures (as defined in Exchange Act rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company is made known to the certifying officers by others within the Company. The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of the Form 10-Q for the Company’s most recently ended fiscal quarter (such date,
the “Evaluation Date”). The Company presented in its most recently filed Form 10-K or Form 10-Q the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal control over financial reporting (as such term is defined in Exchange Act rules 13a-15(f) and 15d-15(f)) or, to the
Company’s knowledge, in other factors that could significantly affect the Company’s internal control over financial reporting. 
  

 9 

 (s) Solvency. Based on the financial condition of the Company as of the Closing
Date (and assuming that the Closing shall have occurred), (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
  
 (t) Certain Fees. Except as described in Schedule
3.1(t), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Investors shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by an Investor pursuant to written agreements executed by such Investor which
fees or commissions shall be the sole responsibility of such Investor) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

  
 (u) Certain Registration Matters.
Assuming the accuracy of the Investors’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Shares, Warrants and Additional Investment Rights, and the offer
of the Warrant Shares and Additional Investment Right Shares, by the Company to the Investors under the Transaction Documents. The Company is eligible to register the resale of its Common Stock for resale by the Investors under Form S-3 promulgated
under the Securities Act. Except as described in Schedule 3.1(u), the Company has not granted or agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered
with the Commission or any other governmental authority that have not been satisfied. 
  
 (v) Listing and Maintenance Requirements. Except as specified in the SEC Reports, the Company has not, in the two years preceding
the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Common Stock on the Trading Market. The issuance and sale of the Securities under the Transaction Documents does not contravene the rules
and regulations of the Trading Market on which the Common Stock is currently listed or quoted (including Rule 4350 of the Nasdaq Stock Market if the Trading Market is the Nasdaq National 

  

 10 

 
or Nasdaq SmallCap Market), and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Investors
the maximum number of Securities contemplated by Transaction Documents, including such as may be required pursuant to Nasdaq Rule 4350. 
  
 (w) Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. 
  
 (x) Application of Takeover Protections. The Company has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Investors as a result of the
Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation the Company’s issuance of the Securities and the Investors’ ownership of the Securities.

  
 (y) No Additional Agreements. The
Company does not have any agreement or understanding with any Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents. 
  
 (z) Disclosure. Except for the existence of this
Agreement, the Company confirms that neither it nor any Person acting on its behalf has provided any of the Investors or their agents or counsel with any information that the Company believes constitutes material, non-public information. The Company
understands and confirms that the Investors will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
  
 3.2 Representations and Warranties of the Investors. Each Investor hereby, for itself and for no other Investor,
represents and warrants to the Company as follows: 
  
 (a) Organization; Authority. Such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Investor of the transactions contemplated by
this Agreement has been duly authorized by all necessary corporate or, if such Investor is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Investor. Each of this Agreement and the
Registration Rights Agreement has been duly executed by such Investor, and when delivered by such Investor 

  

 11 

 
in accordance with terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other
equitable principles of general application. 
  
 (b) Investment Intent. Such Investor is acquiring the Securities as principal for its own account for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing
contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time. 
  
 (c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, and on the Closing
Date and on each date which it exercises its Warrants and Additional Investment Rights, it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Investor is not a registered broker-dealer under Section
15 of the Exchange Act. Such Investor is acquiring the Securities hereunder in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the
Securities. 
  
 (d) General Solicitation.
Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement. 
  
 (e) Access to Information. Such Investor acknowledges that it has reviewed the disclosure materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents. 
  
 (f) Limited Ownership. The purchase by such Investor
of the Securities issuable to it at the Closing (including the underlying shares of Common Stock that would be issuable in respect of such Securities and including any Securities issuable under the terms of the Additional Investment Rights issued or
issuable to such Investor) will not result in such Investor 

  

 12 

 
(individually or together with other Person with whom such Investor has identified, or will have identified, itself as part of a “group” in a
public filing made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 19.999% of the Common Stock or the voting power of the Company on a post transaction basis that assumes that
the Closing shall have occurred. Such Investor does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or obtained the
right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the Common Stock or the voting power of the Company on a post transaction
basis that assumes that the Closing shall have occurred. 
  
 (g) Experience of Investor. Each Investor, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment. 
  
 (h) Independent Investment Decision. Such Investor has independently evaluated the merits of its decision to purchase Securities pursuant to this Agreement, such decision has been independently made by such
Investor and such Investor confirms that it has only relied on the advice of its own business and/or legal counsel and not on the advice of any other Investor’s business and/or legal counsel in making such decision. If such Investor is other
than Steelhead Investments Ltd., such Investor represents and warrants that Bryan Cave LLP has not acted as its legal counsel in connection with the transactions contemplated by this Agreement. 
  
 (i) Certain Trading Activities. Such Investor has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the
Company’s securities) since the time that such Investor was first contacted by the Company or Roth Capital Partners, LLC regarding this investment in the Company. Such Investor covenants that neither it nor any Person acting on its behalf or
pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed or if doing so would be a
violation of applicable securities laws. 
  
 (j)
Waiver of Participation Rights. If such Investor is a party to (or a transferee of securities issued pursuant to) that certain Securities Purchase Agreement dated January 22, 2004 (the “Purchase Agreement”) by and among the
Company and the other parties thereto, then such Investor acknowledges and agrees that the rights of such Investor to purchase the Securities are set forth in the Transaction Documents and such Investor hereby waives any and all participation rights
under Section 4.4 of the Purchase Agreement that such Investor may have with respect to the offer and sale of the Securities by the Company as well as warrants to purchase 150,000 shares of Common Stock that may be issued to Roth Capital Partners,
LLC as a placement agent fee 
  

 13 

 The Company acknowledges and agrees that each Investor does not make or has not made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfers of Securities. 
  
 (a) Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any transfer of the Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate of an Investor, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act. 
  
 (b)
Certificates evidencing the Securities will contain the following legend, until such time as they are not required under Section 4.1(c): 
  
 [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED]
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
  
 (c) Certificates evidencing the Shares, Warrant Shares and Additional Investment Right Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)): (i) following the Effective Date, or (ii) following a sale of such Shares, Warrant Shares or Additional Investment Right Shares pursuant to Rule 144, or (iii) while such Shares,
Warrant Shares or Additional Investment Right Shares are eligible for sale under Rule 144(k) (provided that the Investor provides the Company with such certifications as it may reasonably request to establish Rule 144(k) status), or (iv) if such
legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). Following such time as restrictive legends are not required to be placed on

  

 14 

 
certificates representing Securities, the Company will, no later than three Trading Days following the delivery by an Investor to the Company or the
Company’s transfer agent of a certificate representing Shares, Warrant Shares or Additional Investment Right Shares containing a restrictive legend, deliver or cause to be delivered to such Investor a certificate representing such Shares or
Warrant Shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section.

  
 4.2 Furnishing of Information. As long as any Investor
owns the Securities and the Company is required under the rules and regulations of the Exchange Act to file periodic reports with the Commission, the Company covenants to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Investor owns Securities, if the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Investors and make publicly available in accordance with Rule 144(c) such information as is required for the Investors to sell such the Shares, Warrant Shares and the Additional Investment Right Shares under Rule 144. The
Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Shares, Warrant Shares and Additional Investment
Right Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.3 Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
  
 4.4 Subsequent Registrations; Subsequent Placements. 
  
 (a) From the Closing Date through and including the
Effective Date, the Company will not (i) directly or indirectly, offer, sell or grant any option to purchase (or announce any offer, sale, grant or any option to purchase) any of its Common Stock or Common Stock Equivalents, or (ii) file a
registration statement (other than on a Form S-8 and pursuant to the Registration Rights Agreement) with the Commission with respect to any securities of the Company (the “Blockout Period”). 
  
 (b) Prior to the 181st day following the Effective Date (the “Participation Period”), the Company will not, directly or indirectly, offer, sell, grant any
option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of Common Stock or Common Stock Equivalents, including without limitation, pursuant to a private placement, an
equity line of credit or a shelf registration statement in accordance with Rule 415 under the Securities Act, (such offer, sale, grant, disposition or announcement being referred to as “Subsequent Placement”) except in 

  

 15 

 
accordance with Section 4.4(d) below. An Investors’ rights under Section 4.4(b) are not transferable or assignable with any transfer or assignment of
Securities (other than to Affiliates of such investor or successors in interest to all of the business of such Investor). 
  
 (c) The Participation Period set forth in the preceding paragraph (b) shall be extended for the number of Trading Days during such period
in which (i) trading in the Common Stock is suspended by any Trading Market or the Commission, or (ii) following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used
by the Investors for the resale of the shares underlying the Warrants. 
  
 (d) Subject to Section 4.4(e), prior to the end of the Participation Period, the Company will not, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section
4.4(d). 
  
 (i) The Company shall deliver to each
Investor a written notice (the “Offer”) of any proposed or intended issuance or sale or exchange of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer shall (x) identify
and describe the Offered Securities, (y) describe the price and other terms upon which the Offered Securities are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged and (z) offer to
issue and sell to or exchange with each Investor (A) a pro rata portion of fifty percent (50%) of the Offered Securities, based on such Investor’s pro rata portion of the aggregate Investment Amount paid by the Investors for all of the Shares
purchased hereunder (the “Basic Amount”), and (B) with respect to each Investor that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Investors as such
Investor shall indicate it will purchase or acquire should the other Investors subscribe for less than their Basic Amounts (the “Undersubscription Amount”). 
  
 (ii) To accept an Offer, in whole or in part, an Investor must deliver a written notice to the Company prior
to the end of the fifth (5) Trading Day from the delivery of the Offer, setting forth the portion of the Investor’s Basic Amount that such Investor elects to purchase and, if such Investor shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Investor elects to purchase (in either case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Investors are less than the total of all of the Basic Amounts, then
each Investor who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if
the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Investor who has subscribed for any
Undersubscription Amount shall be entitled to purchase that portion of the Available Undersubscription Amount as the Basic Amount of such Investor bears to the total Basic Amounts of all Investors that have subscribed for Undersubscription Amounts,
subject to rounding by the Board of Directors the extent its deems reasonably necessary. 
  

 16 

 (iii) The Company shall have ten (10) Trading Days from the expiration of the period set
forth in Section 4.4(d)(ii) above to issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Investors (the “Refused Securities”), but only to the offerees
described in the Offer and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons than those set forth in the Offer. 
  
 (iv) In the event the Company shall propose to sell less
than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4.4(d)(iii) above), then each Investor may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities
specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of to Offered Securities that the Investor elected to purchase pursuant to Section 4.4(d)(ii) above multiplied by a fraction, (i) the numerator of
which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the
event that any Investor so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and
until such securities have again been offered to the Investors in accordance with Section 4.4(d)(i) above. 
  
 (v) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, each Investor shall acquire from
the Company, and the Company shall issue to each such Investor, the number or amount of Offered Securities specified in such Investor’s Notices of Acceptance, as reduced pursuant to Section 4.4(d) the Investors have so elected, upon the terms
and conditions specified in the Offer. The purchase by the Investors of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Investors of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Investors and the Company and their respective counsel. 
  
 (e) Notwithstanding anything to contrary contained in this Section 4.4, the right of participation set forth in this Section 4.4 shall not
apply to direct or indirect issuances or offerings of Common Stock or Common Stock Equivalents (i) pursuant to Company stock option plans, or any similar stock option plan, stock purchase right or arrangement approved by the Company’s Board of
Directors, (ii) pursuant to restricted stock grants approved by the Company’s Board of Directors, (iii) upon exercise of warrants, options, or other rights outstanding as of the date of this Agreement (but not as to any amendments or other
modifications to the number of Common Stock issuable thereunder, the terms set forth therein, or the exercise price set forth therein), (iv) issued in connection with equipment leases or real property leases, provided that not more than
$250,000 of securities is so issuable and such leases are otherwise on customary terms; (v) issued as a dividend or distribution on the Common Stock or in connection with the subdivision of outstanding shares of Common Stock into a larger number of
shares or (vi) as part of the purchase price of the acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, 

  

 17 

 
or other reorganization in which the Company acquires, in a single transaction or a series of related transactions, all or substantially all of the assets of
such other corporation or entity; provided, that such transaction is not primarily a financing transaction. 
  
 4.5 Securities Laws Disclosure; Publicity. By 8:45 a.m. (New York City time) on the Business Day immediately following the date of this Agreement,
the Company shall issue a press release reasonably acceptable to the Investors disclosing the entering into of the transactions contemplated hereby and on such day file a Current Report on Form 8-K disclosing the material terms of the transactions
contemplated hereby and will file as exhibits thereto all of the Transaction Documents. The Company will issue a press release on the Closing Date to disclose the Closing. In addition, the Company will make such other filings and notices in the
manner and time required by the Commission and the Trading Market on which the Common Stock is listed. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any filing
with the Commission (other than the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without
the prior written consent of such Investor, except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Investors with prior notice of such disclosure. 
  
 4.6 Indemnification of Investors. In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and hold the Investors and their directors, officers, shareholders, partners, employees and agents (each, an “Investor Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively,
“Losses”) that any such Investor Party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction
Document. In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable documented legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred. 
  
 4.7 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Investor or its agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Investor shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Investor shall be relying on the
foregoing representations in effecting transactions in securities of the Company. 
  
 4.8 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the satisfaction of any portion of the Company’s debt (other
than payment of trade payables and accrued expenses in the ordinary course of the Company’s business and prior practices), to redeem any Common Stock or Common Stock Equivalents or to settle any outstanding Action. 
  

 18 

 ARTICLE V. 
 CONDITIONS PRECEDENT 
  
 5.1
Conditions Precedent to the Obligations of the Investors to Purchase Securities. The obligation of each Investor to acquire Securities at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each
of the following conditions: 
  
 (a)
Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing as though made on and as of such date;

  
 (b) Performance. The Company shall
have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing; 
  
 (c) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the
Transaction Documents; 
  
 (d) Adverse
Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would be expected to have or result in a (i) an adverse effect on the legality, validity or enforceability of any
Transaction Document, or (ii) a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, taken as a whole; 
  
 (e) No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have
been suspended by the Commission or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding the Company) at any time since the date of execution of
this Agreement, and the Common Stock shall have been at all times since such date listed for trading on a Trading Market; 
  
 (f) Nasdaq Listing. The Nasdaq Stock Market shall have waived application of the 15 day prior notice contained in NASD Marketplace
Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; 
  
 (g) Waivers. The Company shall have received the waivers of all participation rights referenced in Schedule 3.1(g); and 
  
 (h) Timing. The Closing shall have occurred no later than December 10, 2004. 
  

 19 

 5.2 Conditions Precedent to the Obligations of the Company to sell Securities. The obligation of
the Company to sell Securities at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions: 
  
 (a) Representations and Warranties. The representations and warranties of each Investor contained
herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date; 
  
 (b) Performance. Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to the Closing; 
  
 (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; 
  
 (d) Nasdaq Listing. The Nasdaq Stock Market shall
have waived application of the 15 day prior notice contained in NASD Marketplace Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; and 
  
 (e) Timing. The Closing shall have occurred no later than December 10, 2004. 
  
 ARTICLE VI. 
 MISCELLANEOUS 
  
 6.1 Fees and Expenses. At the Closing, the Company shall reimburse HBK $25,000 in connection with its diligence and legal fees concerning the transactions contemplated by the Transaction Documents (HBK may deduct such amount from the
portion of its Investment Amount deliverable to the Company at the Closing), it being understood that Bryan Cave LLP has only rendered legal advice to Steelhead Investments Ltd., and not to the Company or any Investor in connection with the
transactions contemplated hereby, and that each of the Company and each Investor has relied for such matters on the advice of its own respective counsel. Except as specified in the immediately preceding sentence, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay
all stamp and other taxes and duties levied in connection with the sale of the Securities. Each Investor and the Company shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Securities. 
  
 6.2 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. 
  

 20 

 6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to
5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be as follows: 
  

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

  
 or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 
  
 6.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investors holding a majority of then outstanding Shares, except that a waiver will be
effective if pertaining to a matter particular to a single Investor (which shall include any waiver of the conditions set forth in Section 5) if provided in writing by such Investor, or if pertaining to a waiver by the Company, if provided in
writing by the Company. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 
  
 6.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof. 
  

 21 

 The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provisions of this Agreement or any of the Transaction Documents. 
  
 6.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investors. Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transfer complies
with Section 4.1 and such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Investors.” 
  
 6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 (as to each Investor Party). 
  
 6.8 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees
that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  

 22 

 6.9 Survival. The representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Securities. 
  
 6.10
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 
  
 6.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement. 
  
 6.12
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
  
 6.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any
issuance of a replacement. 
  
 6.14 Remedies. In
addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate. 
  
 6.15
Payment Set Aside. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor enforces or 

  

 23 

 
exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 6.16 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several and
not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute
the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Document. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with
monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that each of the Investors has been provided
with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor. 
  
 6.17 Limitation of Liability. Notwithstanding anything herein to the contrary, the Company acknowledges and agrees
that the liability of an Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Investor, and that no trustee, officer, other investment vehicle
or any other Affiliate of such Investor or any investor, shareholder or holder of shares of beneficial interest of such a Investor shall be personally liable for any liabilities of such Investor. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOLLOW] 
  

 24 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

			
	EMERGE INTERACTIVE, INC.
	
	/s/    ROBERT E.
DRURY        
	 Name:
	 	Robert E. Drury
	 Title:
	 	Chief Financial Officer

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR INVESTORS FOLLOW] 
  

 25 

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

					
	OMICRON MASTER TRUST
	 By:
	 	 Omicron Capital L.P., as advisor

	 By:
	 	 Omicron Capital Inc., its general partner

			
	By:	 	 	 	/s/    BRIAN DALY        
	 Name:
	 	 	 	Brian Daly
	 Title:
	 	 	 	CFO
	 For:
	 	 	 	Bruce Bernstein
	 Title:
	 	 	 	Managing Partner

			
		
	 Investment Amount:
	 	 $1,000,000.00

  

			
	 Registered Office
	  	Omicron Master Trust
	 	  	 c/o Winchester Global Trust Company

	 	  	 Williams House

	 	  	 20 Reid Street

	 	  	 Hamilton HM 11

	 	  	 Bermuda

	 	  	 Telephone: (441) 292-1018

	 	  	 Facsimile: (441) 298-5031

		
	 	  	 ARTICLE VII. Tax ID: 98-6053436

		
	 Mailing Address:
	  	Omicron Capital, L.P.
	 	  	 650 Fifth Avenue, 24th Flr

	 	  	 New York, NY 10019

  

					
	CRANSURE CAPITAL, LP
			
	By:	 	 	 	/s/    MICHAEL D. KOREN        
	 Name:
	 	 	 	Michael D. Koren
	 Title:
	 	 	 	President - Downsview Capital
	 	 	 	 	The General Partner

			
		
	 Investment Amount:
	 	 $1,500,000

		
	 Address for Notice:
	 	 666 Dundee Road, Suite 1901
 Northbrook, IL
60062

  

					
	STEELHEAD INVESTMENTS LTD.
			
	By:	 	 	 	/s/    DAVID C. HALEY        
	 Name:
	 	 	 	David C. Haley
	 Title:
	 	 	 	Authorized Signatory

			
		
	 Investment Amount:
	 	 $1,500,000

		
	Address for Notice:	 	 

	
	
	 Steelhead Investments Ltd.

	 c/o Investment Manager

	 300 Crescent Court, Suite 700

	 Dallas, Texas 75201

	 Telephone: 214-758-6107

	 Telecopy: 214-758-1207

	 Attention: General Counsel

  

 26 

 EXHIBIT A 
  
 NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
  
 EMERGE INTERACTIVE, INC. 
  
 WARRANT 
  

			
	 Warrant No. [    ]
	 	Date of Original Issuance: [    ], 2004

  
 eMerge Interactive,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [            ] or its registered assigns (the “Holder”), is
entitled to purchase from the Company up to a total of [    ]1 shares of Class A common stock,
par value $0.008 per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $2.00 per share (as
adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and from time to time from and after the six month anniversary of the Date of Original Issuance and through and including
[            ], 2009 (the “Expiration Date”), and subject to the following terms and conditions: 
  
 1. Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise
defined herein shall have the meanings given to such terms in the Securities Purchase Agreement, dated as of November 22, 2004, to which the Company and the original Holder are parties (the “Purchase Agreement”). 
  
 2. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 

	1	A number of shares as equals 35% of the number of shares issued to Holder at closing. 

  

 3. Registration of Transfers. This Warrant is subject to the transfer restrictions in the Purchase
Agreement. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. The Holder agrees that it may not transfer this Warrant as to more than the number of Warrant Shares then outstanding as shown on the most updated Exercise Log, and any purported transfer in excess of such number of Warrant Shares shall have
no effect. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant. 
  
 4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the
six month anniversary of the Date of Original Issuance and through and including the Expiration Date. At 6:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no
value. The Company may not call or redeem all or any portion of this Warrant without the prior written consent of the Holder. 
  
 5. Delivery of Warrant Shares. 
  
 (a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised. Upon delivery of the Exercise Notice to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied
by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate
for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the Purchase Agreement, shall be free of restrictive legends. The Company shall, upon request of the Holder and subsequent to the date on which a registration
statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use its best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through
the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly
signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this Warrant, payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased. The Company shall file a
registration statement covering the Warrant Shares and shall use its best efforts to keep such registration statement continuously effective, in each case in accordance with the terms of the Registration Rights Agreement, dated as of the date
hereof, between the original Holder and the Company. 
  

 2 

 (b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise. 
  
 (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay either cash or issue additional registered shares of Common Stock, at the Company’s option,
to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that
the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of the Common Stock at the time of the obligation giving rise to such purchase obligation, with the number of additional
registered shares of Common Stock determined by dividing the above noted amount by the closing price of the Common Stock at the time of the obligation, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The
Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In. 
  
 (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof. 
  
 6. Charges, Taxes
and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved
in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof. 
  

 3 

 7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant. 
  
 8.
Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights
of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise
Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
  
 9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time
to time as set forth in this Section 9. 
  
 (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of
Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event. 
  
 (b) Fundamental Transactions. If, at any time while this Warrant is outstanding, (1) the Company effects any merger or
consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common Stock are permitted to 

  

 4 

 
tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder shall have the right to
require the repurchase of this Warrant for a purchase price, payable in cash or registered shares of Common Stock, at the Company’s option, within five Trading Days after such request (or, if later, on the effective date of the Fundamental
Transaction) equal to the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such request. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph (c). 
  
 (c) Subsequent Equity Sales. 
  
 (i) If the Company or any subsidiary thereof, as applicable with respect to Common Stock Equivalents (as defined below), at any time while
this Warrant is outstanding, shall issue any securities of the Company or any Subsidiary which entitle the holder thereof to acquire Common Stock at any time, including without limitation, any debt, preferred stock, rights, options, warrants or any
other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock
(“Common Stock Equivalents”) entitling any Person to acquire shares of Common Stock, at a price per share less than the Exercise Price (if the holder of the Common Stock or Common Stock Equivalent so issued shall at any time,
whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights issued in connection with such issuance, be entitled to receive shares of
Common Stock at a price less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price), then, at the option of the Holder for such exercises as it shall indicate, the Exercise Price shall be adjusted
to mirror the conversion, exchange or purchase price for such Common Stock or Common Stock Equivalents (including any reset provisions thereof) at issue. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are
issued. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalent subject to this section, indicating therein the applicable issuance price, or of applicable
reset price, exchange price, conversion price and other pricing terms. Notwithstanding the foregoing, no adjustment will be made under this Section 9(d) in respect of: 
  
 (A) Any grant of an option or warrant for Common Stock or issuance of any shares of Common Stock upon the
exercise of any options or warrants to employees, officers and directors of or consultants to the Company pursuant to any stock option plan, employee stock purchase plan or similar plan or incentive or consulting arrangement approved by the
Company’s board of directors; 
  
 (B) Any
restricted stock awards approved by the Company’s Board of Directors; 
  

 5 

 (C) Any Common Stock or Common Stock Equivalents issued in connection with equipment
leases or real property leases, provided that not more than $250,000 of securities is so issuable and such leases are otherwise on customary terms; 
  
 (D) Any Common Stock issued as a dividend or distribution on the Company’s Common Stock or in a transaction described in Section
9(a); 
  
 (E) Any Common Stock or Common Stock
Equivalents issued as part of the purchase price of the acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires,
in a single transaction or a series of related transactions, all or substantially all of the assets of such other corporation or entity; provided, that such transaction is not primarily a financing transaction; or 
  
 (F) Any rights or agreements to purchase Common Stock
Equivalents outstanding on the date hereof and as specified in Schedule 3.1(g) to the Purchase Agreement (but not as to any amendments or other modifications to the number of Common Stock issuable thereunder, the terms set forth therein, or the
exercise price set forth therein). 
  
 (ii) If,
at any time while this Warrant is outstanding, the Company or any Subsidiary issues Common Stock Equivalents at a price per share that floats or resets or otherwise varies or is subject to adjustment based on market prices of the Common Stock (a
“Floating Price Security”), then for purposes of applying the preceding paragraph in connection with any subsequent exercise, the Exercise Price will be determined separately on each Exercise Date and will be deemed to equal the
lowest price per share at which any holder of such Floating Price Security is entitled to acquire shares of Common Stock on such Exercise Date (regardless of whether any such holder actually acquires any shares on such date). 
  
 (d) Number of Warrant Shares. Simultaneously with any
adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate
Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. 
  
 (e) Calculations. All calculations under this Section 9 shall be made to the nearest cent or
the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock. 
  
 (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9,
the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such 

  

 6 

 
adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer
Agent. 
  
 (g) Notice of Corporate Events.
If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of
the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder), then the Company shall deliver to the Holder a notice describing the material terms and
conditions of such transaction, at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 
  
 10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the following manners: 
  
 (a) Cash Exercise. The Holder may deliver immediately
available funds; or 
  
 (b) Cashless
Exercise. If an Exercise Notice is delivered after the Effectiveness Date (as defined in the Registration Rights Agreement among the original Holder and the Company in connection with this Warrant) and a registration statement permitting the
Holder to resell the Warrant Shares is not then effective or the prospectus forming a part thereof is not then available to the Holder for the resale of the Warrant Shares, then and only then, the Holder may notify the Company in an Exercise Notice
of its election to utilize cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows: 
  
 X = Y [(A-B)/A] 
  
 where: 
  
 X = the number of Warrant Shares to be issued to the Holder. 
  
 Y = the number of Warrant Shares with respect to which this Warrant is being exercised. 
  
 A = the average of the closing prices for the five Trading Days immediately prior to (but not including) the Exercise Date.

  
 B = the Exercise Price. 
  

 7 

 For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the
Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued.

  
 11. Limitations on Exercise. 
  
 (a) Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. By written notice to the Company, the Holder may waive the provisions of
this Section but any such waiver will not be effective until the 61st day after such notice is delivered to the Company. 
  
 (b) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder
upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such
Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may
receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. This restriction may not be waived. 
  
 (c) Notwithstanding anything to the contrary contained herein, if (i) the Company elects to pay the Buy-In penalty pursuant to clause (1)
of the first sentence of Section 5(c) in shares of registered Common Stock or (ii) the Holder exercises its right to require the Company to repurchase this Warrant pursuant to Section 9(b) and the Company elects to pay the purchase price in shares
of registered Common Stock, in no event shall the aggregate number of 

  

 8 

 
shares of Common Stock acquired by the Holder pursuant to the foregoing provisions exceed
[            ]2 in the aggregate. 
  
 12. No Fractional Shares. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant and in lieu thereof, any fractional shares shall be rounded down to the nearest whole. 
  
 13. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on
a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses
for such communications shall be: (i) if to the Company, to eMerge Interactive, Inc., Attn: Chief Financial Officer, Facsimile No.: (772) 581-8171, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or
such other address or facsimile number as the Holder may provide to the Company in accordance with this Section. 
  
 14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a
new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the
Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register. 
  
 15. Miscellaneous. 
  
 (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject
to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns. 
  
 (b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of 

	2	The Holder’s pro rata share of 900,000 shares of Common Stock based on such Holder’s Investment Amount under the Purchase Agreement

  

 9 

 law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court,
or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right
to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  
 (c) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. 
  
 (d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
  
 (e) Subject to the provisions of Section 9 of this Warrant, prior to exercise of this Warrant, the holder hereof shall not, by reason of
by being a holder hereof, be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive
rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. 
  
 (f) This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK, 
 SIGNATURE PAGE FOLLOWS] 
  

 10 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above. 
  

			
	EMERGE INTERACTIVE, INC.
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 11 

  
 EMERGE INTERACTIVE, INC.

 WARRANT ORIGINALLY ISSUED [            ], 2004 
  
 EXERCISE NOTICE 
  
 To eMerge Interactive, Inc.: 
  
 The undersigned hereby irrevocably elects to purchase
                     shares of Common Stock pursuant to the above captioned Warrant, and, if such Holder is not utilizing the cashless
exercise provisions set forth in the Warrant, encloses herewith $             in cash, certified or official bank check or checks or other immediately available funds, which sum
represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Exercise Notice relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. 
  
 By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11(a) and (b) of this Warrant to which this notice relates. 
  
 The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of 
  

			
	 	  	 PLEASE INSERT SOCIAL SECURITY OR
 TAX
IDENTIFICATION NUMBER

  
 (Please print name and
address) 
  

 12 

 Warrant Shares Exercise Log 
  

							
	 Date

	 	 Number of Warrant
 Shares Available to be
 Exercised

	 	 Number of Warrant Shares
 Exercised

	 	 Number of
 Warrant Shares
 Remaining to
 be Exercised

  

 13 

  
 EMERGE INTERACTIVE, INC.

 WARRANT ORIGINALLY ISSUED [            ], 2004 
 FORM OF ASSIGNMENT 
  
 [To be completed and signed only upon transfer of Warrant] 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                     the right represented by the above-captioned Warrant to purchase
                     shares of Common Stock to which such Warrant relates and appoints
                     attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

 
 Dated:
                                    ,
             
  

	
	
	 
	 (Signature must conform in all respects to name of
 holder as specified on the face of the Warrant)

	
	 
	 Address of Transferee

	
	 
	
	 

  
 In the presence of: 

 
 __________________________ 
  

 14 

  
 EXHIBIT B

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

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

  
 “Losses” shall have the
meaning set forth in Section 5(a). 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means: (i) the Shares, (ii) the Warrant Shares, (iii) the Additional Investment Right Shares,
and (iv) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to any of the securities referenced in (i), (ii) or (iii) above. 
  
 “Registration Statement” means the initial
registration statement required to be filed in accordance with Section 2(a) and any additional registration statement(s) required to be filed under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statements. 
  
 “Rule 144” means Rule 144 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 415” means Rule 415 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means the Securities Act
of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to the Investors pursuant to the Purchase Agreement. 
  

 2 

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

 3 

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

 4 

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

  
 (d) Use its best efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any 

  

 5 

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

  

 6 

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

 7 

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

  

 8 

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

  

 9 

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

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

  

 10 

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

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

  

 11 

			
	If to any other Person who is then the registered Holder:	  	To the address of such Holder as it appears in the stock transfer books of the Company

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

 12 

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

 13 

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

			
	EMERGE INTERACTIVE, INC.
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

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

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

					
	[INVESTOR]
		
	 By:
	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
	
	 Address for Notice:

	
	 Facsimile No.:

	 Attn:

  

 15 

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

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

  

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

  

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

  

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

  

	 	•	privately negotiated transactions; 

  

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

  

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

  

	 	•	a combination of any such methods of sale; and 

  

	 	•	any other method permitted pursuant to applicable law. 

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

  

 16 

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

 17 

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

	1.	Name. 

  

	 	(a)	Full Legal Name of Selling Securityholder 

  
                                       
                                        
                                        
                                        
                                        
                                        

  

	 	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held: 

  
                                       
                                        
                                        
                                        
                                        
                                        

  

	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the
questionnaire): 

  
                                       
                                        
                                        
                                        
                                        
                                        

  
 2. Address for Notices to Selling Securityholder: 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
  

			
	 Telephone:
	 	                                       
                                        
                                        
                                        
                                        
                             

		
	 Fax:
	 	                                      
                                        
                                        
                                        
                                        
                             
		
	 Contact Person:
	 	                                       
                                        
                                        
                                        
                                        
                             

  

 18 

	3.	Beneficial Ownership of Registrable Securities: 

  
 Type and Principal Amount of Registrable Securities beneficially owned: 
  
                                       
                                        
                                        
                                        
                                        
                                        

  
                                       
                                        
                                        
                                        
                                        
                                        

  
                                       
                                        
                                        
                                        
                                        
                                        

  

	4.	Broker-Dealer Status: 

  

	 	(a)	Are you a broker-dealer? 

  
 Yes  ̈    No  ̈ 
  

	 	Note:	If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	 	(b)	Are you an affiliate of a broker-dealer? 

  
 Yes  ̈    No  ̈ 
  

	 	(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? 

  
 Yes  ̈    No  ̈ 
  

	 	Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder. 

  
 Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of
the Company other than the Registrable Securities listed above in Item 3. 
  
 Type and Amount of Other Securities beneficially owned by the Selling Securityholder: 
  
                                       
                                        
                                        
                                        
                                        
                                        

  
                                       
                                        
                                        
                                        
                                        
                                        

  
                                       
                                        
                                        
                                        
                                        
                                        

  

 19 

	6.	Relationships with the Company: 

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

  
                                       
                                        
                                        
                                        
                                        
                                        

  
 The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date hereof and prior to the Effective Date for the Registration Statement. 
  
 By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information
in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

  
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. 
  

									
					
	 Dated:
	 	 	 	 	 	 Beneficial Owner:
	 	 

									
					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

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

 20 

  
 EXHIBIT C 

 
 NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
  
 EMERGE INTERACTIVE, INC. 
  
 ADDITIONAL INVESTMENT RIGHT 
  
 Date of Original
Issuance:[            ], 2004 
  
 eMerge Interactive, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received,
[    ] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total number of shares of Common Stock (as defined below) (such shares, the “Additional Investment Right
Shares”) as equals the product of (1) .50 and (2) the quotient obtained by dividing (a) $[    ]1 by (b)$1.60. This Additional Investment Right (“Additional Investment Right”) may be exercised from time to time and at any time in whole or in part prior to the Expiration Date and is subject to the terms and
conditions set forth below. 
  
 1. Definitions. As used in
this Additional Investment Right, the following terms shall have the respective definitions set forth in this Section. Capitalized terms that are used and not defined in this Additional Investment Right that are defined in the Purchase Agreement (as
defined below) shall have the respective definitions set forth in the Purchase Agreement. 
  
 (a) “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United
States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. 
  
 (b) “Closing Price” means on any particular date: (a) the closing sales price per share of Common Stock on such date on
any of the New York Stock Exchange, American Stock Exchange, NASDAQ National Market or NASDAQ SmallCap Market on which the Common Stock is then listed or quoted (as reported by Bloomberg L.P. for regular session 

	1	The Holder’s Investment Amount under the Purchase Agreement. 

  

 trading on such day), or if there is no such price on such date, then the closing sales price on such
trading markets on the date nearest preceding such date (as reported by Bloomberg L.P. for the closing sales price for regular session trading on such day), or (b) if the shares of Common Stock are not then listed or quoted on any of the New York
Stock Exchange, American Stock Exchange, NASDAQ National Market or NASDAQ SmallCap Market, the closing sales price for a share of Common Stock on the OTC Bulletin Board (as reported by Bloomberg L.P. for 5:00 P.M. (New York time), or (c) if the
shares of Common Stock are not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the “Pink Sheet”
quotes for the relevant conversion period, as determined in good faith by the Holder, or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined by an appraiser selected in good
faith by the Holders of this Additional Investment Right. 
  
 (c) “Common Stock” means the Class A common stock of the Company, $0.008 par value per share, and any securities into which such common stock may be hereafter reclassified. 
  
 (d) “Expiration Date” means the
180th Trading Day after the Effective Date, subject to extension in accordance with Section 4(a). 
  
 (e) “Exercise Price” means the Per Unit
Purchase Price, subject to adjustment in accordance with Section 9 hereof. 
  
 (f) “Purchase Agreement” means the Securities Purchase Agreement dated as of November 22, 2004 to which the Company and the original Holder are parties. 
  
 (g) “Trading Day” means (i) a day on which
the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common
Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 2. Registration of Additional Investment Right. The Company shall register this Additional Investment Right, upon
records to be maintained by the Company for that purpose (the “Additional Investment Right Register”), in the name of the record Holder hereof from time to time. The Holder agrees that it may not transfer this Additional Investment
Right as to more than the number of Additional Investment Right Shares then outstanding as shown on the most updated Additional Investment Right Exercise Log, and any purported transfer in excess of such number of Additional Investment Right Shares
shall have no effect. The Company may deem and treat the registered Holder of this Additional Investment Right as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent
actual notice to the contrary. 
  

 2 

 3. Registration of Transfers. This Additional Investment Right is subject to the transfer
restrictions set forth in the Purchase Agreement. The Company shall register the transfer of any portion of this Additional Investment Right in the Additional Investment Right Register, upon surrender of this Additional Investment Right, with the
Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Additional Investment Right to purchase Common Stock, in substantially the form of this
Additional Investment Right (any such new Additional Investment Right, a “New Additional Investment Right”), evidencing the portion of this Additional Investment Right so transferred shall be issued to the transferee and a New
Additional Investment Right evidencing the remaining portion of this Additional Investment Right not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Additional Investment Right by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Additional Investment Right. 
  
 4. Exercise and Duration of Additional Investment Rights. 
  

(a) This Additional Investment Right shall be exercisable by the registered Holder at any time and from time to time on or after the
date hereof to and including 6:30 p.m. New York City time, on the Expiration Date. At 6:30 p.m., New York City time on the Expiration Date, the portion of this Additional Investment Right not exercised prior thereto shall be and become void and of
no value. The Company may not call or redeem any portion of this Additional Investment Right without the consent of the Holder. The Expiration Date set forth above shall be extended for the number of Trading Days during such period in which (i)
trading in the Common Stock is suspended by any Trading Market or the Commission, or (ii) following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the
Holder for resale of the Additional Investment Right Shares. 
  
 (b) Subject to the provisions of this Section 4(b), at any time after the Effective Date and prior to the Expiration Date, if the: (i) closing sales price of the Common Stock as reported by the Nasdaq Stock Market for
each of 5 consecutive Trading Days after such Effective Date is equal to or greater than 120% of the Exercise Price on the Date of Original Issuance (as may be adjusted pursuant to Section 9), (ii) the Additional Investment Right Shares are either
registered for resale pursuant to an effective registration statement naming the Holder as a selling stockholder thereunder (and the prospectus thereunder is available for use by the Holder as to all then available Additional Investment Right
Shares) or freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act, as determined by counsel to the Company pursuant to a written opinion letter addressed and in form and substance reasonably
acceptable to the Holder and the transfer agent for the Common Stock, and (iii) the Company shall have honored all Exercise Notices delivered prior to 1:00 p.m. (New York City time) on the Call Date (as defined below), then the Company may, subject
to Section 11, require that Holder exercise all, but (subject to Section 11) not less than all, of the portion of this Additional Investment Right for which Exercise Notices have not been delivered by 5:00 p.m. on the Call Date. To exercise this
right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein that this Additional Investment Right shall be exercised. If the conditions for such Call are satisfied from the
period from the date of the Call Notice through and including the Call Date, then, subject to Section 11, this 

  

 3 

 
Additional Investment Right shall be deemed to have been exercised in full at 6:30 p.m. (New York City time) on the 10th Trading Day after the date the Call
Notice is received by the Holder (such date, the “Call Date”). The Holder shall deliver payment in immediately available funds of the Exercise Price for the number of Additional Investment Right Shares for which this Additional
Investment Right is required to be exercised under this subsection promptly but in any event no later than the Call Date. Subject to the immediately following sentence, any unexercised portion of this Additional Investment Right following the Call
Date shall automatically be deemed cancelled. The Company and the Holder agree that, if and to the extent Section 11 of this Additional Investment Right would restrict the ability of the Holder to exercise this Additional Investment Right in full in
the event of a delivery of a Call Notice, then notwithstanding anything to the contrary set forth in the Call Notice, the Call Notice shall be deemed automatically amended to apply only to such portion of this Additional Investment Right as may be
exercised by the Holder by the Call Date in accordance with Section 11. The Holder will promptly (and, in any event, prior to the Call Date) notify the Company in writing following receipt of a Call Notice if Section 11 would restrict its exercise
of the Additional Investment Right, specifying therein the number of Additional Investment Right Shares so restricted. 
  
 5. Delivery of Additional Investment Right Shares. 
  
 (a) To acquire Additional Investment Right Shares under this Additional Investment Right, the Holder shall not be required to physically
surrender this Additional Investment Right unless the aggregate number of Additional Investment Right Shares then represented by this Additional Investment Right is being exercised. Upon delivery of a written notice, in the form of the Exercise
Notice attached hereto (the “Exercise Notice”) to the Company (together with the Additional Investment Right Exercise Log attached thereto (the “Additional Investment Right Exercise Log”) at its address for notice
set forth herein and upon payment of the Exercise Price multiplied by the number of Additional Investment Right Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the
Date of Exercise) issue and deliver to the Holder, a certificate representing the number of Additional Investment Right Shares to which such exercise pertains (the dollar amount of the exercise at issue divided by the Exercise Price), which, unless
otherwise required by the Purchase Agreement, shall be free of restrictive legends. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Additional Investment Right
Shares has been declared effective by the Securities and Exchange Commission, use its best efforts to deliver the Additional Investment Right Shares hereunder electronically through the Depository Trust Corporation or another established clearing
corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Additional Investment Right Shares electronically
through the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to Company: (i) the Exercise Notice (with the Additional Investment Right Exercise Log attached to it),
appropriately completed and duly signed and (ii) the Exercise Price for the number of Additional Investment Right Shares so indicated by the Holder to be purchased. The Company shall file a registration statement covering the Additional Investment
Right Shares and shall use its best efforts to keep such registration statement continuously 

  

 4 

 
effective, in each case in accordance with the terms of the Registration Rights Agreement, dated as of the date hereof, between the original Holder and the
Company. 
  
 (b) If by the third Trading Day
after a Date of Exercise the Company fails to deliver the required number of Additional Investment Right Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise. 
  
 (c) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Additional Investment Right Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Additional Investment Right Shares, the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Additional Investment Right Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (1) pay cash or issued additional registered shares of Common Stock, at the Company’s option, to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Additional Investment Right Shares that the Company was required to deliver to the Holder in connection with the
exercise at issue by (B) the closing bid price of the Common Stock at the time of the obligation giving rise to such purchase obligation, with the number of additional registered shares of Common Stock determined by dividing the above noted amount
by the closing price of the Common Stock at the time of the obligation, and (2) reinstate the portion of the Additional Investment Right and equivalent number of Additional Investment Right Shares for which such exercise was not honored. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In. 
  
 (d) The Company’s obligations to issue and deliver Additional Investment Right Shares in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Additional Investment Right Shares. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Additional
Investment Right Shares upon exercise of the Additional Investment Right as required pursuant to the terms hereof. 
  
 6. Charges, Taxes and Expenses. Issuance and delivery of Additional Investment Right Shares upon exercise of this Additional Investment Right shall
be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates 

  

 5 

 
for Additional Investment Right Shares in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as
a result of holding or transferring this Additional Investment Right or receiving Additional Investment Right Shares upon exercise hereof. 
  
 7. Replacement of Additional Investment Right. If this Additional Investment Right is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Additional Investment Right, a New Additional Investment Right, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Additional Investment Right under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Additional Investment Right is requested as a result of a mutilation of this Additional Investment Right, then the Holder
shall deliver such mutilated Additional Investment Right to the Company as a condition precedent to the Company’s obligation to issue the New Additional Investment Right. 
  
 8. Reservation of Shares. The Company covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Additional Investment Right Shares upon exercise of this Additional Investment Right as herein provided, the number of
Additional Investment Right Shares which are then issuable and deliverable upon the exercise of this entire Additional Investment Right, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking
into account the adjustments and restrictions of Section 9). The Company covenants that all Additional Investment Right Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
  
 9. Certain Adjustments. The Exercise Price and number of Additional Investment Right Shares issuable upon exercise of this Additional Investment
Right are subject to adjustment from time to time as set forth in this Section 9. 
  
 (a) Stock Dividends and Splits. If the Company, at any time while this Additional Investment Right is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event
requiring an adjustment under this paragraph occurs during the period that an Exercise 

  

 6 

 
Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event. 
  
 (b) Fundamental Transactions. If, at any time while
this Additional Investment Right is outstanding, (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4)
the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then the Holder shall have the right to require the repurchase of this Additional Investment Right for a purchase price, payable in cash or registered shares of Common Stock, at the Company’s option,
within five Trading Days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the Black Scholes value of the remaining unexercised portion of this Additional Investment Right on the date of such request.
The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (c). 
  
 (c) Number of Additional Investment Right Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Additional Investment Right Shares that may be purchased upon exercise of this Additional Investment Right shall be increased or
decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Additional Investment Right Shares shall be the same as the aggregate Exercise Price in effect immediately prior to
such adjustment. 
  
 (d) Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

  
 (e) Notice of Adjustments. Upon the
occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Additional Investment Right and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Additional Investment Right Shares or other securities issuable upon exercise of this Additional Investment Right (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s
Transfer Agent. 
  
 (f) Notice of Corporate
Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including 

  

 7 

 
without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or
approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company (but only to the extent such
disclosure would not result in the dissemination of material, non-public information to the Holder), then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 10 calendar days
prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Additional Investment Right prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be described in such notice. 
  
 10. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds or certified or official bank check or
checks. 
  
 11. Limitation on Exercise. 
  
 (a) Notwithstanding anything to the contrary contained
herein, the number of Additional Investment Right Shares that may be acquired by the Holder upon any exercise of this Additional Investment Right (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following
such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Additional Investment Right. By written notice to the
Company, the Holder may waive the provisions of this Section but any such waiver will not be effective until the 61st day after such notice is delivered to the Company. 
  
 (b) Notwithstanding anything to the contrary contained herein, the number of Additional Investment Right Shares that may be acquired by the Holder upon any exercise of this Additional Investment Right (or otherwise in
respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations 

  

 8 

 
promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Additional Investment Right. This restriction may not be waived. 
  
 (c) Notwithstanding anything to the contrary contained
herein, if (i) the Company elects to pay the Buy-In penalty pursuant to clause (1) of the first sentence of Section 5(c) in shares of registered Common Stock or (ii) the Holder exercises its right to require the Company to repurchase this Additional
Investment Right pursuant to Section 9(b) and the Company elects to pay the purchase price in shares of registered Common Stock, in no event shall the aggregate number of shares of Common Stock acquired by the Holder pursuant to the foregoing
provisions exceed [ ]2 in the aggregate. 
  
 12. No Fractional Shares. No fractional shares of Additional Investment Right Shares will be issued in connection
with any exercise of this Additional Investment Right and in lieu thereof, any fractional shares shall be rounded down to the nearest whole. 
  
 13. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on
a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses
for such communications shall be: (i) if to the Company, to (772) 581-8171, Attn: Chief Financial Officer, or (ii) if to the Holder, to the address or facsimile number appearing on the Additional Investment Right Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with this Section. 
  
 14. Additional Investment Right Agent. The Company shall serve as Additional Investment Right agent under this Additional Investment Right. Upon 30 days’ notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company
or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Additional Investment Right without any further act. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Additional Investment Right Register. 

	2	The Holder’s pro rata share of 900,000 shares of Common Stock based on such Holder’s Investment Amount under the Purchase Agreement

  

 9 

 15. Miscellaneous. 
  
 (a) This Additional Investment Right shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding sentence, nothing in this Additional Investment Right shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Additional Investment Right. This Additional Investment Right may be amended only in writing signed by the Company and the Holder and their successors and assigns. 
  
 (b) All questions concerning the construction, validity, enforcement and interpretation of this Additional
Investment Right shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of this Additional Investment Right and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Additional Investment Right and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Additional Investment Right or the transactions contemplated hereby. If either party
shall commence a Proceeding to enforce any provisions of this Additional Investment Right, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding. 
  
 (c) The headings herein are for convenience only, do not constitute a part of this Additional Investment Right and shall not be deemed to limit or affect any of the provisions hereof. 
  

 10 

 (d) In case any one or more of the provisions of this Additional Investment Right shall
be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Additional Investment Right shall not in any way be affected or impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Additional Investment Right. 
  
 (e) Subject to the provisions of Section 9 hereof, prior to
exercise of this Additional Investment Right, the holder hereof shall not, by reason of by being a holder hereof, be entitled to any rights of a stockholder with respect to the Additional Investment Right Shares, including (without limitation) the
right to vote such Additional Investment Right Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication
concerning the business or affairs of the Company. 
  
 (f) This Additional Investment Right may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. 
  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS] 
  

 11 

 IN WITNESS WHEREOF, the Company has caused this Additional Investment Right to be duly executed by its
authorized officer as of the date first indicated above. 
  

			
	EMERGE INTERACTIVE, INC.
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 12 

  
 EXERCISE NOTICE 

 
 The undersigned hereby irrevocably elects to purchase
                             shares of Common Stock of eMerge Interactive, Inc., pursuant to the
Additional Investment Right, originally issued [            ], 2004 (the “Additional Investment Right”), and the Holder encloses herewith
$             in cash, certified or official bank check or checks or other immediately available funds, which sum represents the aggregate Exercise Price (as defined in the
Additional Investment Right) for the number of Additional Investment Right Shares to which this Exercise Notice relates, together with any applicable taxes payable by the undersigned pursuant to the Additional Investment Right. 
  
 By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11(a) and (b) of this Additional Investment Right to which this notice relates. 
  
 The undersigned requests that certificates for the Additional Investment Right Shares issuable upon this exercise be issued in the name of 
  

					
	 	  	 	  	 PLEASE INSERT SOCIAL SECURITY OR

	 	  	 	  	 TAX IDENTIFICATION NUMBER

  
 (Please print name and
address) 
  

 13 

 Additional Investment Right Exercise Log 
  

							
	 Date

	 	 Number of Additional Investment
 Right Shares Available to be
 Exercised

	 	 Number of Additional
 Investment Right Shares
 Exercised

	 	 Number of Additional
 Investment Right Shares
 Remaining to be Exercised

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

  

 14 

  
 FORM OF ASSIGNMENT

  
 [To be completed and signed only upon transfer of Additional
Investment Right] 
  
 FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto                      the right represented by the within Additional Investment Right to purchase
                     shares of Common Stock of eMerge Interactive, Inc. to which the within Additional Investment Right relates and appoints
                     attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

 
 Dated:
                    ,              
  

	
	
	 
	 (Signature must conform in all respects to name of
 holder as specified on the face of the Additional
 Investment Right)

	
	 
	 Address of Transferee

	
	 
	
	 

  

	
	In the presence of:
	
	  

  

 15

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