Document:

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                                                                   EXHIBIT 10.32

                 COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
                                No. 58-3K95-M-764

                                     between

                      USDA'S AGRICULTURAL RESEARCH SERVICE

                                       and

                           eMERGE VISION SYSTEMS, INC.

                                       and

                 IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY

                                   concerning

          Methods for Detecting Fecal and Ingesta Contamination on Meat

                                                     CRIS NO. 3625-32420-001-00D
                                                        Log No. 3630-30-00-16377
                                                                   Term: 3 years
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                                    CONTENTS

Objective and Approach .................................................       5
Scientific Interactions ................................................       5
Ars' Responsibilities ..................................................
eMERGE's Responsibilities ..............................................       6
Isu's Responsibilities .................................................       7
Sharing of Research Results ............................................       7
Research Exclusion .....................................................       7
Reports and Records ....................................................       8
Regulatory Approvals ...................................................       8
Confidentiality and Proprietary Property ...............................       8
Publications ...........................................................      10
Use of Name or Endorsements ............................................      10
Manufacture in the United States .......................................      10
Indemnity and Liability ................................................      10
Export Control .........................................................      11
Relationship of Parties ................................................      11
Availability of Appropriations .........................................      11
Force Majeure ..........................................................      12
Termination by Mutual Agreement ........................................      12
Termination by Mutual Agreement ........................................      12
Scope of Agreement .....................................................      13
Amendment ..............................................................      14
Notices and Authorized Agents ..........................................      14
Scientific Representatives .............................................      15
Disputes ...............................................................      15
Limitation on Ars' Scientific Representative's authority ...............      16
Officials Not to Benefit ...............................................      16
Subcontracting Approval ................................................      16
Entire Agreement .......................................................      16
Severability ...........................................................      17
Assignments ............................................................      17
Subject Inventions .....................................................      17
Ownership of Inventions ................................................      18
Subject Inventions .....................................................      18
Subject Invention Information ..........................................      19
Property Protection Applications .......................................      19
Headings and Titles ....................................................      19
Ambiguities ............................................................      20
Term ...................................................................      20
Signatures and Effective Date ..........................................      20
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Certifications .........................................................      21
Estimated Budget .......................................................      23
Research Plan ..........................................................      24
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                       ARTICLE IV - OBJECTIVE AND APPROACH

4.01     The objective of this Agreement is to evaluate and further develop the
         technology described in a US Patent Application Serial No. 09/033, 754,
         "Method and System for Detecting Fecal and Ingesta Contamination on the
         Carcasses of Meat Animals During and After Slaughter Using Visible
         Light Fluorescent Spectroscopy," filed 3 March 1999. ARS will provide
         microbial and animal expertise. ISU will provide physical chemistry and
         spectroscopy expertise. eMERGE will provide design and engineering
         expertise and will construct prototype instruments. All parties will
         participate in the testing and evaluation of the prototype instruments
         for their ability to detect fecal and ingesta contamination on meat.

4.02     The approaches to be used by ARS are to:

         Share the knowledge gained thus far on the use of spectroscopy to
         detect fecal material and ingesta on meat and to join with ISU and
         eMERGE to evaluate and enhance its practical application.

4.03     The approaches to be used by eMERGE are to:

         Design and construct prototype instruments adjoin with ARS and ISU to
         evaluate its practical application in the detection of fecal material
         and ingesta on meat.

4.04     The approaches to be used by ISU are to:

         Share the knowledge gained thus far on the use of spectroscopy to
         detect fecal material and ingesta on meat and to join with ARS and
         eMERGE to evaluate and enhance its practical application.

                       ARTICLE V - SCIENTIFIC INTERACTIONS

5.01     Frequent and effective communication is essential to the successful
         accomplishment of the objectives of this Agreement. To this end, the
         scientific representatives of ARS, ISU and eMERGE shall meet at least
         once every six (6) months to exchange results, perform critiques and
         make plans and recommendations.

         a.       Any such plan or recommendation that is outside the Scope of
                  Agreement shall be reduced to writing and referred to the
                  management of each party for appropriate action.

         b.       Any such plan or recommendation so referred shall not be
                  binding on either party unless incorporated into this
                  Agreement by amendment.

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                       ARTICLE VI - ARS' RESPONSIBILITIES

6.01     Using approaches herein described in Section 4.02, provide expertise in
         the microbiology, physiology and metabolism of the gastrointestinal
         tract.

6.02     Provide biological samples and animals as necessary and mutually agreed
         upon to evaluate the prototype instrument(s) developed by eMERGE to
         detect fecal material and ingesta on meat.

6.03     Permit ISU and eMERGE scientific personnel assigned to this cooperative
         effort entrance to and exit from ARS facilities as needed and agreed.

6.04     Assign personnel, equipment, supplies, transportation, and facilities
         as needed and available to meet its responsibilities hereunder, such
         resources to remain the property of ARS.

                     ARTICLE VII - eMERGE'S RESPONSIBILITIES

7.01     Using approaches herein described in Section 4.03, design and produce a
         prototype and a commercially feasible fecal and ingesta detection
         instrument and evaluate with ARS and ISU its usefulness under practical
         conditions.

7.02     Conduct market surveys in support of a commercialization strategy for
         the above mentioned fecal and ingesta detection instrument.

7.03     Explore the regulatory issues regarding the adoption of the
         above-mentioned fecal and ingesta detection instrument.

7.04     Permit ISU and ARS scientific personnel assigned to this cooperative
         effort entrance to and exit from eMERGE facilities as needed and
         agreed.

7.05     Assign personnel, equipment, supplies, transportation, and facilities
         as needed and available to meet its responsibilities hereunder, such
         resources to remain the property of eMERGE.

7.06     Pay $150,000 to ISU, as follows:

          a.   $50,000 within thirty (30) days of final signature of this
               Agreement;

          b.   $50,000 within thirty (30) days after the completion of the first
               year of this Agreement;

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         c.       $50,000 within thirty (30) days after the completion of the
                  second year of this Agreement.

         Make checks or money orders out to the "Iowa State University of
         Science and Technology," cite Agreement No. 58-3K95-M-764 thereon and
         send to:

                  Contracts and Grants Office
                  213 Beardshear Hall
                  Iowa State University
                  Ames, IA 50011-2041.

                      ARTICLE VIII - ISU'S RESPONSIBILITIES

8.01     Using approaches herein described in Section 4.04, provide physical
         chemistry and spectroscopy expertise as needed by eMERGE in the design
         of the prototype fecal and ingesta detection instrument and participate
         with ARS and eMERGE in evaluating its ability to detect fecal
         contamination and ingesta on meat.

8.02     Permit ARS and eMERGE scientific personnel assigned to this cooperative
         effort entrance to and exit from ISU facilities as needed and agreed.

8.03     Assign personnel, equipment, supplies, transportation, and facilities
         as needed and available to meet its responsibilities hereunder, such
         resources to remain the property of ISU.

                    ARTICLE IX - SHARING OF RESEARCH RESULTS

9.01     The results of this Agreement and research data which are collected,
         compiled and evaluated under this Agreement shall be shared and
         mutually exchanged by ARS, eMERGE and ISU.

                         ARTICLE X - RESEARCH EXCLUSION

10.01    The results of this Agreement shall be made available to others for
         bona find research purposes if confidentiality is not breached and
         Subject Inventions or the pending patent application described in
         Section 4.01 are not infringed.

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                        ARTICLE XI - REPORTS AND RECORDS

11.01    Each party shall keep complete records relating to this research. All
         such records shall be available for inspection by the other parties at
         reasonable times.

11.02    The records, or true copies of them shall be delivered to the other
         parties upon request.

11.03    Written progress reports shall be supplied by each party to the other
         parties at least fifteen (15) calendar days prior to each semiannual
         meeting.

11.04    A final report summarizing all data shall be submitted by each party to
         the other parties within sixty (60) days of the completion of this
         Agreement.

                       ARTICLE XII - REGULATORY APPROVALS

12.01    Each party is joined and separately responsible for obtaining
         appropriate opinions, permits, or licenses from Federal or State
         agencies which research materials that each may contribute to or may
         result from the performance of this Agreement.

12.02    eMERGE is responsible for obtaining appropriate opinions, permits, or
         licenses from Federal or State agencies which regulate commercial
         products that may arise from the research work performed within the
         Scope of Agreement.

             ARTICLE XIII - CONFIDENTIALITY AND PROPRIETARY PROPERTY

13.01    Trade secrets or commercial or financial information, hereinafter
         referred to as Confidential Information, that is privileged or
         confidential, under the meaning of 5 USC 552(b)(4), which is obtained
         by one party from another in the conduct of research under this
         Agreement shall not be disclosed to any third party without prior
         written permission of the disclosing party. Each party should use the
         same degree or care in safeguarding the Confidential Information of the
         other party as it uses for its own Confidential Information, but in no
         event less than reasonable care. Also, disclosure of Confidential
         Information should be on a need-to-know basis.

13.02    Information and sample materials submitted or created under this
         Agreement and permanently labeled "confidential" or "proprietary" but
         the submitter or creator shall be deemed to be Confidential
         Information.

13.03    To the extent one party orally submits its Confidential Information to
         the other parties, the submitting party will prepare a document marked
         "CONFIDENTIAL" embodying or

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         identifying in reasonable detail such orally submitted Confidential
         Information and provide the document to the other parties.

13.04    Confidential Information and sample materials submitted under this
         Agreement shall not be disclosed or transferred to a party other than a
         party to this Agreement without permission from the submitter or
         creator.
13.05    A party hereto shall be bound by confidentiality unless the information
         or sample material received from another party:

         a. Already are available to the public or known to the recipient;

         b. Become available to the public through no fault of the recipient, or

         c. Are nonconfidentialy received from another party legally entitled to
         them.

13.06    Proprietary Material Property

         a.       Proprietary Material Property means individually and
                  collectively, without limitation, computer software, computer
                  simulations, arrays, germplasm, cultures, cell lines, plants,
                  plant parts, seeds, pollen, proteins, peptides, and
                  metabolites, DNA and RNA sequences, genes, probes and
                  plasmids.

         b.       Any Proprietary Material Property which is supplied under this
                  agreement by a party, including materials embodying or
                  embodied by such Proprietary Material Property, shall remain
                  the sole property of the supplying party and no right or
                  license to any such Proprietary Materials Property will be
                  created by virtue of this Agreement, EXCEPT: as authorized by
                  15 USC 3710a(a)(2).

         c.       With respect to Proprietary Material Property supplied to the
                  Agreement by any party and as authorized by 15 USC
                  3710a(c)(7)(A):

                           (1)      Such Proprietary Material Property is
                                    supplied and may be used, solely for
                                    research purposes and only as expressly
                                    provided herein;

                           (2)      Such Proprietary Material Property shall not
                                    be transferred to any third party without
                                    the prior written consent of the supplying
                                    party; and

                           (3)      At expiration or termination of this
                                    Agreement, all Proprietary Material Property
                                    shall be returned or destroyed, at the
                                    option of the supplying party, and the
                                    receiving party shall cease using and make
                                    no further use of all Proprietary Material
                                    Property provided by the supplying party,
                                    unless otherwise agreed in writing by both
                                    parties.

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                           ARTICLE XIV - PUBLICATIONS

14.01    Subject to the requirements of the confidentiality and preservation of
         invention rights, any party hereto may publish the results under the
         Agreement, PROVIDED;

         a.       The other parties are allowed to review the manuscript at
                  least sixty (60) days prior to submission for publication;

         b.       Such publications shall acknowledge this Agreement and the
                  contributions of each party's personnel.

14.02 The final decision as to the publication content rests with the author of
the publication.

14.03    Publication and/or other disclosure of the results of this Agreement
         shall be delayed as necessary to preserve both United States of America
         and foreign patent rights in a Subject Invention, PROVIDED: the
         requesting party demonstrates promptness and diligence in seeking
         patent protection on the Invention.

                    ARTICLE XV - USE OF NAME OR ENDORSEMENTS

15.01    By entering into this Agreement, neither ARS nor ISU directly or
         indirectly endorse any product or service provided or to be provided,
         whether directly or indirectly related to this Agreement or the results
         of this Agreement.

15.02    No party shall in any way state or imply that this Agreement or the
         results of this Agreement are an endorsement of its organizational
         units, employees, products, or services except to the extent permission
         is specifically granted by the Authorized Agents of ARS and ISU.

                 ARTICLE XVI - MANUFACTURE IN THE UNITED STATES

16.01    Any product embodying Subject Inventions or produced through the use of
         such Inventions used or sold by eMERGE or any licensee or sublicensee
         in the United States of America shall be manufactured substantially in
         the United States of America.

                     ARTICLE XVII - INDEMNITY AND LIABILITY

17.01    ISU will hold ARS and eMERGE harmless from any liability arising from
         the negligent acts or omissions of an employee, agent, or officer or
         ISU, EXCEPT: to the extent

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         aforesaid liability arises from the negligent acts or omissions of ARS
         or eMERGE, their employees, agents, or contractors and employees or
         agents of the contractor.

         a. ISU's liability is limited to that available under IOWA State Law.

17.02    ARS will hold eMERGE and ISU harmless from any liability arising rom
         the negligent act or omission of a federal Government officer or
         employee acting within the scope of his or her employment, EXCEPT: to
         the extent aforesaid liability arises from the negligent acts or
         omissions of eMERGE of ISU, their employees, agents, or contractors and
         employees or agents of the contractor.

         a.       ARS' liability is limited to that available pursuant to the
                  Federal Tort Claim Act, 28 USC 2671, et seq.

17.03    eMERGE will hold ARS and ISU harmless from any liability arising from
         the negligent act or omission of an eMERGE officer or employee acting
         within the scope of his or her employment, EXCEPT; to the extent
         aforesaid liability arises from the negligent acts or omissions of ARS
         or ISU, their employees, agents or contractors and employees or agents
         of the contractor.

                         ARTICLE XVIII - EXPORT CONTROL

18.01    ARS, eMERGE and ISU understand that materials resulting from the
         performance of this Agreement may be subject to export control laws and
         regulations.

18.02 Each party is separately responsible for compliance with such laws.

                      ARTICLE XIX - RELATIONSHIP OF PARTIES

19.01    ARS, eMERGE and ISU act in their independent capacities in the
         performance of their respective functions under this Agreement and no
         party is to be considered the officer, agent, or employee of another
         party.

                   ARTICLE XX - AVAILABILITY OF APPROPRIATIONS

20.01    ARS continuance of its obligations in this Agreement Is subject to the
         passage by the Congress of the United States of an appropriation of
         funds from which expenditures may legally be made to cover ARS'
         contributions.

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20.02    ISU's continuance of its obligations in this Agreement is subject to
         the passage by the Legislature of the State of Iowa of an appropriation
         of funds from which expenditures may legally be made to cover ISU's
         contributions.

                           ARTICLE XXI - FORCE MAJEURE

21.01    No party shall be liable for any unforeseeable event beyond its
         reasonable control not caused by the fault or negligence of such p.

         a.       Which causes the party to be unable to perform its obligations
                  under this Agreement; and

         b.       Which it has been unable to overcome by the exercise of due
                  diligence.

         c.       This includes, but is not limited to, floods, drought,
                  earthquake, storm, fire, pestilence, lightning and other
                  natural catastrophes, epidemic, war, riot, civil distance or
                  disobedience, strikes, labor dispute, failure, or sabotage of
                  a party's facilities or any order or injunction made by a,
                  court or public agency.

21.02    In the event of the occurrence of such force majeure. events, the party
         unable to perform shall promptly notify the other parties.

         a.       It shall also use its best efforts to resume performance as
                  quickly as practicable;

         b.       It shall suspend performance only for such period of time as
                  is reasonably necessary as a result of the force majeure
                  event.

                 ARTICLE XXII - TERMINATION BY MUTUAL AGREEMENT

22.01 This Agreement or parts thereof, is subject to termination at any time by
mutual consent.

22.02    Pledges of confidentiality and rights accruing in intellectual property
         shall survive such termination.

                 ARTICLE XXIII - TERMINATION BY MUTUAL AGREEMENT

23.01    ARS, eMERGE or ISU may unilaterally terminate its participation in this
         Agreement at any time for material breach by another by giving other
         parties written notice not less than ninety (90) calendar days prior to
         the desired termination date.

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23.02    Pledges of confidentiality and rights accruing in intellectual property
         shall survive such termination.

23.03 If ISU unilaterally terminates this Agreement pursuant to this Clause,
ISU:

         a.       Shall return to ARS and eMERGE any and all data and materials
                  originated or provided by ARS and eMERGE in ISU's possession;
                  and

         b.       Shall retain no rights to use or publish said material or data
                  after the effective date of ISU's unilateral termination.

23.04 If ARS unilaterally terminates this Agreement pursuant to this Clause,
ARS:

         a.       Shall return to ISU and eMERGE any and all data and materials
                  originated or provided by ISU and eMERGE in ARS' possession;
                  and

         b.       Shall retain no rights to use or publish said material or data
                  after the effective date of ARS' unilateral termination.

23.05 If eMERGE unilaterally terminates this Agreement pursuant to Clause,
eMERGE:

         a.       Shall return to ISU and ARS any and all data and materials
                  originated or provided by ISU and ARS in eMERGE's possession;
                  and

         b.       Shall retain no rights to use or publish said material or data
                  the effective date of eMERGE's unilateral termination.

                        ARTICLE XXIV - SCOPE OF AGREEMENT

24.01    Scope of Agreement means objectives, duties and responsibilities forth
         in Articles 4, 6, 7 and 8 and Schedule 3.

24.02    Any time a hereto believes their work progress hereunder dictates; a
         substantial change in the work described herein, all parties shall make
         a good faith effort to agree on any necessary change in this Agreement.

24.03    Any change in this Agreement shall be by written amendment

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                             ARTICLE XXV - AMENDMENT

25.01    If a party hereto desires a modification in this Agreement, the other
         pes shall confer in good faith to determine the desirability of such
         modification.

25.02    Such modification shall not be effective until a written amendment is
         signed by the Authorized Agents of all pes.

                  ARTICLE XXVI - NOTICES AND AUTHORIZED AGENTS

26.01    Notices and copies of correspondence among the scientific
         representatives of the parties that interpret or may have a bearing on
         the legal effect of this Agreement's terms and conditions shall be sent
         to the Authorized Agents.

26.02 Referencing Agreement Number 58-3K95-M-764 thereon, send to Authorized
Agents:

         If to ARS:
                  Willard J. Phelps
                  USDA/ARS/OTT
                  5601 Sunnyside Avenue
                  Beltsville, MD 20705-5131
                  Tel.: (301) 504-6532
                  FAX: (301) 504-5060
                  Email: mjp@ars.usda.gov;

         If to eMERGE:
                  Michael Sarmey
                  eMERGE Vision Systems, Inc.
                  10315 102nd Terrace
                  Sebastian FL 32959-7923
                  Tel.: (561) 581-7144
                  FAX: (561) 599-3779;

         If to ISU:
                  Richard E. Hasbrook
                  Contracts & Grants Officer
                  213 Beardshem
                  Iowa State University
                  Ames IA 50011-2041
                  Tel.: (515) 294-5225
                  FAX: (515) 294-8000
                  Email: grants@iastate.edu;

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                   ARTICLE XXVII - SCIENTIFIC REPRESENTATIVES

27.01 The Scientific Representative of ARS is:

                  Mark A. Rasmussen
                  USDA/ARS/NADC
                  P.O. Box 70
                  Ames IA 50010-0070
                  Email: mramuss@nadc.ars.usda.gov.

27.02    The Scientific Representative of eMERGE is:

                  Albin Gapsch
                  AMERGE - Vision Systems, Inc.
                  10315 102nd Terrace
                  Sebastian FL 32958-7823

27.03    The Scientific Representative of ISU is:

                  Jacob W. Petrich
                  116 Gilman Hall
                  Iowa State University
                  Ames IA 50011-3111
                  Email: jwp@lastate.edu.

                            ARTICLE XXVIII - DISPUTES

28.01    Any dispute arising under this Agreement which cannot be readily
         resolved shall be submitted to Authorized Agents for resolution.

28.02    Each party agrees to seek in good faith to resolve the issue through
         negotiation or other forms of nonbinding dispute resolution processes
         mutually acceptable to the parties.

28.03    A joint decision of ft Authorized Agents, or their designees, shall be
         dispositive of such dispute.

28.04    Pending the resolution of any dispute or claim pursuant to this Clause,
         the parties agree that performance of all obligations shall be pursued
         diligently.

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          ARTICLE XXIX - LIMITATION ON ARS' SCIENTIFIC REPRESENTATIVE'S
                                    AUTHORITY

29.01    ARS' Scientific Representative, also known as the Authorized
         Departmental Officer's Designated Representative, is authorized to
         perform the research, development, testing, and evaluation falling
         within the Scope of Agreement. That individual is not authorized to
         change or interpret with authority the terms and conditions of this
         Agreement.

                     ARTICLE XXX - OFFICIALS NOT TO BENEFIT

30.01    No Delegate to or Member of the Congress of the United States of
         America shall have a of or fit from this Agreement,

30.02    This requirement does not include corporations if this Agreement is
         entered into for the corporation's general benefit.

                     ARTICLE XXXI - SUBCONTRACTING APPROVAL

31.01    A party hereto desiring to cont or otherwise award a substantial
         portion of the, research and development described herein shall give
         prior notice to the other parties, including details of the contact or
         award and receive their permission, which permission shall not be
         unreasonably withheld or delayed.

31.02    This requirement is to assure confidentiality is not breached, Subject
         inventions are not infringed, and rights to Subject Inventions
         compromised.

                        ARTICLE XXXII - ENTIRE AGREEMENT

32.01    Agreement constitute the entire agreement among ARS, eMERGE, and ISU
         and supersedes all prior Agreements and understandings among them with
         respect to its subject matter.

32.02    Any representation, promise, or condition in correction with such
         subject matter which is not incorporated in this Agreement shall not be
         binding upon the parties.

32.03    No modification, renewal, extension, waiver, or termination of this
         Agreement or any of its provisions shall be binding upon The party or
         parties against whom enforcement of such modification, renewal,
         extension, waiver, or termination is sought, unless made in writing and
         signed on behalf of such party or parties by a Authorized Agent.

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32.04    As used herein, the word "termination" includes any and all means of
         bringing to an end prior to its expiration by its own terms this
         Agreement, or any provision thereof, whether by release, discharge,
         abandonment, or otherwise.

                          ARTICLE XXXIII - SEVERABILITY

33.01    The illegality or invalidity of any provision of this Agreement shall
         not impair, affect or invalidate the other provisions of this
         Agreement.

                           ARTICLE XXXIV - ASSIGNMENTS

34.01    Neither this Agreement nor any rights or obligations of the parties
         hereto shall be assigned or otherwise transferred by a party without
         the prior written consent of the other parties, which consent shall not
         be unreasonably withheld or delayed.

34.02    Notwithstanding the foregoing, eMERGE may assignees of a substantial
         portion of eMERGE's business interests to which this Agreement
         pertains.

34.03    ARS is an agency of the U.S., Government and any rights or data creased
         under this Agreement are freely transferable within the U.S. Government
         and shall not be deemed an "assignment" as contemplated by this Clause.

34.04    Iowa State University Research Foundation is a nonprofit organization
         associated with Iowa State University which has the right to manage
         intellectual property and receive assignment of intellectual property
         developed under this Agreement.

                        ARTICLE XXXV - SUBJECT INVENTIONS

35.01    "Subject Inventions" shall mean any invention or other intellectual
         property conceived or first reduced to practice under this Agreement
         which is patentable or otherwise protectable under title 35 of the
         United States Code, under 7 USC 232 1, et seq., and foreign
         intellectual property laws.

35.02    "SUBJECT  INVENTIONS"  DOES NOT MEAN INVENTIONS MADE OUTSIDE
         THE SCOPE OF AGREEMENT OR PRIOR TO THE EXECUTION OF THIS
         AGREEMENT.

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                     ARTICLE XXXVI - OWNERSHIP OF INVENTIONS

36.01    All rights, title and interest in any Subject Invention will be vested
         in equal share to the parties hereof by which the inventors thereof are
         employed,

                       ARTICLE XXXVII - SUBJECT INVENTIONS

37.01    ISU grants to eMERGE an option to obtain a worldwide, royalty-bearing
         exclusive license to make, use and sell any ISU owned or Co-owned
         Subject Inventions. The option will expire unless:

         a.       eMERGE informs ISU within sixty (60) days of its receipt of
                  Subject Invention disclosure that it desires to exercise its
                  option; or

         b.       A license is si within ninety (90) days of eMERGE's
                  notification.

37.02    eMERGE shall grant ARS, on behalf of the U.S. Government, a
         royalty-free, nonexclusive, worldwide, irrevocable, nontransferable
         license on any eMERGE wholly owned or co-owned Subject Invention. The
         purpose of this license shall be to practice the Subject Invention or
         have it practiced, by or on behalf of the Government, for research or
         other Government purposes 15 USC 3710 a(b)(2).

37.03    ISU is granted an option for a royalty-free, non-exclusive, worldwide,
         irrevocable license to practice and use eMERGE's or ARS' solely owned
         Subject Invention for ISU research purposes.

37.04    eMERGE is granted an option for an exclusive to an exclusive
         commercialization license in each Subject Invention owned or co-owned
         by ARS. This license shall be consistent with the requirements of 35
         USC 209(a), 209(b), and 209(f) and other such terms and conditions as
         may be reasonable under the circumstances, as agreed upon through good
         faith negotiations between eMERGE and ARS. The right of first refusal
         shall terminate whenever eMERGE fails to:

         a.       Submit a complete application for an exclusive license within
                  sixty (60) days of being notified by ARS of an Invention's
                  availability for licensing; or

         b.       Submit a good faith written response to a written proposal of
                  licensing terms within ninety (90) days of such proposal.

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                 ARTICLE XXXVIII - SUBJECT INVENTION INFORMATION

38.01    Each party shall promptly make written disclosure to the Authorized
         Agents of the other parties of each Subject Invention.

38.02    This information shall be treated in confidence by the receiving party.

38.03    Each party shall provide, when requested by the other patties, all
         information in its possession, or true copies thereof, pertaining to a
         Subject Invention which may be necessary or useful in the preparation,
         filing, and prosecution of patent applications covering the Subject
         Invention.

                ARTICLE XXXIX - PROPERTY PROTECTION APPLICATIONS

39.01    ARS, eMERGE, and ISU agree to cooperate with each other in the
         preparation, filing, and prosecution of patent or other intellectual
         property applications in the United States of America and any other
         country on Subject Inventions.

39.02    The Authorized Agents or designees of each party shall provide the
         other parties with a copy of any patent application or other
         intellectual property application on a Subject Invention filed in the
         United States of America and any other country within sixty (60)
         calendar days after filing.

39.03    The filing party shall furnish the other parties a power of attorney to
         inspect said patent or other intellectual property application.

39.04    ARS shall have the first option to prepare and prosecute patent
         applications on Subject Inventions that are owned or co-owned by the
         U.S. Government, which option may be waived in whole or in part. ARS
         shall decide to exercise or waive its option within sixty (60) days
         after agreement that a Subject Invention has been made.

                        ARTICLE XL - HEADINGS AND TITLES

40.01    The headings and titles to the articles and paragraphs in this
         Agreement are intended solely for convenience and shall be given no
         effect in the construction or interpretation of this Agreement.

                                                                         Page 18
<PAGE>   19
                            ARTICLE XLI - AMBIGUITIES

41.01    ARS, eMERGE and ISU agree that each party has reviewed this Agreement
         and that any rule of construction to the effect that ambiguities are to
         be resolved against the drafting party shall not apply to the
         interpretation of this Agreement.

                               ARTICLE XLII - TERM

42.01    This Agreement shall become effective on the date of signature and
         continue in effect unless otherwise terminated as provided for
         elsewhere herein, for a term of three (3) years.

                  ARTICLE XLIII - SIGNATURES AND EFFECTIVE DATE

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives in triplicate.

FOR THE UNITED STATES DEPARTMENT OF AGRICULTURE:

-------------------------------
WILLARD J. PHELPS
Authorized Departmental Officer                                  Date:

FOR eMERGE VISION SYSTEMS, INC.:

-------------------------------
MICHAEL JANNEY
Chief Financial Officer                                          Date:

FOR IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY:

-------------------------------
RICHARD E. HASBROOK
Contract & Grants Officer                                        Date:

                                                                         Page 19
<PAGE>   20
                                 CERTIFICATIONS

ISU certifies that it:

         a.       is not a small business concern;

         b.       is not a minority business;

         c.       opera as a public, educational institution.

         d.       has not paid or agreed to pay any company or person (other
                  than a bona fide employee working solely for ISU) any fee,
                  commission, percentage, or brokerage fee, consent upon the
                  award of this Agreement, and if so, agrees to furnish
                  information relating thereto, as requested, by the Authorized
                  Departmental officer.

         e.       its Principal Officers are not listed on the U.S. Government's
                  list of debarred and suspended organizations and individuals;
                  shall notify the Authorized Departmental Officer if so listed;
                  and shall not subcontract or otherwise award to any
                  organization or individual so listed;

         f.       agrees to comply with the provisions of the Civil Rights Act
                  of 1964, as amended, and Executive Order 11246, addressing
                  equal opportunity and affirmative action;

         g.       agrees to comply with the provisions of Title IX of the
                  Education Amendment of 1972, 20 USC 1681, et seq.; Section 504
                  of the Rehabilitation Act of 1973, as amended, 29 USC 704; Age
                  Discrimination Act of 1975, 43 USC 6101-6107; and Drug-Free
                  Workplace Act of 1988, 41 USC 701, et seq.; and

         h.       is in a position to undertake, perform, and complete this
                  Agreement and will diligently perform work in accordance with
                  its provisions.

                                                                         Page 20
<PAGE>   21
                                 CERTIFICATIONS

eMERGE cities that it:

         a.       is not a small business concern;

         b.       is not a minority business;

         c.       operates as a corporation, incorporated in the State of
                  Delaware.

         d.       has riot paid or agreed to pay any company or person (other
                  than a bona fide employee working solely for the Cooperator)
                  any fee, commission, percentage, or brokerage fee, contingent
                  upon award of this Agreement, and if so, agrees to furnish
                  information relating thereto, as requested by the Authorized
                  Departmental officer.

         e.       its Principal Officers are not listed on the U.S. Government's
                  list of debarred and suspended organizations and individuals;
                  shall notify the Authorized Department Officer if so listed;
                  and shall not subcontract or otherwise award to any
                  organization or individual so listed;

         f.       agrees to comply with the provisions of the Civil Rights Act
                  of 1964, as amended, and Executive Order 11246, addressing
                  equal opportunity and affirmative action;

         g.       agrees to comply with the provisions of Title IX of the
                  Education Amendment of 1972, 20 USC 1681, et seq.; Section 504
                  of the Rehabilitation Act of 1973, as amended, 29 USC 794; Age
                  Discrimination Act of 1975, 43 USC 6101-6107; and Drug-Free
                  Workplace Act of 1988, 41 USC 701, et seq.; and

         h.       is in a position to undertake, perform, and complete this
                  Agreement and will diligently perform work in accordance with
                  its provisions,

                                                                         Page 21
<PAGE>   22
                                ESTIMATED BUDGET

<TABLE>
<CAPTION>
                                                  ISU
                                                  To Receive       ARS              eMERGE             ISU
                                                  Funds For        In-House         In-House           In-House
<S>                                               <C>              <C>              <C>                <C>
YEAR 1
a.   Salaries and Wages ...................         $ 39,300           15,000        178, 500          17,100
b.   Equipment ............................                0           10,000          20,000               0
c.   Material and Supplies ................            8,700            5,000          10,000               0
d.   Travel
     a. Domestic ..........................            2,000            2,000          22,000               0
     b. Foreign ...........................                0                0               0               0
e.   Facilities ...........................                0                0          35,522               0
f.   Other direct Costs ...................                0            6,400               0               0
g.   TOTAL DIRECT COST ....................           50,000           38,400         266,022          17,100
h.   Indirect Cost ........................                0                0         343,650           7,600
i.   TOTAL COSTS (G+H) ....................           50,000           38,400         690,672          24,700

YEAR 2
a.   Salaries and Wages ...................         $ 39,300           15,000         295,500          17,100
b.   Equipment ............................                0           10,000               0               0
c.   Material and Supplies ................            8,700            5,000         125,000               0
d.   Travel
     a. Domestic ..........................            2,000            2,000          22,000               0
     b. Foreign ...........................                0                0               0               0
e.   Facilities ...........................                0                0          58,805               0
f.   Other direct Costs ...................                0            6,400         100,000               0
g.   TOTAL DIRECT COST ....................           50,000           38,400         601,305          17,100
h.   Indirect Cost ........................                0                0         580,200           7,600
i.   TOTAL COSTS (G+H) ....................           50,000           38,400       1,181,505          24,700

YEAR 3
a.   Salaries and Wages ...................         $ 39,300           25,000         226,700          17,100
b.   Equipment ............................                0           10,000               0               0
c.   Material and Supplies ................            8,700            5,000          45,000               0
d.   Travel
     a. Domestic ..........................            2,000            2,000          32,000               0
     b. Foreign ...........................                0                0               0               0
e.   Facilities ...........................                0                0          45,113               0
f.   Other direct Costs ...................                0            6,400           1,000               0
g.   TOTAL DIRECT COST ....................           50,000           38,400         349,813          17,100
h.   Indirect Cost ........................                0                0         437,480           7,600
i.   TOTAL COSTS (G+H) ....................           50,000           38,400         787,293          24,700

SUMMARY
a.   Salaries and Wages ...................          117,900           55,000         700,700          51,300
b.   Equipment ............................                0           20,000          20,000               0
c.   Material and Supplies ................           26,100           15,000          15,000               0
d.   Travel
     a. Domestic ..........................            6,000            6,000           6,000               0
     b. Foreign ...........................                0                0               0               0
e.   Facilities ...........................                0                0         139,439               0
f.   Other direct Costs ...................                0           19,200         101,000               0
g.   TOTAL DIRECT COST ....................          150,000          115,200       1,217,139          51,300
h.   Indirect Cost ........................                0                0       1,361,330          22,800
i.   TOTAL COSTS (G+H) ....................          150,000          115,200       2,578,469          74,100
</TABLE>

                                                                         Page 22
<PAGE>   23
                                  RESEARCH PLAN

For successful completion of this Agreement all parties agree to the following
research objectives and research responsibilities.

OBJECTIVES

1. To achieve 0% visual positive detection of fecal or ingesta contamination on
meat carcasses at the final rail inspection station. By using fluorescent
detection instrumentation to assist in the achievement of 0% visual goal, all
partners agree that instrument will be designed and constructed that are 10 fold
more sensitive than visual detection limits.

2. To investigate promising carcass conation intervention technology that can be
used in conjunction with the fecal detection system. The intervention technology
must be capable of removing or significantly reducing or make nonviable
microbial contamination on carcasses and other meat products.

3. To investigate the potential use of fluorescent spectroscopic methods of
fecal and ingests detection for applications other than detecting contamination
on animal carcasses and meat products.

A.   Fecal Detection System

     Detector Design - The following design parameters are agreed to and will be
used for the construction of test detection devices for the meat industry,

     1.   Targeted sensitivity: 10x more sensitive than unaided human vision.

     2.   Device mug be capable of operation at normal slaughter plant chain
          speeds (450 had) per hour, plant; 1100 head per hour, pork plant, or
          90 birds per minute, poultry plant).

     3.   Device must be capable of a 360 degree inspection field.

     4.   Device must provide positional output information with a circular
          error probability of 1 inch.

     5.   Instrument must be shielded from environment for safe and trouble free
          operation.

     6.   Instrument must be light shielded or baffled to minimize external
          light contamination and maximize worker safety.

     7.   Device must be capable of multi wavelength operation and be capable of
          detecting light emissions particularly at 490 and 675 mm.

It will be, the responsibility of eMERGE to design, select, procure and assemble
component parts necessary for prototype instrument manufacture. Testing will be
the responsibility of all parties with each party contributing their own
expertise. For example: 1) eMERGE would be responsible for testing electronic
and optical Fort, 2) ISU would co-responsibility for optical

                                                                         Page 23
<PAGE>   24
function; 3) ARS would be responsible for testing performance of instrument on
organic samples such as feces and meat. All parties will participate in
obtaining access to packing plants for instrument testing in industrial
settings.

B. Sensitivity Analysis - To evaluate the targeted instrument sensitivity (10x
unaided visual exam), the following research is agreed to:

     1.   ISU and ARS will establish dilution and inspection protocols which can
          be used to quantify and compare the sensitivity of visual exam versus
          instrument examination.

     2.   eMERGE and/or ISU will provide instruments for sensitivity studies.

C. Signal Diversity of Animal Samples - To determine the extent of few
Fluorescent signal variation that can be expected to be found in field settings,
the following is agreed to:

     1.   ISU and ARS will collect, analyze and provide data on the wavelengths
          useful for fecal detection and the extent to which those signals vary
          between animals on a range of diets that are expected to be
          encountered in field settings.

     2.   eMERGE will use the wavelength and signal variation information
          collected in its instrument design criteria.

D.      Dietary Fluorescent Signal Additives

        If it is determined by mutual agreement that fluorescent signal
additives would be beneficial to the overall success of the project, all three
parties maybe responsible for identifying and procuring adequate amounts of
potential signal compounds for testing in animals. It will be the responsibility
of the ARS to test these compounds in animal diets and collect feces for
spectroscopic analysis by ISU or eMERGE.

E.      Intervention Techniques Following Detection

        Recognizing that a detection system for fecal contamination will be more
valuable to the meat industry if it is coupled with an intervention system that
disposes of the detected contamination, this research plan also includes a
research objective to study selected intervention techniques. Potential
techniques under consideration include; (1) a making system which identifies
contamination after detection for subsequent manual trimming by plant workers;
and (2) high intensity pulsed light and photodynamic antimicrobial treatments.
By mutual agreement other intervention techniques may be included in this
research plan as they are conceived if they are deemed valuable to the overall
objectives of the project.

        In pursuit of a suitable intervention technique: eMERGE and ISU will be
responsible for procurement of materials and construction of prototype
intervention systems including lighting

                                                                         Page 24
<PAGE>   25
systems necessary to test the photodynamic antimicrobial concept. ARS and ISU
will be responsible for identification and testing of candidate photodynamic
compounds for their antimicrobial properties and evaluating their safety
suitability for food use.

                                                                         Page 25<PAGE>   1
                                                                   Exhibit 10.33

                           EXCLUSIVE LICENSE AGREEMENT

         THIS AGREEMENT made and entered into by and between IOWA STATE
UNIVERSITY RESEARCH FOUNDATION, INC., a nonprofit corporation of the state of
Iowa, having its principal office at Iowa State University, 310 Lab of
Mechanics, Ames, Iowa 50011, (hereinafter called "ISURF"), and eMERGE
Interactive, Inc., a corporation of the State of Florida , having its principal
office at 10315 102nd Terrace, Sebastian, Florida 32958, (hereinafter called
"LICENSEE").

The effective date of this Agreement is the last date of signature below.

                                    RECITALS

         WHEREAS, ISURF is Owner by assignment from Jacob Petrich and his
associate(s) of their Patent Rights (as later defined herein), in ISURF
Intellectual Property Disclosure and Record Docket Number 02314 and is titled
"Method and System for Detecting Fecal and Ingesta Contamination on the
Carcasses of Meat Animals During and After Slaughter Using Visible Light"
(hereinafter "Invention") ; and

         WHEREAS, ISURF has right to certain technical data and information
("Technology" as hereinafter defined); and

         WHEREAS, LICENSEE has entered into a Cooperative Research and
Development Agreement (CRADA) with the United States Department of
Agriculture/Agricultural Research Service (USDA/ARS;) to develop a prototype
instrument embodying Invention; and

         WHEREAS, ISURF desires to have Invention, Technology and Patent Rights
utilized in the public interest and is willing to grant a license thereunder;
and

         WHEREAS, Invention, Technology, and Patent Rights are jointly owned
with USDA and subject to a joint ownership agreement under which ISURF has the
right to exclusively license Invention, Technology and Patent Rights; and

         WHEREAS, LICENSEE has represented to ISURF, to induce ISURF to enter
into this Agreement, that LICENSEE is experienced in the development,
production, manufacture, marketing and sale of products comparable to the
Licensed Products (as later defined herein) and/or the use of the Licensed
Process(es) (as later defined herein) and that it shall commit itself to a
thorough, vigorous, commercially reasonable and diligent program of exploiting
the Patent Rights, Invention, and Technology so that public utilization shall
result therefrom; and
<PAGE>   2
         WHEREAS, LICENSEE desires to obtain a license in order to practice the
above referenced invention covered by Patent Rights, Invention and the
Technology in the Territory, and to manufacture, use and sell in the commercial
market the products made in accordance therewith; and

         WHEREAS, ISURF is desirous of granting such a license to LICENSEE in
accordance with the terms of this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises the parties
hereto agree as follows:

                                 I. DEFINITIONS

         As used in this Agreement, the following words and phrases shall have
the meanings ascribed to them in this section.

1.1      AFFILIATED COMPANY: Any company (1) in which LICENSEE has a controlling
         interest or (2) is under common control with LICENSEE by third party.

1.2      FIELD: meat and carcass inspection.

1.3      LICENSED PRODUCTS: Any product or part thereof which utilizes
         Technology or Invention and/or is covered in whole or in part by an
         issued, unexpired claim or a pending claim contained in Patent Rights
         or products made in accordance with or by means of Licensed Processes.

1.4      LICENSED PROCESSES: Any process which, but for the rights granted in
         this Agreement would infringe one or more of an issued, unexpired, or
         pending claim contained in the Patent Rights.

1.5      NET SALES: The amount billed or invoiced on sales of Licensed Products
         or products made with the use of Licensed Processes, whether in the
         form of rentals, leases, royalties, sales price, or otherwise,
         including all amounts paid for installation, maintenance and service,
         less:

         a)       Customary trade, quantity or cash discounts;

         b)       Amounts repaid or credited by reason of rejection or return;
                  and/or

         c)       To the extent separately stated on purchase orders, invoices
                  or other documents of sale, shipping charges, taxes levied on
                  and/or other governmental charges made as to production, sale,
                  transportation, delivery or use and paid by or on behalf of
                  LICENSEE.

                                        2
<PAGE>   3
         Licensed Product given away, or transferred by any other method without
         charge or at a reduced rate, without prior consent of ISURF, will be
         considered sold at the average price at which LICENSEE, Affiliated
         Company, or sublicensee sells the Licensed Product. Licensed Products
         distributed without charge with prior consent of ISURF will not be
         considered sold.

1.6      PATENT RIGHTS: All present and future United States patent
         applications, the inventions described and claimed therein, and any
         divisions, continuations, continuations-in-part to the extent the
         claims are directed to subject matter specifically described in
         Invention, patents issuing thereon or reissues thereof; and any and all
         foreign patents and patent applications corresponding thereto; which
         will be automatically incorporated in and added to the Agreement.

1.7      TERRITORY: worldwide.

1.8      TECHNOLOGY: Existing technical data and information provided to
         LICENSEE and pertaining to ISURF Docket No. 2314 or Patent Rights.

1.9      TERM.  as defined in Section 8.1

1.10     EXCLUSIVE LICENSE: A license under which ISURF shall not grant further
         licenses to a third party to use Technology and Patent Rights in the
         Field and within the Territory, subject to 2.6 and 2.7.

                                    II. GRANT

2.1      EXCLUSIVITY: ISURF hereby grants and LICENSEE hereby accepts subject to
         the terms and conditions hereof, an Exclusive License, in the Field and
         within the Territory, and to the extent not prohibited by other patents
         not owned by: ISURF, to make and have made, to use, sell, offer to
         sell, and import Licensed Products and products made with the use of
         Licensed Processes and to use Licensed Processes during the Term of
         this Agreement.

2.2      US MANUFACTURE: LICENSEE agrees that Licensed Products sold in the
         United States shall be manufactured substantially in the United States.

2.3      REASONABLE EFFORTS: LICENSEE shall use reasonable efforts to effect
         introduction of the Licensed Products into the commercial market as
         soon as practicable, consistent with sound and reasonable business
         practice and judgment, thereafter, until the expiration of this
         Agreement, LICENSEE shall make reasonable efforts to keep Licensed
         Products reasonably available to the public within the Territory.

                                        3
<PAGE>   4
2.4      SUBLICENSE: LICENSEE shall have the right to sublicense for use any or
         all of the rights and privileges granted to LICENSEE in this Agreement
         subject to the following:

         a)       LICENSEE agrees that any such sublicense will contain
                  provisions which obligate the sublicensee to LICENSEE to at
                  least the same extent that LICENSEE is obligated to ISURF
                  under this Agreement;

         b)       LICENSEE agrees that any such sublicense will not be
                  transferable except to ISURF or LICENSEE;

         c)       LICENSEE agrees to inform ISURF of every fully executed
                  sublicense involving the Patent Rights and to provide a copy
                  of each such sublicense to ISURF upon the latter's request;
                  and

         d)       LICENSEE shall not receive from sublicensees anything of value
                  in lieu of cash payments in consideration for any sublicense
                  under this Agreement, without the express prior written
                  permission of ISURF.

         e)       In the event that after five (5) years from the Effective Date
                  of the Agreement, LICENSEE is unable or has no firm business
                  plan to introduce Licensed Product(s) into any region of the
                  exclusive Territory for use within the Field where ISURF can
                  demonstrate a genuine need for a Licensed Product exists and
                  LICENSEE is unwilling to grant sublicenses to third parties
                  which may reasonably satisfy such a need, ISURF may directly
                  license such third parties to use Patent Rights and Technology
                  only in said region of the Territory and for said specific use
                  and will provide LICENSEE with the names of any third party it
                  intends to license within twenty (20) days of signing a
                  license with such third party. ISURF shall not license such
                  third parties under terms more favorable than those granted to
                  LICENSEE.

2.5      RESEARCH AND PUBLICATION RIGHTS: ISURF retains rights to make and to
         use and to grant non-exclusive licenses to make and to use for research
         purposes only and to publish on the subject matter described in Patent
         Rights and Technology.

2.6      SPONSOR RIGHTS: The granting and acceptance of this Agreement is
         subject to ISURF's obligations under federal research funding subject
         to United States Public Law 96-517, and Public Law 98-620, as amended,
         wherein the US Federal Government has a royalty-free license to
         practice, the inventions which are the subject of this License
         Agreement. Any right granted in this Agreement greater than that
         permitted under Public Law 96-517 or Public Law 98-620 shall be subject
         to modification as may be required to conform to the provisions of that
         statute.

                                        4
<PAGE>   5
                               III. CONSIDERATIONS

3.1      LICENSE FEE AND ROYALTY: In consideration for the license granted to it
         hereunder, LICENSEE will pay to ISURF:

         a)       a non-refundable license issue fee in the sum of $10,000.00
                  upon execution of this Agreement.

         b)       during the term of this Agreement a royalty of six percent
                  (6%) of Net Sales of all Licensed Products used or sold by
                  and/or for LICENSEE, its Affiliated Companies, and its
                  sublicensees.

         c)       in the case of sublicenses, LICENSEE shall also pay to ISURF
                  fifty percent (50%) of non-royalty sublicense income (e.g.,
                  license issue fees, license maintenance fees, etc.).

3.2      Licensed Product will be considered sold when billed out or invoiced.

3.3      On sales between LICENSEE and its Affiliated Companies or sublicensees
         for resale, the royalty shall be paid on the resale.

3.4      MINIMUM ROYALTIES: ISURF shall have the right to terminate this license
         in the event that LICENSEE does not pay to ISURF the following
         nonrefundable minimum royalties which are creditable against running
         royalties:

         December 31 of 2000                                      $1000.00
         December 31 of 2001                                      $3000.00
         December 31 of 2002                                      $5000.00
         and each year thereafter.

3.5      This duty to pay royalties under 3.1 shall expire with the
         last-to-expire Patent Rights on a country by country basis. If no
         Patent Rights exist in a country, this duty to pay royalties shall
         expire 10 years after the first commercial sale in that country.

3.6      In the event that LICENSEE develops a combination product(s), which
         shall mean a product sold by LICENSEE, its Affiliated Company(ies), or
         Sublicensees, that contains a Licensed Product plus other non-Licensed
         Product component(s) that (i) can be sold separately by LICENSEE
         without infringing, contributing to the infringement of, or dependent
         upon Patent Rights; and (ii) adds value to the final product being sold
         by the LICENSEE, ISURF will consider renegotiating royalties for the
         combination product(s).

                                        5
<PAGE>   6
                    IV. ROYALTY PAYMENT, REPORTS, AND RECORDS

4.1      FIRST SALE AND PRODUCT NAMES: LICENSEE shall report to ISURF the date
         of first sale of LICENSED PRODUCTS (or results of LICENSED PROCESSES)
         in each country where products are sold within thirty (30) days of
         occurrence. LICENSEE shall report to ISURF the specific product name(s)
         or trade name(s) of each and every product(s) sold by LICENSEE using
         licensed Invention and/or Technology.

4.2      SEMI-ANNUAL REPORTS: LICENSEE, within sixty (60) days after June 30,
         and December 31, of each year, shall deliver to ISURF true and accurate
         reports, giving such particulars of the business conducted by LICENSEE,
         its Affiliated Companies, and its sublicensees during the preceding six
         month period under this Agreement as shall be pertinent to a royalty
         accounting hereunder. These shall include at least the following;

         a)       number of Licensed Products manufactured and sold by LICENSEE,
                  its Affiliated Companies, and all sublicensees;

         b)       total billings for Licensed Products sold by LICENSEE, its
                  Affiliated Companies, and all sublicensees;

         c)       accounting for all Licensed Processes and Technology used or
                  sold by LICENSEE, its Affiliated Companies, and all
                  sublicensees;

         d)       deductions applicable as provided in Paragraph (1.5);

         e)       total royalties due;

         f)       names and addresses of all sublicensees of LICENSEE; and

         g)       if no royalties are due, LICENSEE shall so report.

4.3      MINIMUMS: If royalties for any calendar year do not meet or exceed the
         minimum royalties established in Section 3.4, LICENSEE shall include
         the balance of the minimum royalty with the payment for the period
         ending December 31.

4.4      ROYALTY PAYMENT: Simultaneously with the delivery of each such
         accounting, LICENSEE shall make disbursements in United States
         currency, drawn on a United States bank, of the royalties due for the
         period covered by such report. Conversion of foreign currency to US
         dollars shall be made at the conversion rate existing in the United
         States (as reported in the Wall Street journal) on the last working day
         of each royalty period. Such payments shall be without deduction of
         exchange, collection or other charges.

                                        6
<PAGE>   7
4.5      LATE PAYMENT: Late payments shall be subject to an interest charge of
         one and one-half percent (1.50 %) per month.

4.6      RECORDS: LICENSEE shall keep, and shall require its Affiliated
         Companies and sublicensees to keep, accurate and correct records of
         LICENSED PRODUCTS made, used or sold under this Agreement, appropriate
         to determine the amount of royalties due hereunder to ISURF. Such
         records shall be retained for at least five (5) years following a given
         reporting period. They shall be available during normal business hours
         for inspection at the expense of ISURF by ISURF's Internal Audit
         department or by a Certified Public Accountant selected by ISURF for
         the sole purpose of verifying reports and payments hereunder. Such
         accountant shall not disclose to ISURF any information other than
         information relating to accuracy of reports and payments made under
         this Agreement.

         In the event that any such inspection shows an under reporting and
         underpayment in excess of five percent (5%) for any twelve (12) month
         period, then LICENSEE shall pay the cost of such examination as well as
         any additional sum that would have been payable to ISURF had the
         LICENSEE reported correctly, plus interest.

4.7      Financial Statement: On or before the ninetieth (90th) day following
         the close of LICENSEE's fiscal year, upon request by ISURF LICENSEE
         shall provide ISURF with LICENSEE's certified financial statements for
         the preceding fiscal year including, at minimum, a Balance Sheet and an
         Operating Statement.

4.8      Confidentiality: All such reports shall be maintained in confidence by
         ISURF, except as required by law, including Public Law 96-517 and
         98-620.

                      V. PATENT PROSECUTION AND MAINTENANCE

5.1      PATENT PROSECUTION & REIMBURSEMENT OF EXPENSES: USDA/ARS shall take
         responsibility for the preparation, filing, prosecution and maintenance
         of any and all future patent applications and patents included in
         Patent Rights.

         LICENSEE shall reimburse ISURF for all patent prosecution and
         maintenance costs of the Patent Rights, which are reported to it by
         USDA/ARS, plus a 15% administration fee, whether such fees and costs
         were incurred before or after the date of this Agreement. Amounts will
         be payable 30 days from date of ISURF's invoice. In country(ies) where
         LICENSEE elects not to reimburse ISURF for such fees and costs,
         LICENSEE shall have no residual license or patent rights to Invention
         in said country(ies).

                                        7
<PAGE>   8
                                VI. INFRINGEMENT

6.1      NOTIFICATION: LICENSEE shall inform ISURF promptly in writing upon
         learning of any alleged infringement of the Patent rights by a third
         Party and of any available evidence thereof.

6.2      ENFORCEMENT BY ISURF: During the term of this Agreement, ISURF shall
         have the right, but shall not be obligated, to prosecute at its own
         expense all infringements of the Patent Rights and, in furtherance of
         such right, LICENSEE hereby agrees that ISURF may include LICENSEE as a
         party plaintiff in any such suit, without expense to LICENSEE. The
         total cost of any such infringement action commenced or defended solely
         by ISURF shall be borne by ISURF and ISURF shall keep any recovery or
         damages for past infringement derived therefrom.

6.3      ENFORCEMENT BY LICENSEE: If within six(6) months after having been
         notified of any alleged infringement, ISURF shall have been
         unsuccessful in persuading the alleged infringer to desist and shall
         not have brought and shall not be diligently prosecuting an
         infringement action, or if ISURF shall notify LICENSEE at any time
         prior thereto of its intention not to bring suit against any alleged
         infringer (in the Territory for the Field), then, and in those events
         only, LICENSEE shall have the right, but not be obligated, to prosecute
         at its own expense any infringement of the Patent Rights (in the
         Territory for the Field), and LICENSEE may, for such purposes, use the
         name of ISURF as party plaintiff; provided, however, that such right to
         bring such an infringement action shall remain in effect only for so
         long as the license granted herein remains effective. No settlement,
         consent judgment or other voluntary final disposition of the suit may
         be entered into without the consent of ISURF, such consent shall not
         unreasonably be withheld. LICENSEE shall indemnify ISURF against any
         order for costs that may be made against ISURF in such proceedings.

6.4      EXPENSE AND RECOVERY: In the event that LICENSEE shall undertake the
         enforcement and/or defense of the Patent Rights by litigation, LICENSEE
         may withhold up to fifty percent (50%) of the payments otherwise
         thereafter due ISURF under Article IV hereunder and apply the same
         toward reimbursement of up to half of LICENSEE's expenses, including
         reasonable attorneys' fees, in connection therewith. Any recovery of
         damages by LICENSEE for each such suit shall be applied first in
         satisfaction of any unreimbursed expenses and legal fees of LICENSEE
         relating to such suit, and next toward reimbursement of ISURF for any
         payments under Article IV past due or withheld and applied pursuant to
         this Article VI. The balance remaining from any such recovery shall be
         divided equally between LICENSEE and ISURF.

6.5      DEFENSE OF INVALIDITY OF PATENT RIGHTS: In the event that a declaratory
         judgment action alleging invalidity or noninfringement of any of the
         Patent Rights shall be brought against LICENSEE, ISURF, at its option,
         shall have the right, within thirty (30) days

                                        8
<PAGE>   9
         after commencement of such action, to intervene and take over the sole
         defense of the action at its own expense.

6.6      COOPERATION: In any infringement suit as either party may institute to
         enforce the Patent Rights pursuant to this Agreement, the other party
         hereto shall, at the request and expense of the party initiating such
         suit, cooperate in all respects and, to the extent practicable, have
         its employees testify when requested and make available relevant
         record, papers, information, samples, specimens, and the like.

6.7      SUBLICENSE: LICENSEE during the exclusive period of the Agreement,
         shall have the sole right in accordance with the terms and conditions
         herein to sublicense to tiny alleged infringer (in the Territory for
         the Field) for future use of the Patent Rights. Any up-front fees as
         part of such a sublicense shall be shared equally between LICENSEE and
         ISURF; other royalties shall be treated per Article IV.

                       VII. INDEMNIFICATION AND WARRANTEES

7.1      INDEMNIFICATION: LICENSEE shall at all times during the term of this
         Agreement indemnify, defend and hold ISURF, its trustees, officers,
         employees and affiliates, and USDA/ARS harmless against all claims,
         proceedings, demands, liabilities and expenses arising out of any
         damage or injury to property or person and resulting from the

         a)       production, manufacture, sale, distribution, use, lease,
                  consumption or advertisement of the Licensed Products, any
                  Licensed Processes, and/or other products incorporating or
                  made using Technology, or

         b)       the utilization of any Technology or Patent Rights granted
                  hereunder, by LICENSEE, its sublicensees, customers or
                  distributors of LICENSEE or its sublicensees, or other users
                  of Licensed Products, Licensed Processes and/or other products
                  incorporating or made using Technology.

7.2      INSURANCE: LICENSEE shall maintain reasonable levels of product
         liability insurance as soon as it has commercialized Licensed Products,
         Licensed Processes, or any other product incorporating or made using
         Technology. ISURF has the right to require such insurance certificates
         to be made available for ISURF's inspection.

7.3      DISCLAIMER OF DAMAGES:

         a)       ISURF and USDA/ARS shall not be liable to LICENSEE or its
                  sublicensees for any direct, indirect, special, incidental,
                  exemplary, consequential or any other damages arising from
                  utilization of the Technology or Patent Rights granted
                  hereunder by LICENSEE or its sublicensees.

                                        9
<PAGE>   10
         b)       ISURF and USDA/ARS shall not be liable to LICENSEE, or its
                  sublicensees, customers or distributors of LICENSEE or its
                  sublicensees, or end users, for any direct, indirect, special,
                  incidental, exemplary, consequential or any other damages
                  arising from such parties' production manufacture, sale,
                  distribution, use, lease, consumption or advertisement of
                  Licensed Products, any Licensed Processes, or other products
                  incorporating or made using Technology.

7.4      AUTHORIZATION TO CONTRACT AND DISCLAIMER OF WARRANTY: ISURF and
         USDA/ARS represent and warrant that Iowa State University and USDA/ARS
         inventor(s) have assigned to ISURF his/her(their) entire right, title
         and interest in the patent applications or patents comprising the
         Patent Rights and that ISURF has the authority to issue licenses under
         said Patent Rights. ISURF does not warrant the validity or
         enforceability of the Patent Right, pending or issued now or in the
         future, licensed hereunder and makes no representations or warranties
         whatsoever with regard to the scope of the Patent Rights or Technology,
         or that such Patent Rights or Technology may be exploited by LICENSEE,
         an Affiliated Company, or sublicensee without infringing other patents.
         Nothing in this Agreement shall be construed as a representation made
         or warranty given by ISURF that the practice by LICENSEE, an Affiliated
         Company or sublicensee of the license granted hereunder will not
         infringe the patent rights of a third party.

         EXCEPT AS OTHERWISE MAY BE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
         TECHNOLOGY AND PATENT RIGHTS ARE LICENSED "AS IS" WITHOUT ANY EXPRESSED
         OR IMPLIED WARRANTIES WHATSOEVER. ISURF EXPRESSLY DISCLAIMS IMPLIED
         WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE
         WITH RESPECT TO THE TECHNOLOGY AND PATENT RIGHTS. ISURF MAKES NO
         REPRESENTATION WHATSOEVER THAT THE TECHNOLOGY IS ERROR FREE.

                           VIII. TERM AND TERMINATION

8.1      TERM: Unless terminated earlier as provided herein, the Term of this
         Agreement shall commence on the Effective Date and expire on expiration
         of the last duty to pay royalties under 3.5.

8.2      TERMINATION BY ISURF: ISURF shall have the right and option of
         terminating this Agreement upon written notice to LICENSEE in the
         following events: If LICENSEE

         a)       fails to make any payment whatsoever due and payable to ISURF
                  hereunder, ISURF shall have the right to terminate this
                  Agreement effective on forty-five (45) days' notice, unless
                  LICENSEE shall make all such payments to ISURF plus interest
                  within said period. Upon the expiration of the forty-five (45)
                  day period, if LICENSEE shall not have made all such payments
                  to ISURF, the rights, privileges and license granted hereunder
                  shall automatically terminate; or

                                       10
<PAGE>   11
         b)       shall be in default in the performance of any obligations
                  under this Agreement (other than as provided in 8.2 (a) above
                  which shall take precedence over any other default), and if
                  the default has not been remedied within ninety (90) days
                  after the date of notice in writing of such default, the
                  nature of which is contained in said notice, ISURF may
                  terminate this Agreement immediately by written notice, or

         c)       is declared insolvent or bankrupt by a court of competent
                  jurisdiction, or a voluntary petition of bankruptcy Is filed
                  in any court of competent jurisdiction, or LICENSEE shall make
                  or execute an assignment for the benefit of creditors, ISURF
                  shall then have the right and option to terminate this
                  Agreement and the rights and obligations hereunder forthwith
                  by notice in writing to LICENSEE.

8.3      TERMINATION BY LICENSEE: LICENSEE shall have the right to terminate
         this Agreement at anytime upon a ninety (90) day written notice to
         ISURF.

8.4      TERMINATION OF SUBLICENSES: Any sublicenses granted by LICENSEE under
         this Agreement shall provide for termination or assignment to ISURF, at
         the option of ISURF, of LICENSEE's interest therein upon termination of
         this agreement.

8.5      ROYALTIES AT TERMINATION: Any termination of this Agreement and the
         rights and obligations hereunder shall not release LICENSEE from the
         payment of any earned royalties accrued or expense reimbursement
         accrued and unpaid up to the date of such termination. Upon termination
         a final report shall be submitted and any royalty payments and
         unreimbursed patent expenses due ISURF become immediately payable.

8.6      OBLIGATIONS CONTINUE: Upon termination of this Agreement for any
         reason, nothing herein shall be construed to release either party from
         any obligation that matured prior to the effective date of such
         termination.

                   IX. ADVERTISING AND LICENSING RESTRICTIONS

9.1      Advertising and Public Announcements: LICENSEE shall not use or publish
         or circulate any printed advertising matter containing a reference to
         Iowa State University or USDA/ARS or the names of personnel either of
         Iowa State University, USDA/ARS or of ISURF. Advertising material which
         identifies publications, by citations in customary form, shall not,
         however, be deemed to contain such a reference to Iowa State
         University, USDA/ARS, ISURF, or personnel of Iowa State University,
         USDA/ARS or ISURF. Authorization is hereby given to LICENSEE in
         connection with Licensed Product to state in advertising matter that
         the Licensed Product is exclusively licensed from ISURF, or that the
         licensed Invention was developed by inventors at Iowa State University.

                                       11
<PAGE>   12
         ISURF retains the right to disclose to the public the transfer of this
         technology and the existence of this license with the LICENSEE.

9.2      ISU PUBLICATIONS: LICENSEE is authorized to use complete reprints of
         publications by Iowa State University, relating to the Invention,
         Technology, or Patent Rights.

9.3      ISURF REVIEW: LICENSEE agrees to send copies of all such advertising
         matter to ISURF immediately after first publication.

                               X. CONFIDENTIALITY

10.1     CONFIDENTIAL INFORMATION: LICENSEE hereby agrees not to disclose to
         third parties information which relates to the Invention, Technology,
         Patent Rights, which information is not yet published in an issued
         patent. LICENSEE agrees to take the same degree of care as it does with
         its own confidential information to maintain the information secret and
         confidential and not to use the same except to the extent that:

         a)       information at the time it was disclosed by ISURF was in the
                  general public knowledge;

         b)       information after being disclosed by ISURF is published or
                  otherwise disseminated to the public other than through
                  LICENSEE's unauthorized disclosures;

         c)       information can be shown to have been in LICENSEE's possession
                  by documentation existing at the time the information was
                  disclosed by ISURF,

         d)       information can be shown by documentation to have been
                  received in good faith by LICENSEE independently from a third
                  party; and

         e)       information can be shown by documentation to have been
                  independently developed by LICENSEE.

         LICENSEE also agrees to exercise all reasonable precautions to prevent
         the use of data, research, findings and/or concepts in ongoing and
         future research and business developments, and to use the information
         only for the purpose stated in this Agreement.

         In any dispute with respect to the exceptions in subparagraphs a)
         through e), the burden of proof will be on LICENSEE and such proof
         shall be by clear and convincing evidence.

                                   XI. GENERAL

                                       12
<PAGE>   13
11.1     GOVERNING LAW: This Agreement shall be governed by and construed in
         accordance with the laws of the State of Iowa.

11.2     COMPLIANCE WITH LAW: LICENSEE agrees to comply with all applicable laws
         and regulations. In particular, it is understood and acknowledged that
         the transfer of certain commodities and technical data is subject to
         United States laws and regulations controlling the export of such
         commodities and technical data, including all Export Administration
         Regulations of the United States Department of Commerce. These laws and
         regulations among other things, prohibit or require a license for the
         export of certain types of technical data to certain specified
         countries. LICENSEE hereby agrees and gives written assurance that
           it will comply with all United States laws and regulations
         controlling the export of commodities and technical data, that it will
         be solely responsible for any violation of such by LICENSEE or its
         Affiliated Companies or sublicensees, and that it will defend and hold
         ISURF harmless in the event of any legal action of any nature
         occasioned by such violation.

11.3     ASSIGNMENT: This agreement may not be assigned. In the event of
         successors in interest to LICENSEE'S business, through merger or asset
         purchase for example, ISURF agrees to consider making appropriate and
         necessary amendments to this provision.

11.4     ENTIRE AGREEMENT: This Agreement contains the entire agreement between
         the parties hereto and supersedes all prior agreements with respect to
         the subject matter thereof.

11.5     NOTICES: Any notice required or permitted to be given under this
         Agreement shall be deemed to have been sufficiently given if a written
         notice is mailed by certified mail, postage prepaid, addressed to the
         party to be notified at its address as may later be furnished in
         writing to the notified party, and providing that the party to be
         notified is also promptly advised by telephone of the sending and
         content of said written notice. Completion of these steps constitutes
         receipt of notice, upon which time said notice is effective.

11.6     MODIFICATION: Any modification of this agreement to be effective must
         be in writing and signed by both parties.

                      (THIS SPACE INTENTIONALLY LEFT BLANK)

                                       13
<PAGE>   14
11.7     SEVERABILITY: If one or more of the provisions of this Agreement shall
         be held to be invalid, illegal or unenforceable in any respect, the
         validity, legality and enforceability of the remaining provisions shall
         not in any way be affected or impaired thereby. The invalid or
         unenforceable part or provisions shall be replaced with a provision
         which accomplishes, to the extent possible, the original business
         purpose of such part or provisions in a valid enforceable manner.

11.8     MARKING: LICENSEE agrees to mark all Licensed Products sold in all
         countries with all applicable patent numbers and other marks in such a
         manner as to conform with the patent laws and practice of the country
         of manufacture or sale.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers.

IOWA STATE UNIVERSITY
RESEARCH FOUNDATION, INC.

                                      Date
---------------------------------------------------------
Kenneth Kirkland, Ph. D,
Executive Director

eMERGE INTERACTIVE, INC.

                                      Date    8/3/99
---------------------------------------------------------
[signature of an authorized officer]

Printed Name: T. Michael Janney

                                       14

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