Sample Business Contracts

Toll Processing Agreement - eMerge Interactive Inc. and ADM Animal Health & Nutrition

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                            TOLL PROCESSING AGREEMENT

         THIS AGREEMENT is made this 16th day of August, 1999, by and between
corporation ("EMERGE"), and ADM ANIMAL HEALTH & NUTRITION, a division of
ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation ("ADM").


         WHEREAS, ADM agrees to produce on a non-exclusive basis NutriCharge(TM)
Premix and/or complete animal feeds to be marketed under the name
NutriCharge(TM) (collectively the "End Product") pursuant to the specifications
set forth in Exhibits A, B and C (collectively, the "Specifications");

         WHEREAS, EMERGE desires to retain the non-exclusive services of ADM for
the manufacture of the End Product;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows;


         (a) ADM hereby agrees to undertake on behalf of EMERGE the manufacture,
testing, packaging and labeling of the End Product in strict compliance with the
Specifications and with all applicable laws and regulations, and not to deviate
in any way from the Specifications without EMERGE's prior written consent. ADM
is currently subcontracting the feed mill portion of the product to an EMERGE
approved source and shall not further contract portions of the manufacturing,
testing, packaging and labeling process of the End Product to third parties
without the prior written consent of the Chief Operating Officer of EMERGE.

         (b) EMERGE shall purchase all End Products if (i) the End Product meets
the Specification quality and (ii) the End Product is made pursuant to an
express written purchase order of EMERGE.

         (c) ADM has and shall maintain in good standing at its own expense all
necessary licenses, permits, authorizations and approvals required by any and
all governmental agencies in connection with the manufacture, testing,
packaging, labeling and shipment of the End Product.
<PAGE>   2

         (a) ADM shall be responsible for acquiring all materials and packaging
materials to be used in the manufacture, packaging and labeling of the End
Product and shall ensure that these comply with the Specifications, and all
applicable laws and regulations.

         (b) ADM shall be responsible for ordering the relevant quantity of
necessary materials for timely delivery to enable ADM to manufacture, package
and label the End Product by the date required by EMERGE in its purchase order.

3.       TERM

This Agreement shall commence on the date this Agreement is signed by both
EMERGE and ADM and shall continue for a period of twelve (12) months (the
"Initial Term"). This Agreement shall be renewed automatically for successive
periods of twelve (12) months each unless either party delivers written notice
to the other at least ninety (90) days before the termination of the then
current term (the Initial Term and each such successive twelve month term shall
each be referred to a "Term"); provided, however, that the delivery of such
written notice shall not impair the obligations of either party with respect to
any outstanding purchase order that has been accepted by ADM in accordance with
the terms of this Agreement.


ADM warrants that the End Product covered by this Agreement shall meet the
Specifications and that the End Product has been manufactured, packaged, shipped
and delivered in compliance with all applicable federal, state and local laws,
rules and regulations including without limitation "good manufacturing
practices" as defined by the U.S. Food and Drug Administration and the EMERGE
Quality Procedure 300131-000, entitled "Feed Manufacturing Quality Plan"
attached as Exhibit D hereto. Except as expressly set forth herein, ADM makes no
warranties or representations concerning the end product, whether express or
implied, and hereby disclaims the implied warranty of merchantability and the
implied warranty of fitness for a particular purpose.


Unless otherwise agreed to by the parties, EVS shall make all arrangements for
the shipment and delivery of all End Products from ADM's facilities to EMERGE's
facilities. ADM shall prepare each shipment of End Product in compliance with
the packaging specification provided by EVS (see attached exhibit E).


         (a)      For the services rendered by ADM under this Agreement, EMERGE
                  shall pay ADM an amount equal to the cost shown on Exhibit F,
                  for product

<PAGE>   3
                  that is shipped to EMERGE and meets the Specifications and
                  other warranties set forth herein.

         (b)      Payment terms are net 30 days upon receipt of invoice.

         (c)      The parties agree to negotiate a change in the price set forth
                  in subsection
(a) where such change is necessary to reflect an increase or decrease in the
cost of raw materials. Any such modification shall not exceed the retail price
index or its equivalent in the Territory and shall be limited to one change in
any three- (3) month period.

7.       INDEMNITY

         (a) ADM shall defend, indemnify and hold EMERGE, its subsidiaries,
divisions and affiliates, and their respective officers, directors, employees
and agents, harmless from and against any and all liability, loss, damage or
expense on account of personal injuries, including death or property loss or
damage to others (including each party and it employees) arising out of ADM's
negligence or willful misconduct including, without limitation, the failure of
ADM to manufacture the End Product in compliance with the Specifications;
provided, however, no such obligation shall exist with respect to any liability,
loss, damage or expense arising in whole or in part from EMERGE's negligence or
willful misconduct.

         (b)      EMERGE shall defend, indemnify and hold ADM, its subsidiaries,
                  divisions and affiliates, and their respective officers,
                  directors, employees and agents, harmless from and against any
                  and all liability, loss, damage or expense on account of
                  personal injuries, including death or property loss or damage
                  to others (including each party and its employees) arising out
                  of EMERGE's negligence or willful misconduct including, any
                  action alleging infringement of the NutriCharge(TM)mark, or
                  any patent, copyright or trades secret action related to the
                  Specifications, provided, however, no such obligation shall
                  exist with respect to any liability, loss, damage or expense
                  arising in whole or in part from ADM's negligence or willful


Should ADM fail to make delivery of End Product to EMERGE, EMERGE shall have as
its exclusive remedy, damages measured by the difference between contract price
and the lowest market price of the goods between the time when EMERGE learned of
ADM's breach and the time at which replacement goods are purchased by EMERGE, or
judgment against ADM is obtained. ADM shall not be liable under any
circumstances for consequential or incidental damages, of whatever kind and
amount incurred by EMERGE. EMERGE shall be barred from any and all claims or
rights based upon the quality of the goods delivered unless within ten (10) days
after EMERGE learns by use or otherwise of the defect complained of, but in any
event within thirty (30) days after EMERGE becomes aware of the arrival of said
goods at destination and EMERGE sends

<PAGE>   4
ADM notice clearly specifying the nature of the complaint. Any action on behalf
of EMERGE for breach of the Agreement must be commenced within one (1) year
after the cause of action accrued.


The parties agree that ADM shall be construed to be an independent contractor
under this Agreement and that its relationship with EMERGE shall be, and shall
not be presented as anything other than, an independent contractor. ADM shall
have no authority to execute contracts or to assume any obligation or liability
on behalf of EMERGE. ADM agrees that all personnel employed by it in the
performance of services under this Agreement shall be deemed for all purposes
employees of ADM and not of EMERGE.

10.      DEFAULT

Upon a material breach of this Agreement by either party, the non-breaching
party may give written notice to the breaching party of its intent to terminate
this Agreement, specifying the alleged breach, and if the breach is not cured
within thirty (30) days after the giving of such notice (unless the breach
cannot be cured within 30 days in which event this party in breach must be
diligently attempting to cure the breach). Then the non-breaching party may
without prejudice to its rights terminate this Agreement forthwith by written
notice thereof the breaching party.


The parties hereto acknowledge and agree that the information contained in this
Agreement and all exhibits hereto is considered confidential "Information" as
such term is defined in the NonDisclosure Agreement between ADM and EMERGE dated
November 12, 1998 (the "NDA Agreement") and is governed by the terms of such NDA
Agreement. The parties further acknowledge and agree that NDA Agreement remains
in full force and effect and is hereby incorporated by reference.


This Agreement shall not be assigned by either party without the prior written
consent of the other party, which consent will not be unreasonably withheld.


Neither party shall be responsible for failure or delay in performance hereunder
if such failure or delay is due to an act of God, war, fire, strike, differences
with workman, accident, equipment breakdown, governmental acts or requirements,
shortages of labor, materials, containers or transportation equipment delays in
transportation, or transportation, or other causes, either similar or dissimilar
to the foregoing, beyond the party's control.

<PAGE>   5

The parties hereby agree that if any part, term or provision of this Agreement
is held by a court of competent jurisdiction to be illegal or in conflict with
any controlling law the validity of the remaining portions or provisions shall
not be affected thereby, and the rights and obligations of the parties shall be
construed and enforced as if this Agreement did not contain the particular part,
term or provision held to be invalid.


This Agreement shall be deemed made in Decatur, Illinois, and the validity and
interpretation thereof shall be governed by the laws of the state of Illinois
without regard to its conflict of law principles.

16.      NOTICE

Any notice given or required to be given hereunder shall be deemed to have been
effectively given when written in English and delivered personally or sent by
certified mail, return receipt requested, with postage prepaid, to the addresses
set forth below and/or such other (or additional) address (es) requested by a
notice given in accordance with this section:

If to ADM:                                   If to EMERGE:
ADM Animal Health & Nutrition                eMERGE Vision Systems, Inc.
1877 N.E. 58th Avenue                        10315 102nd Terrace
Des Moines, IA 50313                         Sebastian, FL 32958
Attn: Matt Harper                            Attn: Alan Bonn, V.P. Operations

Copy to:                                     Copy to:
Archer-Daniel-Midland Company                Karen M. Keating, Esquire
4666 Faries Parkway                          800 The Safeguard Building
Decatur, IL 62522                            435 Devon Park Drive
Attn: General Counsel                        Wayne, PA 19087-1945

Nothing contained herein shall justify or excuse failure to give oral notice or
notice by facsimile for the purpose of informing the other party thereof when
prompt notification is appropriate, but such oral notice or notice by facsimile
shall not satisfy the requirement of written notice.


This Agreement, in addition to any accompanying purchase order, contains the
entire agreement between the parties and the undersigned are not relying upon
any representations or agreements other than contained herein. Any additions,
modifications or amendments to the Agreement shall not be binding unless made in
writing and signed

<PAGE>   6
by the parities. This Agreement supersedes all previous agreements, written or
oral, which have existed or now exist between the parties. To the extent the
terms and conditions printed on or accompanying any purchase order,
acknowledgement, invoices or similar document utilized by the parties in
connection with this Agreement conflict with the provision of this Agreement,
the provisions of this Agreement shall control.

18.      HEADINGS

Section titles and captions contained in this Agreement are inserted as a matter
of convenience and for reference and are to be of no force or effect in
construing and interpreting provisioning of this Agreement.


This Agreement maybe executed in Counterparts, each of which shall be deemed an
original, but both of which taken together shall constitute one and the same

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
day first written above.

                                                  NUTRITION, a division of

By: __________________________                    By: __________________________
      Name:                                           Name:
      Title:                                          Title:

<PAGE>   7

Reference: Specification for the confidential formulation of NutriCharge(TM)
Premix previously supplied to Matt Harper, ADM Animal Health & Nutrition
Division, Des Moines, IA, in accordance with the terms of the Non-Disclosure
Agreement referenced herein. eMerge Interactive document number 300103.


Reference: Specification for the confidential formulation of NutriCharge(TM)
Feedyard Pre-harvest Conditioner(TM) Crumbles previously supplied to Matt
Harper, ADM Animal Health & Nutrition Division, Des Moines, IA, in accordance
with the terms of the Non-Disclosure Agreement referenced herein. eMerge
Interactive document number 300104.


Reference: Specification for the confidential formulation of NutriCharge(TM)
Plus Packer Pre-harvest Conditioner(TM) Pellets previously supplied to Matt
Harper, ADM Animal Health & Nutrition Division, Des Moines, IA, in accordance
with the terms of the Non-Disclosure Agreement referenced herein. eMerge
Interactive document number 300105.


Reference:  Quality procedure 300131-000 attached.


Reference:  Packaging Specification Attachment


Reference:  Current Pricing Schedule attached

<PAGE>   8

<PAGE>   9


<PAGE>   10


<PAGE>   11
                                                                       EXHIBIT D


1.0               Purpose

1.1               This document describes the Quality Plan for the eMERGE
                  Vision, Animal Sciences and Nutricharge project. It states the
                  levels of quality to be achieved during the project and how
                  they will be monitored, verified, and reported during the life
                  of the project.

2.0               Scope

2.1               The Quality Plan covers the organization and activities that
                  are vital to success and to what standard each activity is to
                  be performed. The Quality Plan allocates responsibilities for
                  each activity to eMERGE/ADM/ various Feed Mills and printers
                  and states the interfaces between the companies.

                  The Quality Plan is a living document with commitment from all
                  project members.

3.0               Applicable Documents:

                  400190Animal Science Part Number Matrix
                  400189Animal Science General Requirements
                  300072-000  Nutricharge Procedural Diagram
                  300106Feed Manufacturing Schematic

4.0               Organization

4.1               Internal organization and Responsibility

                  Business Development
                  Key customer interface. Responsible for all trials and
                  introductory periods. Will provide forecasts-quantities and

                  Project Manager
                  It is the Project Managers responsibility to ensure proper
                  formulation of the products and to ensure their

                  VP Operations
                  Manufacturing shall be responsible for the project costing and
                  that the project is administered according to this Quality
                  Plan and maintains the level of quality

<PAGE>   12
                  commensurate with our customers expectations. Manufacturing is
                  also responsible for ensuring the proper manufacturing
                  processes are followed and verified in conjunction with the
                  Quality Manager.

                  Contract Manager
                  Inventory control, distribution, customer service, and order
                  entry are the responsibilities of the Contract Manager. The
                  Contract Specialist reports to the Contract Manager.
                  Regulatory requirements are the responsibility of the Contract

                  Quality Assurance Manager
                  The QA Manager shall provide audits of the project against the
                  Quality Plan as an independent authority. Document control
                  reports to the QA Manager. Batch and lot control are the
                  responsibilities of the QA Manager.

                  Field Technicians
                  The Field Technicians shall provide customer assistance during
                  the product start-up phase and will work with the Project
                  Manager and Business Development during the trials and

4.2               Project Organizational Structure

                  The project organizational structure comprises eMerge as the
                  prime contractor with the VP of operations as the key
                  coordinator. ADM (Animal Health and Nutrition Division) shall
                  be a sub-contractor. ADM shall manufacture the pre-mix and in
                  some cases will coordinate the manufacture of the feed. Other
                  major sub-contractors include Nutrition Services, Inc. who
                  shall manufacture the completed feed as part of the ADM team
                  along with various other feed mills throughout the country.
                  The manufacture of the micro-tracer shall be done by
                  Micro-Tracers, Inc. Printing of labels and bags shall be done
                  by various printers.

5.0               Project Structure

5.1               Regulatory

5.1.1             All of the products must be registered with each state in
                  order to sell within that state. The requirements for each
                  state, tonnage fees for each state and which states
                  Nutricharge is registered in are kept in folders by the
                  Contract Specialist. It is the responsibility of the Contract
                  Specialist to ensure these files are kept up to date and that
                  the tonnage fees are paid.

<PAGE>   13
5.2               Design Control

5.2.1             The formulation of the product shall be the responsibility of
                  the Project Manager. The Project manager shall work with
                  Business Development and Field Technicians to ensure the
                  trials of new product are conducted and documented per
                  released procedures.

5.3               Document and data control

5.3.1             Electronic master copies of the formula shall be maintained by
                  the Project Manager. Should the trials, tests, or
                  manufacturability cause a change to occur in the formula, the
                  Project Manager will provide the QA Manager with a changed
                  hard copy. The eVS ECO process shall be utilized to control
                  the change. The approvals for the ECO shall be the QA Manager
                  and the VP Operations exclusively. If the change effects the
                  labeling the Project Manager will notify the QA Manager in
                  writing as to what should be on the labels. The QA Manager
                  shall include the label change on the ECO. The formula shall
                  be controlled at eVS in the QA Managers office in a fireproof
                  safe. Access is limited to the QA Manager and the VP
                  Operations. The labels shall be controlled by Document
                  Control. Upon ECO approval a hard copy of the formula will be
                  faxed to Matt Harper of ADM who will initiate the changes at
                  the feed mills. It is Matt Harper's responsibility to ensure
                  that access to the formula is restricted. A Non-Disclosure/Non
                  Compete letter was signed by ADM and feed mills. Should the
                  label change, the QA Manager and Matt Harper will determine if
                  regulations require a copy of the revised label be sent to the
                  states where the product is registered. It shall be the
                  Contract Specialist's responsibility to ensure the revised
                  labels are sent to the appropriate regulatory agencies.

5.3.2             For bulk load orders, a unique bulk label will be distributed
                  by ADM to the Feed Mill. It will be the responsibility of ADM
                  and the Feed Mill to ensure this label is distributed to the
                  bulk driver. The Feed Mill shall stamp the Lot Code on the
                  label. These labels shall be controlled as described in 6.3.1
                  which also applies to bagged feed.

                  The bag size, material, and printing are controlled at the
                  printer, Grief Brothers Printers in Omaha. They maintain
                  scatter proofs for quality control on the 4 color process.

                  eVS Document Control shall maintain a master record index.
                  This index shall list all procedures, test results, formulas,
                  labels, etc. The revision of each document and location shall
                  also be specified.

<PAGE>   14
5.4               Subcontractor Quality

5.4.1             The VP of Operations and the Quality Manager shall determine
                  if a subcontractor has the ability to provide eVS with quality
                  products. Quality audits shall be performed per eVS's Quality
                  Audit procedure 400131. The subcontractor shall document how
                  he will control his process and provide eVS with a copy. This
                  will be kept by document control.

5.5               Product identification and Traceability

5.5.1             Upon initiating a P.O. to ADM or the feed mill, eVS purchasing
                  department shall include as instructions, for ADM or the feed
                  mill to place upon their invoice the location each batch is
                  sent. The feed mill shall attach to the invoice copies of
                  shipping documents which will specify the lot number that the
                  feed mill assigns for tracking purposes. Copies of the
                  invoices shall be kept by the Contract Specialist.

5.5.2             ADM shall provide the feed mill with lot codes for all batches
                  of pre-mix. The feed mill shall record all pre-mix lot codes
                  on their batch records. The feed mill shall maintain records
                  of all lot numbers for a minimum of two years.

5.5.3             The micro-tracer manufacturer shall provide lot numbers on
                  each batch made and ADM shall place the number on their
                  pre-mix batch record.

5.5.4             Upon placement of an order for final product, ADM shall
                  initiate the printing of the labels with the printer in the
                  quantities necessary, plus 4%. The printer shall FAX a copy of
                  the label to ADM and eVS Quality Mgr. for print approval.

5.6               Process control

5.6.1             Part numbering-see Procedure 400190 Animal Science Part
                  Numbering Matrix

5.6.2             Order entry and process flow-see Nutricharge Procedural
                  Diagram 300072-000.

5.6.3             Process steps:

                  1)       When a product is manufactured it will be tested per
                           documented procedures developed by the Project
                           Manager. It will be the QA Managers responsibility
                           along with the Project Manager to determine what
                           tests are to be performed by the independent lab and
                           to ensure they are documented with the results being
                           turned over to document control.

                  2)       Quality and Manufacturability audits shall be
                           performed on all feed mills during their first runs
                           of product.

<PAGE>   15
                  3)       The manufacturing process shall be documented by the
                           Feed Mill and given to eVS. The Feed Manufacturing
                           Schematic 300106 shows the process flow.

                  4)       eVS Manufacturing shall establish delivery methods
                           and document them in the form of a flow chart.

                  5)       Once the product is delivered to the customer a
                           startup procedure shall be followed by the field

                  6)       The Contract Manager shall develop a customer service

5.7               Inspection and testing

                  The formula shall be verified by having the first lot
                  manufactured by a feed mill and sample (approximately -1/2 LB)
                  tested to the following requirements. These analyses to be
                  performed by Woodson-Tenet Laboratories, 3507 Delaware Ave.
                  Des Moines, Iowa 50313; (515) 265-1461

                  1. Proximate Grouped Analysis:

                  Moisture and Fat-Ether Extraction, Fiber-Crude, Protein.

                  Estimated levels for the Feedyard Crumbles are:
                  Fat- 4.00%, Crude Fiber- 2.50%, Protein- 17.50%.

                  Estimated levels for the Packer Pellets are:
                  Fat- 3.50%, Crude Fiber- 2.50%, Protein- 13.00%

                  2. Inorganic Grouped Analysis:

                  Feed Group Elements-Three: Magnesium, Potassium, and Sodium.

                  Estimated levels for the Feedyard Crumbles are:
                  Magnesium- 0.13%, Potassium- 1.00%, Sodium- 1.75%

                  Estimated levels for the Packer Pellets are:
                  Magnesium- 0.10%, Potassium- 0.65%, Sodium- 1.00%

                  3. Amino Acid Analysis:

                  Amino Acid Profile including Tryptophan.

                  Numbers 1 and 2 above are to be performed on every batch for
                  the first 6 months. Number 3 is to be performed on the 1st
                  batch from each product. Copies of the

<PAGE>   16
                  analyses data will be maintained by document control and
                  entered into a data base.

                  A sample of each batch of product, approximately -1/2 to 1
                  pound, to be sent for tracking purposes to QA at eMerge Vision
                  where it will be labeled and placed into a cabinet in the QA
                  area. Samples shall be maintained for a 2 year period from
                  date of manufacture.

                  There will be no tolerance for antibiotics or pesticides in
                  any of the mixes.

5.7.1             Should the test results show that product is nonconforming to
                  the above specified tests, the QA department shall immediately
                  fill out the appropriate paperwork per NC-1300- Control of
                  Nonconforming Product and forward a copy to ADM and the feed

                  ADM and/or the feed mill shall quarantine or recall all lots
                  of nonconforming product specified by the lot number.

5.8               Inspection, Measuring, and Test Equipment

                  All test and measurement equipment at the pre-mix,
                  micro-tracer, and final product manufacturers shall be
                  calibrated to the applicable standards.

5.9               Every lot of pre-mix and final product shall be tested for
                  complete micro tracer mixing. This testing shall be done by
                  the micro tracer manufacturer:

                  Micro Tracers, Inc. 1370 Van Dyke Avenue
                  San Francisco, CA 94124
                  fax 415-822-6615
                  Contact: David Eisenberg

                  ADM shall be responsible for ensuring that the samples of
                  pre-mix and final product are sent to Micro Tracer, Inc. The
                  sample sizes shall be:

                  Pre-mix - six, 100 gram samples Final Product - six, 2
                  kilogram samples

                  The results of all tests are to be sent to the Quality
                  Assurance Manager at eVS for entry into A database. The
                  results shall be interpreted by the eVS QA Manager and Micro
                  Tracer, Inc.

<PAGE>   17
                  Recoverability should be 60% +40%, - 0% for the final product.

                  Recoverability should be 75% +25%, - 0% for the pre-mix.

<PAGE>   18
                                                                       EXHIBIT E

1)       Pallet must be in good-working condition with no protruding nails or
         any other deficiencies that could damage bagged feed.

2)       200 lb. single-walled (minimum) cardboard slipsheet must be placed
         directly on top of pallet to protect bagged feed. Dimensions will
         coincide with pallet size (approx. 48" by 40").

3)       Feed bags must be stacked efficiently in a cubed manner, also
         coinciding with pallet dimensions.

4)       Apply plastic exterior covering or stretchwrap (4 layers minimum)
         around bundle from bottom to top to secure feed for shipment.

5)       Each pallet must have a label (8-1/2" by 11") applied to the center of
         two sides (front & side) of the stretchwrapped-bundle. Labels must be
         easily visible and marked with the lot number and part number of the
         feed to be shipped.

6)       Each feed bag and pallet label must have a lot number attached to its
         label as follows:

         [NE 060999 CHART]                   1st-2nd: denotes State abbreviation
                                              3rd-8th: denotes mfg date (mmddyy)
                                          9th: eMERGE Interactive, Inc. assigned
                                                facility code as derived from eI
                                            facility code list held in Contracts

7)       Each pallet label must have a part number matching that on the purchase
         order provided by eMERGE Interactive, Inc.

8)       Ensure no forklift damage occurs on bags or plastic covering
         (stretchwrap) in the process of loading packaged feed into truck or
         relocating in warehouse.
<PAGE>   19
ANIMAL HEALTH &                                              1877 NE 58th Avenue
NUTRITION Division                                          Des Moines, IA 50313
                                                                FAX 515-266-1925
                                                            WATTS 1-800-247-5450

                                                                       EXHIBIT F

                         eMERGE VISION - PRICE SCHEDULE

                              JULY - SEPTEMBER 1999


ADM PRODUCT CODE              PRODUCT DESCRIPTION                (F.O.B.)
----------------              -------------------                --------
<S>                           <C>                                <C>
190082                        NC Packer Pellets                  $[ ** ]

190083                        NC Feedyard Crumbs                 $[ ** ]

310011                        NC Tank Mixer                      $[ ** ]