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JOINT VENTURE AGREEMENT
This Agreement is made as of October 26, 1999 by and between Internet Capital
Group, Inc. ("ICG") and Safeguard Scientifics, Inc. ("SSI")
WHEREAS, SSI and ICG and certain entities controlled by them own and/or have
the right to acquire substantial numbers of shares of voting capital stock of
eMerge Interactive, Inc. ("eMerge"); and
WHEREAS, SSI and ICG desire to act jointly to exercise a controlling influence
over the management and policies of eMerge.
NOW, THEREFORE, intending to be legally bound, the parties agree as follows:
1. Election of Directors. Each of SSI and ICG will vote all shares of
eMerge that it currently owns or hereafter acquires, and will use
reasonable efforts in good faith to cause all other eMerge
shareholders controlled by it to vote all of their shares of eMerge
currently owned or hereafter acquired, to elect to and maintain on the
eMerge Board of Directors, two designees of ICG and two designees of
SSI (one of which shall be subdesignated by TL Ventures). The
designees of ICG and SSI will be advised of the existence and the
purpose of this Agreement, and will be encouraged, subject to their
fiduciary duties, to consult with each other on all key corporate
matters submitted to a vote of the directors of eMerge, including
capital structure, corporate reorganizations, mergers and
acquisitions, sale of substantially all of the corporation's assets,
significant loans and borrowings, significant capital expenditures,
budgets, and key management personnel decisions.
2. Other Votes. The parties will consult with each other with regard to
all matters submitted to a vote of the shareholders of eMerge, and
will attempt in good faith to agree on a course of action which is in
the best interests of both SSI and ICG, it being acknowledged that
this is an obligation to meet and discuss such matters, but not an
obligation to act other than in each entity's best interest.
3. Right of First Refusal. After the closing of eMerge's initial Public
Offering (defined below), if either of SSI and ICG or any of their
majority owned subsidiaries intends to sell to an unaffiliated buyer
less than all of its shares of capital stock of eMerge, it will first
offer to sell such shares to the other party at the fair market price
of the shares, based on the average closing price of the Class A
common stock of eMerge as reported on the principal market or exchange
on which such shares trade for the five trading days immediately
preceding the date on which the offer expires. Such offer will expire
at 4:00 eastern time on the first trading day after the date the offer
was made. If the offer is accepted for any or all of the shares, the
parties will each be obligated to complete the transaction at the
offered price within five business days after acceptance. If the offer
is not accepted in whole, then the selling party may sell the
remaining offered shares at any time within one month after the offer
was made at the market price at the time of the sale. For purposes of
this Agreement, the term "Public Offering" means the effectiveness of
a
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registration statement filed by eMerge pursuant to the Securities Act of
1933, as amended (other than on Form S-4 or S-8 on any successor forms
thereto), covering the offer and sale of Class A Common Stock in an
underwritten public offering on a firm commitment basis in which the gross
proceeds of the offering will equal or exceed $10,000,000 (calculated
before deducting underwriters' discounts and commissions and other offering
expenses), and in which the public offering price per share of Class A
Common Stock (calculated before deducting underwriters' discounts and
commissions) results in a valuation of the total number of outstanding
shares of capital stock of eMerge immediately prior to the closing of the
public offering of at least $30,000,000.
4. Sale of Entire Interest. After the closing of eMerge's initial Public
Offering, if either of SSI or ICG desires to sell to an unaffiliated buyer
all of the shares of capital stock of eMerge owned by such party and its
majority owned subsidiaries, such party will first discuss such intention
with the other party and will attempt in good faith to provide the other
party to have the opportunity either to purchase all of the shares owned
by the selling party and its subsidiaries or to participate in the sale of
shares to the unaffiliated buyer.
5. Management of the Company. Each of SSI and ICG acknowledges that (i) it
intends to actively participate in discussions with the other party
regarding the business of eMerge and (ii) it has substantial expertise in
the e-commerce industry. The parties will coordinate their public
statements regarding this Agreement and eMerge, including filings on
Schedule 13D.
6. Term and Termination. This Agreement shall continue in effect until the
earlier of (a) the date the parties mutually agree in writing to terminate
or amend this Agreement and (b) the date that the aggregate number of
shares of eMerge owned by either ICG or SSI is less than 5% of all of
the outstanding shares of all classes of Common Stock of eMerge on a
combined basis. This Agreement shall terminate automatically if it is
determined by relevant authority not to create a valid joint venture;
provided that the parties will prior to such termination meet to discuss
in good faith and to determine whether this Agreement could be modified
to constitute a valid joint venture so long as such modifications do not
materially alter the respective rights and obligations of the parties.
7. Non-assignable Agreement. This Agreement, and the rights and obligations
of the parties hereunder, shall be binding on the parties and their
successors, but may not be otherwise assigned by either party.
8. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware as applied to contracts made and to be
performed entirely within that state between residents of that state.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INTERNET CAPITAL GROUP, INC. SAFEGUARD SCIENTIFICS, INC.
By: /s/ Henry W. Nassau By: /s/ Steve J. Rosard
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Name: Henry W. Nassau Name: Steve J. Rosard
Title: Managing Director Title: Vice President
