Unassociated Document


     

    
      SECOND AMENDMENT TO SECURITIES PURCHASE
AGREEMENT

      


      THIS SECOND AMENDMENT TO SECURITIES
PURCHASE AGREEMENT is dated as of May 10, 2010 (this “Second Amendment”),
by and between Emerald Dairy Inc., a Nevada
corporation (the “Company”) and Keith
Guenther, a California resident (the “Investor”).

      


      RECITALS:

      


      A.           On
November 10, 2008, the Company sold to the Investor, for a purchase price of
$500,000, (a) a 10% promissory notes in the principal amount of $500,000,
originally due on November 10, 2009 (the “Original Note”) and
(b) three-year warrants to purchase 50,000 shares of its common stock, at an
exercise price of $2.61 per share (the “Original Warrants”),
pursuant to the terms and conditions of a Securities Purchase Agreement (the
“Purchase
Agreement”).

      


      B.           As
of November 10, 2009, the Company and the Investor entered into an Amendment to
the Purchase Agreement (the “First Amendment”),
pursuant to which, among other things: (i) the maturity date of the Original
Note was extended from November 10, 2009 to May 10, 2010, (ii) the Company
issued and delivered to the Investor, against delivery by such Investor of his
Original Note, marked “canceled”, a duly executed Amended and Restated Note (the
“Amended Note”)
reflecting, among other things, the change set forth in (i) above; and (iii) the
Company issued the Investor additional three-year warrants to purchase 100,000
shares of the Company’s common stock, at an exercise price of $1.63 per share
(the “Additional
Warrants”).

      


      C.           The
parties desire to further amend the Purchase Agreement, and to amend the Amended
Note, in order to modify the terms and conditions thereof upon the terms and
subject to the conditions set forth in this Second Amendment.

      


      NOW, THEREFORE, in
consideration of the premises and the other mutual covenants contained herein,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

      


      1.           Accuracy
of Recitals; Definitions.  Each of the Company and the Investor
acknowledge and agree that the foregoing Recitals are true and accurate and are
incorporated herein by reference.  The Purchase Agreement, Original
Note, Original Warrants, First Amendment, Amended Note and Additional Warrants
shall be referred to herein collectively as the “Transaction
Documents.”  Capitalized terms used and not otherwise defined herein
are used as defined in the Transaction Documents.

      


      2.           Amendments
to Transaction Documents.

      


      2.1           Subject
to the satisfaction of the conditions set forth in Section 3 below, the Company
and Investor hereby agree as follows:

      


      (a)    On May
11, 2010, the Company will pay the Investor $75,000, by a single wire transfer
of immediately available funds to the bank account designated by the Investor,
which represents the full amount of accrued and unpaid interest on the Amended
Note as of the date hereof;

       

      
        
          
          

        

        
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      (b)    Within
thirty (30) days of the date hereof, the Company will repay to the Investor the
full $500,000 principal amount due under the Amended Note, plus additional
interest, at a rate of 15%, accrued from May 10, 2010 through the date of repayment;
and

       

      (c)    As
additional consideration, the Company will issue to the Investor a total
of:

       

      (i)    5,000
restricted shares of the Company’s common stock, if the full amount due under
the Amended Note is repaid to the Investor on or before May 25, 2010;
or

       

      (ii)    10,000
restricted shares of the Company’s common stock, if the full amount due under
the Amended Note is repaid to the Investor after May 25, 2010, but on or before
June 9, 2010.

      


      3.           Conditions
Precedent.  The effectiveness
of this Second Amendment is subject to satisfaction of each of the following
conditions precedent:

      


      3.1           The
representations and warranties made by the Company in this Second Amendment are
accurate in all respects.

      


      3.2           No
Event of Default shall be in existence under the Amended Note.

      


      3.3           No
Material Adverse Effect has occurred since the date of filing of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2009.

      


      3.4           No
suit, proceeding or action has been commenced against or involving the Company
which, if successful, would result in a Material Adverse Effect.

      


      3.5           The
Investor shall have received the following documents and other items from the
Company, duly executed by an authorized representative of the Company, as
necessary:

      
        


        (a)           An
executed copy of this Second Amendment.

         

        (b)           Evidence
that the execution, delivery and performance of this Second Amendment by the
Company has been duly authorized by all necessary corporate
action.

      

      


      3.6           The
Company shall have received the following documents and other items from the
Investor, duly executed by an authorized representative of the Investor, as
applicable:

      
        


        (a)           An
executed copy of this Second Amendment.

         

        
          
            
            

          

          
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      4.           Transaction
Documents in Full Force and Effect as Amended.  Except as
specifically amended hereby, the Transaction Documents shall remain in full
force and effect and hereby are ratified and confirmed as so
amended.  This Second Amendment shall not constitute a novation,
satisfaction and accord, cure, release and/or satisfaction of the Transaction
Documents, but shall constitute an amendment thereof.  The parties
hereto agree to be bound by the terms and conditions of the Transaction
Documents as amended by this Second Amendment, as though such terms and
conditions were set forth herein and therein in full.  Each reference
in the Transaction Documents or any other document or instrument to any
Transaction Documents, or words of similar import shall mean and be a reference
to the Transaction Documents as amended hereby.

      


      5.           Representations.  The Company
hereby represents and warrants to the Investor as follows: (a) it is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) the execution, delivery and performance by it
of this Second Amendment are within its powers, have been duly authorized, and
do not contravene (i) its articles of incorporation, bylaws or other
organizational documents, or (ii) any applicable law, statute, regulation,
ordinance, tariff or order; (c) no consent, license, permit, approval or
authorization of, or registration, filing or declaration with any governmental
authority or other person is required in connection with the execution,
delivery, performance, validity or enforceability of this Second Amendment by or
against it; (d) this Second Amendment has been duly executed and delivered by
it; (e) this Second Amendment constitutes its legal, valid and binding
obligations enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally or by general principles of equity; (f) to the best of its knowledge, it is in compliance with all covenants and
agreements in the Transaction Documents and it is not in default under the
Transaction Documents, and no Event of Default exists, has occurred and is
continuing or would result by the execution, delivery or performance of this
Second Amendment; and (g) the representations and warranties contained in the
Transaction Documents are true and correct in all material respects as of the
date hereof as if made on the date hereof.

      


      6.           Miscellaneous.

      


      6.1           The execution, delivery and
effectiveness of this Second Amendment shall not, except as expressly provided
herein, be deemed to be an amendment or
modification of, or operate as a waiver of, any provision of the
Transaction Documents, or any right, power or remedy of the Investors, nor
constitute a waiver of any provision of the Transaction Documents, or any other
document, instrument and/or agreement executed or delivered in connection
therewith or of any Event of Default under any of the foregoing, in each case
whether arising before or after the date hereof or as a result of performance
hereunder or thereunder.  This Second Amendment shall not preclude the
future exercise of any right, remedy, power or privilege available to the
parties whether under the Transaction Documents,
at law, or otherwise.

      


      6.2           This
Second Amendment may be executed in any number of counterparts (including by
facsimile), and by the different parties hereto or thereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.  Each party agrees that it will be bound by its own
facsimile signature and that it accepts the facsimile signature of
each other party.  The descriptive headings of the various sections of this
Second Amendment are inserted for convenience of reference only and shall not be
deemed to affect the meaning or construction
of any of the provisions hereof or thereof.  Whenever the context and
construction so require, all words herein in the singular number herein shall be
deemed to have been used in the plural, and vice
versa, and the masculine gender shall
include the feminine and neuter and the neuter shall include the masculine and
feminine.

       

      
        
          
          

        

        
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      6.3           This
Second Amendment may not be changed, amended, restated, waived, supplemented,
discharged, canceled, terminated or otherwise modified
orally or by any course of dealing or in any manner other
than as provided in the applicable Transaction Documents.  This Second
Amendment shall be considered part of the Transaction Documents for all purposes
under the Transaction Documents.  In the event of any inconsistency
between this Second Amendment and any of the other Transaction Documents, the
terms of this Second Amendment shall control.

      


      6.4           The
Transaction Documents constitute the final, entire agreement and understanding
between the parties with respect to the subject matter hereof and thereof and
may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements between the parties, and shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto and
thereto.  There are no unwritten oral agreements between the parties
with respect to the subject matter hereof and thereof.  If any
provision of this Second Amendment is adjudicated to be invalid under applicable
laws or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
this Second Amendment which shall be given effect so far as
possible.

      


      6.5           THIS
SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF
LAW PROVISIONS SET FORTH IN THE TRANSACTION DOCUMENTS, AS AMENDED BY THIS SECOND
AMENDMENT.

      


      6.6           Each
party shall execute and deliver such other documents, certificates and/or
instruments and
take such other actions as reasonably requested by the other party in
order more effectively to consummate the transactions contemplated
hereby.

      


      


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      IN
WITNESS WHEREOF,
the parties have caused this Second Amendment to be executed under seal
by their respective
officers thereunder duly authorized, as of the date first above
written.

       

      
        
          	 	COMPANY:	 
	 	 	 
	 	EMERALD DAIRY
      INC. 	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 /s/
      Shu Kaneko 	 
	 	Name: 	Shu
      Kaneko 	 
	 	Title: 	Chief
      Financial Officer 	 
	 	 	 	 


        

      

       

       

      
        	 	INVESTOR:	 
	 	 	 
	 	 	 
	
                 

              	  /s/
      Keith Guenther 	 
	 	Keith
      Guenther