Document:

THE SECURITIES REPRESENTED HEREBY MAY
NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

    

    SUBJECT TO THE PROVISIONS HEREOF, THIS
WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE 24, 2013 (THE
“EXPIRATION DATE”).

    

    EMERALD
DAIRY INC.

    

    WARRANT
TO PURCHASE 934,600 SHARES OF

    COMMON
STOCK, PAR VALUE $0.001 PER SHARE

    

    FOR VALUE RECEIVED, FENGHUI LEASING
CO., LTD., a company organized under the laws of the People’s Republic of China
(“Warrantholder”), is entitled to purchase, subject to the provisions of this
Warrant, from Emerald Dairy Inc., a Nevada corporation (“Company”), at any time
not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined
above), at an exercise price per share equal to $1.65 (the exercise price in
effect being herein called the “Warrant Price”), 934,600 shares (“Warrant
Shares”) of the Company’s Common Stock, par value $0.001 per share (“Common
Stock”).  The number of Warrant Shares purchasable upon exercise of
this Warrant and the Warrant Price shall be subject to adjustment from time to
time as described herein.  This Warrant is being issued pursuant to a
Sale and Leaseback Agreement, dated as of June 24, 2010 (the “Agreement”),
between the Company and the Warrantholder.  Capitalized terms used
herein have the respective meanings ascribed thereto in the Agreement unless
otherwise defined herein.

    

    Section
1.         Registration.  The
Company shall maintain books for the transfer and registration of the
Warrant.  Upon the initial issuance of this Warrant, the Company shall
issue and register the Warrant in the name of the Warrantholder.

    

    Section
2.         Transfers.  As
provided herein, this Warrant may be transferred only pursuant to a registration
statement filed under the Securities Act of 1933, as amended (the “Securities
Act”), or an exemption from such registration.  Subject to such
restrictions, the Company shall transfer this Warrant from time to time upon the
books to be maintained by the Company for that purpose, upon surrender hereof
for transfer, properly endorsed or accompanied by appropriate instructions for
transfer and such other documents as may be reasonably required by the Company,
including, if required by the Company, an opinion of its counsel to the effect
that such transfer is exempt from the registration requirements of the
Securities Act, to establish that such transfer is being made in accordance with
the terms hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
3.         Exercise of
Warrant.  Subject to the provisions hereof, the Warrantholder
may exercise this Warrant, in whole or in part, at any time prior to its
expiration upon surrender of the Warrant, together with delivery of a duly
executed Warrant exercise form, in the form attached hereto as “Appendix A” (the
“Exercise Agreement”) and payment by cash, certified check or wire transfer of
funds of the aggregate Warrant Price for
that number of Warrant Shares then being purchased, to the Company during normal
business hours on any business day at the Company’s principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the Warrantholder).  The Warrant Shares so purchased shall be deemed
to be issued to the Warrantholder or the Warrantholder’s designee, as the record
owner of such shares, as of the close of business on the date on which this
Warrant shall have been surrendered (or the date evidence of loss, theft or
destruction thereof and security or indemnity satisfactory to the Company has
been provided to the Company), the Warrant Price shall have been paid and the
completed Exercise Agreement shall have been delivered.  Certificates
for the Warrant Shares so purchased shall be delivered to the Warrantholder
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised.  The certificates so delivered
shall be in such denominations as may be requested by the Warrantholder and
shall be registered in the name of the Warrantholder or such other name as shall
be designated by the Warrantholder, as specified in the Exercise
Agreement.  If this Warrant shall have been exercised only in part,
then, unless this Warrant has expired, the Company shall, at its expense, at the
time of delivery of such certificates, deliver to the Warrantholder a new
Warrant representing the right to purchase the number of shares with respect to
which this Warrant shall not then have been exercised.  As used
herein, “business day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of
business.  Each exercise hereof shall constitute the re-affirmation by
the Warrantholder that the representations and warranties contained in the
investment representation letter the Warrantholder executed upon receipt of this
Warrant are true and correct in all material respects with respect to the
Warrantholder as of the time of such exercise.

    

    Notwithstanding anything in this
Warrant to the contrary, in no event shall the Holder of this Warrant be
entitled to exercise a number of Warrants (or portions thereof) in excess of the
number of Warrants (or portions thereof) upon exercise of which the sum of (i)
the number of shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised Warrants and the unexercised or
unconverted portion of any other securities of the Company (subject to a
limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 9.99% of the outstanding shares of Common
Stock.  For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except as
otherwise provided in clause (i) of the preceding
sentence.  Notwithstanding anything to the contrary contained herein,
the limitation on exercise of this Warrant may be waived by written agreement
between the Holder and the Company; provided, however, such waiver
may not be effective less than sixty-one (61) days from the date
thereof.

    
      
         

      

      
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    Section
4.         Compliance with the
Securities Act of 1933. The Company may cause the legend set forth on the
first page of this Warrant to be set forth on each Warrant, and a similar legend
on any security issued or issuable upon exercise of this Warrant, unless counsel
for the Company is of the opinion as to any such security that such legend is
unnecessary.

    

    Section
5.         Payment of
Taxes.  The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or deliver
any certificate for Warrant Shares or any Warrant until the person requesting
the same has paid to the Company the amount of such tax or has established to
the Company’s reasonable satisfaction that such tax has been
paid.  The Warrantholder shall be responsible for income taxes due
under federal, state or other law, if any such tax is due.

    

    Section
6.         Mutilated or Missing
Warrants.  In case this Warrant shall be mutilated, lost,
stolen, or destroyed, the Company shall issue in exchange and substitution of
and upon surrender and cancellation of the mutilated Warrant, or in lieu of and
substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction of the Warrant, and with respect to a lost, stolen or destroyed
Warrant, reasonable indemnity or bond with respect thereto, if requested by the
Company.

    

    Section
7.         Reservation of Common
Stock.  The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the exercise of the Company Warrants, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Company Warrants in accordance with
their respective terms.  The Company agrees that all Warrant Shares
issued upon due exercise of the Warrant shall be, at the time of delivery of the
certificates for such Warrant Shares, duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock of the Company.

    

    Section
8.         Adjustments.  Subject
and pursuant to the provisions of this Section 8, the Warrant Price and number
of Warrant Shares subject to this Warrant shall be subject to adjustment from
time to time as set forth hereinafter.

    
      
         

      

      
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    (a)      If the
Company shall, at any time or from time to time while this Warrant is
outstanding, pay a dividend or make a distribution on its Common Stock in shares
of Common Stock, subdivide its outstanding shares of Common Stock into a greater
number of shares or combine its outstanding shares of Common Stock into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then (i) the Warrant Price in effect
immediately prior to the date on which such change shall become effective shall
be adjusted by multiplying such Warrant Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such change and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after giving effect to such change and
(ii) the number of Warrant Shares purchasable upon exercise of this Warrant
shall be adjusted by multiplying the number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior to the date on which such change
shall become effective by a fraction, the numerator of which is shall be the
Warrant Price in effect immediately prior to the date on which such change shall
become effective and the denominator of which shall be the Warrant Price in
effect immediately after giving effect to such change, calculated in accordance
with clause (i) above.  Such adjustments shall be made successively
whenever any event listed above shall occur.

    

    (b)      If any
capital reorganization or reclassification of the capital stock of the Company,
consolidation or merger of the Company with another corporation in which the
Company is not the survivor, or sale, transfer or other disposition of all or
substantially all of the Company’s assets to another corporation shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each Warrantholder shall thereafter have the
right to purchase and receive upon the basis and upon the terms and conditions
herein specified and in lieu of the Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, such shares of stock, securities or
assets as would have been issuable or payable with respect to or in exchange for
a number of Warrant Shares equal to the number of Warrant Shares immediately
theretofore issuable upon exercise of the Warrant, had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of each Warrantholder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Warrant Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.  The Company shall
not effect any such consolidation, merger, sale, transfer or other disposition
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger, or the corporation purchasing or otherwise acquiring such assets or
other appropriate corporation or entity shall assume the obligation to deliver
to the Warrantholder, at the last address of the Warrantholder appearing on the
books of the Company, such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Warrantholder may be entitled to
purchase, and the other obligations under this Warrant.  The
provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or
other dispositions.

    
      
         

      

      
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    (c)      In case
the Company shall fix a payment date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness or assets (other than cash dividends or cash
distributions payable out of consolidated earnings or earned surplus or
dividends or distributions referred to in Section 8(a)), or subscription rights
or warrants, the Warrant Price to be in effect after such payment date shall be
determined by multiplying the Warrant Price in effect immediately prior to such
payment date by a fraction, the numerator of which shall be the total number of
shares of Common Stock outstanding multiplied by the Market Price (as defined
below) per share of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Company’s Board of Directors in good
faith) of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock immediately prior to such payment date.  “Market
Price” as of a particular date (the “Valuation Date”) shall mean the following:
(a) if the Common Stock is then listed on a national stock exchange, the closing
sale price of one share of Common Stock on such exchange on the last trading day
prior to the Valuation Date; (b) if the Common Stock is then quoted on the
Financial Industry Regulatory Authority, Inc.’s OTC Bulletin Board (the
“Bulletin Board”) or such similar quotation system or association, the closing
sale price of one share of Common Stock on the Bulletin Board or such other
quotation system or association on the last trading day prior to the Valuation
Date or, if no such closing sale price is available, the average of the high bid
and the low asked price quoted thereon on the last trading day prior to the
Valuation Date; or (c) if the Common Stock is not then listed on a national
stock exchange or quoted on the Bulletin Board or such other quotation system or
association, the fair market value of one share of Common Stock as of the
Valuation Date, as determined in good faith by the Board of Directors of the
Company and the Warrantholder.  If the Common Stock is not then listed
on a national securities exchange, the Bulletin Board or such other quotation
system or association, the Board of Directors of the Company shall respond
promptly, in writing, to an inquiry by the Warrantholder prior to the exercise
hereunder as to the fair market value of a share of Common Stock as determined
by the Board of Directors of the Company.  In the event that the Board
of Directors of the Company and the Warrantholder are unable to agree upon the
fair market value in respect of subpart (c) of this paragraph, the Company and
the Warrantholder shall jointly select an appraiser, who is experienced in such
matters.  The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Warrantholder.  Such adjustment shall be made successively
whenever such a payment date is fixed.

    

    (d)      An
adjustment to the Warrant Price shall become effective immediately after the
payment date in the case of each dividend or distribution and immediately after
the effective date of each other event which requires an
adjustment.

    

    (e)      In the
event that, as a result of an adjustment made pursuant to this Section 8, the
Warrantholder shall become entitled to receive any shares of capital stock of
the Company other than shares of Common Stock, the number of such other shares
so receivable upon exercise of this Warrant shall be subject thereafter to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
this Warrant.

    
      
         

      

      
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    (f)      To the
extent permitted by applicable law and the listing requirements of any stock
market or exchange on which the Common Stock is then listed, the Company from
time to time may decrease the Warrant Price by any amount for any period of time
if the period is at least twenty (20) days, the decrease is irrevocable during
the period and the Board shall have made a determination that such decrease
would be in the best interests of the Company, which determination shall be
conclusive.  Whenever the Warrant Price is decreased pursuant to the
preceding sentence, the Company shall provide written notice thereof to the
Warrantholder at least five (5) days prior to the date the decreased Warrant
Price takes effect, and such notice shall state the decreased Warrant Price and
the period during which it will be in effect.

    

    Section
9.         Fractional
Interest.  The Company shall not be required to issue fractions
of Warrant Shares upon the exercise of this Warrant.  If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this Section 9, be deliverable upon such exercise, the Company, in
lieu of delivering such fractional share, shall pay to the exercising
Warrantholder an amount in cash equal to the Market Price of such fractional
share of Common Stock on the date of exercise.

    

    Section
10.       Benefits.  Nothing
in this Warrant shall be construed to give any person, firm or corporation
(other than the Company and the Warrantholder) any legal or equitable right,
remedy or claim, it being agreed that this Warrant shall be for the sole and
exclusive benefit of the Company and the Warrantholder.

    

    Section
11.       Notices to
Warrantholder.  Upon the happening of any event requiring an
adjustment of the Warrant Price, the Company shall promptly give written notice
thereof to the Warrantholder at the address appearing in the records of the
Company, stating the adjusted Warrant Price and the adjusted number of Warrant
Shares resulting from such event and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.  Failure to give such notice to the Warrantholder or any defect
therein shall not affect the legality or validity of the subject
adjustment.

    

    Section
12.       Identity of Transfer
Agent.  The Transfer Agent for the Common Stock is
Computershare, Inc., located at 350 Indiana Street, Suite 800, Golden, CO 80401.
Upon the appointment of any subsequent transfer agent for the Common Stock or
other shares of the Company’s capital stock issuable upon the exercise of the
rights of purchase represented by the Warrant, the Company will mail to the
Warrantholder a statement setting forth the name and address of such transfer
agent.

    

    Section
13.       Notices.  Unless
otherwise provided, any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon
such delivery, (ii) if given by telex or facsimile, then such notice shall be
deemed given upon receipt of confirmation of complete transmittal, (iii) if
given by mail, then such notice shall be deemed given upon the earlier of (A)
receipt of such notice by the recipient or (B) three days after such notice is
deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier.  All
notices shall be addressed as follows: if to the Warrantholder, at its address
as set forth in the Company’s books and records and, if to the Company, at the
address as follows, or at such other address as the Warrantholder or the Company
may designate by ten days’ advance written notice to the other:

    
      
         

      

      
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    If to the
Company:

    

    Emerald
Dairy Inc.

    11990
Market Street, Suite 205

    Reston,
VA 20190

    Attn:  Shu
Kaneko, Chief Financial Officer

    Fax:  (678)
868-0633

    

    With a
copy to:

    

    Blank
Rome LLP

    The
Chrysler Building

    405
Lexington Ave.

    New York,
NY 10174

    Attn:
Jeffrey A. Rinde, Esq.

    Fax:
(212) 885-5001

    

    Section
14.       Successors.  All
the covenants and provisions hereof by or for the benefit of the Warrantholder
shall bind and inure to the benefit of its respective successors and assigns
hereunder.

    

    Section
15.       Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial.  This Warrant shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law provisions
thereof.  The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby.  Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Warrant.  The Company and, by accepting this
Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in
such court.  The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably waives any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT
COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    

    Section
16.       No Rights as
Stockholder.  Prior to the exercise of this Warrant, the
Warrantholder shall not have or exercise any rights as a stockholder of the
Company by virtue of its ownership of this Warrant.

    
      
         

      

      
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    Section
17.       Amendment;
Waiver.  Any term of this Warrant may be amended or waived upon
the written consent of the Company and the Warrantholder.

    

    Section
18.       Section
Headings.  The section headings in this Warrant are for the
convenience of the Company and the Warrantholder and in no way alter, modify,
amend, limit or restrict the provisions hereof.

    

    [The
remainder of this page is left blank intentionally.  Signature page
follows.]

    
      
         

      

      
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    IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed, as of the   24th  day
of June, 2010.

    

    
      
        	 
      	
                EMERALD
      DAIRY INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Shu Kaneko

              
	 
      	 
      	
                  Name:
      Shu Kaneko

              
	 
      	 
      	
                  Title:
      Chief Financial Officer

              

      

    

    
      
         

      

      
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    APPENDIX
A

    EMERALD
DAIRY INC.

    WARRANT
EXERCISE FORM

    

    To:
Emerald Dairy Inc.:

    

    The undersigned hereby irrevocably
elects to exercise the right of purchase represented by the within Warrant
(“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price
and surrender of the Warrant, _______________ shares of Common Stock (“Warrant
Shares”) provided for therein, and requests that certificates for the Warrant
Shares be issued as follows:

     

    
      
        
          	
                   
      

                
	
                  Name

                
	 
      
	
                  Address

                
	 
      
	
                  Federal
      Tax ID or Social Security
No.

                

        

      

    

    

    and delivered
by:            certified
mail to the above address, or

    electronically (provide
DWAC

    Instructions:___________________),
or

    other
(specify):__________________________________________).

    

    and, if
the number of Warrant Shares shall not be all the Warrant Shares purchasable
upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
Shares purchasable upon exercise of this Warrant be registered in the name of
the undersigned Warrantholder or the undersigned’s Assignee as below indicated
and delivered to the address stated below.

    

    Dated:
___________________, ____

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Note:

                            	
                              The
      signature must correspond with

                            	 
      
	 
      	
                              Signature:

                            	 
      	 
      
	
                              the
      name of the Warrantholder as written

                            	 
      
	
                              on
      the first page of the Warrant in every

                            	 
      
	
                              particular,
      without alteration or enlargement

                            	
                              Name
      (please print)

                            
	
                              or
      any change whatever, unless the Warrant

                            	 
      
	
                              has
      been assigned.

                            	
                              Address

                            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                              Federal
      Identification or

                            
	 
      	 
      	 
      	
                              Social
      Security No.

                            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                              Assignee:Unassociated Document

    LOAN
AGREEMENT

    

    THIS LOAN AGREEMENT (the
“Agreement”) is
dated as of the 24th day of June, 2010, by and between Emerald Dairy Inc., a
Nevada corporation, with an address at 11990 Market Street, Suite 205, Reston,
VA 20190 (the “Borrower”), and Xiang
Li Zhao, a resident of the People’s Republic of China, with an address at
_________________________ (the “Lender”).

    

    WITNESSETH:

    

    WHEREAS, the Borrower requires
funding in the amount of Eight Hundred Thousand ($800,000) Dollars for the
purposes hereinafter set forth; and

    

    WHEREAS, the Borrower is
borrowing from the Lender Eight Hundred Thousand ($800,000) Dollars, in
consideration for which the Borrower is issuing to the Lender a non-negotiable
promissory note.

    

    NOW, THEREFORE, it is agreed
as follows:

    

    1.           Commitment of Lender;
Borrowing Conditions.

    

    1.1          Commitment.  Subject to the
terms and conditions of this Agreement, the Lender hereby agrees to make a
one-year term loan (the “Loan”) to the
Borrower, in the principal amount of Eight Hundred Thousand ($800,000) Dollars
(the “Principal”).

    

    1.2          Promissory
Note.

    

    (a)          General.  The Loan shall be
evidenced by a non-negotiable promissory note, issued by the Borrower to the
Lender, in substantially the form of “Exhibit A” annexed
hereto (the “Note”), dated as of
even date herewith.  The Principal, and any accrued and unpaid
Interest (as defined in Section 1.2(b) below) shall be due and payable in full
on the one (1) year anniversary of the Closing Date (as defined in Section 6
below) (the “Maturity
Date”).

        

    (b)          Interest.

    

    (i)           The
Loan shall bear Interest at the rate of ten (10%) percent per annum, computed on
the basis of the actual number of days elapsed in a year of 360
days.  Any accrued and unpaid Interest shall be due and payable in
full on the Maturity Date.

    

    (ii)           Upon
the maturity of the Note, by acceleration or otherwise, and/or after judgment,
interest shall be payable at the rate of twelve (12%) percent per annum or at
the judgment rate, whichever is higher, until the obligation is paid in
full.

    

    
      
        
        

      

      
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    (c)           Prepayment.   The
Borrower may from time to time prepay any amount due under the Note, in whole or
in part, without penalty.  All payments made shall be applied first
toward the payment of I    nterest and the
balance toward the reduction of the Principal.

    

    2.           Representations
and Warranties of the Borrower.  The Borrower
makes the following representations and warranties:

    

    2.1           Organization
and Authorization.  The Borrower (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, (b) is duly authorized to transact business and is
in good standing in every other jurisdiction where the failure to qualify to do
business would have a material adverse effect upon the Borrower, and (c) is duly
authorized and empowered to create, grant and issue the Note, and to execute and
deliver this Agreement.  The Borrower has the authority to own, lease
and operate its assets, and to carry on its business as presently
conducted.  All action on the part of the Borrower requisite for the
due creation, issuance and delivery of this Agreement and the Note has been duly
and effectively taken.  This Agreement and the Note, upon the
granting, issuance and delivery thereof, will be the valid, binding and
enforceable obligations of the Borrower in accordance with their respective
terms and compliance herewith will not violate any provision of law, the
Articles of Incorporation or Bylaws of the Borrower, or any agreement, judgment,
order or decree to which the Borrower is a party or otherwise bound, subject to
applicable bankruptcy, insolvency, or reorganization, moratorium or other
similar laws relating to or affecting generally the enforcement of creditors’
rights.  No approval or consent of any governmental agency or body of
the United States or any state thereof or of any other entity or person is
required as of the Closing Date for the legal and valid execution and delivery
by the Borrower of this Agreement, the Note pursuant to this Agreement, or the
performance of any obligation of the Borrower hereunder.

    

    2.2           Litigation.  There is no
litigation, legal or administrative proceeding, investigation or other action of
any nature pending or, to the knowledge of Borrower, threatened, against or
affecting the Borrower and/or its subsidiaries which: (a) involves the
possibility of any judgments or liabilities aggregating more than Fifty Thousand
($50,000) Dollars not fully covered by insurance, or (b) which may materially
and adversely affect the assets of the Borrower or the right of the Borrower to
carry on its business as now conducted or as contemplated.

    

    2.3           Taxes.  All tax returns
of the Borrower and its subsidiaries, if any, which are shown to be due and
payable thereon have been paid.  The Borrower does not know of any
ongoing tax audit, proposed tax deficiency, assessment, charge or levy against
it, the payment of which is not adequately provided for on the books of the
Borrower.

    

    2.4           Full
Disclosure.  Neither this
Agreement, nor any of the exhibits or schedules attached hereto, contain any
statement that is false or misleading with respect to any material fact and do
not omit to state a material fact necessary in order to make the statements
therein not false or misleading.

    

    
      
        
        

      

      
        - 2 -

        
          

        

      

      
        
        

      

           

    

    2.5           Compliance
with Instruments; etc.  The Borrower is
not: (a) in default under any indenture, agreement or instrument to which it is
a party or by which it is bound, (b) in violation of its Articles of
Incorporation, Bylaws or of any applicable law, (c) in default with respect to
any order, writ, injunction or decree of any court, administrative agency or
arbitrator, or (d) in default under any order, license, regulation or demand of
any government agency, which default or violation would materially and adversely
affect the business, properties, condition (financial or otherwise) or business
prospects of the Borrower.

    

    3.           Affirmative
Covenants of the Borrower.  Except as
specifically set forth herein, so long as any part of the Principal or Interest
remains outstanding, without the prior written consent of the
Lender:

    

    3.1           Discharge
Taxes and Indebtedness.  The Borrower will
pay and discharge, as they become due, all taxes, assessments, debts, claims and
other governmental or non-governmental charges lawfully imposed upon or incurred
by it or the properties and assets of the Borrower, except taxes, assessments,
debts, claims and charges contested in good faith in appropriate proceedings for
which the Borrower shall have set aside adequate reserves for the payment of
such tax, assessment, debt, claim or charge.  The Borrower shall
provide the Lender, upon the Lender’s request, evidence of payment of such
taxes, assessments, debts, claims and charges satisfactory to the
Lender.

    

    3.2           Insurance.  The Borrower
shall maintain such insurance on its properties and assets with financially
sound and responsible insurance companies, in such amounts as from time to time
are reasonably required by the Lender.  The Borrower shall: (a)
deliver to the Lender, upon its request, a detailed list of insurance then in
effect, stating (i) the names of the insurance companies, (ii) the amounts and
rates of the insurance, (iii) dates of expiration thereof and the properties and
risks covered thereby; and (b) upon request, provide to the Lender copies of all
insurance policies.

    

    3.3           Maintain
Properties.  The Borrower
shall maintain in full force and effect its corporate existence, rights and
franchises and all material terms of licenses and other rights to use licenses,
trademarks, tradenames, service marks, copyrights, patents or processes owned or
possessed by it and necessary to the conduct of its business.  The
Borrower will maintain, preserve and keep all of its properties, equipment and
assets in good repair, working order and condition, and make, or cause to be
made, all necessary or appropriate repairs, renewals, replacements,
substitutions, additions, betterments and improvements thereto.

    

    3.4           Furnish
Information.  Promptly on
request of the Lender, the Borrower will furnish such information as may
reasonably be necessary to determine whether: (a) the Borrower is complying with
its covenants and agreements contained in this Agreement, or (b) an Event of
Default (as hereunder defined) has occurred hereunder.

    

    3.5           Additional
Documentation.  In furtherance of
the transactions herein contemplated, the Borrower will execute and cause to be
delivered to the Lender such other certificates, documents, statements,
agreements and opinions as may be reasonably requested by the Lender during the
term of this Agreement.

    

    
      
        
        

      

      
        - 3 -

        
          

        

      

      
        
        

      

       

    

    3.6           Notice of
Adverse Change.  The Borrower
shall promptly give notice to the Lender (but in any event within seven (7)
business days) after becoming aware of the existence of any condition or event
which constitutes, or the occurrence of: (a) any Event of Default as hereunder
defined; or (b)the institution or threatening of institution of an action, suit
or proceeding against the Borrower before any court, administrative agency or
arbitrator, which, if adversely decided, could materially adversely affect the
business, prospects, properties, financial condition or results of operations of
the Borrower, whether or not arising in the ordinary course of
business.  Any notice given hereunder shall specify the nature and
period of existence of the condition, event, information, development or
circumstance, the anticipated effect thereof and what actions the Borrower has
taken and/or proposes to take with respect thereto.

    

    3.8           Compliance
With Agreements; Compliance With Laws.  The Borrower
shall comply with the terms and conditions of all material agreements,
commitments or instruments to which the Borrower is a party or by which it may
be bound.  The Borrower shall duly comply in all respects with any
relevant laws, ordinances, rules and regulations of any foreign, federal, state
or local government or any agency thereof, or any writ, order or decree, and
conform to all valid requirements of governmental authorities relating to the
conduct of its business, properties or assets.

    

    3.7           Use of
Proceeds.  The parties agree
that the Borrower intends to apply substantially all of the proceeds of the Loan
toward the cost of equipping its new production facility in Hailun City,
Heilongjiang Province, PRC.

    

    4.           Defaults And
Remedies.

    

    4.1          Events of
Default.  Any one of the
following events shall be considered an event of default (“Event of Default”) as
that term is used herein:

    

    (a)           If
the Borrower defaults in the payment of Principal or Interest on the Note after
the same shall become payable as therein or herein set forth; or

    

    (b)           If
any representation or warranty made by the Borrower herein proves to have been
untrue in any material respect as of the Closing Date, or any information,
statement, certificate or data furnished hereunder proves to have been untrue in
any material respect as of the date as of which the facts therein set forth were
stated or certified; or

    

    (c)           Except
for a default covered by clauses (a), (b) and (d) hereof, if a default shall be
made in the due observance or performance of any other covenant, affirmative or
negative, or condition to be kept or performed by the Borrower contained in this
Agreement; or

    

    
      
        
        

      

      
        - 4 -

        
          

        

      

      
        
        

      

       

    

    (d)           If
the Borrower shall (i) sell all or substantially all of its assets, or (ii) make
a general assignment for the benefit of creditors, or (iii) apply for or consent
to the appointment of a receiver, trustee, or liquidator of the Borrower or of
all or a substantial part of its assets, or (iv) be adjudicated a bankrupt, or
(v) file a voluntary petition in bankruptcy or a voluntary petition seeking
reorganization or to effect a plan or other arrangement with creditors or file a
petition or answer seeking to take advantage of any law (whether federal or
state) relating to the relief of debtors.

    

    4.2           Acceleration
of Loan.  During the continuation of any Event of Default
specified in Section 4.1 hereof, the Lender or any other holder of the Note, may
by notice in writing delivered to the Borrower, declare the entire outstanding
Principal and the Interest due and payable, and the said Principal and Interest
shall thereupon become and be immediately due and payable without presentment,
demand, protest, notice of protest or other notice of dishonor of any kind, all
of which are hereby expressly waived by the Borrower.

    

    4.3           Enforcement
of Rights.  Upon the happening of any Event of Default
specified in Section 4.1 hereof, the Lender or any other holder of the Note, may
proceed to protect and enforce his, her or its rights with respect to the Note
and the other documents referred to herein either by suit in equity or action at
law, and proceed to obtain judgment or any other relief whatsoever.

    

    4.4           Payment
of Expenses.   The Borrower shall pay all expenses, court
costs and attorneys' fees which may be incurred by the Lender or any other
holder of the Note in connection with or arising out of any Event of Default
hereunder.

    

    5.           Conditions
Precedent.  The obligations
of the Lender hereunder shall be subject to the performance by the Borrower of
all its agreements theretofore to be performed hereunder.  On the
Closing Date, the Lender shall receive in form and content satisfactory to
Lender and its counsel, an originally executed Note and such other documents or
instruments as the Lender may reasonably request.

    

    6.           Closing.  The closing of
the Agreement and the issuance of the Note to the Lender shall occur at the
offices of Blank Rome, LLP, Chrysler Building, 405 Lexington Ave., New York, NY
10174 on the date hereof (the "Closing Date"), or at
such other time or place as the parties shall agree.

    

    7.           Miscellaneous.

    

    7.1           Representation
to Survive Closing.  All warranties, representations, covenants
and agreements made by the Borrower herein shall survive the Closing
Date.

    

    
      
        
        

      

      
        - 5 -

        
          

        

      

      
        
        

      

       

    

    7.2           Notice.  All
notices, requests, demands and communications under or in respect hereof shall
be deemed to have been duly given and made if in writing (including fax) if
delivered by hand or left at or posted by pre-paid registered or certified mail
(airmail if dispatched to a foreign county) to the party concerned at its
address first set forth above.  Service shall be deemed to be
effective: (a) so far as delivery by hand is concerned when handed to the
recipient or left at the recipient's address; and (b) by post three days after
posting (seven days if sent to a foreign country).  The said addresses
shall continue in force until alternatives are notified and receipt of such
notification has been acknowledged.

    

    7.3           Binding
upon Successors.  All covenants and agreements herein contained
by or on behalf of the Borrower shall bind its successors and assigns and shall
inure to the benefit of the Lender and its successors and
assigns.  Borrower may not assign this Agreement or any rights or
duties hereunder without Lender’s prior written consent and any prohibited
assignment shall be absolutely void.  Lender reserves the right to
sell, assign, transfer, negotiate, or grant participation in all or any part of,
or any interest in Lender's rights and benefits hereunder; provided, that Lender
shall, for informational purposes but not as a requirement, notify the Borrower
of the identity of all other assignees or participants who have acquired an
ownership interest in the Note, and upon conversion, in the equity of the
Borrower as a result thereof.  In connection with any such assignment
or participation, the Lender may disclose all documents and information which
the Lender now or hereafter may have relating to Borrower’s
business.

    

    7.4           Counterparts.  This
Agreement may be executed in counterparts at one time or at different times and,
irrespective of the date of execution between the parties named herein, it shall
be deemed executed as of the date first above written.

    

    7.5           Governing
Law; Jurisdiction.  This Agreement and the performance of the
parties hereunder shall be construed and interpreted in accordance with the
internal laws of the State of New York, wherein it was negotiated and executed,
and the parties hereunder consent and agree that the state and federal courts
which sit in the State of New York and the County of New York shall have
exclusive jurisdiction with respect to all controversies and disputes arising
hereunder.

    

    7.6           Severability.  If
any provision of this Agreement is held to be unenforceable for any reason, the
remainder of this Agreement shall, nevertheless, remain in full force and
effect.

    

    7.7           No Waiver
of Rights.  No course of dealing on the part of the Lender, nor
any failure or delay on the part of the Lender with respect to the exercise of
any right, power or privilege given or granted hereunder, the Note or any other
document or instrument executed in connection herewith shall operate as a waiver
thereof as to any future defaults, or any single or partial exercise by the
Lender of any right, power or privilege granted or contained herein or therein
shall preclude the Lender from later or further exercise of any right, power or
privilege as to any future defaults.  The rights and remedies of the
Lender are cumulative and not exclusive of any other remedies under
law.

    

    
      
        
        

      

      
        - 6 -

        
          

        

      

      
        
        

      

       

    

    7.8           No
Broker.  Each of the Lender and Borrower represents and
warrants to each other that they have not employed or dealt with any broker in
connection with any transactions contemplated by this Agreement and each of the
Lender and the Borrower shall indemnify and hold each other harmless from and
against any and all claims at any time heretofore or hereafter made for broker’s
or finder’s fees or commissions, which claim or claims arise from, out of, or in
connection with any of the transactions with any of the transactions
contemplated by this Agreement.

    

    7.9           Construction.  Unless
the context of this Agreement clearly requires otherwise, references to the
plural include the singular, references to the singular include the plural, the
term "including" is not limiting, and the term "or" has, except where otherwise
inducted, the inclusive meaning represented by the phrase
"and/or."  The words, "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement.  Section, subsection,
paragraph, clause, schedule, and exhibit references are to this Agreement unless
otherwise specified.  Any reference in this Agreement to this
Agreement shall include all alterations, amendments, changes, extension,
modifications, renewals, replacement, substitutions and supplements, thereto and
thereof, as applicable.

    

    7.10           Indemnification.
In the event the Lender is required to appear before, or participate in, or
become involved with, any proceeding initiated by or brought with respect to the
Borrower by any government or administrative agency, federal, state or local,
investigating the business operations or activities of the Borrower, the Lender
shall be reimbursed by the Borrower for all expenses incurred by it in
connection therewith, including, but not limited to, attorney's
fees.  Additionally, the Borrower will indemnify and hold harmless the
Lender from each and every liability, loss, obligation, cost or expense which
may be imposed or arising out of: (a) any such proceeding, or (b) any of the
transactions evidenced hereby, except for the Lender's gross negligence or
willful misconduct.

    

    7.11           Confidentiality.  The
Borrower agrees that it will not disclose, and will not include in any public
announcement, the name of the Lender, unless expressly agreed to by the Lender
unless and until disclosure is required by law or regulations, and then, only to
the extent of such requirement.

    

    7.12           Term.  This
Agreement shall become effective upon execution and delivery hereof by Borrower
and Lender and shall continue in full force and effect until all amounts of
principal and interest on the Note have been paid in full.

     

    [THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

     

    
      
         

      

      
        - 7 -

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.

     

    
      
        	
                BORROWER:

              
	 
      
	
                EMERALD
      DAIRY INC.

              
	 
      
	
                By:

              	
                /s/ Shu Kaneko

              
	 
      	
                Name:
      Shu Kaneko

              
	 
      	
                Title:
      Chief Financial Officer

              
	 
      
	
                LENDER:

              
	 
      
	
                /s/ Xiang Li Zhao

              
	
                Xiang
      Li Zhao

              

      

    

     

    
      
         

      

      
        - 8 -

        
          

        

      

      
         

      

    

    “EXHIBIT
A”

    

    Form
of Promissory Note

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      NON-NEGOTIABLE PROMISSORY
NOTE

      

      
        
          	
                  $800,000

                	
                  Issue
      Date: June 24, 2010

                

      

       

      

      FOR VALUE RECEIVED, EMERALD
DAIRY INC., a Nevada corporation, having an address at 11990 Market Street,
Suite 205, Reston, VA 20190  (the “Borrower”), promises to pay to the
order of XIANG LI ZHAO, a resident of the People’s Republic of China, having and
address at ________________________________ (the “Lender”), the principal sum of
EIGHT HUNDRED THOUSAND ($800,000) DOLLARS (the “Principal”).

      

      This Note is being issued in accordance
with the terms and conditions set forth in a Loan Agreement, by and between the
Borrower and the Lender, dated  of equal date herewith (the “Loan
Agreement”).  All of the agreements, conditions, covenants, provisions
and stipulations contained in the Loan Agreement are hereby made a part of this
Note to the same extent and with the same force and effect as if they were fully
set forth herein.  Each capitalized term used herein, and not
otherwise defined, shall have the meaning ascribed thereto in the Loan
Agreement.

      

      The Principal shall be due and payable
on the first anniversary of the Issue Date (the “Maturity Date”), to be
accompanied by payment of any accrued and unpaid Interest thereon (as determined
below).

      

      The unpaid Principal from time to time
outstanding on this Note shall bear interest at the rate of ten (10%) percent
per annum (“Interest”), computed on the basis of the actual number of days
elapsed in a year of 360 days.

      

      Upon the maturity hereof, by
acceleration or otherwise, and/or after judgment, interest shall be payable at
the rate of twelve (12%) percent per annum or at the judgment rate, whichever is
higher (“Default Interest”), until the obligation is paid in full.  In
addition, all costs and expenses incurred by the Lender, including, but not
limited to, reasonable attorneys' fees and disbursements, as a result of a
default hereunder, shall be added to the Principal due hereunder.

      

      Any Interest or Default Interest not
paid when due hereunder shall be added to the Principal and shall bear interest
from its due date at the applicable interest rate specified above.

      

      Borrower may from time to time prepay
any amount due under the Note, in whole or in part, without
penalty.  All payments made shall be applied first toward the payment
of Interest and the balance toward the reduction of the Principal.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      The entire unpaid Principal balance,
together with accrued Interest, shall become forthwith due and payable on demand
of the holder upon the occurrence of any Event of Default, as further set forth
in Section 4 of the Loan Agreement.  The Lender’s failure to assert
this right shall not be deemed a waiver thereof.

      

      The Borrower shall pay all of Lender’s
reasonable expenses incurred to enforce or collect any of the amounts due under
this Note including, without limitation, reasonable arbitration, paralegals’,
attorneys’ and experts’ fees and expenses, whether incurred without the
commencement of a suit, in any trial, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.

      

      The Borrower and all endorsers,
sureties, and guarantors hereof, jointly and severally waive presentment, demand
for payment, notice of dishonor, notice of protest and protest, and all other
notices or demands in connection with the delivery, acceptance, performance,
default, endorsement or guaranty of this instrument.

      

      Notwithstanding any provision contained
herein or in the Loan Agreement, the total liability of Borrower for payment of
interest pursuant hereto, including late charges, shall not exceed the maximum
amount of such interest permitted by law to be charged, collected, or received
from Borrower, and if any payments by Borrower include interest in excess of
such a maximum amount, Lender shall apply such excess to the reduction of the
unpaid principal amount due pursuant hereto, or if none is due, such excess
shall be refunded to Borrower.

      

      This Note shall be construed and
enforced in accordance with the laws of the State of New York.  The
undersigned hereby consents to the in personam jurisdiction of the courts of the
State of New York.  Wherever possible each provision of this Note
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Note.

       

      
        
          	 	

                  EMERALD
      DAIRY INC.

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	Name:
      Shu Kaneko	 
	 	 	Title:
      Chief Financial Officer

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