Document:

Unassociated Document

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THE SECURITIES MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

    

    

    AMENDED
AND RESTATED PROMISSORY NOTE

    

    
      	
              New
      York, New York

            	
              $___________

            

    

    

    Original
Issue Date: June ___, 2008

    Amended
As Of: December __, 2008

    

    THIS
NOTE AMENDS AND RESTATES IN ITS ENTIRETY THE 8% PROMISSORY NOTE, DATED AS OF
JUNE __, 2008 (THE “ORIGINAL NOTE”), ISSUED BY THE UNDERSIGNED TO THE
HOLDER.  THE EXECUTION AND DELIVERY OF THIS AMENDED AND RESTATED NOTE
IS NOT INTENDED TO BE A REPAYMENT OR NOVATION OF THE INDEBTEDNESS EVIDENCED BY
THE ORIGINAL NOTE.

    

    FOR VALUE RECEIVED, EMERALD DAIRY INC., a Nevada
corporation (hereinafter called the “Borrower”), hereby
promises to pay to the order of ____________________, a __________, or its
registered assigns (the “Holder”) the sum of
__________________ Dollars ($______), on December 31, 2009 (the “Maturity Date”), and
to pay interest on the unpaid principal balance hereof: (a) at the rate of eight
percent (8%) per annum (the “Initial Interest
Rate”) from June __, 2008 (the “Issue Date”) through
December 31, 2008, and (b) at the rate of ten percent (10%) per annum (the
“Increased Interest
Rate”) until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise.  Any amount of
principal or interest on this Amended and Restated Note (the “Note”) which is not
paid when due shall bear interest at the rate of twelve percent (12%) per annum
from the due date thereof until the same is paid (“Default
Interest”).  Interest shall commence accruing on the Issue
Date, shall be computed on the basis of a 365-day year and the actual number of
days elapsed and shall be payable, at the Maturity Date.  All payments
due hereunder shall be made in lawful money of the United States of America. All
payments shall be made at such address as the Holder shall hereafter give to the
Borrower by written notice made in accordance with the provisions of this
Note.  Whenever any amount expressed to be due by the terms of this
Note is due on any day which is not a business day, the same shall instead be
due on the next succeeding day which is a business day.  As used in
this Note, the term “business day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are
authorized or required by law or executive order to remain
closed.  This Note was originally issued pursuant to a Securities
Purchase Agreement entered into between the Borrower and Holder (the “Purchase Agreement”),
dated as of June __, 2008, as amended by an Amendment, dated as of December __,
2008.  Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in the Purchase Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The following terms shall apply to this
Note:

    

    ARTICLE
I.

    PREPAYMENT

    

    1.1           Borrower’s
Prepayment Option.  Notwithstanding
anything to the contrary contained herein, at Borrower’s option at any time
following the Issue Date, upon fifteen (15) days prior written notice, the
Borrower shall have the right to prepay the entire principal amount of the Note
(the “Prepayment
Option”).  On the 16th day following such notice, the Borrower
shall make payment to the Holder of an amount in cash equal to the sum of (a)
the principal amount of the Note outstanding on such day plus (b) accrued and
unpaid interest on such unpaid principal amount plus (c) Default Interest, if
any, on the amounts referred to in clauses (a) and (b) plus (d) any amounts owed
to the Holder pursuant to this Note (the “Prepayment
Amount”).  If the Borrower fails to make such payment within
one (1) business day of such date the Borrower shall be subject to a penalty of
..005 multiplied by the Prepayment Amount for every additional business day on
which such payment is not made.

     

    1.2           Holder’s
Prepayment Option.  Notwithstanding
anything to the contrary contained herein, at Holder’s option, Holder shall have
the right at any time to be prepaid, in whole or in part, any amounts due under
the terms of this Note from the proceeds of any offering of the Borrower’s
securities resulting in gross proceeds of $4,500,000 or more, with the exception
of offerings where the proceeds will be used primarily in connection with the
completion of the Borrower’s production facility currently under construction in
Hailun City, Heilongjiang Province, PRC.  In order to exercise such
right, Holder shall deliver a written notice of prepayment to the
Borrower.  The Borrower shall make payment to the Holder of an amount
in cash equal to the sum indicated in such notice within three (3) business days
following the date on which notice of prepayment is delivered.

    

    ARTICLE
II.

    CERTAIN
COVENANTS

    

    2.1           Distributions
on Capital Stock.  So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested
directors.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.2           Restriction
on Stock Repurchases.  So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent redeem, repurchase or otherwise acquire (whether for cash or in exchange
for property or other securities or otherwise) in any one transaction or series
of related transactions any shares of capital stock of the Borrower or any
warrants, rights or options to purchase or acquire any such shares, with the
exception of the Company’s obligations under the Put Call Agreements described
in the Company’s SEC Filings.

    

    2.3           Borrowings.  So
long as the Borrower shall have any obligation under this Note, the Borrower
shall not, without the Holder’s written consent, create, incur, assume or suffer
to exist any liability for borrowed money, except (a) borrowings in existence or
committed on the date hereof and of which the Borrower has informed Holder in
writing prior to the date hereof, (b) indebtedness to trade creditors or
financial institutions incurred in the ordinary course of business or (c)
borrowings from financial institutions where the primary purpose of the proceeds
is for the general corporate use of the Borrower (d) borrowings, the proceeds of
which shall be used to repay this Note, or (e) borrowings where the funds will
be used primarily in connection with the completion of the Borrower’s production
facility currently under construction in Hailun City, Heilongjiang Province,
PRC.

    

    2.4           Sale of
Assets.  So long as the
Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, sell, lease or otherwise dispose
(collectively, a “Disposition”) of any
significant portion of its assets, other than to a wholly-owned subsidiary of
the Borrower, outside the ordinary course of business unless the proceeds of
such Disposition shall be used to repay this Note.  Any consent to the
disposition of any assets may be conditioned on a specified use of the proceeds
of disposition.

    

    2.5           Advances
and Loans.  So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder’s written consent,
lend money, give credit or make advances to any person, firm, joint venture or
corporation, including, without limitation, officers, directors, employees,
subsidiaries and affiliates of the Borrower, except loans, credits or advances
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof or (b) made in the ordinary
course of business.

    

    2.6           Contingent
Liabilities.  So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder’s written consent,
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable upon the obligation of any person firm, partnership, joint venture or
corporation, except by the endorsement of negotiable instruments for deposit or
collection and except assumptions, guarantees, endorsements and contingencies
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, and (b) similar
transactions in the ordinary course of business.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ARTICLE
III.  EVENTS OF DEFAULT

    

    3.1           Events of
Default.  Each of the
following events shall be deemed an “Event of Default” under this
Note:

    

    (a)           Failure
to Pay Principal or Interest.  The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether at maturity,
upon acceleration, or otherwise.

    

    (b)           Breach of
Covenants.  The Borrower breaches any material covenant or
other material term or condition contained herein, or in the Purchase Agreement,
and such breach continues for a period of thirty (30) days after written notice
thereof to the Borrower from the Holder.

    

    (c)           Breach of
Representations and Warranties.  Any representation or warranty
of the Borrower made herein or in any agreement, statement or certificate given
in writing pursuant hereto or in connection herewith (including, without
limitation, the Purchase Agreement), shall be false or misleading in any
material respect when made and the breach of which has (or with the passage of
time will have) a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.

    

    (d)           Receiver
or Trustee.  The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

    

    (e)           Judgments.  Any
money judgment, writ or similar process shall be entered or filed against the
Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $250,000, and shall remain un-vacated, un-bonded or
un-stayed for a period of twenty (20) days unless otherwise consented to by the
Holder, which consent will not be unreasonably withheld;

    

    (f)           Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Borrower or any subsidiary of the Borrower and if
instituted against Borrower is not dismissed within sixty (60) days;
or

    

    (g)           Delisting
of Common Stock.  The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB, the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the NYSE
Alternext.

    

    3.2           Effect of
Event of Default.  Upon the
happening of any Event of Default, as set forth in Section 3.1 above, then, or
at any time thereafter, and in each and every such case, unless such Event of
Default shall have been waived in writing by the Holder (which waiver shall not
serve as a waiver of any subsequent default) at the option of the Holder and in
the Holder’s sole discretion, the Holder may consider this Note immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything herein notwithstanding, and the
Holder may immediately enforce any and all of the Holder’s rights and remedies
provided herein or any other right or remedy afforded by law.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    ARTICLE
IV.  MISCELLANEOUS

    

    4.1           Failure
or Indulgence Not Waiver.  No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges.  All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

    

    4.2           Notices.  Any
notice herein required or permitted to be given shall be in writing and may be
personally served or delivered by courier or sent by United States mail and
shall be deemed to have been given upon receipt if personally served (which
shall include telephone line facsimile transmission) or sent by courier or three
(3) days after being deposited in the United States mail, certified, with
postage pre-paid and properly addressed, if sent by mail.  For the
purposes hereof, the address of the Holder shall be as shown on the records of
the Borrower; and the address of the Borrower shall be 11990 Market Street,
Suite 205, Reston, VA 20190, Fax #: (678) 868-0633.  Both the Holder
and the Borrower may change the address for service by service of written notice
to the other as herein provided.

    

    4.3           Amendments.  This
Note and any provision hereof may only be amended by an instrument in writing
signed by the Borrower and the Holder.  The term “Note” and all
reference thereto, as used throughout this instrument, shall mean this
instrument (and the other Notes issued pursuant to the Purchase Agreement) as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

    

    4.4           Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.  Each transferee of this Note must be an “accredited
investor” (as defined in Rule 501(a) of the 1933
Act).  Notwithstanding anything in this Note to the contrary, this
Note may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement.

    

    4.5           Cost of
Collection.  If default is made in the payment of this Note,
the Borrower shall pay the Holder hereof costs of collection, including
reasonable attorneys’ fees.

    

    4.6           Governing
Law.  THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS.  THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT
A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN
ANY DISPUTE ARISING UNDER THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
CONNECTION WITH SUCH DISPUTE.

    
      
        
        

      

      
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    4.7           Denominations.  At
the request of the Holder, upon surrender of this Note, the Borrower shall
promptly issue new Notes in the aggregate outstanding principal amount hereof,
in the form hereof, in such denominations as the Holder shall
request.

    

    4.8           Purchase
Agreement.  By its acceptance of this Note, each Holder agrees
to be bound by the applicable terms of the Purchase Agreement.

    

    4.9           Remedies.  The Borrower
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Borrower acknowledges that the
remedy at law for a breach of its obligations under this Note will be inadequate
and agrees, in the event of a breach or threatened breach by the Borrower of the
provisions of this Note, that the Holder shall be entitled, in addition to all
other available remedies at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing or
curing any breach of this Note and to enforce specifically the terms and
provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.

    

     

    
 

    

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    IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized
representative this ____ day of December, 2008.

    

    
      
        	 	EMERALD DAIRY
    INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	                                                                                                            
    	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 

      

     

    
      
        
        

      

      
        7Unassociated 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 OF SECTION 10
HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE ___,
2013 (THE “EXPIRATION DATE”).

    

    No.
C-                      

    

    

    EMERALD
DAIRY INC.

    

    AMENDED
AND RESTATED WARRANT TO PURCHASE __________ SHARES OF

    COMMON STOCK, PAR VALUE $0.001 PER
SHARE

    

    Originally
Issued: June __, 2008

    Amended
As Of: December __, 2008

    

    FOR VALUE RECEIVED,
____________________ (“Warrantholder”), is entitled to purchase, subject to the
provisions of this Amended and Restated Warrant (“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 $1.63 (the exercise price in effect being herein called the
“Warrant Price”), __________ 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 the Securities
Purchase Agreement, dated as of June __, 2008 (the “Purchase Agreement”), as
amended on December __, 2008, among the Company and the initial holders of the
Company Warrants (as defined below).  Capitalized terms used herein
have the respective meanings ascribed thereto in the Purchase 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 Section 5
of the Purchase Agreement 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. Except as provided in the Purchase Agreement, 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.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (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
Nasdaq Stock Market, Inc. (“Nasdaq”), the National Association of Securities
Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar
quotation system or association, the closing sale price of one share of Common
Stock on Nasdaq, 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
Nasdaq, 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, Nasdaq 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.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (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.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    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:

    

    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:

    

    Hodgson
Russ LLP

    1540
Broadway, 24th Floor

    New York,
NY 10036

    Attn:
Jeffrey A. Rinde, Esq.

    Fax:
(212) 751-4300

    

    Section
14.              Registration
Rights.  The initial Warrantholder is entitled to the benefit
of certain registration rights with respect to the shares of Common Stock
issuable upon the exercise of this Warrant as provided in Section 7.7 of the
Purchase Agreement, and any subsequent Warrantholder may be entitled to such
rights.

    

    Section
15.              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
16.              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.

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    Section
17.              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.

    

    Section
18.              Amendment;
Waiver.  This Warrant is one of a series of Warrants of like
tenor issued by the Company pursuant to the Purchase Agreement and initially
covering an aggregate of up to 300,000 shares of Common Stock
(collectively, the “Company Warrants”).  Any term of this Warrant may
be amended or waived (including the adjustment provisions included in Section 8
of this Warrant) upon the written consent of the Company and the holders of
Company Warrants representing over 50% of the number of shares of Common Stock
then subject to all outstanding Company Warrants (the “Majority Holders”); provided, that (x)
any such amendment or waiver must apply to all Company Warrants; and (y) the
number of Warrant Shares subject to this Warrant, the Warrant Price and the
Expiration Date may not be amended, and the right to exercise this Warrant may
not be altered or waived in any manner adverse to the Warrantholder, without the
written consent of the Warrantholder.

    

    Section
19.              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.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of
the ___ day of December, 2008.

     

    

      
        	 	EMERALD DAIRY
    INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	                                                                                                           
    	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 

      

    

     

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    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:	 	 
	 	_______________________________ 	 	 
	 	_______________________________ 	 	 
	 	_______________________________ 	 	 

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
B

    EMERALD
DAIRY INC.

    NET ISSUE
ELECTION NOTICE

    

    

    To:
Emerald Dairy Inc.

    

    Date:[_________________________]

    

    

    The
undersigned hereby elects under Section 19 of this
Warrant to surrender the right to purchase [____________] shares of Common Stock
pursuant to this Warrant and hereby requests the issuance of [_____________]
shares of Common Stock.  The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or
as otherwise indicated below.

    

    

    _________________________________________

    Signature

    

    _________________________________________

    Name for
Registration

    

    _________________________________________

    Mailing
Address

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