Unassociated Document


    AGREEMENT
      REGARDING 2006 NOTES

     

    THIS
      AGREEMENT REGARDING 2006 NOTES (the
      “Agreement”)
      is
      made and entered into as of this 12th
      day of
      November 2008, by and among AMERICAN
      DAIRY, INC.,
      a Utah
      corporation (the “Company”),
      AMERICAN FLYING CRANE CORPORATION, a Delaware corporation (“AFC”),
      MR.
      LENG
      YOU-BIN,
      being
      an individual resident in the People’s Republic of China (“Mr.
      Leng”),
      and
      the INVESTORS
      listed
      on Schedule
      I
      attached
      hereto (each an “Investor”,
      and
      collectively, the “Investors”).
      

    


    RECITALS:

    


    WHEREAS,
      the
      Company issued to the Investors those certain 7.75% Convertible Notes dated
      October 3, 2006 in the original aggregate principal amount of $18.2 million
      (the
“Notes”),
      and
      those certain Common Stock Purchase Warrants dated October 3, 2006 (the
“Warrants”);

    


    WHEREAS,
      in
      connection with the issuance of the Notes and the Warrants, the Investors and
      the Company entered into that certain Registration Rights Agreement dated
      October 2, 2006 (the “Registration
      Rights Agreement”);

    


    WHEREAS,
      Section
      2(c) of the Registration Rights Agreement provides, inter alia,
      for the
      obligation of the Company, under certain circumstances, to pay to the Investors
      an amount equal to two-hundredths (.02) of the principal amount of the Notes
      for
      each month that a registration statement filed with the Securities and Exchange
      Commission under the Securities Act of 1933, as amended (the “1933
      Act”)
      has
      not been declared effective in respect of the “Registrable Securities” (as such
      term is defined in the Registration Rights Agreement), as set forth and in
      accordance with the terms and conditions therein;

    


    WHEREAS,
      the
      Investors have claimed that under the terms of Section 2(c) of the Registration
      Rights Agreement, such amount, at the rate of two-hundredths (.02) of the
      principal amount of the Notes, has been accruing monthly and is unpaid since
      October 1, 2007, due to the fact that a registration statement has not been
      declared effective in respect of the Registrable Securities in accordance with
      the provisions of the Registration Rights Agreement, and the Investors have
      asserted their demand and claim for payment of such amounts for the period
      October 1, 2007 through September 30, 2008 (the “Claim);
      

    


    WHEREAS,
      the
      Company desires to compromise the obligation to pay such Claim by issuing to
      the
      Investors, in lieu of paying in cash any amounts that may have accrued under
      the
      Registration Rights Agreement through September 30, 2008, an aggregate number
      of
      shares of the Company’s common stock having a current value of US $2.5 million,
      the number of shares to be issued to be determined by dividing the amount of
      US
      $2.5 million by the average closing price of the Company’s shares of Common
      Stock on the NYSE Arca for the thirty (30) trading day period ending on the
      last
      trading day immediately preceding the date of this Agreement;

    


    WHEREAS,
      the
      Investors are willing to accept such shares in payment of the Claim, provided:
      (i) that the Notes, the Warrants, and the Registration Rights Agreement are
      amended as hereinafter set forth, (ii) the Company and Mr. Leng execute and
      deliver a share pledge agreement to secure the Notes as hereinafter described,
      and (iii) the Company complies with the other terms and conditions as set forth
      in this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    NOW
      THEREFORE,
      in
      consideration of the above premises and for good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      agree as follows:

     

    1. Issuance
      of Shares. Contemporaneously
      with the execution of this Agreement, the Company shall issue a total of 216,639
      shares of Common Stock of the Company, par value $.001 (the “Shares”),
      to
      the Investors in the respective amounts listed on Schedule
      I
      attached
      hereto and incorporated herein by this reference. The Company will issue to
      each
      Investor a stock certificate of the Company representing the respective number
      of shares of common stock set forth in Schedule
      I opposite
      such Investor’s name. 

    


    2.
      Other
      Documents. Contemporaneously
      with the execution of this Agreement, and as conditions precedent to the
      effectiveness of this Agreement, the Company will also execute and deliver
      or
      provide the following agreements, instruments, or documents to the Investors
      (collectively, the “Other
      Documents”):

    


    (a)
      an
      Amended and Restated Note to each Investor (collectively, the “Amended
      and Restated Notes”)
      to
      amend and restate the Notes in the form attached hereto as Exhibit
      A
      and
      incorporated herein by this reference, with each Investor receiving an Amended
      and Restated Note in the respective principal amount set forth opposite its
      name
      on Schedule
      II attached
      hereto and incorporated herein by this reference;

    


    (b) an
      Amended and Restated Common Stock Purchase Warrant to each Investor
      (collectively, the “Amended
      and Restated Warrants”)
      to
      amend and restate the Warrants, in the form attached hereto as Exhibit
      B and
      incorporated herein by this reference, with
      each
      Investor receiving an Amended and Restated Warrant for the respective amount
      of
      warrants set forth opposite its name on Schedule
      III attached
      hereto and incorporated herein by this reference;

    


    (c) an
      amendment to the Registration Rights Agreement between the Company and the
      Investors in the form attached hereto as Exhibit
      C and
      incorporated herein by this reference (the “Registration
      Rights Amendment”);

    


    (d) a
      share
      pledge agreement in favor of the Investors (the “Share
      Pledge Agreement”)
      to
      secure the Notes executed by the Company and Mr. Leng, as pledgors, and The
      Bank
      of New York Mellon, as collateral agent, in the form attached hereto as
Exhibit
      D and
      incorporated herein by this reference;

    


    (e) a
      guarantee executed by AFC (the “Guarantee”),
      in
      the form attached hereto as Exhibit
      E
      and
      incorporated herein by this reference; 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    


    (f) a
      legal
      opinion from the Company’s United States counsel, addressed to the Investors, in
      the form attached hereto as Exhibit
      F and
      incorporated herein by this reference;

    


    (g) UCC-1
      financing statements with the Company and Mr. Leng as debtors, and The Bank
      of
      New York Mellon (Collateral Agent), as the secured party;

    


    (h) a
      certified copy of: (i) the certificate of incorporation of the Company (and
      all
      amendments thereto), (ii) the bylaws of the Company (and all amendments
      thereto), and (iii) board of director resolutions of the Company approving
      this
      Agreement and all transactions contemplated hereby;

     

    (i) a
      certified copy of : (i) the certificate of incorporation of AFC (and all
      amendments thereto), (ii) the bylaws of AFC (and all amendments thereto), and
      (iii) board of director resolutions of AFC approving this Agreement and all
      transactions contemplated hereby;

    


    (j) an
      incumbency certificate signed by the proper officers of the
      Company;

    


    (k)
      an
      incumbency certificate signed by the proper officers of AFC;

    


    (l) an
      executed intercreditor agreement substantially in the form attached hereto
      as
Exhibit
      G
      and
      incorporated herein by this reference;

    


    (m) evidence
      that the requisite holders of the Company’s 1% Guaranteed Senior Secured
      Convertible Notes due 2012 (the “1%
      Notes”)
      have
      provided the requisite consent to this Agreement and the transactions
      contemplated hereby, in form satisfactory to the Investors; and

    


    (n)
      good
      standing certificates for the Company and AFC, issued by their respective
      jurisdictions of organization.

    


    3.
       Waiver
      Letter. 
      Contemporaneously with the execution of this Agreement and delivery of the
      Shares and the Other Documents to the Investors pursuant to this Agreement,
      the
      Investors will execute and deliver to the Company a waiver letter agreement
      (the
“Waiver”)
      in the
      form attached hereto as Exhibit
      H
      and
      incorporated herein by this reference.

    


    4.
       Continuing
      Covenant. 
      The
      Company and AFC covenant and agree that if, and to the extent that, any security
      interest with respect to equity interests in the Company’s PRC Subsidiaries (as
      defined below), or any additional subsidiaries of the Company or of AFC,
      currently existing or in the future, is granted by the Company or AFC in favor
      of the holders of the 1% Notes, then the Company and AFC shall grant a security
      interest in favor of the holders of the Amended and Restated Notes to the same
      relative extent as the interests granted by the Share Pledge Agreement referred
      to herein, pursuant to an applicable share pledge agreement. For purposes of
      this Agreement, “PRC
      Subsidiaries”
shall
      mean LangFang Feihe Dairy Company Limited, GanHan Feihe Diary Company Limited,
      Shanxi Feihesantai Biotechnology Scientific and Commercial Co., Limited,
      Heilongjiang Feihe Dairy Co., Limited, BaiQuan Feihe Dairy Co., Limited, and
      Beijing Feihe Biotechnology Scientific and Commercial Co., Limited.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    


    5.
       Other
      Obligations.
      Other
      than the resolution of the Claim pursuant to this Agreement and as expressly
      provided in the Waiver and the Other Agreements (as defined below), all
      obligations of the Company under the Registration Rights Agreement (as amended
      by the Registration Rights Amendment), the Amended and Restated Notes, the
      Amended and Restated Warrants, and the Subscription Agreement dated October
      2,
      2006 executed by the Company and the Investors, and at law, remain in full
      force
      and effect and shall not be impaired, compromised or released in any way by
      this
      Agreement. Without limitation of the foregoing, except as expressly provided
      in
      the Waiver, amounts of Additional Interest under the Registration Rights
      Amendment and the Amended and Restated Notes shall accrue and be due and payable
      pursuant to the Amended and Restated Notes and the Registration Rights Amendment
      for all periods from and after October 1, 2008.

    


    6.
       Company
      Representations and Warranties.

    


    (a) The
      Company is a corporation duly organized and validly existing in good standing
      under the laws of State of Utah and has the requisite corporate power to own
      its
      properties and carry on its business as presently conducted. 

    


    (b) The
      authorized capital stock of the Company consists of 50,000,000 shares of common
      stock, par value $.001 per share, of which 17,181,407 shares are issued and
      outstanding as of the date hereof, after giving effect to the issuance of the
      Shares pursuant to this Agreement. 

    


    (c) The
      Company has the requisite power and authority to enter into and perform this
      Agreement, the Amended and Restated Notes, the Amended and Restated Warrants,
      the Registration Rights Agreement as amended by the Registration Rights
      Amendment, and the Share Pledge Agreement (collectively, the “Other
      Agreements”)
      and to
      issue the Shares in accordance with the terms hereof and thereof.

    


    (d) This
      Agreement and the Other Agreements have been duly authorized, executed and
      delivered by the Company, and, to the extent applicable, AFC, and constitute
      the
      valid and binding obligations of the Company, and, to the extent applicable,
      AFC, and are enforceable against the Company and, to the extent applicable,
      AFC,
      in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
      transfer, reorganization, moratorium and similar laws of general applicability
      relating to or affecting creditors’ rights generally and to general principles
      of equity. 

    


    (e) The
      Shares have been duly and validly authorized and issued and are fully paid
      and
      non-assessable.

     

    (f) No
      consent, approval, authorization or order of any court, governmental agency
      or
      body or arbitrator having jurisdiction over the Company, or any of its
      subsidiaries, is required for the execution, delivery or performance of this
      Agreement or the Other Agreements.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    


    (g) Assuming
      the accuracy of the Investors’ representations and warranties set forth in
      Section 7 below, neither the issuance of the Shares nor the performance of
      the
      Company’s obligations under this Agreement or the Other Agreements will violate
      or conflict with, result in a breach of, or constitute a default (or an event
      with the giving of notice or the lapse of time or both would constitute a
      default) under (A) the Company’s certificate of incorporation, bylaws, or other
      organizational documents; (B) any decree judgment, order, law, treaty, rule,
      regulation or determination applicable to the Company or over the properties
      or
      assets of the Company or any of its affiliates or subsidiaries; or (C) the
      terms
      of any bond, debenture, note, or any other evidence of indebtedness, or any
      agreement, stock option or similar plan, indenture, lease, mortgage, deed of
      trust or other instrument to which the Company or any of its affiliates or
      subsidiaries is a party, or to which any of the properties of the Company or
      any
      of its affiliates or subsidiaries are subject; except to the extent that such
      circumstances would not have a material adverse effect on the rights of the
      Investors under this Agreement and the Other Agreements or their ability to
      enforce such rights.

    


    (h) The
      Shares upon issuance are: (i) free and clear of any security interests, liens,
      claims or other encumbrances, subject to restrictions upon transfer under the
      1933 Act and any applicable state securities laws; and (ii) have not been issued
      or sold in violation of any pre-emptive or other similar rights of the holders
      of any securities of the Company.

    


    (i)
       To
      the
      knowledge of the Company, and giving effect to the waivers and consents granted
      by the holders of the 1% Notes in that certain Supplemental Indenture of the
      Company in regard to the 1% Notes dated as of even date herewith, no “Default”
or “Event of Default” has occurred and is continuing under (and as such terms
      are defined in) either of the Indentures between the Company and The Bank of
      New
      York Mellon (as Trustee) dated June 1, 2007 and June 27, 2007, respectively
      (the
“Indentures”),
      governing the 1% Notes.

    


    (j)
       
      (i)
 Schedule
      IV attached
      hereto and incorporated herein by this reference
      contains
      complete and correct lists of each person in which the Company owns, directly
      or
      indirectly, any capital stock or similar equity interests, showing, as to each
      subsidiary, the correct name thereof, the jurisdiction of its organization,
      and
      the percentage of shares of each class of its capital stock or similar equity
      interests outstanding owned by the Company and each other
      subsidiary.

    


    (ii) All
      of
      the outstanding shares of capital stock or similar equity interests of each
      subsidiary shown in Schedule
      IV
      as being
      owned by the Company and its subsidiaries have been validly issued, are fully
      paid and non-assessable and are owned by the Company or another Subsidiary
      free
      and clear of any lien, except to the extent that such circumstances would not
      have a material adverse effect on the Company’s, or any applicable subsidiary’s,
      rights of ownership with respect to such capital stock or equity
      interests.

    


    (iii) Except
      as
      disclosed in Schedule
      IV,
      no
      subsidiary is a party to, or otherwise subject to any legal or regulatory
      restriction or any agreement (other than this Agreement and the terms and
      conditions of the 1% Notes and the agreements entered into in connection
      therewith) restricting the ability of such subsidiary to pay dividends out
      of
      profits or make any other similar distributions of profits to the Company or
      any
      of its subsidiaries that owns outstanding shares of capital stock or similar
      equity interests of such subsidiary.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    


    (k) Except
      as
      disclosed in Schedule
      V,
      attached
      hereto and incorporated herein by this reference,
      each of
      the Company’s subsidiaries (i) has been duly organized, is validly existing and
      is in good standing under the laws of its jurisdiction of organization, (ii)
      has
      all requisite power and authority to carry on its business and to own, lease
      and
      operate its properties and assets, and (iii) is duly qualified or licensed
      to do
      business and is in good standing as a domestic or foreign corporation or limited
      liability company, as the case may be, authorized to do business in each
      jurisdiction in which the nature of such business or the ownership or leasing
      of
      such properties requires such qualification, except where, for the purposes
      of
      (ii) or (iii) only, the failure to have all such requisite power and authority
      or to be so duly qualified or licensed does not, and would not, individually
      or
      in the aggregate, have a material adverse effect. The constitutional documents
      and certificates of each of the PRC Subsidiaries of the Company are valid and
      have been duly approved or registered (as applicable) by applicable governmental
      authorities. 

    


    (l) 
      (i) All
      of
      the outstanding shares of capital stock or similar equity interests of the
      Company in its subsidiaries have been validly issued, are fully paid and
      non-assessable, and are free and clear of any lien, other than as set forth
      in
      that certain Share Pledge Agreement between the Company, Mr. Leng, and The
      Bank
      of New York Mellon (as Collateral Agent) dated June 1, 2007, and the Share
      Pledge Agreement entered into as of even date herewith by the Company, Mr.
      Leng,
      and The Bank of New York Mellon (as Collateral Agent), and delivered to the
      Investors pursuant to Section 2(d) of this Agreement.

    


     
      (ii) Except
      as
      set forth on Schedule
      VI,
      attached
      hereto and incorporated herein by this reference,
      as of
      the date hereof, there is no capital stock issued or issuable pursuant to any
      exercise, conversion, exchange, subscription or otherwise in connection with
      any
      warrants, options, convertible securities or any agreement to sell or issue
      capital stock of the Company or securities which may be exercised, converted
      or
      exchanged for capital stock of the Company. As of the date hereof, the shares
      of
      common stock issuable upon conversion of the Amended and Restated Notes and
      the
      exercise of the Amended and Restated Warrants will have been duly reserved
      for
      issuance. When duly issued upon conversion of the Amended and Restated Notes
      in
      accordance with the terms of the Amended and Restated Notes, the shares of
      common stock will have been validly issued, fully paid and non-assessable,
      and
      the issuance of the shares of common stock will not be subject to any preemptive
      or similar right. When duly issued upon exercise of the Amended and Restated
      Warrants, in accordance with the terms and conditions thereof, the shares of
      common stock issuable thereunder will have been validly issued, fully paid
      and
      non-assessable, and the issuance of the shares of common stock will not be
      subject to any preemptive or similar right.

    


    7.
       Investors
      Representations and Warranties

    


    (a) Each
      Investor that is a partnership, corporation, limited liability company, or
      trust, represents severally that it is validly existing in good standing under
      the laws of its state of incorporation or organization, and has the requisite
      power to own its properties and carry on its business. Each Investor represents
      severally that it has the requisite power and authority to enter into and
      perform this Agreement.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    


    (b)
       Each
      Investor represents severally that it is acquiring its Shares as set forth
      on
Schedule
      I
      as
      principal for its own account for investment purposes only and not with a view
      to or for distributing or reselling such Shares or any part thereof, without
      prejudice, however, to each Investor’s right at all times to sell or otherwise
      dispose of all or part of the Shares in compliance with applicable federal
      and
      state securities laws. Subject to the immediately preceding sentence, nothing
      contain herein shall be deemed a representation or warranty by an Investor
      to
      hold the Shares for any period of time.

    


    (c)
       Each
      Investor represents severally that it is an “accredited investor,” as such term
      is defined in Regulation D promulgated under the 1933 Act and is experienced
      in
      investments and business matters.

    


    (d)
       Each
      Investor represents severally that this Agreement has been duly executed and
      delivered by such Investor and constitutes the valid and binding obligations
      of
      such Investor enforceable against such Investor in accordance with its terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability relating to or affecting
      creditors’ rights generally and to general principles of equity.

    


    8.
       Miscellaneous

    


    (a) This
      Agreement shall accrue to the benefit of and be binding upon the parties hereto,
      their respective successors, agents and permitted assigns. 

    


    (b)
       This
      Agreement shall be interpreted, enforced, construed, and governed under the
      laws
      of the State of New York, without regard to its conflict of laws
      principles.

    


    (c) No
      waiver, modification or amendment of this Agreement, or any of the terms or
      provisions hereof, shall be binding upon any of the parties unless confirmed
      by
      a written instrument signed by such party. No waiver by any party of any term
      or
      provision of this Agreement or of any breach or default hereunder shall affect
      such party’s rights thereafter to enforce such term or provision or to exercise
      any right or remedy in the event of any other default, whether or not
      similar.

    


    (d) This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute the same
      Agreement. This Agreement, once executed by a party, may be delivered to the
      other party hereto by facsimile, pdf, or other electronic transmission of a
      copy
      of this Agreement bearing the signature of the party so delivering this
      Agreement.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (e) THE
      PARTIES HERETO HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED
      IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
      TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE PARTIES PERTAINING
      TO
      THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT;
      PROVIDED
      THAT THE
      PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
      BE HEARD
      BY
      A COURT LOCATED OUTSIDE OF NEW YORK COUNTY. EACH OF THE PARTIES HERETO EXPRESSLY
      SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
      COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION
      WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
      OR
FORUM NON CONVENIENS
      AND
      HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
      APPROPRIATE BY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY WAIVES PERSONAL
      SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION
      OR
      SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS
      MAY
      BE MADE BY REGISTERED OR CERTIFIED MAIL AND THAT SERVICE SO MADE SHALL BE DEEMED
      COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER
      DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. 

    


    


    


    


    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    


     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the date first written
      above.

     

    
      	 	 	 
	 	
              “Company”

              


              AMERICAN
                DAIRY, INC.

            
	 
 	 
 	 
 
	 	By:	 /s/ Jonathan
              Chou
	 	Name:	 Jonathan Chou
	 	Title:	 Chief Financial
              Officer


    

    


    

      
        	 	 	 
	 	
                
                  “AFC”     

                   

                  AMERICAN
                    FLYING CRANE CORPORATION

                

              
	 
 	 
 	 
 
	 	By:	 /s/ Jonathan
                Chou
	 	Name:	 Jonathan Chou
	 	Title:	 Chief Financial
                Officer


      

      


    

    
      
        	 	 	 
	 	
                “MR.
                  LENG”

              
	 
 	 
 	 
 
	 	By:	 /s/ Leng
                You-Bin
	 	Name:	 Leng You-Bin


      

      

 

    

    [The
      signatures of the Investors begin on the next page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 RFT INVESTMENT COMPANY,
              LLC
	 	 	 	 	 
	 	 	 By: 	 LOR, Inc., its
              Manager
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
              Donald P.Carson
	 	 	 	 Name: 	 Donald P. Carson
	 	 	 	 Title: 	 Secretary/Treasurer


    

    
 

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	ST.
              JAMES CAPITAL,
              L.L.C. 
	 
 	 
 	 
 
	 	By:  	/s/ Donald
              P.
              Carson
	 	Name: 	Donald P. Carson
	 	Title: 	Manager
	 	
            


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

    
      	 	 	 
	 	 	/s/ R.
              Randall Rollins
	 	R. RANDALL ROLLINS 
	 	 


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	 	 	 RCTLOR, LLC 
	 	 	 	 	 
	 	 	 By: 	 LOR, Inc., its
                Manager
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
                Donald P.Carson
	 	 	 	 Name: 	 Donald P. Carson
	 	 	 	 Title: 	 Secretary/Treasurer


      

    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	GRACE
              C.
              ROLLINS 
	 
 	 
 	 
 
	 	By:  	 /s/ R.
              Randall Rollins 
	 	Name:	 R. Randall Rollins 
	 	Title: 	 Attorney-in-fact
	 	 	 


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              
              

            	
               

            	
              RRR
                DECEMBER PARTNERSHIP, L.P. 

            
	 	 	 	 	 
	 	 	By: 	
               1994
                RRR Voting Trust, its managing general
                partner

            
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
              R. Randall Rollins 
	 	 	 	 Name: 	 R. Randall Rollins 
	 	 	 	 Title: 	 Trustee


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              
              

            	
               

            	
              GWR
                DECEMBER PARTNERSHIP, L.P. 

            
	 	 	 	 	 
	 	 	By: 	
               1994
                GWR Voting Trust, its managing general
                partner

            
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
              Gary W. Rollins
	 	 	 	 Name: 	 Gary W. Rollins
	 	 	 	 Title: 	 Trustee


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                
                

              	
                 

              	
                GIA
                  PARTNERS, L.P. 

              
	 	 	 	 	 
	 	 	By: 	
                 GIA
                  Management Company, LLC, its general
                  partner

              
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
                Gary W. Rollins
	 	 	 	 Name: 	 Gary W. Rollins
	 	 	 	 Title: 	 CEO


      

    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	 	 
	 	RADIC,
              L.L.C.
	 
 	 
 	 
 
	 	By:  	/s/ Gary
              W.
              Rollins
	 	
              Name: Gary
                W. Rollins   

              Title:  
                Manager

            


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	ROLLINS
              INVESTMENT
              FUND
	 
 	 
 	 
 
	 	By:  	/s/ R.
              Randall Rollins
	 	
              Name:
                R.
                Randall Rollins   

              Title:  
                Partner

            


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	 	 
	 	THE
              O. WAYNE
              ROLLINS FOUNDATION 
	 
 	 
 	 
 
	 	By:  	/s/ R.
              Randall Rollins 
	 	
              Name: R.
                Randall Rollins   

              Title:  
                Trustee

            


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              
              

            	
               

            	
              COOK
                & BYNUM CAPITAL QP, LLC, as successor
                to Gullane Capital Partners Encore LLC 

            
	 	 	 	 	 
	 	 	By: 	
               Cook
&
Bynum
                Capital Management, LLC, its
                managing member

            
	 	 	 	 
	 	 	 	 
	 	 	 	 By: 	 /s/
              Richard Poellnitz Cook
	 	 	 	 Name: 	 Richard Poellnitz Cook
	 	 	 	 Title: 	 Principal


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              DISCOVERY
                GLOBAL OPPORTUNITY 

              MASTER
                FUND, LTD.

            
	 
 	 
 	 
 
	 	By:  	/s/ Sammy
              Acebal
	 	Name: 	Sammy Acebal
	 	Title:	Senior Vice
              President


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
            	 	 
	 	
              
                SWIFTWATER
                  AGGRESSIVE VALUE MASTER 

                FUND,
                  LTD. 

              

            
	 
 	 
 	 
 
	 	By:  	/s/ Shawn
              P. Bryant
	 	Name: 	Shawn P. Bryant
	 	Title:	Director


    

     

     

    (Signature
      page to Agreement Regarding 2006 Notes)