Unassociated Document


    FIRST
      AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

    


    THIS
      FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”)
      is
      made and entered into effective as of the 12th
      day of
      November, 2008 by and among American Dairy, Inc., a corporation organized under
      the laws of State of Utah (the “Company”),
      and
      the undersigned investors (individually, an “Investor”
and
      collectively, the “Investors”). Capitalized
      terms not otherwise defined herein shall have the meaning set forth in the
      Agreement (as defined below). 

    


    W
      I T
      N E S S E T H

    


    WHEREAS,
      the Company and the Investors have entered into that certain Registration Rights
      Agreement, dated as of October 2, 2006 (the “Agreement”);
      and


    


    WHEREAS,
      the Parties have negotiated and agreed upon certain amendments to the Agreement
      to be effective from and after the date of this Amendment, and wish to document
      the same.

    


    NOW,
      THEREFORE, for and in consideration of the mutual promises of the Parties as
      set
      forth herein, and other valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the Parties agree as follows:

    


    Article
      1

    Amendments
      to the Agreement

    


    1.1 Section
      1
      of the Agreement is amended as follows:

    


    (a) The
      definition of “Registrable
      Securities”
shall
      be deleted in its entirety and replaced with the following: 

     

    ““Registrable
      Securities”
means
      the shares of the Company’s Common Stock issued or issuable upon (i) conversion
      of the principal amount of the Notes (the “Principal
      Conversion Shares”),
      (ii)
      conversion of interest payable on the Notes (the “Interest
      Conversion Shares”,
      and
      together with the Principal Conversion Shares, the “Conversion
      Shares”),
      (iii)
      exercise of the Investor Warrants (the “Warrant
      Shares”),
      and
      (iv) the 216,639 shares of the Company’s Common Stock (the “Settlement
      Shares”)
      issued
      by the Company and delivered to the Holders contemporaneously with execution
      of
      this Amendment in settlement and compromise of a claim of the Investors for
      amounts due from the Company under Section 2(c) of this Agreement for the period
      from October 1, 2007 through September 30, 2008, and any shares of capital
      stock
      issued or issuable as a dividend on or in exchange for or otherwise with respect
      to any of the foregoing.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


    (b) The
      following definitions shall be added:

    


    ““Permitted
      Holders”
means
      Mr. Leng You-Bin, a resident of Beijing in the People’s Republic of China, and
      his estate, spouse, ancestors and lineal descendants, the legal representatives
      of any of the foregoing and the trustees of any bona fide trusts of which the
      foregoing are the sole beneficiaries or the grantors, or any individual, entity
      or association of which the foregoing beneficially owns, individually or
      collectively with any of the foregoing, at least 30% of the total voting power
      of the voting stock of such entity or association.”

    


    ““Qualifying
      IPO”
means
      a
      public offering of Common Stock of the Company pursuant to an effective
      registration statement under the 1933 Act that results in (i) at least 25%
      of
      the Company’s issued and outstanding share capital being publicly held by
      individuals, entities and associations other than any affiliate of the Company
      or the Permitted Holders, (ii) the product of (x) the number of shares of Common
      Stock of the Company (including other securities of the Company that are
      convertible into Common Stock of the Company, on an as-converted basis) and
      (y)
      the aggregate last sale price of the Company’s Common Stock on the securities
      exchange on which it is listed on the date of listing in connection with the
      Qualifying IPO, shall be at least $500,000,000 (unless such percentage in (i)
      above or dollar amount in (ii) above be otherwise agreed by the holders of
      a
      majority in aggregate principal amount of the Notes then outstanding), (iii)
      the
      minimum number of holders of the Company’s Common Stock as required by the
      securities exchange on which such Common Stock is listed in connection with
      such
      Qualifying IPO and (iv) listing of the Common Stock on the New York Stock
      Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
      Select Market or any other market consented to by the holders of a majority
      in
      aggregate principal amount of the Notes then outstanding.” 

    


    1.2 Section
      2(a)(i) of the Agreement is amended by adding the following phrase after the
      word “Warrants” in the third to last sentence of that section:

    


    “,
      and
      the number of Settlement Shares.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.3 Section
      2(c) of the Agreement is hereby deleted in its entirety and replaced with the
      following language: 

    


    “Payments
      by the Company.
      The
      Company shall use its best efforts to obtain effectiveness of the Registration
      Statement as soon as practicable. If (i) the Registration Statement(s) covering
      the Registrable Securities required to be filed by the Company pursuant to
      Section 2(a) hereof is not filed by the Required Filing Date or any Demand
      Filing Date, as applicable, or declared effective by the SEC one hundred and
      twenty (120) days thereafter, or (ii) after the Registration Statement has
      been
      declared effective by the SEC, sales of all of the Registrable Securities cannot
      be made pursuant to the Registration Statement, or (iii) the Common Stock is
      not
      listed or included for quotation on the Nasdaq Global Market (“Nasdaq”),
      the
      Nasdaq Capital Market (“Nasdaq
      Capital”),
      the
      New York Stock Exchange (the “NYSE”),
      the
      NYSE Archipelago Exchange (“ArcaEx”),
      or
      the NYSE Euronext after being so listed or included for quotation, or (iv)
      the
      Common Stock ceases to be traded on the Over-the-Counter Bulletin Board (the
      “OTC
      BB”)
      prior
      to being listed or included for quotation on one of the aforementioned markets,
      or (v) a Qualifying IPO has not occurred on or before June 30, 2009, then the
      Company will pay to each holder of the Notes additional interest (“Additional
      Interest”)
      in an
      amount equal to the then outstanding principal amount of the Notes held by
      such
      holder (“Outstanding
      Principal Amount”)
      multiplied by the Applicable Percentage (as defined below) times the sum of:
      (i)
      the number of months (prorated for partial months) after the Required Filing
      Date or Demand Filing Date, as applicable, or the end of the aforementioned
      one
      hundred and twenty-day period and prior to the date the Registration Statement
      is declared effective by the SEC; provided,
      however,
      that
      there shall be excluded from such a period any delays which are solely
      attributable to changes required by the Investors in the Registration Statement
      with respect to information relating to the Investors, including, without
      limitation, changes to the plan of distribution, or to the failure of the
      Investors to conduct their review of the Registration Statement pursuant to
      Section 3(h) below in a reasonably prompt manner; and (ii) the number of months
      (prorated for partial months) that sales of all of the Registrable Securities
      cannot be made pursuant to the Registration Statement after the Registration
      Statement has been declared effective (including, without limitation, when
      sales
      cannot be made by reason of the Company’s failure to properly supplement or
      amend the prospectus included therein in accordance with the terms of this
      Agreement, but excluding any days during an Allowed Delay (as defined in Section
      3(f)). The term “Applicable
      Percentage”
means,
      effective as of October 1, 2008, one hundredth (.01) with respect to the first
      thirty (30) days of any calculation under clause (i) of the sentence in which
      the term is used, and one hundredth (.01) for any other purpose. (For example,
      if the Registration Statement becomes effective one (1) month after the end
      of
      such thirty-day period, the Company would pay $2,500 for each $250,000 of
      Outstanding Principal Amount. If thereafter, sales could not be made pursuant
      to
      the Registration Statement for an additional period of one (1) month, the
      Company would pay an additional $2,500 for each $250,000 of Outstanding
      Principal Amount.) Such amounts shall be paid in cash in U.S. dollars and in
      immediately available funds or, at each Investor’s option, in shares of Common
      Stock priced at the Conversion Rate of the Notes, within five (5) days of the
      last day of each month during which any such amounts are incurred
      hereunder.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    1.4 Section
      8
      of the Agreement is deleted in its entirety and replaced with the following:
      

    


    “Section
      8.  Additional
      Covenants of the Company

     

    (a) With
      a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the Investors to sell securities of the Company to the public
      without registration (“Rule
      144”),
      the
      Company agrees to:

     

    (i) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

    


    (ii)
       file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements and the filing of such reports and other documents
      is required for the applicable provisions of Rule 144; and

     

    (iii)
       furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied with
      the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company, and (iii) such other information
      as may be reasonably requested to permit the Investors to sell such securities
      pursuant to Rule 144 without registration.

     

    (b) Until
      all
      the Registrable Securities have been resold or transferred by all the Investors
      (other than to an affiliate of any Investor), the Company will (i) cause its
      Common Stock to be continued to be registered under Section 12(b) or 12(g)
      of
      the 1934 Act, (ii) comply in all respects with its reporting and filing
      obligations under the 1934 Act, (iii) comply with all reporting requirements
      that are applicable to an issuer with a class of shares registered pursuant
      to
      Section 12(b) or 12(g) of the 1934 Act, as applicable, (iv) comply with all
      requirements related to any registration statement filed pursuant to this
      Agreement, and (v) not take any action or file any document (whether or not
      permitted by the 1933 Act or the 1934 Act or the rules thereunder) that would
      result in termination or suspension of such registration or termination or
      suspension of its reporting and filing obligations under said acts.


    


    (c) Upon
      the
      occurrence of and during the continuation of any breach or violation by the
      Company of any of the covenants in this Section 8, the Company shall pay to
      the
      holders of the Notes additional interest at the rate of 1% per month payable
      on
      the last day of each month in United States Dollars in cash in immediately
      available funds.

     

    (d) Notwithstanding
      the forgoing provisions of this Section 8, in no event will the aggregate
      additional interest payable by the Company after October 1, 2008 pursuant to
      Section 2(c) and Section 8(c) exceed 1% per month.” 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


    Article
      2

    Miscellaneous

    


    2.1 Counterparts;
      Facsimile Signatures.
      This
      Amendment may be executed in two (2) or more counterparts, each of which shall
      be deemed an original, but all of which together shall constitute one and the
      same instrument. Any signature page of any such counterpart, or any electronic
      facsimile thereof, may be attached or appended to any other counterpart to
      complete a fully executed counterpart of this Amendment, and any telecopy or
      other facsimile transmission of any signature of a Party shall be deemed an
      original and shall bind such Party.

    


    2.2 Nature
      of Amendment.
      This
      Amendment contains the entire agreement of the Parties with respect to the
      specific subject matter hereof and supersedes all prior written or oral
      correspondence between the Parties and their representatives (including emails)
      regarding the specific subject matter hereof.

    


    2.3 Ratification
      of Agreement.
      Except
      as expressly set forth in this Amendment, all other provisions of the Agreement
      remain unchanged and in full force and effect.

    


    2.4 Amendments.
      No
      amendment to the terms and conditions of this Amendment shall be valid and
      binding on the Parties unless made in writing and signed by an authorized
      representative of each of the Parties.

    


    2.5 Waiver.
      No
      waiver of any provision of this Amendment, or breach hereof, shall be effective
      unless it is in writing, signed by the Party waiving such
      provision.

    


    2.6 Governing
      Law.
      This
      Amendment shall be interpreted in accordance with the substantive and procedural
      laws of the State of New York, without regard to its choice of laws rules which
      may dictate the application of the laws of another jurisdiction.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company and the undersigned Investors have caused this Agreement to be duly
      executed as of the date first above written.

     

    
      	 	 	 
	 	AMERICAN
              DAIRY, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Jonathan
              Chou
	 	
              Name: Jonathan
                Chou

              Title:  
                Chief
                Financial Officer

            


    

         

    [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 First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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


      

       

      

        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


       

      
        	 	 	 
	 	 	/s/ R.
                Randall Rollins
	 	R. RANDALL ROLLINS 
	 	 


      

       

       

      
        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

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


        

      

       

       

      
        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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


      

       

      

        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                
                

              	
                 

              	
                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 First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                
                

              	
                 

              	
                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 First Amendment to Registration Rights Agreement)

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
         

        
          	
                  
                  

                	
                   

                	
                  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 First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

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

                Title:  
                  Manager

              


      

       

       

      
        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

                Title:  
                  Partner

              


      

       

       

      
        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

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

                Title:  
                  Trustee

              


      

       

       

      
        (Signature
          page to First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                
                

              	
                 

              	
                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 First Amendment to Registration Rights
          Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 
	 	
                DISCOVERY
                  GLOBAL OPPORTUNITY 

                MASTER
                  FUND, LTD.

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


      

       

      

        (Signature
          page to First Amendment to Registration Rights Agreement)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	 	 
	 	
                
                  SWIFTWATER
                    AGGRESSIVE VALUE MASTER 

                  FUND,
                    LTD. 

                

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


      

       

      

        (Signature
          page to First Amendment to Registration Rights
          Agreement)