EXECUTION
        COPY

    


    REGISTRATION
      RIGHTS AGREEMENT

    


    THIS
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
      is
      made and entered into as of June 1, 2007 among American Dairy, Inc., a Utah
      corporation (the “Company”),
      American Flying Crane Corporation, a Delaware corporation wholly-owned by the
      Company (the “Guarantor”),
      Mr.
      Leng You-Bin and Mr. Liu Hua (together with Mr. Leng, the “Controlling
      Shareholders”)
      and
      Citadel Equity Fund Ltd., as the initial purchaser (the “Purchaser”)
      of the
      Notes (defined below).

    


    This
      Agreement is made pursuant to the Amended and Restated Notes Purchase Agreement
      dated June 1, 2007 (the “Purchase
      Agreement”)
      among
      the Purchaser, the Company, the Guarantor, other subsidiaries of the Company
      named therein, and the Controlling Shareholders, which provides for, among
      other
      things, the issuance and sale of the Company’s 1% Guaranteed Senior Secured
      Convertible Notes Due 2012 (the “Notes”),
      each
      with a principal amount of US$100,000, for an aggregate principal amount not
      exceeding US$80,000,000, to the Purchaser, which are guaranteed (the
“Guarantees”)
      by
      each of the Guarantors pursuant to the terms of the Indenture. Capitalized
      terms used but not defined herein shall have the meanings given to such terms
      in
      the Purchase Agreement. 

    


    As
      an
      inducement to the Purchaser to enter into the Purchase Agreement, and in
      satisfaction of a condition to the obligations of the Purchaser thereunder,
      the
      Company, the Guarantors and the Controlling Shareholders agree with the
      Purchaser, for the benefit of the holders (including the Purchaser) of the
      Notes
      and the Shares (as defined below) (collectively, the “Holders”),
      as
      follows:

    


    
      	 	
              1.

            	
              Certain
                Definitions.

            


    

    


    For
      purposes of this Registration Rights Agreement the following terms shall have
      the following meanings:

    


    (a) “Additional
      Guarantor”
means
      any subsidiary of the Company that executes a Guarantee under the Indenture
      after the date of this Agreement.

    


    (b) “Additional
      Interest”
has
      the
      meaning assigned thereto in Section 2(d).

    


    (c) “Additional
      Interest Payment Date”
has
      the
      meaning assigned thereto in Section 2(d). 

    


    (d) “Agreement”
means
      this Registration Rights Agreement, as the same may be amended from time to
      time
      pursuant to the terms hereof.

    


    (e) “Business
      Day”
means
      any day other than a Saturday, a Sunday, or a day on which banking institutions
      in New York, New York are authorized or required by law or executive order
      to
      remain closed.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (f) “Closing
      Date”
means
      the date on which any Notes are initially issued.

    


    (g) “Commission”
means
      the Securities and Exchange Commission, or any other federal agency at the
      time
      administering the Exchange Act or the Securities Act, whichever is the relevant
      statute for the particular purpose.

    


    (h) “Company”
has
      the
      meaning specified in the first paragraph of this Agreement.

    


    (i) “Controlling
      Shareholders”
has
      the
      meaning specified in the first paragraph of this Agreement.

    


    (j) “Deferral
      Notice”
has
      the
      meaning assigned thereto in Section 4(b).

    


    (k) “Deferral
      Period”
has
      the
      meaning assigned thereto in Section 4(b).

    


    (l) “Effective
      Period”
has
      the
      meaning assigned thereto in Section 2(a).

    


    (m) “Eligibility
      Date”
has
      the
      meaning assigned thereto in Section 2(a).

    


    (n) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder. 

    


    (o) “Free
      Writing Prospectus”
      means
      each free writing prospectus (as defined in Rule 405 under the Securities Act)
      prepared by or on behalf of the Company or used or referred to by the Company
      in
      connection with the sale of the Securities.

    


    (p) “Guarantees”
has
      the
      meaning specified in the second paragraph of this Agreement.

    


    (q) “Guarantors”
has
      the
      meaning set forth in the first paragraph of this Agreement and also includes
      any
      Guarantor’s successors and any Additional Guarantors.

    


    (r) “Holder”
means
      each holder, from time to time, of Registrable Securities (including the
      Purchaser).

    


    (s) “Incidental
      Registration”
means
      a
      registration required to be effected by the Company pursuant to Section
      3.

    


    (t) “Incidental
      Registration Statement”
means
      the registration statement referred to in Section 3(a), as amended or
      supplemented by any amendment or supplement, including post-effective
      amendments, and all materials incorporated by reference or explicitly deemed
      to
      be incorporated by reference in such registration statement. 

    


    (u) “Indenture”
means
      the Indenture dated as of the date hereof among the Company, the Guarantor
      and
      The Bank of New York, as Trustee, pursuant to which the Notes and the Guarantees
      are being issued.

    


    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    (v) “Issuer
      Information”
has
      the
      meaning set forth in Section 7(a) hereof.

    


    (w) “Material
      Event”
has
      the
      meaning assigned thereto in Section 4(a)(iv).

    


    (x) “Majority
      Holders”
shall
      mean, on any date, holders of the majority of the Shares constituting
      Registrable Securities; for the purposes of this definition, Holders of Notes
      constituting Registrable Securities shall be deemed to be the Holders of the
      number of Shares into which such Notes are or would be convertible as of such
      date.

    


    (y) “NASD”
shall
      mean the National Association of Securities Dealers, Inc.

    


    (z) “NASD
      Rules”
shall
      mean the Conduct Rules and the By-Laws of the NASD.

    


    (aa) “Notes”
has
      the
      meaning specified in the first paragraph of this Agreement.

    


    (bb) “Notice
      and Questionnaire”
means
      a
      written notice delivered to the Company containing substantially the information
      called for by the Form of Selling Securityholder Notice and Questionnaire
      attached as Annex
      A
      hereto.

    


    (cc) “Notice
      Holder”
means,
      on any date, any Holder that has delivered a Notice and Questionnaire to the
      Company prior to such date.

    


    (dd) “Person”
means
      a
      corporation, association, partnership, organization, business, individual,
      government or political subdivision thereof or governmental agency.

    


    (ee) “Prospectus”
means
      the prospectus included in any Relevant Registration Statement, including any
      preliminary prospectus, and any such prospectus as amended or supplemented
      by
      any amendment or prospectus supplement, including post-effective amendments,
      and
      all materials incorporated by reference or explicitly deemed to be incorporated
      by reference in such Prospectus.

    


    (ff) “Purchase
      Agreement”
has
      the
      meaning specified in the first paragraph of this Agreement.

    


    (gg) “Purchaser”
has
      the
      meaning specified in the first paragraph of this Agreement.

    


    (hh) “Registrable
      Securities”
      means

    


    
      	 	
              (i)

            	
              any
                Notes and the Guarantees until the earliest of (i) their effective
                registration under the Securities Act and the resale of all such
                Notes and
                Guarantees in accordance with the Relevant Registration Statement,
                (ii)
                the date on which such Notes and Guarantees are (A) sold pursuant
                to Rule
                144 under circumstances in which any legend borne by such Notes and
                Guarantees relating to restrictions on transferability thereof, under
                the
                Securities Act or otherwise, is removed or (B) freely transferable
                without
                restriction under Rule 144(k) or (iii) the date on which such Notes
                have
                been converted (and the related Guarantees have been terminated)
                or
                otherwise cease to be outstanding;
                and

            


    

    


    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    
      	 	
              (ii)

            	
              any
                Shares issuable upon conversion of any Notes constituting Registrable
                Securities, until the earliest of (i) their effective registration
                under
                the Securities Act and the resale of all such Shares in accordance
                with
                the Relevant Registration Statement, (ii) the date on which such
                Shares
                are (A) sold pursuant to Rule 144 under circumstances in which any
                legend
                borne by such Shares relating to restrictions on transferability
                thereof,
                under the Securities Act or otherwise, is removed or (B) freely
                transferable without restriction under Rule 144(k) or (iii) the date
                on
                which such Shares cease to be
                outstanding.

            


    

    


    (ii) “Registration
      Default”
has
      the
      meaning assigned thereto in Section 2(d). 

    


    (jj) “Registration
      Expenses”
has
      the
      meaning assigned thereto in Section 7.

    


    (kk) “Relevant
      Registration Statement”
means
      the Shelf Registration Statement or the Incidental Registration Statement,
      as
      the context may require. 

    


    (ll) “Rule
      144,”
      “Rule
      405”
and
      “Rule
      415”
mean,
      in each case, such rule as promulgated under the Securities Act.

    


    (mm) “Securities”
means,
      collectively, the Notes and the Shares.

    


    (nn) “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

    


    (oo) “Shares”
means
      the shares of common stock of the Company, par value $0.001 per share, into
      which the Notes are convertible or that have been issued upon a conversion
      from
      Notes into common stock of the Company.

    


    (pp) “Shelf
      Registration Statement”
means
      the shelf registration statement referred to in Section 2(a), as amended or
      supplemented by any amendment or supplement, including post-effective
      amendments, and all materials incorporated by reference or explicitly deemed
      to
      be incorporated by reference in such Shelf Registration Statement.

    


    (qq) “Special
      Counsel”
shall
      have the meaning assigned thereto in Section 7.

    


    (rr) “Guarantee”
means,
      individually, any Guarantee of payment of the Securities by a Guarantor pursuant
      to the terms of the Indenture and any supplemental indenture thereto and,
      collectively, all such Guarantees. Each such Guarantee will be in the form
      prescribed by the Indenture.

    


    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    (ss) “Trustee”
shall
      have the meaning assigned such term in the Indenture.

    


    (tt) “Underwritten
      Incidental Registration”
shall
      have the meaning assigned thereto in Section 3(b).

    


    (uu) “Underwritten
      Offering”
means
      a
      sale of securities of the Company to an underwriter or underwriters for
      reoffering to the public.

    


    Unless
      the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Agreement, and the
      words “herein,” “hereof” and “hereunder” and other words of similar import refer
      to this Agreement as a whole and not to any particular Section or other
      subdivision. Unless the context otherwise requires, any reference to a statute,
      rule or regulation refers to the same (including any successor statute, rule
      or
      regulation thereto) as it may be amended from time to time.

    


    
      	 	
              2.

            	
              Registration
                Under the Securities Act.

            


    

    


    (a) The
      Company, the Guarantors and the Controlling Shareholders agree to file under
      the
      Securities Act as promptly as practicable but in any event within 90 days after
      the latter of (x) the Closing Date and (y) the date on which the Company becomes
      eligible to so file (the latter date hereinafter being referred to as the
“Eligibility
      Date”),
      a
      shelf registration statement providing for the registration of, and the sale
      on
      a continuous or delayed basis by the Holders of, all of the Registrable
      Securities, pursuant to Rule 415 or any similar rule that may be adopted by
      the
      Commission. The Company, the Guarantors and the Controlling Shareholders agree
      to use their reasonable efforts to cause the Shelf Registration Statement to
      become effective within 180 days after the Eligibility Date and to keep such
      Shelf Registration Statement continuously effective until such time as there
      are
      no longer any Registrable Securities outstanding (the “Effective
      Period”).
      Without prejudice to any registration rights, existing as of the date hereof,
      held by the Company’s securityholders or the Guarantors’ securityholders with
      respect to the Company’s securities or the Guarantors’ securities, respectively,
      none of the Company’s securityholders or the Guarantors’ securityholders (other
      than Holders of Registrable Securities) shall have the right to include any
      of
      the Company’s securities or the Guarantors’ securities in the Shelf Registration
      Statement.

    


    (b) The
      Company, the Guarantors and the Controlling Shareholders further agree that
      they
      shall cause the Shelf Registration Statement and the related Prospectus and
      any
      amendment or supplement thereto, as of the effective date of the Shelf
      Registration Statement or such amendment or supplement, (i) to comply in all
      material respects with the applicable requirements of the Securities Act; and
      (ii) not to contain any untrue statement of a material fact or omit to state
      a
      material fact required to be stated therein or necessary in order to make the
      statements therein (in the case of the Prospectus, in the light of the
      circumstances under which they were made) not misleading, and the Company,
      the
      Guarantors and the Controlling Shareholders agree to furnish to the Holders
      of
      the Registrable Securities copies of any supplement or amendment prior to its
      being used or promptly following its filing with the Commission; provided,
      however,
      that
      the Company shall have no obligation to deliver to Holders of Registrable
      Securities copies of any amendment consisting exclusively of an Exchange Act
      report or other Exchange Act filing otherwise publicly available on the
      Company’s website. If the Shelf Registration Statement, as amended or
      supplemented from time to time, ceases to be effective for any reason at any
      time during the Effective Period (other than because all Registrable Securities
      registered thereunder shall have been sold pursuant thereto or shall have
      otherwise ceased to be Registrable Securities), the Company, the Guarantors
      and
      the Controlling Shareholders shall use their reasonable best efforts to obtain
      the prompt withdrawal of any order suspending the effectiveness
      thereof.

    


    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    (c) Each
      Holder of Registrable Securities agrees that if such Holder wishes to sell
      Registrable Securities pursuant to the Shelf Registration Statement and related
      Prospectus, it will do so only in accordance with this Section 2(c) and Section
      4(b). From and after the date the Shelf Registration Statement is declared
      or
      becomes effective, the Company, the Guarantors and the Controlling Shareholders
      shall, as promptly as is practicable after the date a Notice and Questionnaire
      is delivered, and in any event within fifteen (15) days after the date of
      receipt of such Notice and Questionnaire, or if the use of the Prospectus has
      been suspended by the Company under Section 4(b) hereof at the time of receipt
      of the Notice and Questionnaire, fifteen (15) days after the expiration of
      the
      period during which the use of the Prospectus is suspended:

    


    (i) if
      required by applicable law, file with the Commission a post-effective amendment
      to the Shelf Registration Statement or prepare and, if required by applicable
      law, file a supplement to the related Prospectus or a supplement or amendment
      to
      any document incorporated therein by reference or file any other required
      document so that the Holder delivering such Notice and Questionnaire is named
      as
      a selling security holder in the Shelf Registration Statement and the related
      Prospectus in such a manner as to permit such Holder to deliver such Prospectus
      to purchasers of the Registrable Securities in accordance with applicable law
      and, if the Company, the Guarantors and the Controlling Shareholders shall
      file
      a post-effective amendment to the Shelf Registration Statement, use their
      reasonable efforts to cause such post-effective amendment to be declared or
      to
      otherwise become effective under the Securities Act as promptly as is
      practicable. Notwithstanding the foregoing, the Company, the Guarantors and
      the
      Controlling Shareholders shall not be required to file more than one
      post-effective amendment to the Shelf Registration Statement or supplement
      to
      the related Prospectus during any thirty (30) day period;

    


    (ii) provide
      such Holder copies of any documents filed pursuant to Section 2(c)(i);
      and

    


    (iii) notify
      such Holder as promptly as practicable after the effectiveness under the
      Securities Act of any post-effective amendment filed pursuant to Section
      2(c)(i);

    


    provided
      that if
      such Notice and Questionnaire is delivered during a Deferral Period, the Company
      shall so inform the Holder delivering such Notice and Questionnaire and shall
      take the actions set forth in clauses (i), (ii) and (iii) above upon expiration
      of the Deferral Period in accordance with Section 4(b). Notwithstanding anything
      contained herein to the contrary, the Company, the Guarantors and the
      Controlling Shareholders shall be under no obligation to name any Holder that
      is
      not a Notice Holder as a selling securityholder in any Shelf Registration
      Statement or related Prospectus; provided,
      however,
      that
      any Holder that becomes a Notice Holder pursuant to the provisions of this
      Section 2(c) (whether or not such Holder was a Notice Holder at the time the
      Shelf Registration Statement was declared or otherwise became effective) shall
      be named as a selling securityholder in the Shelf Registration Statement or
      related Prospectus in accordance with the requirements of this Section
      2(c).

    


    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    (d) If
      any of
      the following events (any such event a “Registration
      Default”)
      shall
      occur, then additional interest (the “Additional
      Interest”)
      shall
      become payable jointly and severally by the Company, the Guarantors and the
      Controlling Shareholders to Holders in respect of the Notes as
      follows:

    


    (i) if
      the
      Shelf Registration Statement is not filed with the Commission within 90 days
      following the Eligibility Date, then commencing on the 91st day after the
      Eligibility Date, Additional Interest shall accrue on the principal amount
      of
      the outstanding Notes that are Registrable Securities at a rate of 0.25% per
      annum for the first 90 days following such 91st
      day and
      at a rate of 0.50% per annum thereafter; or

    


    (ii) if
      the
      Shelf Registration Statement is not declared effective and does not otherwise
      become effective within 180 days following the Eligibility Date, then commencing
      on the 181st
      day
      after the Eligibility Date, Additional Interest shall accrue on the principal
      amount of the outstanding Notes that are Registrable Securities at a rate of
      0.25% per annum for the first 90 days following such 181st
      day and
      at a rate of 0.50% per annum thereafter; or

    


    (iii) if
      the
      Company, the Guarantors and the Controlling Shareholders have failed to perform
      their obligations set forth in Section 2(c) hereof within the time periods
      required therein, then commencing on the first day after the date by which
      the
      Company, the Guarantors and the Controlling Shareholders were required to
      perform such obligations, Additional Interest shall accrue on the principal
      amount of the outstanding Notes that are Registrable Securities at a rate of
      0.25% per annum for the first 90 days and at a rate of 0.50% per annum
      thereafter;

    


    (iv) if
      the
      Shelf Registration Statement has been declared effective or has otherwise become
      effective but such Shelf Registration Statement ceases to be effective at any
      time during the Effective Period (other than pursuant to Section 4(b) hereof),
      then commencing on the day such Shelf Registration Statement ceases to be
      effective, Additional Interest shall accrue on the principal amount of the
      outstanding Notes that are Registrable Securities at a rate of 0.25% per annum
      for the first 90 days following such date on which the Shelf Registration
      Statement ceases to be effective and at a rate of 0.50% per annum thereafter;
      or

    


    (v) if
      the
      aggregate duration of Deferral Periods in any period exceeds the number of
      days
      permitted in respect of such period pursuant to Section 4(b) hereof, then
      commencing on the day the aggregate duration of Deferral Periods in any period
      exceeds the number of days permitted in respect of such period (and again on
      the
      first day of any subsequent Deferral Period during such period), Additional
      Interest shall accrue on the principal amount of the outstanding Notes that
      are
      Registrable Securities at a rate of 0.25% per annum for the first 90 days and
      at
      a rate of 0.50% per annum thereafter;

    


    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    provided,
      however,
      that
      the Additional Interest rate on the Notes shall not exceed in the aggregate
      0.50% per annum and shall not be payable under more than one clause above for
      any given period of time, except that if Additional Interest would be payable
      under more than one clause above, but at a rate of 0.25% per annum under one
      clause and at a rate of 0.50% per annum under the other, then the Additional
      Interest rate shall be the higher rate of 0.50% per annum; provided
      further,
      however, that
      (1)
      upon the filing of the Shelf Registration Statement (in the case of clause
      (i)
      above), (2) upon the effectiveness of the Shelf Registration Statement (in
      the
      case of clause (ii) above), (3) upon the performance by the Company, the
      Guarantors and the Controlling Shareholders of their obligations set forth
      in
      Section 2(c) hereof within the time periods required therein (in the case of
      clause (iii) above), (4) upon the effectiveness of the Shelf Registration
      Statement which had ceased to remain effective (in the case of clause (iv)
      above), (5) upon the termination of the Deferral Period that caused the limit
      on
      the aggregate duration of Deferral Periods in a period set forth in Section
      4(b)
      to be exceeded (in the case of clause (v) above) or (6) upon the termination
      of
      certain transfer restrictions on the Securities as a result of the application
      of Rule 144(k) or any successor provision, Additional Interest on the Notes
      as a
      result of such clause, as the case may be, shall cease to accrue.

    


    Additional
      Interest on the Notes, if any, will be payable in cash on June 1 and December
      1
      of each year (the “Additional
      Interest Payment Date”)
      to
      holders of record of outstanding Notes that are Registrable Securities on each
      preceding May 18 and November 17; provided
      that any
      Additional Interest accrued with respect to any Notes or portion thereof called
      for redemption on a redemption date or converted into Shares on a conversion
      date prior to the Registration Default shall, in any such event, be paid instead
      to the Holder who submitted such Notes or portion thereof for redemption or
      conversion on the applicable redemption date or conversion date, as the case
      may
      be, on such date (or promptly following the conversion date, in the case of
      conversion). Following the cure of all Registration Defaults requiring the
      payment of Additional Interest to the Holders of Notes that are Registrable
      Securities pursuant to this Section, the accrual of Additional Interest will
      cease (without in any way limiting the effect of any subsequent Registration
      Default requiring the payment of Additional Interest).

    


    The
      Company shall notify the Trustee promptly upon the happening of each and every
      Registration Default. The
      Trustee shall be entitled, on behalf of Holders of Securities, to seek any
      available remedy for the enforcement of this Agreement, including for the
      payment of any Additional Interest. Notwithstanding the foregoing, the parties
      agree that the sole monetary damages payable for a violation of the terms of
      this Agreement with respect to which additional monetary amounts are expressly
      provided shall be as set forth in this Section 2(d). Nothing shall preclude
      a
      Notice Holder or Holder of Registrable Securities from pursuing or obtaining
      specific performance or other equitable relief with respect to this
      Agreement.

    


    (e) A
      Shelf
      Registration Statement pursuant to this Section 2 will not be deemed to have
      become effective unless it has been declared effective by the SEC or is
      automatically effective upon filing with the SEC as provided by Rule 462 under
      the Securities Act. 

    


    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    
      	 	
              3.

            	
              Incidental
                Registration.

            


    

    


    (a) If
      at any
      time from and after the date hereof, the Company proposes to register any of
      its
      securities under the Securities Act (other than (A) any registration of public
      sales or distributions solely by and for the account of the Company of
      securities issued (x) pursuant to any employee benefit or similar plan or any
      dividend reinvestment plan, (y) in any acquisition by the Company or (z)
      pursuant to any registration rights agreement, existing as of the date hereof,
      with the Company’s existing shareholders, or (B) pursuant to Section 2 hereof),
      either in connection with a primary offering for cash for the account of the
      Company or a secondary offering, the Company will, each time it intends to
      effect such a registration, give written notice to all Holders at least ten
      (10)
      but no more than thirty (30) business days prior to the expected initial filing
      of a Registration Statement with the Commission pertaining thereto, informing
      such Holders of its intent to file such Registration Statement, the expected
      filing date, and of the Holders’ rights to request the registration of the
      Registrable Shares held by such Holder (the “Company
      Notice”).
      Upon
      the written request of any Holder made within ten (10) business days after
      any
      such Company Notice is given (which request shall specify the Registrable
      Securities intended to be disposed of by such Holder or its transferees and,
      unless the applicable registration is intended to effect a primary offering
      of
      Shares for cash for the account of the Company, the intended method of
      distribution thereof), the Company will use its reasonable best efforts to
      effect the registration under the Securities Act of all Registrable Securities
      which the Company has been so requested to register by such Holders to the
      extent required to permit the disposition (in accordance with the intended
      methods of distribution thereof or, in the case of a registration which is
      intended to effect a primary offering for cash for the account of the Company,
      in accordance with the Company’s intended method of distribution) of the
      Registrable Securities so requested to be registered, including, if necessary,
      by filing with the Commission a post-effective amendment or a supplement to
      the
      Incidental Registration Statement or the related Prospectus or any document
      incorporated therein by reference or by filing any other required document
      or
      otherwise supplementing or amending the Incidental Registration Statement,
      if
      required by the rules, regulations or instructions applicable to the
      registration form used by the Company for such Incidental Registration Statement
      or by the Securities Act, any state securities or blue sky laws, or any rules
      and regulations thereunder; provided,
      however,
      that
      if, at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the Incidental Registration
      Statement filed in connection with such registration, the Company shall
      determine for any reason not to register or to delay registration of such
      securities, the Company may, at its election, give written notice of such
      determination to each Holder and, thereupon, (A) in the case of a determination
      not to register, the Company shall be relieved of its obligation to register
      any
      Registrable Securities in connection with such registration (but not from its
      obligation to pay the Registration Expenses incurred in connection therewith),
      and (B) in the case of a determination to delay such registration, the Company
      shall be permitted to delay registration of any Registrable Securities requested
      to be included in such Incidental Registration Statement for the same period
      as
      the delay in registering such other securities.

    


    The
      registration rights granted pursuant to the provisions of this Section 3(a)
      shall be in addition to the registration rights granted pursuant to the other
      provisions of this Agreement.

    


    
      
         

      

      
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    (b) Amount
      of Inclusion.
      The
      Company shall be required to include in the Incidental Registration the
      percentage of the Registrable Securities held by the Holders in such
      registration as will equal the fraction, (x) the numerator of which shall be
      the
      number of all the Registrable Securities and (y) the denominator of which shall
      be the number of shares of the outstanding capital stock of the Company on
      a
      fully-diluted basis, in each case, immediately prior to the effectiveness of
      such registration statement. The number of Registrable Securities to be included
      in the Incidental Registration shall be allocated pro
      rata
      among
      the Holders thereof requesting inclusion in such Incidental Registration on
      the
      basis of the number of securities requested to be included by all such
      Holders.

    


    
      	 	
              4.

            	
              Registration
                Procedures.

            


    

    


    The
      following provisions shall apply to the Relevant Registration Statement filed
      pursuant to Section 2 or Section 3, as the case may be:

    


    (a) the
      Company, the Guarantors and the Controlling Shareholders shall:

    


    (i) prepare
      and file with the Commission a registration statement on any form which may
      be
      utilized by the Company, the Guarantors and the Controlling Shareholders and
      which shall permit the disposition of the Registrable Securities in accordance
      with the intended method or methods thereof, as specified in writing by the
      Holders of the Registrable Securities, and use their reasonable efforts to
      cause
      such registration statement to become effective in accordance with Section
      2(a)
      or 3(a) above, as the case may be;

    


    (ii) before
      filing any Relevant Registration Statement or Prospectus or any amendments
      or
      supplements thereto with the Commission, furnish to the Purchaser copies of
      all
      such documents proposed to be filed and use reasonable efforts to reflect in
      each such document when so filed with the Commission such comments as the
      Purchaser reasonably shall propose within three (3) Business Days of the
      delivery of such copies to the Purchaser;

    


    (iii) use
      their
      reasonable efforts to prepare and file with the Commission such amendments
      and
      post-effective amendments to the Relevant Registration Statement and file with
      the Commission any other required document as may be necessary to keep such
      Relevant Registration Statement continuously effective until the expiration
      of
      the Effective Period; cause the related Prospectus to be supplemented by any
      required prospectus supplement, and as so supplemented to be filed pursuant
      to
      Rule 424 (or any similar provisions then in force) under the Securities Act;
      and
      comply with the provisions of the Securities Act applicable to it with respect
      to the disposition of all Securities covered by such Relevant Registration
      Statement during the Effective Period in accordance with the intended methods
      of
      disposition by the sellers thereof set forth in such Relevant Registration
      Statement as so amended or such Prospectus as so supplemented;

    


    
      
         

      

      
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    (iv) promptly
      notify the Notice Holders of Registrable Securities (A)
      when
      such Relevant Registration Statement or the Prospectus included therein or
      any
      amendment or supplement to the Prospectus or post-effective amendment has been
      filed with the Commission, and, with respect to such Relevant Registration
      Statement or any post-effective amendment, when the same has become
      effective,
      (B)
      of any
      request, following the effectiveness of the Relevant Registration Statement,
      by
      the Commission or any other Federal or state governmental authority for
      amendments or supplements to the Relevant Registration Statement or related
      Prospectus or for additional information, (C) of the issuance by the Commission
      of any stop order suspending the effectiveness of such Relevant Registration
      Statement or the initiation or written threat of any proceedings for that
      purpose, including
      the receipt by the Company of any notice of objection of the Commission to
      the
      use of a Relevant Registration Statement or any post-effective amendment thereto
      pursuant to Rule 401(g)(2) under the Securities Act,
      (D)
      of the
      receipt by the Company, any Guarantor or any Controlling Shareholder of any
      notification with respect to the suspension of the qualification of the
      Registrable Securities for sale in any jurisdiction or the initiation or written
      threat of any proceeding for such purpose, (E) of the occurrence of (but not
      the
      nature of or details concerning) any event or the existence of any fact (a
      “Material
      Event”)
      as a
      result of which any Relevant Registration Statement shall contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary to make the statements therein not misleading,
      or
      any Prospectus shall contain any untrue statement of a material fact or omit
      to
      state any material fact required to be stated therein or necessary to make
      the
      statements therein, in the light of the circumstances under which they were
      made, not misleading (provided,
      however,
      that no
      notice by the Company shall be required pursuant to this clause (E) in the
      event
      that the Company either promptly files a prospectus supplement to update the
      Prospectus or a Form 8-K or other appropriate Exchange Act report that is
      incorporated by reference into the Relevant Registration Statement, which,
      in
      either case, contains the requisite information with respect to such Material
      Event that results in such Relevant Registration Statement no longer containing
      any untrue statement of material fact or omitting to state a material fact
      necessary to make the statements contained therein not misleading), (F) of
      the
      determination by the Company that a post-effective amendment to the Relevant
      Registration Statement will be filed with the Commission, which notice may,
      at
      the discretion of the Company (or as required pursuant to Section 4(b)), state
      that it constitutes a Deferral Notice, in which event the provisions of Section
      4(b) shall apply or
      (G)
      at any
      time when a Prospectus is required to be delivered under the Securities Act,
      that the Relevant Registration Statement, Prospectus, Prospectus amendment
      or
      supplement or post-effective amendment does not conform in all material respects
      to the applicable requirements of the Securities Act and the rules and
      regulations of the Commission thereunder;

    


    (v) prior
      to
      any public offering of the Registrable Securities pursuant to the Relevant
      Registration Statement, use
      their
      reasonable best efforts to register or qualify, or cooperate with the Notice
      Holders of Securities included therein and their respective counsel in
      connection with the registration or qualification of, such Securities for offer
      and sale under the securities or blue sky laws of such jurisdictions as any
      such
      Notice Holders reasonably requests in writing and do any and all other acts
      or
      things necessary or advisable to enable the offer and sale in such jurisdictions
      of the Securities covered by the Relevant
      Registration
      Statement; prior
      to
      any public offering of the Registrable Securities pursuant to the Relevant
      Registration Statement, use its reasonable efforts to keep each such
      registration or qualification (or exemption therefrom) effective during the
      Effective Period in connection with such Notice Holder’s offer and sale of
      Registrable Securities pursuant to such registration or qualification (or
      exemption therefrom) and do any and all other acts or things necessary or
      advisable to enable the disposition in such jurisdictions of such Registrable
      Securities in the manner set forth in the Relevant Registration Statement and
      the related Prospectus; provided
      that the
      Company and the Guarantors will not be required to qualify generally to do
      business in any jurisdiction where it is not then so qualified or to take any
      action which would subject it to general service of process or to taxation
      in
      any such jurisdiction where it is not then so subject;

    


    
      
         

      

      
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    (vi) use
      its
      reasonable best efforts to prevent the issuance of, and if issued, to obtain
      the
      withdrawal of any order suspending the effectiveness of the Relevant
      Registration Statement or, in the event of an objection of the Commission
      pursuant to Rule 401(g)(2), promptly file an amendment to such Relevant
      Registration Statement on the proper form, and to lift any suspension of the
      qualification of any of the Registrable Securities for sale in any jurisdiction
      in which they have been qualified for sale, in each case at the earliest
      practicable date;

    


    (vii) upon
      reasonable notice, for a reasonable period prior to the filing of the Relevant
      Registration Statement, and throughout the Effective Period, (i)
      make
      reasonably available for inspection by a representative of, and Special Counsel
      acting for, Majority Holders of the Securities being sold and any underwriter
      (and its counsel) participating in any disposition of Securities pursuant to
      such Relevant
      Registration
      Statement, all relevant financial and other records, pertinent corporate
      documents and properties of the Company and its subsidiaries and (ii) use
      reasonable best efforts to have their officers, directors, employees,
      accountants and counsel supply all relevant information reasonably requested
      by
      such representative, Special Counsel or any such underwriter in connection
      with
      such Relevant
      Registration
      Statement;

    


    (viii) if
      requested by Majority Holders of the Securities being sold in an underwriting,
      their Special Counsel or the managing underwriters (if any) in connection with
      such Relevant Registration Statement, use their reasonable best efforts to
      cause
      (i) their counsel to deliver an opinion relating to the Relevant Registration
      Statement and the Securities in customary form, (ii) their officers to execute
      and deliver all customary documents and certificates requested by the Majority
      Holders of the Securities being sold, their Special Counsel or the managing
      underwriters (if any) and (iii) their independent registered public accounting
      firm to provide a letter confirming
      that they are an independent registered public accounting firm within the rules
      and regulations adopted by the Commission and the Public Accounting Oversight
      Board (United States) and as required by the Securities Act with, in the case
      of
      an amendment or supplement that includes audited financial information, such
      changes as may be necessary to reflect the amended or supplemented financial
      information.

    


    (ix) if
      reasonably requested by the Purchaser or any Notice Holder, promptly incorporate
      in a prospectus supplement or post-effective amendment to the Relevant
      Registration Statement such information as the Purchaser or such Notice Holder
      shall, on the basis of a written opinion of nationally-recognized counsel
      experienced in such matters, determine to be required to be included therein
      by
      applicable law and make any required filings of such prospectus supplement
      or
      such post-effective amendment; provided,
      that
      the Company shall not be required to take any actions under this Section
      4(a)(ix) that are not, in the reasonable opinion of counsel for the Company,
      in
      compliance with applicable law;

    


    
      
         

      

      
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    (x) promptly
      furnish to each Notice Holder and the Purchaser, upon their request and without
      charge, at least one (1) conformed copy of the Relevant Registration Statement
      and any amendments thereto, including financial statements but excluding
      schedules, all documents incorporated or deemed to be incorporated therein
      by
      reference and all exhibits; provided,
      however,
      that
      the Company shall have no obligation to deliver to Notice Holders or the
      Purchaser a copy of any amendment consisting exclusively of an Exchange Act
      report or other Exchange Act filing otherwise publicly available on the
      Company’s website;

    


    (xi) during
      the Effective Period, deliver to each Notice Holder in connection with any
      sale
      of Registrable Securities pursuant to the Relevant Registration Statement,
      without charge, as many copies of the Prospectus relating to such Registrable
      Securities (including each preliminary prospectus) and any amendment or
      supplement thereto as such Notice Holder may reasonably request; and the Company
      hereby consents (except during such periods that a Deferral Notice is
      outstanding and has not been revoked) to the use of such Prospectus or each
      amendment or supplement thereto by each Notice Holder in connection with any
      offering and sale of the Registrable Securities covered by such Prospectus
      or
      any amendment or supplement thereto in the manner set forth therein;
      and

    


    (xii) cooperate
      with the Notice Holders
      of
      Securities to facilitate the timely preparation and delivery of certificates
      representing Securities to be sold pursuant to the Relevant
      Registration
      Statement free of any restrictive legends and in such denominations and
      registered in such names as the Holders thereof may request in writing at least
      two business days prior to sales of Securities pursuant to such Relevant
      Registration Statement; provided
      that
      nothing herein shall require the Company to deliver certificated Notes to any
      beneficial holder of Notes except as required by the Indenture.

    


    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    (b) Upon
      (A)
      the issuance by the Commission of a stop order suspending the effectiveness
      of
      the Relevant Registration Statement or the initiation of proceedings with
      respect to the Relevant Registration Statement under Section 8(d) or 8(e) of
      the
      Securities Act, (B) the occurrence of any event or the existence of any Material
      Event as a result of which the Relevant Registration Statement shall contain
      any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein not misleading,
      or any Prospectus shall contain any untrue statement of a material fact or
      omit
      to state any material fact required to be stated therein or necessary to make
      the statements therein, in the light of the circumstances under which they
      were
      made, not misleading, or (C) the occurrence or existence of any corporate
      development that, in the discretion of the Company, makes it appropriate to
      suspend the availability of the Relevant Registration Statement and the related
      Prospectus, the Company will (i) in the case of clause (B) above, subject to
      the
      third sentence of this provision, as promptly as is practicable prepare and
      file
      a post-effective amendment to such Relevant Registration Statement or a
      supplement to the related Prospectus or any document incorporated therein by
      reference or file any other required document that would be incorporated by
      reference into such Relevant Registration Statement and Prospectus so that
      such
      Relevant Registration Statement does not contain any untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading, and such Prospectus
      does not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading, as thereafter delivered (or, to the extent permitted by law, made
      available) to the purchasers of the Registrable Securities being sold
      thereunder, and, in the case of a post-effective amendment to the Relevant
      Registration Statement, subject to the third sentence of this provision, use
      reasonable efforts to cause it to be declared effective or otherwise become
      effective as promptly as is practicable, and (ii) give notice to the Notice
      Holders that the availability of the Relevant Registration Statement is
      suspended (a “Deferral
      Notice”).
      Upon
      receipt of any Deferral Notice, each Notice Holder agrees not to sell any
      Registrable Securities pursuant to the Relevant Registration Statement until
      such Notice Holder’s receipt of copies of the supplemented or amended Prospectus
      provided for in clause (i) above, or until it is advised in writing by the
      Company that the Prospectus may be used, and has received copies of any
      additional or supplemental filings that are incorporated or deemed incorporated
      by reference in such Prospectus. The Company will use its reasonable best
      efforts to ensure that the use of the Prospectus may be resumed (x) in the
      case
      of clause (A) above, as promptly as is practicable, (y) in the case of clause
      (B) above, as soon as, in the sole judgment of the Company, public disclosure
      of
      such Material Event would not be prejudicial to or contrary to the interests
      of
      the Company or, if necessary to avoid unreasonable burden or expense, as soon
      as
      practicable thereafter and (z) in the case of clause (C) above, as soon as,
      in
      the discretion of the Company, such suspension is no longer appropriate;
provided
      that the
      period during which the availability of the Relevant Registration Statement
      and
      any Prospectus is suspended (the “Deferral
      Period”),
      without the Company incurring any obligation to pay Additional Interest pursuant
      to Section 2(d), shall not exceed 120 days in the aggregate in any 12 month
      period.

    


    (c) Each
      Holder of Registrable Securities agrees that upon receipt of any Deferral Notice
      from the Company, such Holder shall forthwith discontinue (and cause any
      placement or sales agent or underwriters acting on their behalf to discontinue)
      the disposition of Registrable Securities pursuant to the registration statement
      applicable to such Registrable Securities until such Holder (i) shall have
      received copies of such amended or supplemented Prospectus and, if so directed
      by the Company, such Holder shall deliver to the Company (at the Company’s
      expense) all copies, other than permanent file copies, then in such Holder’s
      possession of the Prospectus covering such Registrable Securities at the time
      of
      receipt of such notice or (ii) shall have received notice from the Company
      that
      the disposition of Registrable Securities pursuant to the Relevant Registration
      may continue.

    


    
      
         

      

      
        14

        
          

        

      

      
         

      

       

    

    (d) The
      Company, the Guarantors and the Controlling Shareholders shall, so long as
      any
      Registrable Securities remain outstanding, cause each Additional Guarantor
      upon
      the creation or acquisition by the Company of such Additional Guarantor, to
      (i)
      execute and deliver a supplemental indenture to the Indenture and (ii) deliver
      to the Trustee an opinion of counsel to the effect that (A) the supplemental
      indenture has been duly executed and authorized and (B) the supplemental
      indenture constitutes a valid, binding and enforceable obligation of such
      Additional Guarantor, except insofar as enforcement thereof may be limited
      by
      bankruptcy, insolvency or similar laws (including, without limitation, all
      laws
      relating to fraudulent transfers) and except insofar as enforcement thereof
      is
      subject to general principles of equity.

    


    (e) The
      Company may require each Holder of Registrable Securities as to which any
      registration pursuant to Section 2(a) or 3(a), as the case may be, is being
      effected to furnish to the Company such information regarding such Holder and
      such Holder’s intended method of distribution of such Registrable Securities as
      the Company may from time to time reasonably request in writing, but only to
      the
      extent that such information is required in order to comply with the Securities
      Act. Each such Holder agrees to notify the Company as promptly as practicable
      of
      any inaccuracy or change in information previously furnished by such Holder
      to
      the Company or of the occurrence of any event in either case as a result of
      which any Prospectus relating to such registration contains or would contain
      an
      untrue statement of a material fact regarding such Holder or such Holder’s
      intended method of disposition of such Registrable Securities or omits to state
      any material fact regarding such Holder or such Holder’s intended method of
      disposition of such Registrable Securities required to be stated therein or
      necessary to make the statements therein not misleading, and promptly to furnish
      to the Company any additional information required to correct and update any
      previously furnished information or required so that such Prospectus shall
      not
      contain, with respect to such Holder or the disposition of such Registrable
      Securities, an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading.

    


    (f) The
      Company shall comply with all applicable rules and regulations of the Commission
      and make generally available to its securityholders earning statements (which
      need not be audited) satisfying the provisions of Section 11(a) of the
      Securities Act and Rule 158 thereunder (or any similar rule promulgated under
      the Securities Act) no later than (i) 40 days after the end of any 12-month
      period (or 60 days after the end of any 12-month period if such period is a
      fiscal year) if the Company is at such time an “accelerated filer” and (ii) 45
      days after the end of any 12-month period (or 90 days after the end of any
      12-month period if such period is a fiscal year) if the Company is not an
“accelerated filer” commencing on the first day of the first fiscal quarter of
      the Company commencing after the effective date of the Relevant Registration
      Statement, which statements shall cover said 12-month periods.

    


    (g) The
      Company shall provide a CUSIP number for all Registrable Securities covered
      by
      the Relevant Registration Statement not later than the initial effective date
      of
      such Relevant Registration Statement and provide the Trustee for the Notes
      and
      the transfer agent for the Shares with printed certificates for the Registrable
      Securities that are in a form eligible for deposit with The Depository Trust
      Company.

    


    (h) The
      Company shall use its reasonable efforts to provide such information as is
      required for any filings required to be made with the National Association
      of
      Securities Dealers, Inc.

    


    
      
         

      

      
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    (i) Until
      the
      expiration of two years after the Closing Date, the Company will not, and will
      not permit any of its “affiliates” (as defined in Rule 144) to, resell any of
      the Securities that have been reacquired by any of them except pursuant to
      an
      effective registration statement under the Securities Act.

    


    (j) The
      Company shall enter into such customary agreements and take all such other
      necessary, reasonable and lawful actions in connection therewith (including
      those requested by the Majority Holders of the Registrable Securities covered
      by
      the Relevant Registration Statement) in order to expedite or facilitate
      disposition of such Registrable Securities.

    


    
      	 	
              5.

            	
              Holder’s
                Obligations.

            


    

    


    Each
      Holder agrees, by acquisition of the Registrable Securities, that no Holder
      of
      Registrable Securities shall be entitled to sell any of such Registrable
      Securities pursuant to the Shelf Registration Statement or to receive a
      Prospectus relating thereto, unless such Holder has furnished the Company with
      a
      Notice and Questionnaire as required pursuant to Section 2(c) hereof (including
      the information required to be included in such Notice and Questionnaire) and
      the information set forth in the next sentence. Each Notice Holder agrees
      promptly to furnish to the Company all information required to be disclosed
      in
      order to make the information previously furnished to the Company by such Notice
      Holder not misleading and any other information regarding such Notice Holder
      and
      the distribution of such Registrable Securities as may be required to be
      disclosed in the Shelf Registration Statement under applicable law or pursuant
      to Commission comments. Each Holder further agrees not to sell any Registrable
      Securities pursuant to the Shelf Registration Statement without delivering,
      or
      causing to be delivered, a Prospectus to the purchaser thereof and, following
      termination of the Effective Period, to notify the Company, within 10 business
      days of a request by the Company, of the amount of Registrable Securities sold
      pursuant to the Shelf Registration Statement and, in the absence of a response,
      the Company may assume that all of the Holder’s Registrable Securities were so
      sold.

    


    
      	 	
              6.

            	
              Registration
                Expenses.

            


    

    


    The
      Company agrees to bear and to pay or cause to be paid promptly upon request
      being made therefor all expenses incident to the Company’s performance of or
      compliance with this Agreement, including, but not limited to, (a) all
      Commission and any NASD registration and filing fees and expenses,
      (b)
      all fees
      and expenses in connection with the qualification of the Securities for offering
      and sale under the State securities and Blue Sky laws referred to in Section
      4(a)(v) hereof, including reasonable fees and disbursements of one counsel
      for
      the placement agent or underwriters, if any, in connection with such
      qualifications,
      (c)
      all
      expenses relating to the preparation, printing, distribution and reproduction
      of
      the Relevant Registration Statement, the related Prospectus and each amendment
      or supplement to each of the foregoing, the certificates representing the
      Securities and all other documents relating hereto,
      (d)
      fees and
      expenses of the Trustee under the Indenture, any escrow agent or custodian,
      and
      of the registrar and transfer agent for the Shares,
      (e)
      fees,
      disbursements and expenses of counsel and independent certified public
      accountants of the Company (including the expenses of any opinions or “cold
      comfort” letters required by or incident to such performance and compliance)
      and
      (f)
      reasonable fees, disbursements and expenses of not more than one counsel for
      the
      Holders of Registrable Securities retained in connection with the Relevant
      Registration Statement, as selected by the Company (unless reasonably objected
      to by the Majority Holders of the Registrable Securities being registered,
      in
      which case the Majority Holders shall select such counsel for the Holders)
      (“Special
      Counsel”),
      and
      fees, expenses and disbursements of any other Persons, including special
      experts, retained by the Company in connection with such registration
      (collectively, the “Registration
      Expenses”).
      To
      the extent that any Registration Expenses are incurred, assumed or paid by
      any
      Holder of Registrable Securities or any underwriter or placement agent therefor,
      the Company shall reimburse such Person for the full amount of the Registration
      Expenses so incurred, assumed or paid promptly after receipt of a documented
      request therefor. Notwithstanding the foregoing, the Holders of the Registrable
      Securities being registered shall pay all underwriting discounts and commissions
      and placement agent fees and commissions attributable to the sale of such
      Registrable Securities and the fees and disbursements of any counsel or other
      advisors or experts retained by such Holders (severally or jointly), other
      than
      the counsel and experts specifically referred to above.

    


    
      
         

      

      
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              7.

            	
              Indemnification.

            


    

    


    (a) The
      Company and each of the Guarantors and the Controlling Shareholders shall
      jointly and severally indemnify and hold harmless each Holder (including,
      without limitation, the Purchaser), its affiliates, their respective officers,
      directors, employees, representatives and agents, and each person, if any,
      who
      controls such Holder within the meaning of the Securities Act or the Exchange
      Act (collectively referred to for purposes of this Section 7 and Section 8
      as a
      Holder) from and against any loss, claim, damage or liability, joint or several,
      or any action in respect thereof (including, without limitation, any loss,
      claim, damage, liability or action relating to purchases and sales of
      Securities), to which that Holder may become subject, whether commenced or
      threatened, under the Securities Act, the Exchange Act, any other federal or
      state statutory law or regulation, at common law or otherwise, insofar as such
      loss, claim, damage, liability or action arises out of, or is based upon,
      (i) any untrue statement or alleged untrue statement of a material fact
      contained in any such Registration Statement, (ii) any untrue statement or
      alleged untrue statement of a material fact contained in any Prospectus, any
      Free Writing Prospectus or any “issuer information” (“Issuer
      Information”)
      filed
      or required to be filed pursuant to Rule 433(d) under the Securities Act or
      (ii) any omission or alleged omission to state therein a material fact
      required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading, and shall reimburse each Holder promptly upon demand for any legal
      or other expenses reasonably incurred by that Holder in connection with
      investigating or defending or preparing to defend against or appearing as a
      third party witness in connection with any such loss, claim, damage, liability
      or action as such expenses are incurred; provided,
      however,
      that
      the Company, the Guarantors and the Controlling Shareholders shall not be liable
      in any such case to the extent that any such loss, claim, damage, liability
      or
      action arises out of, or is based upon, an untrue statement or alleged untrue
      statement in or omission or alleged omission from any of such documents in
      reliance upon and in conformity with any information provided by a Holder in
      its
      most recent Notice and Questionnaire; and provided,
      further,
      that
      with respect to any such untrue statement in or omission from any related
      preliminary prospectus, the indemnity agreement contained in this Section 7(a)
      shall not inure to the benefit of any Holder from whom the person asserting
      any
      such loss, claim, damage, liability or action received Securities to the extent
      that such loss, claim, damage, liability or action of or with respect to such
      Holder results from the fact that both (A) a copy of the final prospectus
      was not sent or given to such person at or prior to the written confirmation
      of
      the sale of such Securities to such person and (B) the untrue statement in
      or
      omission from the related preliminary prospectus was corrected in the final
      prospectus unless, in either case, such failure to deliver the final Prospectus
      was a result of non-compliance by the Company, the Guarantors and the
      Controlling Shareholders with Section 4. This indemnity agreement shall be
      in addition to any liability that the Company, the Guarantors and the
      Controlling Shareholders may otherwise have.

    


    
      
         

      

      
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    The
      Company, the Guarantors and the Controlling Shareholders also shall jointly
      and
      severally indemnify and hold harmless as provided in this Section 7(a) or
      contribute as provided in Section 7 hereof with respect to any loss, claim,
      damage, liability or action of each underwriter, if any, of Securities
      registered under the Relevant Registration Statement, its affiliates, their
      respective officers, directors, employees, representatives and agents, and
      each
      person, if any, who controls such underwriter within the meaning of the
      Securities Act or the Exchange Act on substantially the same basis as that
      of
      the indemnification of the selling Holders provided in this paragraph (a) and
      shall, if requested by any Holder, enter into an underwriting agreement
      reflecting such agreement.

    


    (b) Each
      Holder shall indemnify and hold
      harmless
      the Company, each Guarantor, each Controlling Shareholder and their respective
      affiliates, their respective officers, directors, employees, representatives
      and
      agents, and each person, if any, who controls the Company, any Guarantor or
      any
      Controlling Shareholder within the meaning of the Securities Act or the Exchange
      Act (collectively referred to for purposes of this Section 7(b) and Section
      8 as
      the Company), from and against any loss, claim, damage or liability, joint
      or
      several, or any action in respect thereof, to which the Company may become
      subject, whether commenced or threatened, under the Securities Act, the Exchange
      Act, any other federal or state statutory law or regulation, at common law
      or
      otherwise, insofar as such loss, claim, damage, liability or action arises
      out
      of, or is based upon, (i) any untrue statement or alleged untrue statement
      of a
      material fact contained in any such Registration Statement or any prospectus
      forming part thereof or in any amendment or supplement thereto or (ii) the
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading, but
      in
      each case only to the extent that the untrue statement or alleged untrue
      statement or omission or alleged omission was made in reliance upon and in
      conformity with any information furnished to the Company by such Holder in
      its
      most recent Notice and Questionnaire, and shall reimburse the Company for any
      legal or other expenses reasonably incurred by the Company in connection with
      investigating or defending or preparing to defend against or appearing as a
      third party witness in connection with any such loss, claim, damage, liability
      or action as such expenses are incurred; provided,
      however,
      that no
      such Holder shall be liable for any indemnity claims hereunder in excess of
      the
      amount of net proceeds received by such Holder from the sale of Securities
      pursuant to such Relevant Registration Statement unless
      such liability is the direct result of the Holder's gross negligence, willful
      misconduct or fraud.
      This
      indemnity agreement will be in addition to any liability which any such Holder
      may otherwise have.

    


    
      
         

      

      
        18

        
          

        

      

      
         

      

       

    

    (c) Promptly
      after receipt by an indemnified party under this Section 7 of notice of any
      claim or the commencement of any action, the indemnified party shall, if a
      claim
      in respect thereof is to be made against the indemnifying party pursuant to
      Section 7(a) or 6(b), notify the indemnifying party in writing of the claim
      or the commencement of that action; provided,
      however,
      that
      the failure to notify the indemnifying party shall not relieve it from any
      liability which it may have under this Section 7 except to the extent that
      it
      has been materially prejudiced (through the forfeiture of substantive rights
      or
      defenses) by such failure; and provided,
      further,
      that
      the failure to notify the indemnifying party shall not relieve it from any
      liability which it may have to an indemnified party otherwise than under this
      Section 7. If any such claim or action shall be brought against an indemnified
      party, and it shall notify the indemnifying party thereof, the indemnifying
      party shall be entitled to participate therein and, to the extent that it
      wishes, jointly with any other similarly notified indemnifying party, to assume
      the defense thereof with counsel reasonably satisfactory to the indemnified
      party.
      After
      notice from the indemnifying party to the indemnified party of its election
      to
      assume the defense of such claim or action, the indemnifying party shall not
      be
      liable to the indemnified party under this Section 7 for any legal or other
      expenses subsequently incurred by the indemnified party in connection with
      the
      defense thereof other than the reasonable costs of investigation; provided,
      however,
      that an
      indemnified party shall have the right to employ its own counsel in any such
      action, but the fees, expenses and other charges of such counsel for the
      indemnified party will be at the expense of such indemnified party unless (1)
      the employment of counsel by the indemnified party has been authorized in
      writing by the indemnifying party, (2) the indemnified party has reasonably
      concluded (based upon advice of counsel to the indemnified party) that there
      may
      be legal defenses available to it or other indemnified parties that are
      different from or in addition to those available to the indemnifying party,
      (3)
      a conflict or potential conflict exists (based upon advice of counsel to the
      indemnified party) between the indemnified party and the indemnifying party
      (in
      which case the indemnifying party will not have the right to direct the defense
      of such action on behalf of the indemnified party) or (4) the indemnifying
      party
      has not in fact employed counsel reasonably satisfactory to the indemnified
      party to assume the defense of such action within a reasonable time after
      receiving notice of the commencement of the action, in each of which cases
      the
      reasonable fees, disbursements and other charges of counsel will be at the
      expense of the indemnifying party or parties. It is understood that the
      indemnifying party or parties shall not, in connection with any proceeding
      or
      related proceedings in the same jurisdiction, be liable for the reasonable
      fees,
      disbursements and other charges of more than one separate firm of attorneys
      (in
      addition to any local counsel) at any one time for all such indemnified party
      or
      parties. Each indemnified party, as a condition of the indemnity agreements
      contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
      cooperate with the indemnifying party in the defense of any such action or
      claim. No indemnifying party shall be liable for any settlement of any such
      action effected without its written consent (which consent shall not be
      unreasonably withheld), but if settled with its written consent or if there
      be a
      final judgment for the plaintiff in any such action, the indemnifying party
      agrees to indemnify and hold harmless any indemnified party from and against
      any
      loss or liability by reason of such settlement or judgment or if the
      indemnifying party has not paid the expenses and fees for which it is liable
      20
      days after notice by the indemnified party of request for reimbursement. No
      indemnifying party shall, without the prior written consent of the indemnified
      party (which consent shall not be unreasonably withheld), effect any settlement
      of any pending or threatened proceeding in respect of which any indemnified
      party is or could have been a party and indemnity could have been sought
      hereunder by such indemnified party, unless such settlement (i) includes an
      unconditional release of such indemnified party from all liability on claims
      that are the subject matter of such proceeding and (ii) does not include a
      statement or admission of fault, culpability or a failure to act, by or on
      behalf of the indemnified party.

    


    
      
         

      

      
        19

        
          

        

      

      
         

      

       

    

    (d) The
      provisions of this Section 7 and Section 8 shall remain in full force and
      effect, regardless of any investigation made by or on behalf of any Holder,
      the
      Company, the Guarantors, the Controlling Shareholders or any of the indemnified
      Persons referred to in this Section 7 and Section 8, and shall survive the
      sale
      by a Holder of securities covered by the Relevant Registration
      Statement.

    


    
      	 	
              8.

            	
              Contribution.

            


    

    


    If
      the
      indemnification provided for in Section 7 is unavailable or insufficient to
      hold
      harmless an indemnified party under Section 7(a) or 7(b), then each indemnifying
      party shall, in lieu of indemnifying such indemnified party, contribute to
      the
      amount paid or payable by such indemnified party as a result of such loss,
      claim, damage or liability, or action in respect thereof, (i) in such
      proportion as shall be appropriate to reflect the relative benefits received
      by
      the Company, the Guarantors and the Controlling Shareholders from the offering
      and sale of the Notes, on the one hand, and a Holder with respect to the sale
      by
      such Holder of Securities, on the other, or (ii) if the allocation provided
      by clause (i) above is not permitted by applicable law, in such proportion
      as is
      appropriate to reflect not only the relative benefits referred to in clause
      (i)
      above but also the relative fault of the Company and each of the Guarantors
      and
      the Controlling Shareholders on the one hand and such Holder on the other with
      respect to the statements or omissions that resulted in such loss, claim, damage
      or liability, or action in respect thereof, as well as any other relevant
      equitable considerations. The relative benefits received by the Company and
      each
      of the Guarantors and the Controlling Shareholders on the one hand and a Holder
      on the other with respect to such offering and such sale shall be deemed to
      be
      in the same proportion as the total net proceeds from the offering of the Notes
      (before deducting expenses) received by or on behalf of the Company and each
      of
      the Guarantors and the Controlling Shareholders, on the one hand, and the total
      discounts and commissions received by such Holder with respect to the
      Securities, on the other, bear to the total gross proceeds from the sale of
      Securities. The relative fault shall be determined by reference to, among other
      things, whether the untrue or alleged untrue statement of a material fact or
      the
      omission or alleged omission to state a material fact relates to the Company
      and
      each of the Guarantors and the Controlling Shareholders or information supplied
      by the Company and each of the Guarantors and the Controlling Shareholders
      on
      the one hand or to any information contained in the relevant Notice and
      Questionnaire supplied by such Holder on the other, the intent of the parties
      and their relative knowledge, access to information and opportunity to correct
      or prevent such untrue statement or omission. The parties hereto agree that
      it
      would not be just and equitable if contributions pursuant to this Section 8
      were
      to be determined by pro
      rata
      allocation or by any other method of allocation that does not take into account
      the equitable considerations referred to herein. The amount paid or payable
      by
      an indemnified party as a result of the loss, claim, damage or liability, or
      action in respect thereof, referred to above in this Section 8 shall be deemed
      to include, for purposes of this Section 8, any legal or other expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending or preparing to defend any such action or claim. Notwithstanding
      the provisions of this Section 8, an indemnifying party that is a Holder of
      Securities shall not be required to contribute any amount in excess of the
      amount by which the total price at which the Securities sold by such
      indemnifying party to any purchaser exceeds the amount of any damages which
      such
      indemnifying party has otherwise paid or become liable to pay by reason of
      any
      untrue or alleged untrue statement or omission or alleged omission unless such
      party is guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) with respect to such statement or omission. No
      person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any person
      who was not guilty of such fraudulent misrepresentation. The Holders’
obligations to contribute pursuant to this Section 8 are several and not
      joint.

    


    
      
         

      

      
        20

        
          

        

      

      
         

      

       

    

    
      	 	
              9.

            	
              Rule
                144A and Rule 144.

            


    

    


    So
      long
      as any Registrable Securities remain outstanding, the Company shall use its
      reasonable best efforts to file the reports required to be filed by it under
      Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner
      and, if at any time the Company is not required to file such reports, it will,
      upon the written request of any Holder of Registrable Securities, make publicly
      available other information so long as necessary to permit sales of such
      Holder’s securities pursuant to Rules 144 and 144A. The Company, the Guarantors
      and the Controlling Shareholders covenant that they will take such further
      action as any Holder of Registrable Securities may reasonably request, all
      to
      the extent required from time to time to enable such Holder to sell Registrable
      Securities without registration under the Securities Act within the limitation
      of the exemptions provided by Rules 144 and 144A (including, without limitation,
      the requirements of Rule 144A(d)(4)). Upon the written request of any Holder
      of
      Registrable Securities, the Company, the Guarantors and the Controlling
      Shareholders shall deliver to such Holder a written statement as to whether
      it
      has complied with such requirements. Notwithstanding the foregoing, nothing
      in
      this Section 9 shall be deemed to require the Company to register any of its
      securities pursuant to the Exchange Act.

    


    
      	 	
              10.

            	
              Third
                Party Beneficiaries.

            


    

    


    The
      Other
      Investors are intended beneficiaries of this Agreement. Upon execution and
      delivery of an Accession Letter pursuant to the Purchase Agreement and the
      issuance and sale of the Other Notes pursuant to the terms of the Other
      Indenture, each Other Investor shall be entitled to the rights, and be subject
      to the obligations, of the Purchaser under this Agreement, on a pro-rated basis
      as to both the Purchaser and the other Other Investors, in accordance with
      the
      fraction (x) the numerator of which is the aggregate principal amount of the
      Other Notes then outstanding held by such Other Investor and (y) the denominator
      of which is the sum of the aggregate principal amount of the Notes and the
      aggregate principal amount of the Other Notes, in each case, then
      outstanding.

    


    
      	 	
              11.

            	
              Miscellaneous.

            


    

    


    (a) Amendments
      and Waivers.
      The
      provisions of this Agreement may not be amended, modified or supplemented,
      and
      waivers or consents to departures from the provisions hereof may not be given,
      unless the Company has obtained the written consent of Majority Holders.
      Notwithstanding the foregoing, a waiver or consent to depart from the provisions
      hereof with respect to a matter that relates exclusively to the rights of
      Holders whose Securities are being sold pursuant to the Relevant Registration
      Statement and that does not directly or indirectly affect the rights of other
      Holders may be given by Holders of a majority in aggregate amount of the
      Registrable Securities being sold by such Holders pursuant to the Relevant
      Registration Statement.

    


    
      
         

      

      
        21

        
          

        

      

      
         

      

       

    

    (b) Notices.
      All
      notices and other communications provided for or permitted hereunder shall
      be
      made in writing by hand-delivery, first-class mail, telecopier or air courier
      guaranteeing next-day delivery:

    


    (i) If
      to the
      Company, the Guarantors or the Controlling Shareholders, initially
      at the address set forth in the Purchase Agreement;

    


    (ii) If
      to the
      Purchaser, initially
      at its address set forth in the Purchase Agreement;
      and

    


    (iii) If
      to a
      Holder, to the address of such Holder set forth in the security register, the
      Notice and Questionnaire or other records of the Company.

    


    All
      such
      notices and communications shall be deemed to have been duly given: when
      delivered by hand, if personally delivered; one business day after being
      delivered to a next-day air courier; five business days after being deposited
      in
      the mail; and when receipt is acknowledged by the recipient’s telecopier
      machine, if sent by telecopier.

    


    (c) Successors
      and Assigns.
      This
      Agreement shall be binding upon the parties hereto and their respective
      successors and assigns.
      Unless
      otherwise provided herein, the
      Purchaser
      may
      assign its rights hereunder to any of
      its
affiliates,
      provided that such assignment shall be in compliance with the Securities
      Act.

    


    (d) Counterparts.
      This
      Agreement may be executed in any number of counterparts (which may be delivered
      in original form or by telecopier) and by the parties hereto in separate
      counterparts, each of which when so executed shall be deemed to be an original
      and all of which taken together shall constitute one and the same
      agreement.

    


    (e) Definition
      of Terms.
      For
      purposes of this Agreement, (a) the term “business day” means any day on which
      the New York Stock Exchange, Inc. is open for trading, (b) the term “subsidiary”
has the meaning set forth in Rule 405 under the Securities Act and (c)
      except where otherwise expressly provided, the term “affiliate” has the meaning
      set forth in Rule 405 under the Securities Act.

    


    (f) Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    


    (g) Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

    


    
      
         

      

      
        22

        
          

        

      

      
         

      

       

    

    (h) Remedies.
      In the
      event of a breach by the Company, any Guarantor or any Controlling Shareholder
      or by any Holder of any of their respective obligations under this Agreement,
      each Holder or the Company, any Guarantor or any Controlling Shareholder, as
      the
      case may be, in addition to being entitled to exercise all rights granted by
      law, including recovery of damages (other than the recovery of damages for
      a
      breach by the Company, any Guarantor or any Controlling Shareholder of their
      obligations under Section 2 hereof for which Additional Interest have been
      paid
      pursuant to Section 4 hereof), will be entitled to specific performance of
      its
      rights under this Agreement. The Company, each Guarantor, each Controlling
      Shareholder and each Holder agree that monetary damages would not be adequate
      compensation for any loss incurred by reason of a breach by it of any of the
      provisions of this Agreement and hereby further agree that, in the event of
      any
      action for specific performance in respect of such breach, it shall waive the
      defense that a remedy at law would be adequate.

    


    (i) No
      Inconsistent Agreements.
      Each of
      the Company, the Guarantors and the Controlling Shareholders represents,
      warrants and agrees that (i) it has not entered into, and shall not, on or
      after
      the date of this Agreement, enter into any agreement that is inconsistent with
      the rights granted to the Holders in this Agreement or otherwise conflicts
      with
      the provisions hereof, (ii) except for the registration rights agreement, dated
      October 2, 2006, by and among the Company and the investors that are parties
      thereto, it has not previously entered into any agreement which remains in
      effect granting any registration rights with respect to any of its debt
      securities to any person and (iii) without limiting the generality of the
      foregoing, without the written consent of the Holders of a majority in aggregate
      principal amount of the then outstanding Registrable Securities, it shall not
      grant to any person the right to request the Company to register any debt
      securities of the Company under the Securities Act unless the rights so granted
      are not in conflict or inconsistent with the provisions of this
      Agreement.

    


    (j) No
      Piggyback on Registrations.
      None of
      the Company, the Guarantors, the Controlling Shareholders and any of their
      respective security holders (other than the Holders of Registrable Securities
      in
      such capacity) shall have the right to include any securities of the Company
      in
      the Relevant Registration Statement other than Registrable
      Securities.

    


    (k) Severability.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law. If any term, provision, covenant or restriction of this
      Agreement is held by a court of competent jurisdiction to be invalid, illegal,
      void or unenforceable, the remainder of the terms, provisions, covenants and
      restrictions set forth herein shall remain in full force and effect and shall
      in
      no way be affected, impaired or invalidated, and the parties hereto shall use
      their reasonable best efforts to find and employ an alternative means to achieve
      the same or substantially the same result as that contemplated by such term,
      provision, covenant or restriction. It is hereby stipulated and declared to
      be
      the intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    


    (l) Survival.
      The
      respective indemnities, agreements, representations, warranties and each other
      provision set forth in this Agreement or made pursuant hereto shall remain
      in
      full force and effect regardless of any investigation (or statement as to the
      results thereof) made by or on behalf of any Holder of Registrable Securities,
      any director, officer or partner of such Holder, any agent or underwriter or
      any
      director, officer or partner thereof, or any controlling person of any of the
      foregoing, and shall survive delivery of and payment for the Registrable
      Securities pursuant to the Purchase Agreement and the transfer and registration
      of Registrable Securities by such Holder.

    


    
      
         

      

      
        23

        
          

        

      

      
         

      

       

    

    (m) Securities
      Held by the Company, etc.
      Whenever
      the consent or approval of Holders of a specified percentage of Securities
      is
      required hereunder, Securities held by the Company or its affiliates (other
      than
      subsequent Holders of Securities if such subsequent Holders are deemed to be
      affiliates solely by reason of their holdings of such Securities) shall not
      be
      counted in determining whether such consent or approval was given by the Holders
      of such required percentage.

    


    [Signature
      Page(s) to Follow]

    


    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    


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

    


     

    
      	 	
              AMERICAN
                DAIRY, INC.

               

              


              By: 
                /s/
                Leng You-Bin

              Name:
                Leng
                You-Bin

              Title:
                CEO

              


              


              
AMERICAN
                FLYING CRANE CORPORATION

              


              


              By: 
                /s/
                Leng You-Bin

              Name:
                Leng
                You-Bin

              Title: 
                Chairman

              


              


              


              /s/
                Leng You-Bin

              Leng
                You-Bin

              


              


              


              /s/
                Liu Hua

              Liu
                Hua

              


              



              CITADEL
                EQUITY FUND LTD.

              


              By:
                Citadel Limited Partnership, its Portfolio Manager

              


              By:
                Citadel Investment Group, L.L.C., its General Partner

              


              


              By: 
                /s/
                Andrew Fong

              Name:
                Andrew
                Fong

              Title:
                Authorized
                Signatory

            


    

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Annex
      A

    


    Form
      of selling securityholder notice and questionnaire

    


    The
      undersigned beneficial holder of the Guaranteed Senior Secured Convertible
      Notes
      due 2012 of American Dairy, Inc. (the “Company”), the subsidiary guarantees, or
      common stock, par value $0.001 per share (together with the notes and subsidiary
      guarantees, the “registrable securities”), of the Company understands that the
      Company has filed or intends to file with the Securities and Exchange Commission
      a registration statement on Form S-3 (the “shelf registration statement”) for
      the registration and resale under Rule 415 of the Securities Act of 1933, as
      amended (the “Securities Act”), of the registrable securities in accordance with
      the terms of the registration rights agreement (the “registration rights
      agreement”) among the Company, the subsidiary guarantors and the purchaser named
      therein. The registration rights agreement is available from the Company upon
      request at the address set forth below. All capitalized terms not otherwise
      defined herein shall have the meaning ascribed thereto in the registration
      rights agreement.

    


    Each
      beneficial owner of registrable securities is entitled to the benefits of the
      registration rights agreement. In order to sell or otherwise dispose of any
      registrable securities pursuant to the shelf registration statement, a
      beneficial owner of registrable securities generally will be required to be
      named as a selling securityholder in the related prospectus, deliver a
      prospectus to purchasers of registrable securities and be bound by those
      provisions of the registration rights agreement applicable to the beneficial
      owner (including indemnification provisions as described below). Beneficial
      owners are encouraged to complete and deliver this notice and questionnaire
      prior to the effectiveness of the shelf registration statement so that the
      beneficial owners may be named as selling securityholders in the related
      prospectus at the time of effectiveness. Upon receipt of a completed notice
      and
      questionnaire from a beneficial owner following the effectiveness of the shelf
      registration statement, the Company will, within 15 days after the date of
      receipt of such questionnaire, or if the use of the shelf registration statement
      is suspended at the time of receipt, within 15 days after the expiration of
      the
      suspension, file the amendments to the shelf registration statement or
      supplements to the related prospectus that are necessary to permit the holder
      to
      deliver the prospectus to purchasers of registrable securities. Notwithstanding
      the foregoing, we will not be required to file more than one post-effective
      amendment or supplement to the related prospectus during any 30-day
      period.

    


    Some
      legal consequences arise from being named as selling securityholders in the
      shelf registration statement and the related prospectus. Accordingly, holders
      and beneficial owners of registrable securities are advised to consult their
      own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the shelf registration statement and the
      related prospectus.

    


    Notice

    


    The
      undersigned beneficial owner (the “selling securityholder”) of registrable
      securities hereby gives notice to the Company of its intention to sell or
      otherwise dispose of registrable securities beneficially owned by it and listed
      below in Item 3 (unless otherwise specified under Item 3) pursuant to the shelf
      registration statement. The undersigned, by signing and returning this notice
      and questionnaire, understands that it will be bound by the terms and conditions
      of this notice and questionnaire and the registration rights
      agreement.

    


    The
      undersigned hereby provides the following information and represents and
      warrants that the information is accurate and complete:

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    Questionnaire

    


    
      	
              1.

            	
              Your
                Identity and Background as the Beneficial Holder of the Registrable
                Securities.

            


    

    


    
      	 	
              1.

            	
              Your
                full legal name:

            


    

    
      	 	 	 


    

    


    
      	 	
              2.

            	
              Your
                business address (including street address) (or residence if no business
                address), telephone number and facsimile
                number:

            


    

    


    Address:           

    
      	
            	 	 


    

    
      
        	
              	 	 


      

    

    
      
        	
              	 	 


      

    

    


    Telephone
      No.:

    
      
        	
              	 	 


      

    

    


    Fax
      No.:

    
      
        	
              	 	 


      

    

    


    
      	 	
              3.

            	
              Are
                you a broker-dealer registered pursuant to Section 15 of the Securities
                Exchange Act of 1934, as amended (the “Exchange
                Act”)?

            


    

    


    o Yes.   o
      No.

    


    
      	 	
              4.

            	
              If
                your response to Item 1(c) above is no, are you an “affiliate” of a
                broker-dealer registered pursuant to Section 15 of the Exchange
                Act?

            


    

    


    o Yes.   o
      No.

    


    For
      the
      purposes of this Item 1(c), an “affiliate” of a registered broker-dealer shall
      include any company that directly, or indirectly through one or more
      intermediaries, controls, or is controlled by, or is under common control with,
      such broker-dealer, and does not include any individuals employed by such
      broker-dealer or its affiliates.

    


    
      	 	
              5.

            	
              Full
                legal name of person through which you hold the registrable
                securities—(i.e. name of your broker or the DTC participant, if
                applicable, through which your Registered Securities are
                held):

            


    

    


    Name
      of
      broker:

    
      	
            	 	 


    

    


    DTC
      number:

    
      	
            	 	 


    

    


    Contact
      person:

    
      	
            	 	 


    

    


    Telephone
      number:

    
      	
            	 	 


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              2.

            	
              Your
                Relationship with American Dairy
                Inc.:

            


    

    


    
      	 	
              1.

            	
              Have
                you or any of your affiliates, officers, directors or principal equity
                holders (owners of 5% or more of the equity securities of the undersigned)
                held any position or office or have you had any other material
                relationship with American Dairy Inc. (or its predecessors or affiliates)
                within the past three years?

            


    

    


    o Yes.    o
      No.

    


    
      	 	
              2.

            	
              If
                your response to Item 2(a) above is yes, please state the nature
                and
                duration of your relationship with American Dairy
                Inc.:

            


    

    


    
      	
              3.

            	
              Your
                Interest in the Registrable
                Securities:

            


    

    


    
      	 	
              3.

            	
              State
                the type of registrable securities (notes and subsidiary guarantees
                or
                common stock) and the principal amount or number of such registrable
                securities beneficially owned by you. Check any of the following
                that
                applies to you.

            


    

    


    o I
      own notes and subsidiary guarantees:


    


    Principal
      amount and CUSIP No. of the notes and subsidiary guarantees beneficially
      owned:

    
      	
            	 	 


    

    


    CUSIP
      No(s):

    
      	
            	 	 


    

    


    o I
      own shares of common stock that were issued upon
      conversion of the notes: 

    


    Number
      of
      shares and CUSIP No. of the Common Stock beneficially owned:


    
      	
            	 	 


    

    


    CUSIP
      Number(s):


    
      	
            	 	 


    

    


    
      	 	
              4.

            	
              Other
                than as set forth in your response to Item 3(a) above, do you beneficially
                own any other securities of American Dairy
                Inc.?

            


    

    


    Yes  q
      No.

    


    
      	 	
              5.

            	
              If
                your answer to Item 3(b) above is yes, state the type, the aggregate
                amount and CUSIP No. of such other securities of American Dairy Inc.
                beneficially owned by you:

            


    

    


    Type:

    
      	
            	 	 


    

    


    Aggregate
      amount:


    
      	
            	 	 


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    CUSIP
      Number(s):


    
      	
            	 	 


    

    


    
      	 	
              6.

            	
              Did
                you acquire the securities listed in Item 3(a) above in the ordinary
                course of business?

            


    

    


    o Yes.   o
      No.

    


    
      	 	
              7.

            	
              At
                the time of your purchase of the securities listed in Item 3(a) above,
                did
                you have any agreements or understandings, directly or indirectly,
                with
                any person to distribute the
                securities?

            


    

    


    o Yes.   o
      No.

    


    
      	 	
              8.

            	
              If
                your response to Item 3(e) above is yes, please describe such agreements
                or understandings:

            


    

    


    4.
      Nature
      of Your Beneficial Ownership:

    


    
      	 	
              9.

            	
              If
                the name of the beneficial holder of the registrable securities set
                forth
                in your response to Item 1(a) above is that of a limited partnership,
                state the names of the general partners of such limited
                partnership:

            


    

    


    
      	
            	 	 


    

    
      	
            	 	 


    

    


    
      	 	
              10.

            	
              With
                respect to each general partner listed in Item 4(a) above who is
                not a
                natural person, and is not publicly held, name each shareholder (or
                holder
                of partnership interests, if applicable) of such general partner.
                If any
                of these named shareholders are not natural persons or publicly held
                entities, please provide the same information. This process should
                be
                repeated until you reach natural persons or a publicly held
                entity.

            


    

    
      	
            	 	 


    

    
      	
            	 	 


    

    


    
      	 	
              11.

            	
              Name
                your controlling shareholder(s) (the “Controlling Entity”). If the
                Controlling Entity is not a natural person and is not a publicly
                held
                entity, name each shareholder of such Controlling Entity. If any
                of these
                named shareholders are not natural persons or publicly held entities,
                please provide the same information. This process should be repeated
                until
                you reach natural persons or a publicly held
                entity.

            


    

    


    
      	 	
              (A)(i)
                

            	
              Full
                legal name of Controlling Entity(ies) or natural person(s) who have
                sole
                or shared voting or dispositive power over the registrable
                securities:

            


    

    


    
      	 	
              (ii)

            	
              Business
                address (including street address) (or residence if no business address),
                telephone number and facsimile number of such
                person(s):

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    Address:           

    
      	
            	 	 


    

    
      	
            	 	 


    

    
      	
            	 	 


    

    


    Telephone
      Number:


    
      	
            	 	 


    

    


    Fax
      Number:


    
      	
            	 	 


    

    


    
      	 	
              (iii)

            	
              Name
                of shareholders:

            


    

    


    
      	 	
              (B)(i)

            	
              Full
                legal name of Controlling
                Entity(ies):

            


    

    


    
      	 	
              (ii)

            	
              Business
                address (including street address) (or residence if no business address),
                telephone number and facsimile number of such
                person(s):

            


    

    


    Address:           

    
      	
            	 	 


    

    
      	
            	 	 


    

    
      	
            	 	 


    

    


    Telephone
      Number:


    
      	
            	 	 


    

    


    Fax
      Number:

    
      	
            	 	 


    

     

    
      	 	
              (iii)

            	
              Name
                of shareholders:

            


    

    


    If
      you need more space for this response, please attach additional sheets of paper.
      Please be sure to indicate your name and the number of the item being responded
      to on each such additional sheet of paper, and to sign each such additional
      sheet of paper before attaching it to this Questionnaire. Please note that
      you
      may be asked to answer additional questions depending on your responses to
      the
      following questions.

    


    
      	
              4.

            	
              Plan
                of Distribution:

            


    

    


    Except
      as set forth below, the undersigned (including its donees or pledgees) intends
      to distribute the registrable securities listed above in Item 3 pursuant to
      the
      shelf registration statement only as follows (if at all): Such registrable
      securities may be sold from time to time directly by the undersigned or,
      alternatively, through underwriters, broker-dealers or agents. If the
      registrable securities are sold through underwriters, broker-dealers or agents,
      the selling securityholder will be responsible for underwriting discounts or
      commissions or agents’ commissions. Such registrable securities may be sold in
      one or more transactions at fixed prices, at prevailing market prices at the
      time of sale, at varying prices determined at the time of sale or at negotiated
      prices. Such sales may be effected in transactions (which may involve block
      transactions) (i) on any national securities exchange or quotation service
      on
      which the registrable securities may be listed or quoted at the time of sale,
      (ii) in the over-the-counter market, or (iii) in transactions otherwise than
      on
      such exchanges or services or in the over-the-counter market. The undersigned
      may also sell registrable securities short and deliver registrable securities
      to
      close out short positions, or loan or pledge registrable securities to
      broker-dealers that in turn may sell such securities.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    State
      any
      exceptions here:

    


    
      	
            	 	 


    

    
      	
            	 	 




    Note:
      In
      no
      event will such method(s) of distribution take the form of an underwritten
      offering of the registrable securities without the prior agreement of the
      Company.

    


    The
      Company hereby advises each selling securityholder of the following
      Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone
      Interpretations regarding short selling:

    


    “An
      issuer filed a Form S-3 registration statement for a secondary offering of
      common stock which is not yet effective. One of the selling shareholders wanted
      to do a short sale of common stock “against the box” and cover the short sale
      with registered shares after the effective date. The issuer was advised that
      the
      short sale could not be made before the registration statement becomes
      effective, because the shares underlying the short sale are deemed to be sold
      at
      the time such sale is made. There would, therefore, be a violation of Section
      5
      if the shares were effectively sold prior to the effective
      date.”

    


    By
      returning this Election and Questionnaire, the selling securityholder will
      be
      deemed to be aware of the foregoing interpretation.

    


    The
      undersigned acknowledges that it understands its obligation to comply with
      the
      provisions of the Exchange Act, and the rules thereunder relating to stock
      manipulation, particularly Regulation M thereunder (or any successor rules
      or
      regulations) and the provisions of the securities act relating to prospectus
      delivery, in connection with any offering of registrable securities pursuant
      to
      the shelf registration statement. The undersigned agrees that neither it nor
      any
      person acting on its behalf will engage in any transaction in violation of
      such
      provisions.

    


    The
      selling securityholder hereby acknowledges its obligations under the
      registration rights agreement to indemnify and hold harmless certain persons
      set
      forth therein.

    


    Pursuant
      to the registration rights agreement, the Company and the subsidiary guarantors
      have agreed under certain circumstances to indemnify the selling securityholders
      against certain liabilities.

    


    In
      accordance with the undersigned’s obligation under the registration rights
      agreement to provide such information as may be required by law for inclusion
      in
      the shelf registration statement, the undersigned agrees to promptly notify
      the
      Company of any inaccuracies or changes in the information provided herein that
      may occur subsequent to the date hereof at any time while the shelf registration
      statement remains effective. All notices hereunder and pursuant to the
      registration rights agreement shall be made in writing at the address set forth
      below.

    


    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to items (1) through (6) above and the inclusion
      of such information in the shelf registration statement and the related
      prospectus. The undersigned understands that such information will be relied
      upon by the Company in connection with the preparation or amendment of the
      shelf
      registration statement and the related prospectus.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
      notice and questionnaire to be executed and delivered either in person or by
      its
      authorized agent.

     

    
      	 	
              Beneficial
                Owner

              


              


              By:
                __________________________________

              Name:
                

              Title:

            


    

    
       

    

    Dated:

    


    


    PLEASE
      RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

    


    American
      Dairy Inc. 

    Star
      City
      International Building, No. 10 

    Jiuxiangiao
      Road, C-16th
      Floor

    Beijing,
      The People’s Republic of China100016

    Attention:
      Judy F. Tu, Esq. 

    Fax
      number: (86) 1084567768

    


    with
      a
      copy to:

    


    Hodgson
      Ross LLP

    1540
      Broadway, 24th
      Floor

    New
      York,
      New York 10036

    Attention:
      Jeffrey A. Rinde, Esq.

    Fax
      number: (212) 751-0928