Document:

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                                                                 EXHIBIT 10.32.1

                              AMENDMENT NUMBER ONE
                  TO INTERCREDITOR AND SUBORDINATION AGREEMENT

         This AMENDMENT NUMBER ONE TO INTERCREDITOR AND SUBORDINATION (this
"Amendment") is entered into as of December 20, 2004, among WELLS FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative
agent and senior secured lender (the "Original Lender") under and pursuant to
the Original Loan Agreement, HSBC BANK USA, solely in its capacity as collateral
agent under the Indenture Loan Documents (in such capacity, together with its
successors and assigns (if any) in such capacity, the "Collateral Agent"),
PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (the "Parent" ) and
those certain subsidiaries of the Parent signatory hereto (the "Subsidiaries";
and, together with the Parent, the "Credit Parties"). All capitalized terms used
in this Amendment and not otherwise defined herein shall have the meanings
assigned to them in the below-defined Intercreditor Agreement.:

         WHEREAS, the Original Lender, Collateral Agent and Credit Parties are
parties to that certain Intercreditor and Subordination Agreement (the
"Intercreditor Agreement"), dated as of October 21, 2003; and

         WHEREAS, the Original Lender, Collateral Agent and Credit Parties have
agreed to amend the Intercreditor Agreement as set forth herein.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

         1.       Amendment of the Intercreditor Agreement.

                  (a) Recital A. of the Intercreditor Agreement is hereby
amended and restated in its entirety to read as follows:

                  "A.      Certain of the Credit Parties, certain other foreign
                  subsidiaries (the "Foreign Indenture Obligors") of the Parent
                  (including, among others, Philipp Brothers Netherlands III
                  B.V. (the "Dutch Issuer" and, together with the Parent, the
                  "Issuers")), the Collateral Agent, and HSBC, in its capacity
                  as Trustee (in such capacity, together with its successors and
                  assigns (if any) in such capacity, the "Trustee"), have
                  entered into an Indenture, dated as of October 21, 2003, as
                  amended by that certain First Supplemental Indenture dated as
                  of June 25, 2004 and that certain Second Supplemental
                  Indenture dated as of December 8, 2004 (as amended, restated,
                  supplemented or otherwise modified from time to time in
                  conformance with the provisions of this Agreement, the
                  "Indenture"), pursuant to which the Issuers have issued
                  127,491 Units (and, together with any additional units that
                  may be issued from time to time thereunder or exchanged
                  therefor or for such

<PAGE>

                  additional units, the "Units"), consisting of $103,207,000
                  aggregate principal amount of 13.0% Senior Secured Notes due
                  2007 issued by the Parent (and, together with any additional
                  notes that may be issued by the Parent from time to time
                  thereunder or exchanged therefor or for such additional notes,
                  the "U.S. Notes") and $24,284,000 aggregate principal amount
                  of 13.0% Senior Secured Notes due 2007 issued by the Dutch
                  Issuer (and, together with any additional notes that may be
                  issued by the Dutch Issuer from time to time thereunder or
                  exchanged therefor or for such additional notes, the "Dutch
                  Notes" and, together with the U.S. Notes, the "Notes"). The
                  repayment of the Indenture Secured Obligations (as hereinafter
                  defined) is secured by, among other things, security interests
                  in and liens on the assets and properties described in the
                  Domestic Collateral Agreements (as defined in the Indenture)
                  dated as of the date hereof (in each case, as amended,
                  restated, supplemented or otherwise modified from time to time
                  in conformance with the provisions of this Agreement, the
                  "Indenture Domestic Collateral Agreements" and, together with
                  the Indenture and all Control Agreements (as defined in the
                  U.S. Security Agreement (as defined in the Indenture))
                  executed and delivered in connection therewith, the "Indenture
                  Agreements"), made by certain of the Credit Parties in favor
                  of the Collateral Agent for the benefit of the Collateral
                  Agent, the Trustee, and the Noteholders."

                  (b)      Recital B. of the Intercreditor Agreement is hereby
amended and restated in its entirety to read as follows:

                           "B.      The Credit Parties and the Original Lender
                  have entered into a Loan and Security Agreement dated as of
                  October 21, 2003 (as amended, restated, supplemented or
                  otherwise modified from time to time in conformance with the
                  provisions of this Agreement, the "Original Loan Agreement")
                  and the Credit Parties and the Original Lender have entered
                  into those certain guaranties, guarantor security agreements
                  (as amended, restated, supplemented or otherwise modified from
                  time to time in conformance with the provisions of this
                  Agreement, the "Security Documents") pursuant to which the
                  Original Lender agreed, upon the terms and conditions stated
                  therein, to make loans and advances to and to issue letters of
                  credit for the account of the Credit Parties up to the
                  principal amount of $40,000,000 (of which no more than
                  $22,500,000 would be available for the issuance of letters of
                  credit and no more than $17,500,000 would be available for
                  advances), together with the fees, interest, expenses and
                  other obligations due under the Original Loan Agreement. The
                  repayment of the Obligations (as that term is defined in the
                  Original Loan Agreement) is secured by first priority security
                  interests in and liens on the Collateral (as defined below)."

                                      -2-
<PAGE>

                  (c)      Section 1.03 of the Intercreditor Agreement hereby is
amended by amending and restating the defined term "Maximum Lender Priority Debt
Amount" to read as follows:

                           ""Maximum Lender Priority Debt Amount" means, as of
                  any date of determination, (a) the undrawn amount of all
                  outstanding letters of credit plus unreimbursed drawings in
                  respect thereof that are Loan Agreement Secured Obligations as
                  of such date up to, but not in excess of, $22,500,000, plus
                  (b) the principal amount of Advances (as that term is defined
                  in the Original Loan Agreement) or revolving loans under any
                  Loan Agreement as of such date up to, but not in excess of,
                  $17,500,000, plus (c) any premium, interest, fees, attorneys'
                  fees, costs, charges, expenses, indemnities, and all other
                  amounts payable under a Loan Agreement or other Lender Loan
                  Documents or in respect of the Loan Agreement Secured
                  Obligations (including, without duplication, all guaranties in
                  respect thereof), plus (d) the Bank Product Obligations not to
                  exceed the Bank Product Reserve; and including, for each
                  amount specified in clauses (a), (b), (c), and (d) all amounts
                  accruing on or after the commencement of any Insolvency
                  Proceeding relating to any Credit Party or any other Person
                  irrespective of whether a claim for all or any portion of such
                  amount is allowable or allowed in any Insolvency Proceeding."

                  (d)      Section 5.02(d) of the Intercreditor Agreement is
hereby amended and restated in its entirety to read as follows:

                           "(d) Notwithstanding anything to the contrary herein,
                  in no event shall Indebtedness represented by any units or
                  notes issued pursuant to the Indenture, including any Units or
                  Notes (or represented by any other evidence of indebtedness
                  for borrowed money under the Units, the Notes, the Indenture
                  or the guarantees related thereto) at any time exceed an
                  aggregate principal amount equal to $127,491,000."

         2.       Choice of Law. The validity of this Amendment, its
construction, interpretation and enforcement, and the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance
with the laws of the State of New York.

         3.       Counterparts; Telefacsimile or Electronic Mail Execution. This
Amendment may be executed in any number of counterparts and by different parties
and separate counterparts, each of which when so executed and delivered, shall
be deemed an original, and all of which, when taken together, shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Amendment by telefacsimile or electronic mail shall be effective as
delivery of a manually executed counterpart of this Amendment. Any party
delivering an executed counterpart of this Amendment by telefacsimile or
electronic mail

                                      -3-
<PAGE>

also shall deliver a manually executed counterpart of this Amendment but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.

         4.       Effect on Intercreditor Agreement.

                  (a)      The Intercreditor Agreement, as amended hereby, shall
be and remain in full force and effect in accordance with its terms and hereby
is ratified and confirmed in all respects. The modifications herein are limited
to the specifics hereof, shall not apply with respect to any facts or
occurrences other than those on which the same are based, shall not excuse
future non-compliance with the Intercreditor Agreement, and shall not operate as
a consent to any further or other matter, under the Intercreditor Agreement.

                  (b)      Upon and after the effectiveness of this Amendment,
each reference in the Intercreditor Agreement to "this Agreement", "hereunder",
"herein", "hereof" or words of like import referring to the Intercreditor
Agreement shall mean and be a reference to the Intercreditor Agreement as
modified hereby.

                  (c)      To the extent that any terms and conditions in the
Intercreditor Agreement shall contradict or be in conflict with any terms or
conditions of the Intercreditor Agreement, after giving effect to this
Amendment, such terms and conditions are hereby deemed modified or amended
accordingly to reflect the terms and conditions of the Intercreditor Agreement
as modified hereby.

                            [Signature page follows]

                                      -4-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.

ORIGINAL LENDER:            WELLS FARGO FOOTHILL, INC.,
                            a California corporation,
                            as Agent and a Lender
                            under the Original Loan Agreement

                            By: /s/ Vincent J. Egan, Jr.
                                ----------------------------
                                Name: Vincent J. Egan, Jr.
                                Title: Vice President

<PAGE>

COLLATERAL                  HSBC BANK USA,
AGENT:                      solely in its capacity as Collateral Agent (and not
                            individually)
                            under the Indenture

                            By: /s/ Herawattee Alli
                               --------------------------------
                                Name: Herawattee Alli
                                Title: Assistant Vice President

<PAGE>

PHIBRO ANIMAL HEALTH CORPORATION, INC.,
a New York corporation

By: /s/ Jack C. Bendheim
    -----------------------------
    Name:
    Title:

PHIBRO ANIMAL HEALTH HOLDINGS, INC.,
a Delaware corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

PRINCE AGRIPRODUCTS, INC.,
a Delaware corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

PHIBRO-TECH, INC.,
a Delaware corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

PHIBRO ANIMAL HEALTH U.S., INC., a Delaware
corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

<PAGE>

PHIBROCHEM, INC.,
a New Jersey corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

WESTERN MAGNESIUM CORP.,
a California corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

CP CHEMICALS, INC.,
a New Jersey corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------

PHIBRO CHEMICALS, INC.,
a New York corporation

By: /s/ David C. Storbeck
    -----------------------------
Name:
      ---------------------------
Title:
      ---------------------------<PAGE>

                                                                   EXHIBIT 10.37

                                   $22,491,000
                           [PHIBRO ANIMAL HEALTH LOGO]
                           22,491 UNITS CONSISTING OF

     $18,207,000 13% SENIOR SECURED NOTES DUE 2007 OF PHIBRO ANIMAL HEALTH
                                  CORPORATION

                                       AND

  $4,284,000 13% SENIOR SECURED NOTES DUE 2007 OF PHILIPP BROTHERS NETHERLANDS
                                    III B.V.

                               PURCHASE AGREEMENT

                                                                December 9, 2004

JEFFERIES & COMPANY, INC.
520 Madison Avenue
12th Floor
New York, NY 10022

Ladies and Gentlemen:

         Phibro Animal Health Corporation, a New York corporation (the "Company"
or the "U.S. Issuer"), Philipp Brothers Netherlands III B.V., a Dutch private
company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) and an indirect wholly-owned subsidiary of the Company (the
"Dutch Issuer" and, together with the U.S. Issuer, the "Issuers"), the Domestic
Guarantors (as defined below) (together with the U.S. Issuer, the "Domestic
Obligors") parties hereto and the Foreign Guarantors (as defined below)
(together with the Dutch Issuer, the "Foreign Obligors" and, together with the
Domestic Obligors, the "Obligors") parties hereto hereby agree (this
"Agreement") with you as follows:

         1. ISSUANCE OF UNITS. Subject to the terms and conditions herein
contained, the Issuers propose to issue and sell to Jefferies & Company, Inc.
(the "Initial Purchaser") 22,491 Units (each a "Unit" and, collectively, the
"Units"), each Unit consisting of $809.5238095 principal amount of 13% Senior
Secured Notes due 2007 issued by the Company (the "U.S. Notes") and $190.4761905
principal amount of 13% Senior Secured Notes due 2007 issued by the Dutch Issuer
(the "Dutch Notes" and, together with the U.S. Notes, the "Notes"). The Notes,
as Units, will be issued pursuant to an indenture (as supplemented by the
Supplemental Indenture dated as of June 25, 2004 the "Existing Indenture" and,
as further supplemented by the Second Supplemental Indenture dated as of
December 8, 2004 (the "Second Supplemental Indenture"), the "Indenture"), dated
as of October 21, 2003, by and among the Issuers, the Guarantors (as defined
below) parties thereto, and HSBC Bank USA, National Association, as trustee (in
such capacity, the "Trustee") and as collateral agent (in such capacity, the
"Collateral Agent"). Capitalized terms used but not defined herein shall have
the meanings set forth in the Indenture.

         The Units will be offered and sold to the Initial Purchaser pursuant to
an exemption from the registration requirements under the Securities Act of
1933, as amended (the "Act"). Upon original issuance thereof, and until such
time as the same is no longer required under the applicable requirements of the
Act, the Units and Notes shall bear the legends set forth in the final offering
circular, dated the date hereof (the "Final Offering Circular"). The Issuers
have prepared a preliminary offering circular, dated

<PAGE>

November 18, 2004 (the "Preliminary Offering Circular"), and the Final Offering
Circular relating to the offer and sale of the Units (the "Offering"). "Offering
Circular" means, as of any date or time referred to in this Agreement, the most
recent offering circular (whether the Preliminary Offering Circular or the Final
Offering Circular, and any amendment or supplement to either such document),
including, without limitation, exhibits and schedules thereto.

         In connection with the sale of the Units, the Company obtained the
requisite consents of holders of 105,000 of its existing units (the "Existing
Units") consisting of $85.0 million aggregate principal amount of its 13% Senior
Secured Notes due 2007 previously issued by the Company under the Indenture (the
"Existing U.S. Notes") and $20.0 million aggregate principal amount of its 13%
Senior Secured Notes due 2007 previously issued by the Dutch Issuer under the
Indenture (the "Existing Dutch Notes" and, together with the Existing U.S.
Notes, the "Existing Notes") to amend the Indenture to, among other things,
permit the issuance of the Units, in each case, as more fully described in that
certain Consent Solicitation Statement dated November 18, 2004 (as amended by an
Amendment and Supplement dated November 23, 2004 to Consent Solicitation
Statement and as further amended by an Amendment and Supplement dated November
30, 2004, the "Solicitation Statement") of the Company (the "Consent
Solicitation").

         2. TERMS OF OFFERING. The Initial Purchaser has advised the Issuers,
and the Issuers understand, that the Initial Purchaser will make offers to sell
(the "Exempt Resales") some or all of the Units purchased by the Initial
Purchaser hereunder on the terms set forth in the Final Offering Circular, as
amended or supplemented, to persons (the "Subsequent Purchasers") whom the
Initial Purchaser (i) reasonably believes to be "qualified institutional buyers"
as defined in Rule 144A under the Act, as such Rule may be amended from time to
time ("QIBs"), (ii) reasonably believes (based upon written representations made
by such persons to the Initial Purchaser) to be institutional "accredited
investors" ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) or
(7) under the Act or (iii) reasonably believes to be non-U.S. persons in
reliance upon Regulation S under the Act.

         Pursuant to the Indenture, (x) all Domestic Restricted Subsidiaries of
the Company, jointly and severally, shall fully and unconditionally guarantee,
on a senior secured basis, to each holder of the Notes, the Collateral Agent and
the Trustee, the payment and performance of the Issuers' respective obligations
under the Indenture and the Notes (each such subsidiary being referred to herein
as a "Domestic Guarantor" and such subsidiaries being referred to herein,
collectively, as the "Domestic Guarantors"), such guarantee being referred to
herein as a "Domestic Guarantee", (y) all Restricted Subsidiaries of the Dutch
Issuer, jointly and severally, shall fully and unconditionally guarantee, on a
senior secured basis, to each holder of the Dutch Notes, the Collateral Agent
and the Trustee, the payment and performance of the Dutch Issuer's obligations
under the Indenture and the Dutch Notes (each such subsidiary being referred to
herein as a "Foreign Guarantor" and such subsidiaries being referred to herein,
collectively, as the "Foreign Guarantors" and, together with the Domestic
Guarantors, the "Guarantors"), such guarantee being referred to herein as a
"Foreign Guarantee", and (z) the Company shall fully and unconditionally
guarantee, on a senior secured basis, to each holder of the Dutch Notes, the
Collateral Agent and the Trustee, the payment and performance of the Dutch
Issuer's obligations under the Indenture and the Dutch Notes, such guarantee
being referred to herein as the "Company Guarantee".

         Pursuant to the terms of (1) the Domestic Collateral Agreements, the
Notes, the Domestic Guarantees and the Company Guarantee will (and the Existing
Notes, the existing Domestic Guarantees and the existing Company Guarantee (as
each such term is defined in the Indenture) will continue to) be secured by
Liens in substantially all of the assets of the Company and the assets of the
Domestic Guarantors (other than real property and interests therein), including,
without limitation, a pledge of the Capital Stock owned directly by the Company
and such Domestic Guarantors (provided, however, that no such pledge will
include more than 65% of the Voting Stock of any Foreign Subsidiary directly
owned by

<PAGE>

the Company or any such Domestic Guarantor) and (2) the Foreign Collateral
Agreements (other than the Floating Charge Agreement (as defined below)), upon
execution of the Floating Charge Agreement by an EU-qualified institution,
acting as sub-collateral agent thereunder, and filing thereof in accordance with
Belgian law (the "Belgium Condition"), the Floating Charge Agreement, the Dutch
Notes and the Foreign Guarantees will (and the Existing Dutch Notes and the
existing Foreign Guarantees (as such term is defined in the Indenture) will
continue to) be secured by Liens consisting of a first priority pledge of all of
the accounts receivable, a first priority security interest or floating charge
on the inventory (to the extent permitted by applicable law), a first priority
mortgage on substantially all real property of each of the Dutch Issuer and each
Foreign Guarantor, a first priority pledge of 100% of the Capital Stock of each
direct Subsidiary of each of the Dutch Issuer and each such Foreign Guarantor
and a first priority pledge of the intercompany loans made by the Dutch Issuer
to its Restricted Subsidiaries, which Liens, in each case, shall be subject to
Permitted Liens.

         Holders of the Units (including, without limitation, Subsequent
Purchasers) will have the registration rights set forth in the registration
rights agreement applicable to the Units and Notes (the "Registration Rights
Agreement"), to be executed on and dated as of the Closing Date, as such term is
defined below. Pursuant to the Registration Rights Agreement, the Issuers will
agree, among other things, to file with the Securities and Exchange Commission
(the "SEC") (a) a registration statement under the Act registering the offer and
sale of senior secured units (the "Exchange Units") and senior secured notes
(the "Exchange Notes") which shall be identical to the Units and the underlying
Notes, respectively (except that the Exchange Units and Exchange Notes shall
have been registered pursuant to such registration statement, will not be
subject to restrictions on transfer or contain additional interest provisions)
to be offered in exchange for the Units and the underlying Notes (such offer to
exchange being referred to as the "Exchange Offer"), and/or (b) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement") relating to the resale by certain holders
of the Units and the underlying Notes. If required under the Registration Rights
Agreement, the Issuers will issue Exchange Units and Exchange Notes to the
Initial Purchaser (the "Private Exchange Units" and "Private Exchange Notes",
respectively). If the Issuers shall fail to satisfy their respective obligations
under the Registration Rights Agreement, they will be required to pay additional
interest to the holders of the Units and underlying Notes under certain
circumstances, as set forth in the Registration Rights Agreement. Such
registration statements may include Exchange Units and Exchange Notes with
respect to the Units, Notes, Existing Units and Existing Notes.

         This Agreement, the Indenture, the Collateral Agreements, the
Registration Rights Agreement, the Units, the Notes, the Guarantees, the Company
Guarantee, the Exchange Units, the Exchange Notes, the Private Exchange Units
and the Private Exchange Notes are referred to herein as the "Documents." As
used herein, unless the context otherwise requires, the terms "Units" and
"Exchange Units" shall include the underlying Notes and underlying Exchange
Notes, respectively.

         3. PURCHASE, SALE AND DELIVERY. On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the selling
restrictions, terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
from the Issuers, 22,491 Units for an aggregate purchase price of
$22,266,090.00. Delivery to the Initial Purchaser of and payment for the Units
shall be made at a closing (the "Closing") to be held at 10:00 a.m., New York
time, on December 21, 2004 (the "Closing Date") at the New York offices of
Mayer, Brown, Rowe & Maw LLP.

         The Issuers shall deliver to the Initial Purchaser one or more
certificates representing the Units and underlying Notes in definitive form, for
your account registered in such names and denominations as the Initial Purchaser
may request no later than 9:00 p.m. two days immediately preceding the Closing
Date, against payment by the Initial Purchaser of the purchase price therefor by

<PAGE>

immediately available Federal funds bank wire transfer to such bank account or
accounts as the Issuers shall designate to the Initial Purchaser at least two
business days prior to the Closing. The certificates representing the Units in
definitive form shall be made available to the Initial Purchaser for inspection
at the New York offices of Mayer, Brown, Rowe & Maw LLP (or such other place as
shall be reasonably acceptable to the Initial Purchaser) not later than 10:00
a.m. one business day immediately preceding the Closing Date. Units to be
represented by one or more definitive global securities in book-entry form will
be deposited on the Closing Date, by or on behalf of the Issuers, with The
Depository Trust Company ("DTC") or its designated custodian, and registered in
the name of Cede & Co.

         4. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS. Each Obligor, on
behalf of itself and its Subsidiaries (as defined below), represents and
warrants to the Initial Purchaser that, as of the date hereof and as of the
Closing Date:

(a)   The Preliminary Offering Circular as of its date did not, and the Final
      Offering Circular as of its date did not, and as of the Closing Date will
      not, and each supplement or amendment thereto as of its date will not,
      contain any untrue statement of a material fact or omit to state any
      material fact (except, in the case of the Preliminary Offering Circular,
      for pricing terms and other financial terms intentionally left blank)
      necessary in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading; provided,
      however, that no Obligor makes any representation or warranty as to
      information furnished in writing to the Company by the Initial Purchaser
      specifically for use therein. No injunction or order has been issued that
      either (i) asserts that any of the transactions contemplated by this
      Agreement or any other Document is subject to the registration
      requirements of the Act, or (ii) would prevent or suspend the issuance or
      sale of any of the Notes or the use of the Preliminary Offering Circular,
      the Final Offering Circular or any amendment or supplement thereto, in any
      jurisdiction. Each of the Preliminary Offering Circular and the Final
      Offering Circular, as of their respective dates contained, and the Final
      Offering Circular, as amended or supplemented, as of the Closing Date will
      contain, all the information specified in, and meet the requirements of,
      Rule 144A(d)(4) under the Act.

(b)   Each corporation, partnership, or other entity in which the Company,
      directly or indirectly through any of its subsidiaries, owns more than
      fifty percent (50%) of any class of Capital Stock is listed on Schedule I
      attached hereto (the "Subsidiaries"). The Capital Stock of each such
      Subsidiary owned, directly or indirectly, by the Company, is owned by the
      Company, as of the Closing Date, free and clear of all Liens other than
      Permitted Liens and in the case of La Cornubia S.A, Liens in favor of its
      creditors (including The Republic of France) pursuant to bankruptcy
      proceedings filed with respect to La Cornubia S.A. in The Republic of
      France. Each Unrestricted Subsidiary of the Company set forth on such
      Schedule has an asterisk ("*") next to the name of such Unrestricted
      Subsidiary.

(c)   Such Obligor and its Subsidiaries (i) have been duly organized or formed,
      as the case may be, are validly existing and are in good standing (to the
      extent relevant in such jurisdiction) under the laws of their jurisdiction
      of organization or formation, as the case may be, (ii) have all requisite
      corporate or other power and corporate or other authority to carry on
      their business and to own, lease and operate their properties and assets,
      and (iii) are duly qualified or licensed to do business and are in good
      standing (to the extent relevant in such jurisdiction) as a foreign
      corporation, partnership or other entity as the case may be, authorized to
      do business in each jurisdiction in which the nature of such businesses or
      the ownership or leasing of such properties requires such qualification,
      except where the failure to be so qualified would not, individually or in
      the aggregate, have a material adverse effect on (A) the properties,
      business, prospects, operations, earnings, assets, liabilities or
      condition (financial or otherwise) of the Company and its

<PAGE>

      Subsidiaries, taken as a whole, (B) the ability of such Obligor to perform
      its obligations in all material respects under any Document to which it is
      a party, (C) the enforceability of any Collateral Agreement or the
      attachment, perfection or priority of any of the Liens intended to be
      created thereby or (D) the validity of any of the Documents or the
      consummation of any of the transactions contemplated therein (each, a
      "Material Adverse Effect").

(d)   All of the issued and outstanding shares of Capital Stock of the Company
      have been duly authorized and validly issued, are fully paid and (subject
      to Section 630 of the Business Corporation Law of the State of New York)
      nonassessable, and were not issued in violation of, and except as set
      forth in the Final Offering Circular are not subject to, any preemptive or
      similar rights. The column entitled "Actual" in the table under the
      caption "Capitalization" in the Final Offering Circular (including the
      footnotes thereto) sets forth, as of September 30, 2004, the
      capitalization of the Company. All of the outstanding shares of Capital
      Stock of each of the Subsidiaries are owned, directly or indirectly, by
      the Company, free and clear of all liens, security interests, mortgages,
      pledges, charges, equities, claims or restrictions on transferability or
      encumbrances of any kind (collectively, "Liens"), other than those imposed
      by the Act and the securities or "Blue Sky" laws of certain domestic or
      foreign jurisdictions and Liens constituting Permitted Liens and in the
      case of La Cornubia S.A, Liens in favor of its creditors (including The
      Republic of France) pursuant to bankruptcy proceedings filed with respect
      to La Cornubia S.A. in The Republic of France. Except as set forth in the
      Final Offering Circular, there are no outstanding (A) options, warrants or
      other rights for third parties to purchase from the Company or any of its
      Subsidiaries, (B) agreements, contracts, arrangements or other obligations
      of the Company or any of its Subsidiaries to issue to third parties or (C)
      other rights of third parties to convert any obligation into or exchange
      any securities for, in the case of each of clauses (A) through (C), shares
      of Capital Stock in the Company or any of its Subsidiaries.

(e)   No holder of securities of the Issuers or any of their respective
      Subsidiaries will be entitled to have such securities registered under the
      registration statements required to be filed by the Issuers and the
      Guarantors with respect to the Exchange Units, the Exchange Notes, the
      Private Exchange Units or the Private Exchange Notes pursuant to the
      Registration Rights Agreement.

(f)   Such Obligor has all requisite corporate or other power and corporate or
      other authority to execute, deliver and perform its obligations under the
      Documents to which it is a party and to consummate the transactions
      contemplated thereby.

(g)   The execution, delivery and performance of each of this Agreement, the
      Indenture and the Collateral Agreements to which such Obligor is a party
      have been duly and validly authorized by such Obligor. Each of the
      Existing Indenture and the existing Collateral Agreements (as such term is
      defined in the Indenture) constitute, and the Second Supplemental
      Indenture, the Foreign Collateral Agreements (other than the Floating
      Charge Agreement), and subject to the Belgium Condition, the Floating
      Charge Agreement, when executed and delivered by such Obligor to the
      extent it is a party thereto, will constitute, a legal, valid and binding
      obligation of such Obligor, enforceable against such Obligor in accordance
      with its terms, except that the enforcement thereof may be subject to (i)
      bankruptcy, insolvency, reorganization, receivership, moratorium,
      fraudulent conveyance or other similar laws now or hereafter in effect
      relating to creditors' rights generally and (ii) general principles of
      equity (whether applied by a court of law or equity) and the discretion of
      the court before which any proceeding therefor may be brought.

(h)   The execution, delivery and performance of the Registration Rights
      Agreement has been duly and validly authorized by such Obligor. The
      Registration Rights Agreement, when executed and delivered by such
      Obligor, will constitute a legal, valid and binding obligation of such
      Obligor,

<PAGE>

      enforceable against such Obligor in accordance with its terms, except that
      (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
      reorganization, receivership, moratorium, fraudulent conveyance or other
      similar laws now or hereafter in effect relating to creditors' rights
      generally and (ii) general principles of equity (whether applied by a
      court of law or equity) and the discretion of the court before which any
      proceeding therefor may be brought and (B) any rights to indemnity or
      contribution thereunder may be limited by Federal and state securities
      laws and public policy considerations.

(i)   The Units and the underlying Notes, when issued, will be in the form
      contemplated by the Indenture. The Indenture meets the requirements for
      qualification under the Trust Indenture Act of 1939, as amended (the
      "TIA"). The execution, delivery and performance of each of the Units,
      Exchange Units, Private Exchange Units, Notes, Exchange Notes and Private
      Exchange Notes have each been duly and validly authorized by each Issuer
      that is to be a maker thereof and, in the case of the Notes and Units,
      when authenticated, delivered to and paid for by the Initial Purchaser in
      accordance with the terms of this Agreement and the Indenture, will have
      been duly executed, issued and delivered and will be legal, valid and
      binding obligations of such Issuer, entitled to the benefit of the
      Indenture, the Collateral Agreements (including the existing Collateral
      Agreements (as such term is defined in the Indenture)) (other than the
      Floating Charge Agreement), the Registration Rights Agreement and subject
      to the Belgium Condition, the Floating Charge Agreement, and enforceable
      against such Issuer in accordance with their terms, except that the
      enforcement thereof may be subject to (i) bankruptcy, insolvency,
      reorganization, receivership, moratorium, fraudulent conveyance or other
      similar laws now or hereafter in effect relating to creditors' rights
      generally and (ii) general principles of equity (whether applied by a
      court of law or equity) and the discretion of the court before which any
      proceeding therefor may be brought. Upon and following delivery to the
      Initial Purchaser, the Units and the underlying Notes will rank at least
      pari passu in right of payment with all other Indebtedness of the Issuer
      that is the maker thereof that is outstanding on the Closing Date or that
      may be incurred thereafter and senior in right of payment to all
      Indebtedness of such Issuer that is outstanding on the Closing Date or
      that may be incurred thereafter and which by its terms is subordinated in
      right of payment to all other Indebtedness of such Issuer.

(j)   The execution, delivery and performance of each of the Domestic
      Guarantees, the Foreign Guarantees and the Company Guarantee have been
      duly and validly authorized by the Domestic Guarantors, the Foreign
      Guarantors and the Company, respectively, and, when executed by each such
      Obligor to the extent it is a party thereto, will have been duly executed,
      issued and delivered and will be legal, valid and binding obligations of
      such Obligor, entitled to the benefit of the Indenture, the Collateral
      Agreements (including the existing Collateral Agreements (as such term is
      defined in the Indenture)) (other than the Floating Charge Agreement), the
      Registration Rights Agreement and subject to the Belgium Condition, the
      Floating Charge Agreement, and enforceable against such Obligor in
      accordance with their terms, except that the enforcement thereof may be
      subject to (i) bankruptcy, insolvency, reorganization, receivership,
      moratorium, fraudulent conveyance or other similar laws now or hereafter
      in effect relating to creditors' rights generally and (ii) general
      principles of equity (whether applied by a court of law or equity) and the
      discretion of the court before which any proceeding therefor may be
      brought. Upon and following delivery to the Initial Purchaser, each
      Guarantee and the Company Guarantee will rank at least pari passu in right
      of payment with all other Indebtedness of the Guarantor that is the maker
      thereof and the Company, respectively, that is outstanding on the Closing
      Date or that may be incurred thereafter and senior in right of payment to
      all Indebtedness of such Guarantor or the Company, as the case may be,
      that is outstanding on the Closing Date or that may be incurred thereafter
      and which by its terms is subordinated in right of payment to all other
      Indebtedness of such Guarantor or the Company, as the case may be.

<PAGE>

(k)   Neither such Obligor nor any of its Subsidiaries is in violation of its
      certificate of incorporation, by-laws, limited liability operating
      agreement or other organizational document (as applicable with respect to
      such Obligor or such Subsidiary, its "Charter Documents"). Neither such
      Obligor nor any of its Subsidiaries is (i) in violation of any Federal,
      state, local or foreign statute, law (including, without limitation,
      common law) or ordinance, or any judgment, decree, rule, regulation or
      order, except for such violations that would not, individually or in the
      aggregate, result in a Material Adverse Effect (collectively, "Applicable
      Law") of any Federal, state, local and other governmental authority,
      governmental or regulatory agency or body, court, arbitrator or
      self-regulatory organization, domestic or foreign having jurisdiction over
      such Obligor or any of its Subsidiaries or any of their respective assets,
      properties or operations (each, a "Governmental Authority") applicable to
      any of them or any of their respective properties, or (ii) in breach of or
      default under any bond, debenture, note or other evidence of Indebtedness,
      indenture, mortgage, deed of trust, lease or any other agreement or
      instrument to which any of them is a party or by which any of them or
      their respective property is bound (collectively, "Applicable
      Agreements"), other than as disclosed in the Final Offering Circular and
      the filing of the Existing Floating Charge Agreement in accordance with
      Belgian law and except for any such breaches or defaults that would not,
      individually or in the aggregate, result in a Material Adverse Effect.
      There exists no condition that, with the passage of time or otherwise,
      would (a) constitute a violation of any such (i) Charter Document or (ii)
      Applicable Law, (b) constitute a breach of or default under any Applicable
      Agreement or (c) result in the imposition of any penalty or the
      acceleration of any Indebtedness and, in the case of clause (a)(ii), (b)
      or (c) above, could reasonably be expected to result in a Material Adverse
      Effect.

(l)   Neither the execution, delivery or performance of the Documents nor the
      consummation of any transactions contemplated therein will conflict with,
      violate, constitute a breach of or a default (with the passage of time or
      otherwise) under, require the consent of any person (other than consents
      already obtained and in full force and effect) under, result in the
      imposition of a Lien on any assets of such Obligor or any of its
      Subsidiaries (except for Liens created pursuant to the Documents and the
      Credit Agreement), or result in an acceleration of Indebtedness under or
      pursuant to (i) the Charter Documents, (ii) any Applicable Agreement, or
      (iii) any Applicable Law, subject to the satisfaction of the conditions
      set forth in Sections 7(q) and (r) and except for conflicts, violations,
      breaches, defaults, consents, Lien impositions or accelerations of
      Indebtedness that, in the case of clause (ii) or (iii) above, would not
      result in a Material Adverse Effect. Immediately after consummation of the
      Offering and the transactions contemplated in the Documents (including the
      application of the proceeds of the Units as disclosed in the Final
      Offering Circular), no Default or Event of Default (each, as defined in
      the Indenture) will exist.

(m)   When executed and delivered, the Documents will conform in all material
      respects to the descriptions thereof in the Final Offering Circular.

(n)   No consent, approval, authorization or order of any Governmental Authority
      or third party is required for the issuance and sale by the Issuers of the
      Units to the Initial Purchaser or the consummation by the Obligors of the
      other transactions contemplated hereby, subject to the satisfaction of the
      conditions set forth in Sections 7(q) and (r) and except such as have been
      obtained (and are in full force and effect) and such as may be required
      under foreign securities laws or state securities or "Blue Sky" laws in
      connection with the purchase and resale of the Units by the Initial
      Purchaser.

(o)   Except as disclosed in the Final Offering Circular, there is no action,
      claim, suit, demand, hearing, notice of violation or deficiency, or
      proceeding, domestic or foreign (collectively, "Proceedings"), pending or,
      to the knowledge of such Obligor, threatened, that either (i) seeks to

<PAGE>

      restrain, enjoin, prevent the consummation of, or otherwise challenge any
      of the Documents or any of the transactions contemplated therein, or (ii)
      would, individually or in the aggregate, have a Material Adverse Effect.
      Such Obligor is not subject to any judgment, order, decree, rule or
      regulation of any Governmental Authority that would, individually or in
      the aggregate, have a Material Adverse Effect. No injunction or order has
      been issued and no Proceeding is pending or, to the knowledge of such
      Obligor or any of its Subsidiaries, threatened that (i) asserts that the
      offer, sale and delivery of the Units to the Initial Purchaser pursuant to
      this Agreement or the initial resale of the Units by the Initial Purchaser
      in the manner contemplated by this Agreement is subject to the
      registration requirements of the Act, or (ii) would prevent or suspend the
      issuance or sale of the Units, including the Exempt Resales, or the use of
      the Preliminary Offering Circular, the Final Offering Circular, or any
      amendment or supplement thereto, in any jurisdiction.

(p)   Such Obligor and its Subsidiaries possess all licenses, permits,
      certificates, consents, orders, approvals and other authorizations from,
      and have made all declarations and filings with, all Governmental
      Authorities, presently required or necessary to own or lease, as the case
      may be, and to operate their respective properties and to carry on their
      respective businesses as now or proposed to be conducted as set forth in
      the Final Offering Circular ("Permits"), except where the failure to
      obtain such Permits would not, individually or in the aggregate, have a
      Material Adverse Effect; such Obligor and its Subsidiaries have fulfilled
      and performed all of their obligations with respect to such Permits and no
      event has occurred which allows, or after notice or lapse of time would
      allow, revocation or termination thereof or results in any other material
      impairment of the rights of the holder of any such Permit, except (i) as
      disclosed in the Final Offering Circular and (ii) where such failure to
      perform such obligations would not, individually or in the aggregate,
      result in a Material Adverse Effect; and neither such Obligor nor any of
      its Subsidiaries have received any notice of any proceeding relating to
      revocation or modification of any such Permit, except as described in the
      Final Offering Circular or except where such revocation or modification
      would not, individually or in the aggregate, have a Material Adverse
      Effect.

(q)   Such Obligor and each of its Subsidiaries has good and marketable title to
      all real property owned by it and good title to all personal property
      owned by it and good and indefeasible title to all leasehold estates in
      real and personal property being leased by it and, as of the Closing Date,
      will be free and clear of all Liens (other than Permitted Liens). All
      Applicable Agreements to which such Obligor or any of its Subsidiaries is
      a party or by which any of them is bound are valid and enforceable against
      such Obligor or such Subsidiary, as applicable, and are valid and
      enforceable against the other party or parties thereto and are in full
      force and effect with only such exceptions as would not, individually or
      in the aggregate, have a Material Adverse Effect. The assets of such
      Obligor and its Subsidiaries include all of the assets and properties
      necessary or required in, or otherwise material to, the conduct of the
      businesses of each of them as currently conducted and as proposed to be
      conducted (as described in the Final Offering Circular), and such assets
      are in good working condition, except where the failure of such assets to
      be in working condition would not, individually or in the aggregate, have
      a Material Adverse Effect.

(r)   All Tax returns required to be filed by such Obligor and each of its
      Subsidiaries have been filed (taking into account all applicable
      extensions) and all such returns are true, complete and correct in all
      material respects. All material Taxes that are due from such Obligor and
      its Subsidiaries have been paid other than those (i) currently payable
      without penalty or interest or (ii) being contested in good faith and by
      appropriate proceedings and for which adequate reserves have been
      established in accordance with generally accepted accounting principles of
      the United States, consistently applied ("GAAP"). To the knowledge of such
      Obligor, after due inquiry,

<PAGE>

      there are no actual or proposed Tax assessments against such Obligor or
      any of its Subsidiaries that would, individually or in the aggregate, have
      a Material Adverse Effect. The accruals and reserves on the books and
      records of the Company and its Subsidiaries in respect of any material Tax
      liability for any period not finally determined are adequate in all
      material respects to meet any assessments of Tax accrued through the date
      as of which they relate and for which such Obligor or any of its
      Subsidiaries may be liable. For purposes of this Agreement, the term "Tax"
      and "Taxes" shall mean all Federal, state, local and foreign taxes, and
      other assessments of a similar nature (whether imposed directly or through
      withholding), including, without limitation, any interest, additions to
      tax, or penalties applicable thereto.

(s)   Such Obligor and each of its Subsidiaries owns, or is licensed under, and
      has the right to use, or can acquire on reasonable terms, adequate
      patents, patent rights, licenses, inventions, copyrights, know-how
      (including, without limitation, trade secrets and other unpatented and/or
      unpatentable proprietary or confidential information, systems or
      procedures), trademarks, service marks and trade names (collectively,
      "Intellectual Property") necessary for the conduct of its businesses and,
      as of the Closing Date, will be free and clear of all Liens, other than
      Permitted Liens, except where the failure to do so could reasonably be
      expected to have a Material Adverse Effect. To such Obligor's knowledge,
      no claims or notices of any potential claim have been asserted by any
      person challenging the use of any such Intellectual Property by such
      Obligor or any of its Subsidiaries or questioning the validity or
      effectiveness of the Intellectual Property or any license or agreement
      related thereto (other than any claims that, if successful, would not,
      individually or in the aggregate, have a Material Adverse Effect). To such
      Obligor's knowledge, the use of such Intellectual Property by such Obligor
      or any of its Subsidiaries will not infringe on the Intellectual Property
      rights of any other person.

(t)   Such Obligor maintains a system of internal accounting controls sufficient
      to provide reasonable assurance that (i) material transactions are
      executed in accordance with management's general or specific
      authorization, (ii) material transactions are recorded as necessary to
      permit preparation of financial statements in conformity with GAAP, and to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management's general or specific authorization and (iv)
      the recorded accountability for assets is compared with the existing
      assets at reasonable intervals and appropriate action is taken with
      respect to any material differences.

(u)   The audited consolidated financial statements and related notes of the
      Company and its Subsidiaries contained in the Final Offering Circular (the
      "Financial Statements") present fairly in all material respects the
      financial position, results of operations and cash flows of the Company
      and its consolidated Subsidiaries, as of the respective dates and for the
      respective periods to which they apply and have been prepared in
      accordance with GAAP and except as disclosed in the Final Offering
      Circular, the requirements of Regulation S-X of the Act. The historical
      financial data set forth under "Summary Consolidated Financial Data" and
      "Selected Consolidated Historical Financial Information" included in the
      Final Offering Circular have been prepared on a basis consistent with that
      of the Financial Statements and present fairly in all material respects
      the financial position and results of operations of the Company and its
      consolidated Subsidiaries as of the respective dates and for the
      respective periods indicated. All other financial, statistical, and market
      and industry-related data included in the Final Offering Circular are
      fairly and accurately presented and are based on or derived from sources
      that the Company believes to be reliable and accurate in all material
      respects. PricewaterhouseCoopers LLP are independent public accountants
      with respect to the Company.

(v)   [INTENTIONALLY OMITTED]

<PAGE>

(w)   Subsequent to the respective dates as of which information is given in the
      Final Offering Circular, except as disclosed in the Final Offering
      Circular, (i) neither the Company nor any of its Subsidiaries has (x)
      incurred any liabilities, direct or contingent, that are material,
      individually or in the aggregate, to the Company and its Subsidiaries, or
      (y) entered into any transactions not in the ordinary course of business
      which are material with respect to the Company and its Subsidiaries
      considered as one enterprise, (ii) there has not been any material
      decrease in the Capital Stock or any material increase in long-term
      Indebtedness or any material increase in short-term Indebtedness of the
      Company and its Subsidiaries, or any payment of or declaration to pay any
      dividends or any other distribution with respect to the Company, and (iii)
      there has not been any material adverse change in the properties,
      business, prospects, operations, earnings, assets, liabilities or
      condition (financial or otherwise) of the Company and its Subsidiaries,
      taken as a whole, since June 30, 2004 (each of clauses (i), (ii) and
      (iii), a "Material Adverse Change"). To the knowledge of such Obligor
      after due inquiry, there is no event that is reasonably likely to occur,
      which if it were to occur, would, individually or in the aggregate, have a
      Material Adverse Effect, except such events that have been adequately
      disclosed in the Final Offering Circular.

(x)   No "nationally recognized statistical rating organization" (as such term
      is defined for purposes of Rule 436(g)(2) under the Act) (i) has imposed
      (or has informed the Company that it is considering imposing) any
      condition (financial or otherwise) on the Company retaining any rating
      assigned to the Company or any of its Subsidiaries or to any securities of
      the Company or any of its Subsidiaries, or (ii) has indicated to the
      Company that it is considering (A) the downgrading, suspension, or
      withdrawal of, or any review for a possible change that does not indicate
      the direction of the possible change in, any rating so assigned, or (B)
      any change in the outlook for any rating of the Company or any of its
      Subsidiaries or any securities of the Company or any of its Subsidiaries.

(y)   All Indebtedness represented by the Notes is being incurred for the
      purposes set forth in the Final Offering Circular under the heading "Use
      of Proceeds." On the Closing Date, such Obligor will be solvent. As used
      in this paragraph, "solvent" means, with respect to a particular date,
      that on such date the present fair market value (present fair saleable
      value) of the assets of such Obligor is not less than the total amount
      required to pay the probable liabilities of such Obligor on its total
      existing debts and liabilities (including, without limitation, contingent
      liabilities) as they become absolute and matured, such Obligor is able to
      realize upon its assets and pay its debts and other liabilities,
      contingent obligations and commitments as they mature and become due in
      the normal course of business, assuming the sale of the Units and the
      making of the Guarantees and the Company Guarantee as contemplated by this
      Agreement and the Final Offering Circular, such Obligor is not incurring
      debts or liabilities beyond its ability to pay as such debts and
      liabilities mature, and such Obligor is not engaged in any business or
      transaction, and is not about to engage in any business or transaction,
      for which its property would constitute unreasonably small capital after
      giving due consideration to the prevailing practice in the industry in
      which such Obligor is engaged. In computing the amount of such contingent
      liabilities at any time, it is intended that such liabilities will be
      computed at the amount that, in the light of all the facts and
      circumstances existing at such time, represents the amount that can
      reasonably be expected to become an actual or matured liability.

(z)   The Issuers have not and, to their knowledge, no one acting on their
      behalf has, (i) taken, directly or indirectly, any action designed to
      cause or to result in, or that has constituted or which might reasonably
      be expected to constitute, the stabilization or manipulation of the price
      of any security of either Issuer to facilitate the sale or resale of any
      of the Units or Notes, (ii) sold, bid for, purchased, or paid anyone any
      compensation for soliciting purchases of, any of the Units, or (iii)

<PAGE>

      except as disclosed in the Final Offering Circular, paid or agreed to pay
      to any person any compensation for soliciting another to purchase any
      other securities of the Issuers.

(aa)  Without limiting any provision herein, no registration under the Act and
      no qualification of the Indenture under the TIA is required for the sale
      of the Notes to the Initial Purchaser as contemplated hereby or for the
      Exempt Resales, assuming (i) that the purchasers in the Exempt Resales are
      QIBs or Accredited Investors or non-U.S. persons and (ii) the accuracy of
      the Initial Purchaser's representations contained herein.

(bb)  When issued and delivered pursuant to this Agreement and the Indenture,
      the Units and Notes will be eligible for resale pursuant to Rule 144A
      under the Act and no other securities of the Issuers are of the same class
      (within the meaning of Rule 144A under the Act) as the Units or Notes and
      listed on a national securities exchange registered under Section 6 of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
      quoted in a U.S. automated inter-dealer quotation system. No securities of
      the Issuers of the same class as the Units or Notes have been offered,
      issued or sold by the Issuers or any of their respective Affiliates within
      the six-month period immediately prior to the date hereof, except to the
      extent the Company filed with the SEC a registration statement on Form S-4
      with respect to the Existing Notes (for which registration statement the
      Company has sent a notice of withdrawal to the SEC).

(cc)  Neither of the Issuers nor any of their respective Affiliates or other
      person acting on behalf of either Issuer has offered or sold the Units by
      means of any general solicitation or general advertising within the
      meaning of Rule 502(c) under the Act or, with respect to Units sold
      outside the United States to non-U.S. persons (as defined in Rule 902
      under the Act), by means of any directed selling efforts within the
      meaning of Rule 902 under the Act, and each Issuer, each Affiliate of
      either Issuer and each other person acting on behalf of either Issuer have
      complied with and will implement the "offering restrictions" within the
      meaning of such Rule 902; provided, that no representation is made in this
      subsection with respect to the actions of the Initial Purchaser.

(dd)  Each of the Company, its Subsidiaries, and each ERISA Affiliate has
      fulfilled its obligations, if any, under the minimum funding standards of
      Section 302 of the United States Employee Retirement Income Security Act
      of 1974, as amended ("ERISA") with respect to each "pension plan" (as
      defined in Section 3(2) of ERISA), subject to Section 302 of ERISA which
      the Company, its Subsidiaries, or any ERISA Affiliate sponsors or
      maintains, or with respect to which it has (or within the last three years
      had) any obligation to make contributions, except where the failure to do
      so would not lead to a liability to any such pension plan not reflected in
      all material respects in the Final Offering Circular, and each such plan
      is in compliance in all material respects with the presently applicable
      provisions of ERISA and the Code (as defined below). Neither the Company,
      its Subsidiaries, nor any ERISA Affiliate has incurred any unpaid
      liability to the Pension Benefit Guaranty Corporation (other than for the
      payment of premiums in the ordinary course) or to any such plan under
      Title IV of ERISA. "ERISA Affiliate" means a corporation, trade or
      business that is, along with the Company or any Subsidiary, a member of a
      controlled group of corporations or a controlled group of trades or
      businesses, as described in Section 414 of the Internal Revenue Code of
      1986, as amended (the "Code") or Section 4001 of ERISA.

(ee)  Except as disclosed in the Final Offering Circular, (i) such Obligor is
      not a party to or bound by any collective bargaining agreement with any
      labor organization other than the collective bargaining agreements listed
      on Schedule II hereto; (ii) there is no union representation question
      existing with respect to the employees of such Obligor, and, to the
      knowledge of such Obligor, no

<PAGE>

      other union organizing activities are taking place; (iii) to such
      Obligor's knowledge, no union organizing or decertification efforts are
      underway or threatened against such Obligor; (iv) no labor strike, work
      stoppage, slowdown, or other labor dispute is pending against such
      Obligor, or, to the knowledge of such Obligor, threatened against such
      Obligor that, could, individually or in the aggregate, reasonably be
      expected to result in a Material Adverse Effect; (v) there is no worker's
      compensation liability, experience or matter that could reasonably be
      expected to have, individually or in the aggregate, a Material Adverse
      Effect; (vi) to the knowledge of such Obligor, there is no threatened or
      pending liability against such Obligor pursuant to the Worker Adjustment
      Retraining and Notification Act of 1988, as amended ("WARN"), or any
      similar state or local law; (vii) there is no employment-related charge,
      complaint, grievance, investigation, unfair labor practice claim, or
      inquiry of any kind, pending or, to the knowledge of such Obligor,
      threatened against such Obligor that could reasonably be expected,
      individually or in the aggregate, to have a Material Adverse Effect;
      (viii) to the knowledge of such Obligor, no employee or agent of such
      Obligor has committed any act or omission giving rise to liability for any
      violation identified in subsection (vi) and (vii) above, other than such
      acts or omissions that would not, individually or in the aggregate, have a
      Material Adverse Effect; and (ix) no term or condition of employment
      exists through arbitration awards, settlement agreements, or side
      agreements that is contrary to the express terms of any applicable
      collective bargaining agreement other than such term or condition that
      would not, individually or in the aggregate, have a Material Adverse
      Effect.

(ff)  None of the transactions contemplated in the Documents or the application
      by the Issuers or any of their respective Subsidiaries of the proceeds of
      the Units will violate or result in a violation of Section 7 of the
      Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part
      220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
      224) of the Board of Governors of the Federal Reserve System).

(gg)  Neither such Obligor nor any of its Subsidiaries is an open-end investment
      company, unit investment trust or face-amount certificate company that is
      or is required to be registered under Section 8 of the Investment Company
      Act of 1940, as amended (the "Investment Company Act"); and neither such
      Obligor nor any of its Subsidiaries is or, after giving effect to the
      Offering and sale of the Units and the application of the proceeds thereof
      as described in the Final Offering Circular, will be an "investment
      company" as defined in the Investment Company Act.

(hh)  Neither Issuer has engaged any broker, finder, commission agent or other
      person (other than the Initial Purchaser) in connection with the Offering
      or any of the transactions contemplated in the Documents, and neither
      Issuer is under any obligation to pay any broker's fee or commission in
      connection with such transactions (other than commissions or fees to the
      Initial Purchaser).

(ii)  Except as disclosed in the Final Offering Circular, such Obligor and each
      of its Subsidiaries (i) is in compliance with all applicable foreign,
      Federal, state and local laws and regulations relating to the protection
      of the environment or hazardous or toxic substances of wastes, pollutants
      or contaminants ("Environmental Laws"), (ii) has received and is in
      compliance with all permits, licenses or other approvals required of them
      under applicable Environmental Laws to conduct its businesses and (iii)
      has not received notice of any actual or potential liability for the
      investigation or remediation of any disposal or release of hazardous or
      toxic substances or wastes, pollutants or contaminants, in each case,
      except where such non-compliance with Environmental Laws, failure to
      receive and comply with required permits, licenses or other approvals, or
      liability would not, individually or in the aggregate, have a Material
      Adverse Effect, whether or not arising from transactions in the ordinary
      course of business. Except as disclosed in the Final Offering Circular,
      neither such Obligor nor any of the Subsidiaries has been named as a
      "potentially

<PAGE>

      responsible party" under the Comprehensive Environmental Response,
      Compensation, and Liability Act of 1980, as amended.

      In the ordinary course of its business, such Obligor periodically reviews
      the effect of Environmental Laws on the business, operations and
      properties of such Obligor and its Subsidiaries, in the course of which it
      identifies and evaluates associated costs and liabilities (including,
      without limitation, any capital or operating expenditures required for
      clean-up, closure of properties or compliance with Environmental Laws, or
      any permit, license or approval, any related constraints on operating
      activities and any potential liabilities to third parties). On the basis
      of such review, such Obligor has reasonably concluded that such associated
      costs would not have a Material Adverse Effect.

(jj)  Except as provided in the Credit Agreement or as described in the Final
      Offering Circular, as of the Closing Date, there will be no contractual
      encumbrances or restrictions on the ability of any Restricted Subsidiary
      of the Company (x) to pay dividends or make other distributions on such
      Restricted Subsidiary's Capital Stock or to pay any Indebtedness to the
      Company or any other Restricted Subsidiary of the Company, (y) to make
      loans or advances or pay any Indebtedness to, or investments in, the
      Company or any other Restricted Subsidiary of the Company or (z) to
      transfer any of its property or assets to the Company or any other
      Restricted Subsidiary of the Company.

(kk)  (a) Upon:

      (i)   [INTENTIONALLY OMITTED]

      (ii)  the execution and delivery of the Pledge of Receivables, dated as of
            the Closing Date (the "Pledge of Receivables"), by the Dutch Issuer,
            Phibro Animal Health SA and the Collateral Agent, a valid and
            enforceable right of pledge over all Inter-company Receivables (as
            defined in the Pledge of Receivables) due from Phibro Animal Health
            SA will be created to secure the Dutch Notes; provided that such
            right of pledge created to secure the Dutch Notes shall be subject
            only to the right of pledge created under the pledge of receivables
            dated as of October 21, 2003, by the Dutch Issuer, Phibro Animal
            Health SA and the Collateral Agent to secure the Existing Dutch
            Notes;

      (iii) the execution and delivery of the Pledge of Movable Assets, dated as
            of the Closing Date (the "Pledge of Movable Assets"), by the Dutch
            Issuer and the Collateral Agent and the registration thereof in The
            Netherlands with the register of the Belastingdienst Ondernemingen,
            a valid and enforceable right of pledge over the Moveable Assets (as
            defined in the Pledge of Movable Assets) will be created to secure
            the Dutch Notes; provided that such right of pledge created to
            secure the Dutch Notes shall be subject only to the right of pledge
            created under the pledge of movable assets dated as of October 21,
            2003, by the Dutch Issuer and the Collateral Agent to secure the
            Existing Dutch Notes;

      (iv)  the execution and delivery of the Share Pledge Agreement, dated as
            of the Closing Date (the "Share Pledge Agreement"), by the Dutch
            Issuer, Phibro Animal Health SA and the Collateral Agent and upon
            due recordation of the pledge purported to be created thereby into
            the shareholders' register of Phibro Animal Health SA, such security
            will be a valid perfected security interest over the shares of
            Phibro Animal Health SA to secure the Dutch Notes; provided that

<PAGE>

            such right of pledge created to secure the Dutch Notes shall be
            subject only to the right of pledge created under the share pledge
            agreement dated as of October 21, 2003, by the Dutch Issuer, Phibro
            Animal Health SA and the Collateral Agent to secure the Existing
            Dutch Notes;

      (v)   the execution and delivery of the Receivables Pledge Agreement,
            dated as of the Closing Date (the "Receivables Pledge Agreement"),
            by Phibro Animal Health SA and the Collateral Agent, and to the
            extent that the pledge purported to be created thereby relates to
            Inter-group Claims and Trade Receivables (in both cases as defined
            in the Receivables Pledge Agreement), the notification to the
            debtors of such Inter-Group Claims and Trade Receivables (in
            accordance with relevant provisions of the Receivables Pledge
            Agreement), and subject to any applicable conflict of law rules,
            such security interest will be a valid perfected security interest
            over such Inter-Group Claims and Trade Receivables to secure its
            Foreign Guarantee in respect of the Dutch Notes; provided that such
            right of pledge created to secure such Foreign Guarantee shall be
            subject only to the right of pledge created under the receivables
            pledge agreement dated as of October 21, 2003, by Phibro Animal
            Health SA and the Collateral Agent to secure the Existing Dutch
            Notes; and

      (vi)  the execution and delivery of the Floating Charge Agreement, dated
            as of the Closing Date (the "Floating Charge Agreement"), by Phibro
            Animal Health SA and HSBC Trinkaus & Burkhardt (International) SA,
            as subcollateral agent (the "Sub-Collateral Agent"), and upon due
            registration and inscription with the relevant land registry
            (Hypotheekbewaarder/Conservateur des hypotheques), such security
            interest will be a valid perfected security interest over the assets
            contemplated in the Floating Charge Agreement to secure its Foreign
            Guarantee in respect of the Dutch Notes; provided that such security
            interest shall be subject only to the security interest created
            under the floating charge agreement dated as of December 8, 2004
            (the "Existing Floating Charge Agreement"), by Phibro Animal Health
            SA and the Sub-Collateral Agent to secure the Existing Dutch Notes.

(b)   As of the Closing Date, except with respect to Permitted Liens, there will
      be no currently effective financing statement, security agreement, chattel
      mortgage, real estate mortgage or other document filed or recorded with
      any filing records, registry, or other public office, that purports to
      cover, affect or give notice of any present or possible future Lien on, or
      security interest in, any assets or property of any Obligor or any rights
      thereunder.

(c)   The issuance of the Notes, the Guarantees and the Company Guarantee in
      respect thereof neither (i) requires that any new filings be made or any
      other action taken to perfect or to maintain the perfection of the Liens
      granted pursuant to (A) any existing Collateral Agreement (as such term is
      defined in the Indenture) or (B) except as set forth in paragraph (a)
      above, any Collateral Agreement nor (ii) impairs the validity,
      effectiveness or priority of the Liens granted pursuant to any existing
      Collateral Agreement (as defined in the Indenture). Such Liens created
      under the existing Collateral Agreements (as defined in the Indenture) (x)
      continue unimpaired with the same priority to secure repayment of all
      obligations under the Existing Notes, the existing Guarantees (as defined
      in the Indenture) in respect of the Existing Notes, the Indenture and the
      existing Collateral Agreements (as defined in the Indenture), whether
      heretofore or except with respect to the issuance of any Additional Notes
      (including the Notes but excluding any

<PAGE>

            Exchange Notes (as defined in the Indenture) issued in exchange for
            any Existing Notes) and obligations directly related thereto,
            hereafter incurred and (y) subject to any Permitted Liens, continue
            to secure repayment of all obligations under the U.S. Notes and the
            existing Domestic Guarantees (as defined in the Indenture) in
            respect of the U.S. Notes and the Dutch Notes, whether heretofore or
            hereafter incurred.

(ll)  Each certificate signed by any officer of either Issuer, or any Subsidiary
      thereof, delivered to the Initial Purchaser shall be deemed a
      representation and warranty by such Issuer or any such Subsidiary thereof
      (and not individually by such officer) to the Initial Purchaser with
      respect to the matters covered thereby.

(mm)  Each of the Company and each of its Subsidiaries is insured by insurers of
      recognized financial responsibility against such losses and risks and in
      such amounts as are prudent and customary in the businesses in which they
      are engaged. All policies of insurance insuring the Company or any of its
      Subsidiaries or their respective businesses, assets, employees, officers
      and directors are in full force and effect. The Company and its
      Subsidiaries are in compliance with the terms of such policies and
      instruments in all material respects, and there are no claims by the
      Company or any of its Subsidiaries under any such policy or instrument as
      to which any insurance company is denying liability or defending under a
      reservation of rights clause. Neither the Company nor any such Subsidiary
      has been refused any insurance coverage sought or applied for, and neither
      the Company nor any such Subsidiary has any reason to believe that it will
      not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as
      may be necessary to continue its business at a cost that would not,
      individually or in the aggregate, have a Material Adverse Effect.

(nn)  The Dutch Issuer is in compliance with the requirements for an exemption
      from the banking license requirement under Section 6 of the Dutch Act on
      the Supervision of the Credit Institutions 1992 (Wet toezicht kredietwezen
      1992) as set forth in the Exemption Regulation under the Dutch Act on the
      Supervision of the Credit Institutions 1992 (Vrijstellingsregeling Wet
      toezicht kredietwezen 1992).

         5. COVENANTS OF THE OBLIGORS. Each Domestic Obligor, jointly and
severally, on behalf of itself and its Subsidiaries, and each Foreign Obligor,
jointly and severally, on behalf of itself and its Subsidiaries, hereby agrees:

(a)   To (i) advise the Initial Purchaser promptly after obtaining knowledge
      (and, if requested by the Initial Purchaser, confirm such advice in
      writing) of (A) the issuance by any state securities commission of any
      stop order suspending the qualification or exemption from qualification of
      any of the Units or Notes for offer or sale in any jurisdiction, or the
      initiation of any proceeding for such purpose by any state securities
      commission or other regulatory authority, or (B) the happening of any
      event that makes any statement of a material fact made in the Final
      Offering Circular untrue or that requires the making of any additions to
      or changes in the Final Offering Circular in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading, (ii) use its commercially reasonable efforts to prevent the
      issuance of any stop order or order suspending the qualification or
      exemption from qualification of any of the Units or Notes under any state
      securities or Blue Sky laws, and (iii) if at any time any state securities
      commission or other regulatory authority shall issue an order suspending
      the qualification or exemption from qualification of any of the Units or
      Notes under any such laws, use its commercially reasonable efforts to
      obtain the withdrawal or lifting of such order at the earliest possible
      time.

<PAGE>

(b)   To (i) furnish the Initial Purchaser, without charge, as many copies of
      the Final Offering Circular, and any amendments or supplements thereto, as
      the Initial Purchaser may reasonably request, and (ii) promptly prepare,
      upon the Initial Purchaser's reasonable request, any amendment or
      supplement to the Final Offering Circular that the Initial Purchaser, upon
      advice of legal counsel, determines may be necessary in connection with
      Exempt Resales (and the Issuers hereby consent to the use of the
      Preliminary Offering Circular and the Final Offering Circular, and any
      amendments and supplements thereto, by the Initial Purchaser in connection
      with Exempt Resales).

(c)   Not to amend or supplement the Final Offering Circular prior to the
      Closing Date or at any time prior to the completion of the resale by the
      Initial Purchaser of all of the Notes purchased by the Initial Purchaser,
      unless the Initial Purchaser shall previously have been advised thereof
      and shall have provided its written consent thereto (which consent shall
      not be unreasonably withheld or delayed).

(d)   At any time prior to the completion of the resale of the Units by the
      Initial Purchaser, (i) if any event shall occur as a result of which, in
      the reasonable judgment of the Company or the Initial Purchaser, it
      becomes necessary or advisable to amend or supplement the Final Offering
      Circular in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading, or if it is
      necessary to amend or supplement the Final Offering Circular to comply
      with Applicable Law, to notify the Initial Purchaser of any such event and
      to prepare, at the expense of the Company, an appropriate amendment or
      supplement to the Final Offering Circular (in form and substance
      reasonably satisfactory to the Initial Purchaser) so that (A) as so
      amended or supplemented, the Final Offering Circular will not include an
      untrue statement of material fact or omit to state a material fact
      necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading, and (B) the
      Final Offering Circular will comply with Applicable Law and (ii) if in the
      reasonable judgment of the Company or the Initial Purchaser it becomes
      necessary or advisable to amend or supplement the Final Offering Circular
      so that the Final Offering Circular will contain all of the information
      specified in, and meet the requirements of, Rule 144A(d)(4) of the Act, to
      prepare an appropriate amendment or supplement to the Final Offering
      Circular (in form and substance reasonably satisfactory to the Initial
      Purchaser) so that the Final Offering Circular, as so amended or
      supplemented, will contain the information specified in, and meet the
      requirements of, such Rule.

(e)   To cooperate with the Initial Purchaser and the Initial Purchaser's
      counsel in connection with the qualification of the Units and Notes under
      the securities or Blue Sky laws of such jurisdictions as the Initial
      Purchaser may request and continue such qualification in effect so long as
      reasonably required for Exempt Resales; provided that no Issuer shall be
      obligated to file any general consent to service of process or to qualify
      as a foreign corporation or as a dealer in securities (or otherwise
      subject itself to taxation) in any jurisdiction in which it is not
      otherwise so subject.

(f)   Whether or not any of the Offering or the transactions contemplated under
      the Documents are consummated or this Agreement is terminated, to pay (i)
      all costs, expenses, fees and taxes incidental to and in connection with:
      (A) the preparation, printing and distribution of the Preliminary Offering
      Circular and the Final Offering Circular and all amendments and
      supplements thereto (including, without limitation, financial statements
      and exhibits), and all other agreements, memoranda, correspondence and
      other documents prepared and delivered in connection herewith, (B) the
      negotiation, printing, processing and distribution (including, without
      limitation, word processing and duplication costs) and delivery of, each
      of the Documents and the Intercreditor Agreement, (C) the preparation,
      issuance and delivery of the Units, (D) the qualification of the Units for
      offer and sale under the securities or Blue Sky laws of the several

<PAGE>

      states (including, without limitation, the reasonable fees and
      disbursements of the Initial Purchaser's counsel relating to such
      registration or qualification), (E) furnishing such copies of the
      Preliminary Offering Circular and the Final Offering Circular, and all
      amendments and supplements thereto, as may reasonably be requested for use
      by the Initial Purchaser and (F) the performance of such Obligor's
      obligations under the Registration Rights Agreement, including but not
      limited to the Exchange Offer, the Exchange Offer Registration Statement
      and any Shelf Registration Statement, (ii) all fees and expenses of the
      counsel, accountants and any other experts or advisors retained by the
      Issuers, (iii) all expenses and listing fees in connection with the
      application for quotation of the Units and, if applicable, the Notes on
      the Private Offerings, Resales and Trading Automated Linkages ("PORTAL")
      market, (iv) all fees and expenses (including, without limitation, fees
      and expenses of counsel) of the Issuers in connection with approval of the
      Units and Notes by DTC for "book-entry" transfer, (v) all fees charged by
      rating agencies in connection with the rating of the Units and the
      underlying Notes, (vi) all fees and expenses (including, without
      limitation, reasonable fees and expenses of counsel) of the Trustee, the
      Collateral Agent and all sub-collateral agents, (vii) all fees and
      expenses incurred in connection with the creation and perfection of the
      security interests under each Collateral Agreement (including, without
      limitation, filing and recording fees, search fees, and taxes) and (viii)
      all fees, disbursements and out-of-pocket expenses incurred by the Initial
      Purchaser in connection with its services to be rendered hereunder
      including, without limitation, the fees and disbursements of each of
      Mayer, Brown, Rowe & Maw LLP, special New York counsel to the Initial
      Purchaser, Van Doorne, special Dutch counsel to the Initial Purchaser, and
      Liedekerke . Wolters . Waelbroeck . Kirkpatrick, special Belgian counsel
      to the Initial Purchaser, travel and lodging expenses, word processing
      charges, messenger and duplicating services, facsimile expenses and other
      customary expenditures.

(g)   To use the proceeds of the Offering in the manner described in the Final
      Offering Circular under the caption "Use of Proceeds."

(h)   To do and perform all things required to be done or performed, both prior
      to and after the Closing Date, by such Obligor under the Documents to
      which it is a party.

(i)   Not to, and to ensure that no "affiliate" (as defined in Rule 501(b) of
      the Act) of the Issuers will, sell, offer for sale or solicit offers to
      buy or otherwise negotiate in respect of any "security" (as defined in the
      Act) that would be integrated with the sale of the Units or Notes in a
      manner that would require the registration under the Act of the sale to
      the Initial Purchaser or to the Subsequent Purchasers of the Units or
      Notes.

(j)   For so long as any of the Units or any of the Notes remain outstanding,
      during any period in which the Issuers are not subject to Section 13 or
      15(d) of the Exchange Act, to make available, upon request and without
      cost, to any owner of the Units or the Notes in connection with any sale
      thereof and any prospective Subsequent Purchasers of such Units or Notes
      from such owner, the information required by Rule 144A(d)(4) under the
      Act.

(k)   To comply with the representation letter of the Issuers to DTC relating to
      the approval of the Units and Notes by DTC for "book entry" transfer.

(l)   To use their reasonable best efforts to effect the inclusion of the Units
      and, if applicable, the Notes in PORTAL and to use their reasonable best
      efforts to maintain the listing of the Units and, if applicable, the Notes
      on PORTAL for so long as the Units or the Notes are outstanding.

<PAGE>

(m)   For so long as any of the Notes remain outstanding, the Issuers will
      furnish to the Initial Purchaser copies of all reports and other
      communications (financial or otherwise) furnished by the Issuers to the
      Trustee or to the holders of the Notes and, as soon as available, copies
      of any reports or financial statements furnished to or filed by the
      Issuers with the SEC or any national securities exchange on which any
      class of securities of the Issuers may be listed.

(n)   Except in connection with the Exchange Offer or the filing of the Shelf
      Registration Statement, not to, and not to authorize or permit any person
      acting on their behalf to, (i) distribute any offering material in
      connection with the offer and sale of the Units other than the Preliminary
      Offering Circular and the Final Offering Circular and any amendments and
      supplements to the Final Offering Circular prepared in compliance with
      this Agreement, or (ii) solicit any offer to buy or offer to sell the
      Units by means of any form of general solicitation or general advertising
      (including, without limitation, as such terms are used in Regulation D
      under the Act) or in any manner involving a public offering within the
      meaning of Section 4(2) of the Act.

(o)   During the two year period after the Closing Date (or such shorter period
      as may be provided for in Rule 144(k) under the Act, as the same may be in
      effect from time to time), to not, and to not permit any current or future
      Subsidiaries of either of the Issuers or any other "affiliates" (as
      defined in Rule 144A under the Act) controlled by the Company to, resell
      any of the Units or Notes which constitute "restricted securities" under
      Rule 144 that have been reacquired by the Company, any current or future
      Subsidiaries of the Company or any other "affiliates" (as defined in Rule
      144A under the Act) controlled by the Company, except pursuant to an
      effective registration statement under the Act.

(p)   To pay all stamp, documentary and transfer taxes (other than Federal,
      state and local income taxes of the Initial Purchaser) and other duties,
      if any, which may be imposed by the United States or any political
      subdivision thereof or taxing authority thereof or therein with respect to
      the issuance of the Units or Notes or the sale thereof to the Initial
      Purchaser.

         6. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The Initial
Purchaser represents and warrants that:

(a)   It is a QIB and it will offer the Units for resale only upon and subject
      to the selling restrictions, terms and conditions set forth in this
      Agreement and in the Final Offering Circular.

(b)   It is not acquiring the Units with a view to any distribution thereof that
      would violate the Act or the securities laws of any state of the United
      States or any other applicable jurisdiction. In connection with the Exempt
      Resales, it will solicit offers to buy the Units only from, and will offer
      and sell the Units only to, (A) persons reasonably believed by the Initial
      Purchaser to be QIBs or (B) persons reasonably believed by the Initial
      Purchaser to be Accredited Investors or (C) non-U.S. persons reasonably
      believed by the Initial Purchaser to be a purchaser referred to in
      Regulation S under the Act; provided, however, that in purchasing such
      Units, such persons are deemed to have represented and agreed as provided
      under the caption "Notice to Investors" contained in the Final Offering
      Circular.

(c)   No form of general solicitation or general advertising in violation of the
      Act has been or will be used nor will any offers in any manner involving a
      public offering within the meaning of Section 4(2) of the Act or, with
      respect to Units to be sold in reliance on Regulation S, by means of any
      directed selling efforts, be made by such Initial Purchaser or any of its
      representatives in connection with the offer and sale of any of the Units.

<PAGE>

(d)   It will deliver to each Subsequent Purchaser of the Units, in connection
      with its original distribution of the Units, a copy of the Final Offering
      Circular, as amended and supplemented at the date of such delivery.

         7. CONDITIONS. The obligations of the Initial Purchaser to purchase the
Units under this Agreement are subject to the satisfaction of each of the
following conditions or waiver thereof by the Initial Purchaser:

(a)   All the representations and warranties of each Obligor and its
      Subsidiaries contained in this Agreement and in each of the Documents
      shall be true and correct as of the date hereof and at the Closing Date.
      On or prior to the Closing Date, each Obligor and each other party to the
      Documents (other than the Initial Purchaser) shall have performed or
      complied with all of the agreements and satisfied all conditions on their
      respective parts to be performed, complied with or satisfied pursuant to
      the Documents (other than conditions to be satisfied by such other
      parties, which the failure to so satisfy would not, individually or in the
      aggregate, have a Material Adverse Effect).

(b)   No injunction, restraining order or order of any nature by a Governmental
      Authority shall have been issued as of the Closing Date that would prevent
      or materially interfere with the consummation of the Offering or any of
      the transactions contemplated under the Documents; and no stop order
      suspending the qualification or exemption from qualification of any of the
      Units in any jurisdiction shall have been issued and no Proceeding for
      that purpose shall have been commenced or, to the knowledge of any
      Obligor, be pending or contemplated as of the Closing Date.

(c)   No action shall have been taken and no Applicable Law shall have been
      enacted, adopted or issued that would, as of the Closing Date, prevent the
      consummation of the Offering or any of the transactions contemplated under
      the Documents. No Proceeding shall be pending or, to the knowledge of any
      Obligor, threatened other than Proceedings that (A) if adversely
      determined would not, individually or in the aggregate, adversely affect
      the issuance or marketability of the Units, and (B) would not,
      individually or in the aggregate, have a Material Adverse Effect.

(d)   Subsequent to the respective dates as of which data and information is
      given in the Final Offering Circular, there shall not have been any
      Material Adverse Change.

(e)   The Units shall have been designated PORTAL securities in accordance with
      the rules and regulations adopted by the National Association of
      Securities Dealers, Inc. relating to trading in the PORTAL market.

(f)   On or after the date hereof, (i) there shall not have occurred any
      downgrading, suspension or withdrawal of, nor shall any notice have been
      given of any potential or intended downgrading, suspension or withdrawal
      of, or of any review (or of any potential or intended review) for a
      possible change that does not indicate the direction of the possible
      change in, any rating of the Issuers or any securities of the Issuers
      (including, without limitation, the placing of any of the foregoing
      ratings on credit watch with negative or developing implications or under
      review with an uncertain direction) by any "nationally recognized
      statistical rating organization" as such term is defined for purposes of
      Rule 436(g)(2) under the Act, (ii) there shall not have occurred any
      change, nor shall any notice have been given of any potential or intended
      change, in the outlook for any rating of the Issuers or any securities of
      the Issuers by any such rating organization and

<PAGE>

      (iii) no such rating organization shall have given notice that it has
      assigned (or is considering assigning) a lower rating to the Notes than
      that on which the Notes were marketed.

(g)   The Initial Purchaser shall have received on the Closing Date:

      (i)   certificates dated the Closing Date, signed on behalf of the Company
            by (1) the Chief Executive Officer and (2) the principal financial
            or accounting officer of the Company, on behalf of the Issuers, to
            the effect that (a) the representations and warranties set forth in
            Section 4 hereof are true and correct in all material respects with
            the same force and effect as though expressly made at and as of the
            Closing Date, (b) the Issuers have complied with all Documents and
            satisfied all conditions in all material respects on their part to
            be performed or satisfied at or prior to the Closing Date, (c) at
            the Closing Date, since the date hereof or since the date of the
            most recent financial statements in the Final Offering Circular
            (exclusive of any amendment or supplement thereto after the date
            hereof) no event or events have occurred, no information has become
            known to any Obligor nor does any condition exist that, individually
            or in the aggregate, would have a Material Adverse Effect, (d) since
            the date of the most recent financial statements in the Final
            Offering Circular (exclusive of any amendment or supplement thereto
            after the date hereof), other than as described in the Final
            Offering Circular or contemplated hereby or thereby, neither the
            Company nor any Subsidiary of the Company has incurred any
            liabilities or obligations, direct or contingent, not in the
            ordinary course of business, that are material to the Company and
            its Subsidiaries, taken as a whole, or entered into any transactions
            not in the ordinary course of business that are material to the
            business, condition (financial or otherwise) or results of
            operations or prospects of the Company and its Subsidiaries, taken
            as a whole, and there has not been any change in the Capital Stock
            or long-term Indebtedness of the Company or any Subsidiary of the
            Company that is material to the business, condition (financial or
            otherwise) or results of operations or prospects of the Company and
            its Subsidiaries, taken as a whole, and (e) the sale of the Units or
            Notes has not been enjoined (temporarily or permanently);

      (ii)  a certificate, dated the Closing Date, executed on behalf of the
            Company by the Secretary of each of the Issuers and each Guarantor,
            certifying such matters as the Initial Purchaser may reasonably
            request;

      (iii) a certificate of solvency, dated the Closing Date, executed on
            behalf of the Company by the principal financial or accounting
            officer of each of the Issuers substantially in the form previously
            approved by the Initial Purchaser;

      (iv)  the opinion of Golenbock Eiseman Assor Bell & Peskoe LLP, special
            New York counsel to the Obligors, dated the Closing Date, in form
            and substance reasonably satisfactory to the Initial Purchaser;

      (v)   the opinion of Allen & Overy LLP, special Dutch and Belgian counsel
            to the Obligors, dated the Closing Date, in form and substance
            reasonably satisfactory to the Initial Purchaser;

      (vi)  the opinion of Greenberg Dauber Epstein & Tucker, special New Jersey
            counsel to the Obligors, dated the Closing Date, in form and
            substance reasonably satisfactory to the Initial Purchaser;

<PAGE>

      (vii)  an opinion, dated the Closing Date, of Van Doorne, special Dutch
             counsel to the Initial Purchaser, in form and substance reasonably
             satisfactory to the Initial Purchaser;

      (viii) an opinion, dated the Closing Date, of Liedekerke . Wolters .
             Waelbroeck . Kirkpatrick, special Belgian counsel to the Initial
             Purchaser, in form and substance reasonably satisfactory to the
             Initial Purchaser; and

      (ix)   an opinion, dated the Closing Date, of Mayer, Brown, Rowe & Maw
             LLP, special New York counsel to the Initial Purchaser, in form and
             substance reasonably satisfactory to the Initial Purchaser.

(h)   The Initial Purchaser shall have received from PricewaterhouseCoopers LLP,
      independent auditors, with respect to the Company, (A) a customary comfort
      letter, dated the date of the Final Offering Circular, in form and
      substance reasonably satisfactory to the Initial Purchaser, with respect
      to the financial statements and certain financial information contained in
      the Final Offering Circular, and (B) a customary "bring down" comfort
      letter, dated the Closing Date, in form and substance reasonably
      satisfactory to the Initial Purchaser, to the effect that
      PricewaterhouseCoopers LLP reaffirms the statements made in its letter
      furnished pursuant to clause (A) above.

(i)   Each of the Documents shall have been executed and delivered by all
      parties thereto, and the Initial Purchaser shall have received a fully
      executed original of each Document.

(j)   The Initial Purchaser shall have received copies in form and substance
      reasonably satisfactory to it of all opinions, certificates, letters and
      other documents delivered or required to be delivered under or in
      connection with the Offering or any transaction contemplated in the
      Documents.

(k)   The Initial Purchaser shall have received the Final Offering Circular, and
      the terms of each Document shall conform in all material respects to the
      description thereof in the Final Offering Circular.

(l)   None of the parties to any of the Documents shall be in breach or default
      of any of their respective obligations in any material respect.

(m)   On the Closing Date, the Company shall have paid or caused to have been
      paid in cash the fees and expenses of each of Mayer, Brown, Rowe & Maw
      LLP, special New York counsel to the Initial Purchaser, Van Doorne,
      special Dutch counsel to the Initial Purchaser, and Liedekerke . Wolters .
      Waelbroeck . Kirkpatrick, special Belgian counsel to the Initial
      Purchaser.

(n)   The Collateral Agent shall have received for the benefit of the Secured
      Parties:

      (i)   [INTENTIONALLY OMITTED]

      (ii)  [INTENTIONALLY OMITTED]

      (iii) [INTENTIONALLY OMITTED]

      (iv)  [INTENTIONALLY OMITTED]

<PAGE>

      (v)   certificates by the relevant land registry
            (Hypotheekbewaarder/Conservateur des hypotheques) evidencing that
            (A) the real property of Phibro Animal Health SA as contemplated in
            the Mortgage Agreement is free of any mortgages, charges,
            encumbrances, liens, attachments or seizures (except for a mortgage
            created to the benefit of Collateral Agent in connection with the
            issuance of the Existing Dutch Notes), and (b) the business
            (handelszaak/fonds de commerce) of Phibro Animal Health SA
            contemplated in the Floating Charge Agreement is free of any
            pledges, charges, encumbrances, liens, attachment or seizure (except
            for the Existing Floating Charge Agreement);

      (vi)  a certified copy of the shareholders' register of Phibro Animal
            Health SA evidencing that all of the issued and outstanding capital
            stock has been pledged to and perfected by the Collateral Agent to
            the benefit of the Secured Parties; and

      (vii) such other approvals, opinions, or documents as the Collateral Agent
            may reasonably request in form and substance reasonably satisfactory
            to the Collateral Agent.

(o)   The Initial Purchaser shall be satisfied that (i) the Lien granted to the
      Collateral Agent, for the benefit of the Secured Parties, in the
      Collateral is a valid and enforceable Lien (subject in priority only to
      Specified Permitted Liens); and (ii) no Lien exists on any of the
      Collateral other than the Lien created in favor of the Collateral Agent,
      for the benefit of the Secured Parties, pursuant to a Collateral
      Agreement, or Permitted Liens.

(p)   The Initial Purchaser shall have received a certificate, dated the Closing
      Date, signed by each of the Chief Executive Officer and the principal
      financial or accounting officer of the Company, on behalf of the Company,
      certifying that (i) attached thereto is a true and correct copy of an
      executed copy of the Belgium Purchase Agreement (as defined in the Second
      Supplemental Indenture), dated as of a date on or prior to the Closing
      Date, which purchase agreement shall be in form and substance reasonably
      satisfactory to the Initial Purchaser, (ii) such purchase agreement is
      effective and (iii) no default or event of default by the Company or
      Phibro Animal Health SA or, to the knowledge of the Company, the
      counterparty thereto, is outstanding under such purchase agreement.

(q)   The Initial Purchaser shall have received (i) a certificate, dated the
      Closing Date, executed by HSBC Bank USA, National Association, the
      tabulation agent for the Consent Solicitation, certifying receipt by such
      tabulation agent as to the level of valid consents from the holders of
      record of the Existing Notes, as of 5:00 p.m., New York City time, on
      December 8, 2004 (as such time may be extended) and (ii) a certificate,
      dated the Closing Date, signed by each of the Chief Executive Officer and
      the principal financial or accounting officer of the Company, on behalf of
      the Company, certifying that attached thereto is a true and correct copy
      of an executed copy of the Second Supplemental Indenture, dated as of a
      date on or prior to the Closing Date, in form and substance reasonably
      satisfactory to the Initial Purchaser, and that all procedures and other
      actions necessary to make the Second Supplemental Indenture and the
      Proposed Amendments (as defined in the Solicitation Statement) effective
      shall have been consummated on or prior to the Closing Date.

(r)   An amendment to each of the Credit Agreement and the Intercreditor
      Agreement shall have been executed and delivered by all parties thereto,
      and the Initial Purchaser shall have received a fully executed original of
      each such amendment which, in each case, shall be in form and substance
      reasonably satisfactory to the Initial Purchaser.

<PAGE>

(s)   The Initial Purchaser shall have received a written consent to the
      issuance of the Units and the Notes from Palladium Equity Partners II,
      L.P., Palladium Equity Partners II-A, L.P. and Palladium Equity Investors
      II, L.P. in form and substance reasonably satisfactory to the Initial
      Purchaser.

         8. INDEMNIFICATION AND CONTRIBUTION.

(a)   The Domestic Obligors, jointly and severally, agree and the Foreign
      Obligors, jointly and severally, agree to indemnify and hold harmless the
      Initial Purchaser, and each person, if any, who controls the Initial
      Purchaser within the meaning of Section 15 of the Act or Section 20 of the
      Exchange Act, against any losses, claims, damages or liabilities of any
      kind to which the Initial Purchaser or such controlling person may become
      subject under the Act, the Exchange Act or otherwise, insofar as any such
      losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon:

      (i)   any untrue statement or alleged untrue statement of any material
            fact contained in any Offering Circular or any amendment or
            supplement thereto; or

      (ii)  the omission or alleged omission to state, in any Offering Circular
            or any amendment or supplement thereto, a material fact required to
            be stated therein or necessary to make the statements therein, in
            light of the circumstances under which they were made, not
            misleading;

      and, subject to the provisions hereof, will reimburse promptly upon
      demand, the Initial Purchaser and each such controlling person for any
      legal or other expenses reasonably incurred by the Initial Purchaser or
      such controlling person in connection with investigating, defending
      against or appearing as a third-party witness in connection with any such
      loss, claim, damage, liability or action in respect thereof; provided,
      however, no Obligor will be liable in any such case to the extent (but
      only to the extent) that any such loss, claim, damage or liability is
      finally judicially determined by a court of competent jurisdiction in a
      final, unappealable judgment, to have resulted solely from any untrue
      statement or alleged untrue statement or omission or alleged omission made
      in any Offering Circular or any amendment or supplement thereto in
      reliance upon and in conformity with written information concerning the
      Initial Purchaser furnished to the Issuers by the Initial Purchaser
      specifically for use therein. This indemnity agreement will be in addition
      to any liability that such Obligors may otherwise have to the indemnified
      parties. No Obligor shall be liable under this Section 8 for any
      settlement of any claim or action effected without its prior written
      consent, which shall not be unreasonably withheld. This indemnity, as to
      the Preliminary Offering Circular, shall not inure to the benefit of the
      Initial Purchaser (or any person controlling such Initial Purchaser) on
      account of any loss, claim, damage or liability arising from the sale of
      Units or Notes to any person by such Initial Purchaser if such Initial
      Purchaser failed to send or give a copy of the Final Offering Circular (as
      the same may be supplemented or amended) to such person at or prior to the
      written confirmation of the sale of the Units or Notes to such person, and
      the untrue statement or alleged untrue statement or omission or alleged
      omission of a material fact in such Preliminary Offering Circular was
      corrected in the Final Offering Circular, unless such failure resulted
      from noncompliance by the Obligors with Section 5(b).

(b)   The Initial Purchaser agrees to indemnify and hold harmless each of the
      Obligors, their directors, officers and each person, if any, who controls
      such Obligor within the meaning of Section 15 of the Act or Section 20 of
      the Exchange Act against any losses, claims, damages or liabilities of

<PAGE>

      any kind to which such Obligor or any such director, officer or
      controlling person may become subject under the Act, the Exchange Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or
      actions in respect thereof) are finally judicially determined by a court
      of competent jurisdiction in a final, unappealable judgment, to have
      resulted solely from (i) any untrue statement or alleged untrue statement
      of any material fact contained in any Offering Circular or any amendment
      or supplement thereto or (ii) the omission or the alleged omission to
      state, in any Offering Circular or any amendment or supplement thereto, a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading, in each case to the extent (but only to
      the extent) that such untrue statement or alleged untrue statement or
      omission or alleged omission was made in reliance upon and in conformity
      with written information concerning such Initial Purchaser, furnished to
      the Issuers or their agents by the Initial Purchaser specifically for use
      therein; and, subject to the limitation set forth immediately preceding
      this clause, will reimburse, promptly upon demand, any legal or other
      expenses incurred by such Obligor or any such director, officer or
      controlling person in connection with any such loss, claim, damage,
      liability or action in respect thereof. This indemnity agreement will be
      in addition to any liability that the Initial Purchaser may otherwise have
      to the indemnified parties.

(c)   As promptly as reasonably practical after receipt by an indemnified party
      under this Section 8 of notice of the commencement of any action for which
      such indemnified party is entitled to indemnification under this Section
      8, such indemnified party will, if a claim in respect thereof is to be
      made against the indemnifying party under this Section 8, notify the
      indemnifying party of the commencement thereof in writing; but the
      omission to so notify the indemnifying party (i) will not relieve such
      indemnifying party from any liability under paragraph (a) or (b) above
      unless and only to the extent it is materially prejudiced as a result
      thereof and (ii) will not, in any event, relieve the indemnifying party
      from any obligations to any indemnified party other than the
      indemnification obligation provided in paragraphs (a) and (b) above. In
      case any such action is brought against any indemnified party, and it
      notifies the indemnifying party of the commencement thereof, the
      indemnifying party will be entitled to participate therein and, to the
      extent that it may determine, jointly with any other indemnifying party
      similarly notified, to assume the defense thereof, with counsel reasonably
      satisfactory to such indemnified party; provided, however, that if (i) the
      use of counsel chosen by the indemnifying party to represent the
      indemnified party would present such counsel with a conflict of interest
      under applicable standards of professional responsibility, (ii) the
      defendants in any such action include both the indemnified party and the
      indemnifying party, and the indemnified party shall have been advised by
      counsel in writing that there may be one or more legal defenses available
      to it and/or other indemnified parties that are different from or
      additional to those available to the indemnifying party, or (iii) the
      indemnifying party shall not have employed counsel reasonably satisfactory
      to the indemnified party to represent the indemnified party within a
      reasonable time after receipt by the indemnifying party of notice of the
      institution of such action, then, in each such case, the indemnifying
      party shall not have the right to direct the defense of such action on
      behalf of such indemnified party or parties and such indemnified party or
      parties shall have the right to select separate counsel to defend such
      action on behalf of such indemnified party or parties at the expense of
      the indemnifying party. After notice from the indemnifying party to such
      indemnified party of its election so to assume the defense thereof and
      approval by such indemnified party of counsel appointed to defend such
      action, the indemnifying party will not be liable to such indemnified
      party under this Section 8 for any legal or other expenses, other than
      reasonable costs of investigation, subsequently incurred by such
      indemnified party in connection with the defense thereof, unless (i) the
      indemnified party shall have employed separate counsel in accordance with
      the proviso to the immediately preceding sentence (it being understood,
      however, that in connection with such action the indemnifying party shall
      not be liable for the expenses of more than one separate counsel (in
      addition to local counsel) in any one action or separate but

<PAGE>

      substantially similar actions in the same jurisdiction arising out of the
      same general allegations or circumstances, designated by the Initial
      Purchaser in the case of paragraph (a) of this Section 8 or the Domestic
      Obligors or the Foreign Obligors, as the case may be, in the case of
      paragraph (b) of this Section 8, representing the indemnified parties
      under such paragraph (a) or paragraph (b), as the case may be, who are
      parties to such action or actions) or (ii) the indemnifying party has
      authorized in writing the employment of counsel for the indemnified party
      at the expense of the indemnifying party. After such notice from the
      indemnifying party to such indemnified party, the indemnifying party will
      not be liable for the costs and expenses of any settlement of such action
      effected by such indemnified party without the prior written consent of
      the indemnifying party (which consent shall not be unreasonably withheld),
      unless such indemnified party waived in writing its rights under this
      Section 8, in which case the indemnified party may effect such a
      settlement without such consent.

(d)   No indemnifying party shall be liable under this Section 8 for any
      settlement of any claim or action (or threatened claim or action) effected
      without its written consent, which shall not be unreasonably withheld, but
      if a claim or action settled with its written consent, or if there be a
      final judgment for the plaintiff with respect to any such claim or action,
      each indemnifying party jointly and severally agrees, subject to the
      exceptions and limitations set forth above, to indemnify and hold harmless
      each indemnified party from and against any and all losses, claims,
      damages or liabilities (and reasonable legal and other expenses as set
      forth above) incurred by reason of such settlement or judgment. No
      indemnifying party shall, without the prior written consent of the
      indemnified party (which consent shall not be unreasonably withheld),
      effect any settlement or compromise of any pending or threatened
      proceeding in respect of which the indemnified party is or could have been
      a party, or indemnity could have been sought hereunder by the indemnified
      party, unless such settlement (A) includes an unconditional written
      release of the indemnified party, in form and substance satisfactory to
      the indemnified party, from all liability on claims that are the subject
      matter of such proceeding and (B) does not include any statement as to an
      admission of fault, culpability or failure to act by or on behalf of the
      indemnified party.

(e)   In circumstances in which the indemnity agreement provided for in the
      preceding paragraphs of this Section 8 is unavailable to, or insufficient
      to hold harmless, an indemnified party in respect of any losses, claims,
      damages or liabilities (or actions in respect thereof), each indemnifying
      party, in order to provide for just and equitable contributions, shall
      contribute to the amount paid or payable by such indemnified party as a
      result of such losses, claims, damages or liabilities (or actions in
      respect thereof) in such proportion as is appropriate to reflect (i) the
      relative benefits received by the indemnifying party or parties, on the
      one hand, and the indemnified party, on the other, from the Offering or
      (ii) if the allocation provided by the foregoing clause (i) is not
      permitted by applicable law, not only such relative benefits but also the
      relative fault of the indemnifying party or parties, on the one hand, and
      the indemnified party, on the other, in connection with the statements or
      omissions or alleged statements or omissions that resulted in such losses,
      claims, damages or liabilities (or actions in respect thereof). The
      relative benefits received by the Domestic Obligors or the Foreign
      Obligors, as the case may be, on the one hand, and the Initial Purchaser,
      on the other, shall be deemed to be in the same proportion as the total
      proceeds from the Offering (before deducting expenses) received by the
      U.S. Issuer or the Dutch Issuer, as the case may be, bear to the total
      discounts and commissions received by the Initial Purchaser. The relative
      fault of the parties 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
      information supplied by the Obligors, on the one hand, or the Initial
      Purchaser, on the other, the parties' relative intent, knowledge, access
      to information

<PAGE>

      and opportunity to correct or prevent such statement or omission or
      alleged statement or omissions, and any other equitable considerations
      appropriate in the circumstances.

(f)   The Obligors and the Initial Purchaser agree that it would not be
      equitable if the amount of such contribution determined pursuant to the
      immediately preceding paragraph (e) were determined by pro rata or per
      capita allocation or by any other method of allocation that does not take
      into account the equitable considerations referred to in the first
      sentence of the immediately preceding paragraph (e). Notwithstanding any
      other provision of this Section 8, the Initial Purchaser shall not be
      obligated to make contributions hereunder that in the aggregate exceed the
      total discounts, commissions and other compensation received by such
      Initial Purchaser under this Agreement, less the aggregate amount of any
      damages that such Initial Purchaser has otherwise been required to pay by
      reason of the untrue or alleged untrue statements or the omissions or
      alleged omissions to state a material fact. No person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Act) shall
      be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation. For purposes of the immediately preceding
      paragraph (e), each person, if any, who controls the Initial Purchaser
      within the meaning of Section 15 of the Act or Section 20 of the Exchange
      Act shall have the same rights to contribution as the Initial Purchaser,
      and each director of any Obligor, each officer of such Obligor and each
      person, if any, who controls such Obligor within the meaning of Section 15
      of the Act or Section 20 of the Exchange Act, shall have the same rights
      to contribution as such Obligor.

(g)   Notwithstanding anything to the contrary herein, (i) each Domestic Obligor
      is jointly and severally liable for any obligation of any other Obligor
      under this Agreement (including, without limitation, this Section 8) and
      (ii) each Foreign Obligor is jointly and severally liable for any
      obligation of any other Foreign Obligor under this Agreement (including,
      without limitation, this Section 8); provided, however, that no Foreign
      Obligor shall be liable for any obligation of any Domestic Obligor under
      this Agreement (including, without limitation, this Section 8).

         9. TERMINATION. The Initial Purchaser may terminate this Agreement at
any time prior to the Closing Date by written notice to the Issuers if any of
the following has occurred:

(a)   since the date hereof, any Material Adverse Effect or development
      involving or reasonably expected to result in a prospective Material
      Adverse Effect that could, in the Initial Purchaser's reasonable judgment,
      be expected to (i) make it impracticable or inadvisable to proceed with
      the offering or delivery of the Units on the terms and in the manner
      contemplated in the Final Offering Circular, or (ii) materially impair the
      investment quality of any of the Units (or underlying Notes);

(b)   the failure of the Obligors to satisfy the conditions contained in Section
      7(a) hereof on or prior to the Closing Date;

(c)   any outbreak or escalation of hostilities or other national or
      international calamity or crisis, including, without limitation, acts of
      terrorism, or material adverse change or disruption in economic conditions
      in, or in the financial markets of, the United States (it being understood
      that any such change or disruption shall be relative to such conditions
      and markets as in effect on the date hereof), if the effect of such
      outbreak, escalation, calamity, crisis, act or material adverse change in
      the economic conditions in, or in the financial markets of, the United
      States could be reasonably expected to make it, in the Initial Purchaser's
      sole judgment, impracticable or inadvisable to market or proceed with the
      offering or delivery of the Units on the terms and in the manner
      contemplated in the Final Offering Circular or to enforce contracts for
      the sale of any of the Units;

<PAGE>

(d)   the suspension or limitation of trading generally in securities on the New
      York Stock Exchange, the American Stock Exchange or the NASDAQ National
      Market or any setting of limitations on prices for securities on any such
      exchange or NASDAQ National Market;

(e)   the enactment, publication, decree or other promulgation after the date
      hereof of any Applicable Law that in the Initial Purchaser's counsel's
      reasonable opinion materially and adversely affects, or could be
      reasonably expected to materially and adversely affect, the properties,
      business, prospects, operations, earnings, assets, liabilities or
      condition (financial or otherwise) of the Company and its Subsidiaries,
      taken as a whole;

(f)   any securities of either Issuer shall have been downgraded or placed on
      any "watch list" for possible downgrading by any "nationally recognized
      statistical rating organization," as such term is defined for purposes of
      Rule 436(g)(2) under the Act; or

(g)   the declaration of a banking moratorium by any Governmental Authority; or
      the taking of any action by any Governmental Authority after the date
      hereof in respect of its monetary or fiscal affairs that in the Initial
      Purchaser's opinion could reasonably be expected to have a material
      adverse effect on the financial markets in the United States or elsewhere.

         10. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES. The representations
and warranties, covenants, indemnities and contribution and expense
reimbursement provisions and other agreements, representations and warranties of
the Obligors set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Units, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchaser, (ii) acceptance
of the Units, and payment for them hereunder, and (iii) any termination of this
Agreement.

         11. DEFAULT BY THE INITIAL PURCHASER. If the Initial Purchaser shall
breach its obligations to purchase the Units that it has agreed to purchase
hereunder on the Closing Date and arrangements satisfactory to the Issuers for
the purchase of such Units are not made within 36 hours after such default, this
Agreement shall terminate with respect to such Initial Purchaser without
liability on the part of the Issuers. Nothing herein shall relieve the Initial
Purchaser from liability for its default.

         12. INFORMATION SUPPLIED BY THE INITIAL PURCHASER. The statements set
forth on the cover page with respect to price and in the first and second
sentences of the third paragraph, the fourth paragraph, the first and second
sentences of the sixth paragraph and the first and second sentences of the
seventh paragraph under the heading "Plan of Distribution" in the Offering
Circular (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Issuers or their Subsidiaries for the purposes of Sections 4(a) and 8 hereof.

         13. MISCELLANEOUS.

(a)   Notices given pursuant to any provision of this Agreement shall be
      addressed as follows: (i) if to either Issuer, to such Issuer, c/o Phibro
      Animal Health Corporation, One Parker Plaza, 400 Kelby Street, Fort Lee,
      NJ 07024 Attention: Corporate Legal Department with a copy to: Golenbock
      Eiseman Assor Bell & Peskoe LLP, 437 Madison Avenue, New York, NY 10022,
      Attention: Lawrence M. Bell, Esq.; and (ii) if to the Initial Purchaser,
      to: Jefferies & Company, Inc., 520 Madison Avenue, 12th Floor, New York,
      New York 10022, Attention: Lloyd H. Feller, Esq. with a copy to: Mayer,
      Brown, Rowe & Maw LLP, 1675 Broadway, New York, New York 10019-

<PAGE>

      5820, Attention: Ronald S. Brody, Esq., (or in any case to such other
      address as the person to be notified may have requested in writing).

(b)   This Agreement has been and is made solely for the benefit of and shall be
      binding upon the Obligors, the Initial Purchaser and, to the extent
      provided in Section 8 hereof, the controlling persons, officers,
      directors, partners, employees, representatives and agents referred to in
      Section 8, and their respective heirs, executors, administrators,
      successors and assigns, all as and to the extent provided in this
      Agreement, and no other person shall acquire or have any right under or by
      virtue of this Agreement. The term "successors and assigns" shall not
      include a purchaser of any of the Units or Notes from the Initial
      Purchaser merely because of such purchase. Notwithstanding the foregoing,
      it is expressly understood and agreed that each purchaser who purchases
      Notes from the Initial Purchaser is intended to be a beneficiary of the
      Obligors' covenants contained in the Registration Rights Agreement to the
      same extent as if the Notes were sold and those covenants were made
      directly to such purchaser by the Obligors, and each such purchaser shall
      have the right to take action against the Obligors to enforce, and obtain
      damages for any breach of, those covenants.

(c)   THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND
      CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
      MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF
      CONFLICTS OF LAW.

(d)   EACH OBLIGOR HEREBY EXPRESSLY AND IRREVOCABLY (I) SUBMITS TO THE
      NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE
      BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING
      ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
      CONTEMPLATED HEREBY; AND (II) WAIVES (A) ITS RIGHT TO A TRIAL BY JURY IN
      ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
      TRANSACTIONS CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF
      DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE INITIAL
      PURCHASER AND FOR ANY COUNTERCLAIM RELATED TO ANY OF THE FOREGOING AND (B)
      ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
      VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE
      AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
      FORUM.

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

(f)   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 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.

<PAGE>

(g)   This Agreement may be amended, modified or supplemented, and waivers or
      consents to departures from the provisions hereof may be given, provided
      that the same are in writing and signed by all of the signatories hereto.

(h)   To the extent that any Obligor may be entitled to the benefit of any
      provision of law requiring the Initial Purchaser in any suit, action or
      proceeding brought in a court of The Netherlands, Belgium or other
      jurisdiction arising out of or in connection with this Agreement, any
      other Document or the transactions contemplated hereby, to post security
      for litigation costs or otherwise post a performance bond or guaranty, or
      to take any similar action, such Obligor hereby irrevocably waives such
      benefit, in each case to the fullest extent now or hereafter permitted
      under the laws of The Netherlands, Belgium or, as the case may be, such
      other jurisdictions.

(i)   This Agreement and each other Document has been negotiated and executed in
      the English language. All certificates, reports, notices and other
      documents and communications given or delivered pursuant to this Agreement
      or any other Document shall be in the English language, or accompanied by
      a certified English translation thereof. Except in the case of laws of, or
      official communications of, The Netherlands or Belgium, in the case of any
      document originally issued in a language other than English, the English
      language version of any such document shall for purposes of this Agreement
      and each other Document, and absent manifest error, control the meaning of
      the matters set forth therein.

(j)   (i)   If, for the purposes of obtaining judgment in any court or
            otherwise, it is necessary to convert a sum due hereunder in United
            States dollars ("Dollars") into another currency, each Obligor
            agrees, to the fullest extent permitted by law, that the rate of
            exchange used shall be that at which in accordance with normal
            banking procedures the Initial Purchaser could purchase Dollars with
            such other currency on the business day preceding that on which
            final judgment is given.

      (ii)  The obligation of each Obligor in respect of any sum due from it to
            the Initial Purchaser shall, notwithstanding any judgment in a
            currency other than Dollars, be discharged only to the extent that
            on the business day following receipt by the Initial Purchaser of
            any sum adjudged to be so due in such other currency the Initial
            Purchaser may, in accordance with normal banking procedures,
            purchase Dollars with such other currency; in the event that the
            Dollars so purchased are less than the sum originally due to the
            Initial Purchaser in Dollars, such Obligor, as a separate obligation
            and notwithstanding any such judgment, hereby indemnifies and holds
            harmless the Initial Purchaser against such loss.

<PAGE>

         Please confirm that the foregoing correctly sets forth the agreement
among the Issuers, the Guarantors and the Initial Purchaser.

                                         Very truly yours,

                                         PHIBRO ANIMAL HEALTH CORPORATION

                                         By: /s/ Jack C. Bendheim
                                             -----------------------------------
                                             Name: Jack C. Bendheim
                                             Title President

                                         PHILIPP BROTHERS NETHERLANDS III B.V.

                                         By: /s/ Jack C. Bendheim
                                             -----------------------------------
                                             Name: Jack C. Bendheim
                                             Title Managing Director

                                         By: /s/ Joseph Katzenstein
                                             -----------------------------------
                                             Name: Joseph Katzenstein
                                             Title Managing Director

                                      DOMESTIC GUARANTORS:
                                      PRINCE AGRIPRODUCTS, INC.
                                      PHIBROCHEM, INC.
                                      PHIBRO ANIMAL HEALTH HOLDINGS, INC.
                                      PHIBRO CHEMICALS, INC.
                                      WESTERN MAGNESIUM CORP.
                                      C P CHEMICALS, INC.
                                      PHIBRO-TECH, INC.
                                      PHIBRO ANIMAL HEALTH U.S., INC.

                                      By: /s/ David C. Storbeck
                                          -----------------------------------
                                          Name: David C. Storbeck
                                          Title: Vice President

                                      FOREIGN GUARANTORS:
                                      PHIBRO ANIMAL HEALTH SA

                                      By: /s/ Jack C. Bendheim
                                          -----------------------------------
                                          Name: Jack C. Bendheim
                                          Title: Manager

<PAGE>

Accepted and Agreed to:
JEFFERIES & COMPANY, INC.

By: /s/ Richard A. Goldenberg
    ------------------------------
    Name: Richard A. Goldenberg
    Title: Managing Director

<PAGE>

                                                                      SCHEDULE I

                              LIST OF SUBSIDIARIES

<TABLE>
<CAPTION>
Name of Subsidiary                                        Jurisdiction of Organization
------------------                                        ----------------------------
<S>                                                       <C>
Phibro Animal Health Holdings, Inc.                                 Delaware
     Phibro Animal Health U.S., Inc.                                Delaware
     Philibro Animal Health de Argentina SRL.                       Argentina
     Phibro Animal Health Pty Ltd.                                  Australia
     Phibro Animal Health, Ltd.                                      Canada
     Philipp Brothers Animal Health de Chile SRL.                     Chile
     Phibro Animal Health de Costa Rica Ltda.                      Costa Rica
     Phibro Corporation Limited.                                    Hong Kong
     Phibro (Malaysia) Sdn Bhd                                      Malaysia
     Philipp Brothers Animal Health de Mexico SRL.                   Mexico
     Phibro Animal Health (Pty) Ltd.                              South Africa
     Philibro Animal Health de Venezuela SRL.                       Venezuela
     PAH Management Company Limited.                             United Kingdom
     Philipp Brothers Netherlands I B.V.                         The Netherlands
          Philipp Brothers Netherlands II B.V.                   The Netherlands
              Philipp Brothers Netherlands III B.V.              The Netherlands
                  Phibro Animal Health SA(1)                         Belgium
              Phibro Saude Animal International Ltda.(2)             Brazil
Prince Agripoducts, Inc.                                            Delaware
Koffolk (1949), Ltd.                                                 Israel
     Koffimex Ltd.(3)                                                Israel
     Agrozan, Ltd.                                                   Israel
     Planalquimica Industrial Ltda.                                  Brazil
     Wychem Limited(4)                                           United Kingdom
Prince MFG, LLC*                                                    Delaware
     PMC Quincy, Inc.*                                              Illinois
Ferro Metal and Chemical Corporation Limited                     United Kingdom
     D.G. Benett Chemicals Limited.                              United Kingdom
     Ferro Metal & Chemical Company Ltd.                         United Kingdom
PhibroChem, Inc.                                                   New Jersey
Western Magnesium Corp.                                            California
MRT Holdings, LLC*                                                  Delaware
CP Chemicals, Inc.                                                 New Jersey
     Phibro-Tech, Inc.(5)                                           Delaware
          L.C. Holding S.A.                                          France
              La Cornubia S.A.                                       France
Phibro Chemicals, Inc.                                              New York
Odda Holdings AS                                                     Norway
     Odda Smelteverk AS.                                             Norway
</TABLE>

------------------
(1)   All shares owned by Philipp Brothers Netherlands III B.V. other than one
      share owned by PhibroChem, Inc.

(2)   All shares owned by Philipp Brothers Netherlands II B.V. other than one
      share owned by PhibroChem, Inc.

(3)   760, 984 shares owned by Koffolk (1949), Ltd. and 1 share owned by
      Agrozan, Ltd.

(4)   200,000 "A" Shares owned by Ferro Metal and Chemical Corporation Limited.
      and 600,000 "B" Shares owned by Koffolk (1949), Ltd.

(5)   Owned 97.86% by CP Chemicals, Inc. and 2.14% by James O. Herlands.

<PAGE>

                                                                     SCHEDULE II

                        COLLECTIVE BARGAINING AGREEMENTS

1.    Agreement between Union Local No. 822, District 55 International
      Association of Machinists and Aerospace Workers, AFL-CIO and The Prince
      Manufacturing Company, dated April 17, 2000.

2.    Agreement between Prince Agri Products, Inc. and Teamsters Local 238,
      effective July 20, 2002.

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