Document:

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                                                                   EXHIBIT 10.38

                        PHIBRO ANIMAL HEALTH CORPORATION

                                       AND

                      PHILIPP BROTHERS NETHERLANDS III B.V.

                           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.

                          REGISTRATION RIGHTS AGREEMENT

                                                               December 21, 2004

JEFFERIES & COMPANY, INC.
11100 Santa Monica Blvd., 10th Floor
Los Angeles, California 90025

Ladies and Gentlemen:

      Phibro Animal Health Corporation, a New York corporation (the "Company")
and Philipp Brothers Netherlands III B.V., a Dutch company with limited
liability and an indirect wholly owned subsidiary of the Company ("Philipp
Brothers Netherlands" and, together with the Company, the "Issuers") are issuing
and selling to Jefferies & Company, Inc. (the "Initial Purchaser"), upon the
terms set forth in the Purchase Agreement dated December 9, 2004, by and among
the Issuers, the Initial Purchaser and the subsidiary guarantors named therein
(the "Purchase Agreement"), 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 Phillip Brothers
Netherlands (the "Dutch Notes" and, together with U.S. Notes, the "Notes"). As
an inducement to the Initial Purchaser to enter into the Purchase Agreement, the
Issuers and the Guarantors (as defined below) agree with the Initial Purchaser,
for the benefit of the Holders (as defined below) of the Units (including,
without limitation, the Initial Purchaser), as follows:

1.    DEFINITIONS

      Capitalized terms that are used herein without definition and are defined
in the Purchase Agreement shall have the respective meanings ascribed to them in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:

      ADDITIONAL INTEREST: See Section 4(a).

      ADVICE: See Section 6(v).

      AGREEMENT: This Registration Rights Agreement, dated as of the Closing
Date, among the Issuers, the Guarantors and the Initial Purchaser.

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      APPLICABLE PERIOD: See Section 2(e).

      BUSINESS DAY: A day that is not a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to be closed.

      CLOSING DATE: December 21, 2004.

      COLLATERAL AGREEMENTS: Shall have the meaning set forth in the Indenture.

      COMPANY: See the introductory paragraph to this Agreement.

      DAY: Unless otherwise expressly provided, a calendar day.

      DUTCH NOTES: See the introductory paragraph to this Agreement.

      EFFECTIVENESS DATE: The 180th day after the Closing Date.

      EFFECTIVENESS PERIOD: See Section 3(a).

      EVENT DATE: See Section 4(b).

      EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

      EXCHANGE DUTCH NOTES: The Senior Secured Notes due 2007 of Philipp
Brothers Netherlands, identical in all material respects to the Dutch Notes,
including the guarantees endorsed thereon, except for restrictive legends and
additional interest provisions.

      EXCHANGE NOTES: The Exchange U.S. Notes and the Exchange Dutch Notes.

      EXCHANGE OFFER: See Section 2(a).

      EXCHANGE REGISTRATION STATEMENT: See Section 2(a).

      EXCHANGE UNITS: Units, each consisting of $809.5238095 principal amount of
Exchange U.S. Notes and $190.4761905 principal amount of Exchange Dutch Notes.

      EXCHANGE U.S. NOTES: The Senior Secured Notes due 2007 of the Company,
identical in all material respects to the U.S. Notes, including the guarantees
endorsed thereon, except for restrictive legends and additional interest
provisions.

      FILING DATE: The 120th day after the Closing Date.

      GUARANTORS: Shall mean the Company and the Subsidiary Guarantors with
respect to the U.S. Notes and the Subsidiary Guarantors with respect to the
Dutch Notes.

      HOLDER: Any registered holder of Registrable Units.

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      INDEMNIFIED PARTY: See Section 8(c).

      INDEMNIFYING PARTY: See Section 8(c).

      INDENTURE: The Indenture, dated as of October 21, 2003, among the Issuers,
the Subsidiary Guarantors and HSBC Bank USA, National Association as trustee,
pursuant to which the Units are being issued, as amended or supplemented from
time to time in accordance with the terms thereof.

      INITIAL PURCHASER: See the introductory paragraph to this Agreement.

      INITIAL SHELF REGISTRATION: See Section 3(a).

      INSPECTORS: See Section 6(o).

      ISSUERS: See the introductory paragraph to this Agreement.

      LOSSES: See Section 8(a).

      NASD: National Association of Securities Dealers, Inc.

      NOTES: See the introductory paragraph to this Agreement.

      PARTICIPATING BROKER-DEALER: See Section 2(e).

      PERSON: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm, government or agency or political subdivision
thereof, or other legal entity.

      PHILIPP BROTHERS NETHERLANDS: See the introductory paragraph to this
Agreement.

      PRIVATE EXCHANGE: See Section 2(f).

      PRIVATE EXCHANGE NOTES: See Section 2(f).

      PRIVATE EXCHANGE UNITS: See Section 2(f).

      PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Units covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

      PURCHASE AGREEMENT: See the introductory paragraph to this Agreement.

      RECORDS: See Section 6(o).

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      REGISTRABLE UNITS: (i) Units, (ii) Private Exchange Units and (iii)
Exchange Units received in the Exchange Offer, in each case, that may not be
sold free of the registration and prospectus delivery requirements of the
Securities Act.

      REGISTRATION STATEMENT: Any registration statement of the Issuers and the
Guarantors filed with the SEC under the Securities Act (including, but not
limited to, the Exchange Registration Statement, the Shelf Registration and any
subsequent Shelf Registration) that covers any of the Registrable Units pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.

      RULE 144: Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer or such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.

      RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.

      RULE 415: Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

      RULE 430A: Rule 430A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

      SEC: The Securities and Exchange Commission.

      SECURITIES: The Units, the Exchange Units and the Private Exchange Units
(including the underlying Notes, the Exchange Notes and the Private Exchange
Notes, respectively).

      SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

      SEPARATION EVENT: Shall have the meaning set forth in the Indenture.

      SHELF NOTICE: See Section 2(j).

      SHELF REGISTRATION: See Section 3(b).

      SUBSEQUENT SHELF REGISTRATION: See Section 3(b).

      SUBSIDIARY GUARANTOR: Each subsidiary of the Company that guarantees the
obligations of the Issuers under the Notes and the Indenture.

      TIA: The Trust Indenture Act of 1939, as amended.

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      TRUSTEE: The trustee under the Indenture and, if existent, the trustee
under any indenture governing the Exchange Units and Private Exchange Units (if
any).

      UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.

      UNITS: See the introductory paragraph to this Agreement.

      U.S. NOTES: See the introductory paragraph to this Agreement.

2.    EXCHANGE OFFER

      (a)   Unless the Exchange Offer would not be permitted by applicable laws
            or a policy of the SEC, the Issuers shall (and shall cause each
            Guarantor with respect to its guarantee to) (i) prepare and file
            with the SEC by the Filing Date, a registration statement (the
            "Exchange Registration Statement") on an appropriate form under the
            Securities Act with respect to an offer (the "Exchange Offer") to
            the Holders of Units to issue and deliver to such Holders, in
            exchange for the Units, a like number of Exchange Units, (ii) use
            their reasonable best efforts to cause the Exchange Registration
            Statement to become effective by the Effectiveness Date, (iii) use
            their reasonable best efforts to keep the Exchange Registration
            Statement effective for not less than 20 Business Days after the
            Exchange Registration Statement is declared effective, and (iv) use
            their reasonable best efforts to issue on or prior to 30 days after
            the date on which the Exchange Registration Statement is declared
            effective, Exchange Units in exchange for all Units tendered prior
            thereto in the Exchange Offer. The Exchange Offer shall not be
            subject to any conditions, other than that the Exchange Offer does
            not violate applicable law or any applicable interpretation of the
            staff of the SEC.

      (b)   The Exchange Units and the underlying Exchange Notes shall be issued
            under, and entitled to the benefits of, (i) the Indenture or a trust
            indenture that is identical to the Indenture (other than such
            changes as are necessary to comply with any requirements of the SEC
            to effect or maintain the qualifications thereof under the TIA) and
            (ii) the Collateral Agreements.

      (c)   Interest on the Exchange Notes and Private Exchange Notes will
            accrue from the last interest payment date on which interest was
            paid on the Notes surrendered in exchange therefor or, if no
            interest has been paid on the Notes, from the date of original issue
            of the Notes. Each Exchange Note and Private Exchange Note shall
            bear interest at the rate set forth thereon; provided, that interest
            with respect to the period prior to the issuance thereof shall
            accrue at the rate or rates borne by the Notes from time to time
            during such period.

      (d)   The Issuers may require each Holder as a condition to participation
            in the Exchange Offer to represent (i) that any Exchange Units
            received by it will be acquired in the ordinary course of its
            business, (ii) that at the time of the commencement and consummation
            of the Exchange Offer such Holder has not entered into any
            arrangement or understanding with any Person to participate in

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            the distribution (within the meaning of the Securities Act) of the
            Exchange Units in violation of the provisions of the Securities Act,
            (iii) that if such Holder is an "affiliate" of the either of the
            Issuers or a Guarantor within the meaning of Rule 405 of the
            Securities Act, it will comply with the registration and prospectus
            delivery requirements of the Securities Act to the extent applicable
            to it, (iv) if such Holder is not a broker-dealer, that it is not
            engaged in, and does not intend to engage in, the distribution of
            the Units and (v) if such Holder is a Participating Broker-Dealer,
            that it will deliver a Prospectus in connection with any resale of
            the Exchange Units.

      (e)   The Issuers shall include within the Prospectus contained in the
            Exchange Registration Statement a section entitled "Plan of
            Distribution" which shall contain a summary statement of the
            positions taken or policies made by the staff of the SEC with
            respect to the potential "underwriter" status of any broker-dealer
            that is the beneficial owner (as defined in Rule 13d-3 under the
            Exchange Act) of Exchange Units received by such broker-dealer in
            the Exchange Offer for its own account in exchange for Units that
            were acquired by it as a result of market-making or other trading
            activity (a "Participating Broker-Dealer"), whether such positions
            or policies have been publicly disseminated by the staff of the SEC
            or such positions or policies, in the judgment of the Initial
            Purchaser, represent the prevailing views of the staff of the SEC.
            Such "Plan of Distribution" section shall also allow, to the extent
            permitted by applicable policies and regulations of the SEC, the use
            of the Prospectus by all Persons subject to the prospectus delivery
            requirements of the Securities Act, including, to the extent so
            permitted, all Participating Broker-Dealers, and include a statement
            describing the manner in which Participating Broker-Dealers may
            resell the Exchange Units. The Issuers shall use their reasonable
            best efforts to keep the Exchange Registration Statement effective
            and to amend and supplement the Prospectus contained therein, in
            order to permit such Prospectus to be lawfully delivered by all
            Persons subject to the prospectus delivery requirements of the
            Securities Act for such period of time as such Persons must comply
            with such requirements in order to resell the Exchange Units (the
            "Applicable Period").

      (f)   If, upon consummation of the Exchange Offer, the Initial Purchaser
            holds any Units acquired by it and having the status of an unsold
            allotment in the initial distribution, the Issuers (upon the written
            request from the Initial Purchaser) shall, simultaneously with the
            delivery of the Exchange Units in the Exchange Offer, issue and
            deliver to the Initial Purchaser, in exchange (the "Private
            Exchange") for the Units held by the Initial Purchaser, a like
            principal amount of Exchange Units that are identical to the Units,
            except for the existence of restrictions on transfer thereof under
            the Securities Act and securities laws of the several states of the
            United States (the "Private Exchange Units" and the Exchange Notes
            underlying the Units the "Private Exchange Notes") (and which are
            issued pursuant to the same indenture as the Exchange Units and
            Exchange Notes). The Private Exchange Units shall bear the same
            CUSIP number as the Exchange Units.

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      (g)   In connection with the Exchange Offer, the Issuers shall (and shall
            cause each Subsidiary Guarantor to):

            (i)   mail to each Holder a copy of the Prospectus forming part of
                  the Exchange Registration Statement, together with an
                  appropriate letter of transmittal that is an exhibit to the
                  Exchange Offer Registration Statement, and any related
                  documents;

            (ii)  keep the Exchange Offer open for not less than 20 Business
                  Days after the date on which the Exchange Registration
                  Statement is declared effective;

            (iii) utilize the services of a depository for the Exchange Offer
                  with an address in the Borough of Manhattan, the City of New
                  York, which may be the Trustee or an affiliate thereof;

            (iv)  permit Holders to withdraw tendered Registrable Units at any
                  time prior to the close of business, New York time, on the
                  last Business Day on which the Exchange Offer shall remain
                  open; and

            (v)   otherwise comply in all material respects with all applicable
                  laws.

      (h)   As soon as practicable after the close of the Exchange Offer or the
            Private Exchange, as the case may be, the Issuers shall (and shall
            cause each Subsidiary Guarantor to):

            (i)   accept for exchange all Registrable Units validly tendered
                  pursuant to the Exchange Offer or the Private Exchange, as the
                  case may be, and not validly withdrawn;

            (ii)  deliver to the Trustee for cancellation all Registrable Units
                  so accepted for exchange; and

            (iii) cause the Trustee to authenticate and deliver promptly to each
                  Holder tendering such Registrable Units, Exchange Units or
                  Private Exchange Units (and the underlying Exchange Notes and
                  Private Exchange Notes), as the case may be, equal in
                  principal amount to the Units of such Holder so accepted for
                  exchange.

      (i)   The Exchange Units and the Private Exchange Units (and the
            underlying Exchange Notes and Private Exchange Notes) may be issued
            under (i) the Indenture or (ii) an indenture identical to the
            Indenture (other than such changes as are necessary to comply with
            any requirements of the SEC to effect or maintain the qualification
            thereof under the TIA), which in either event will provide that the
            Exchange Units will not be subject to the transfer restrictions set
            forth in the Indenture, and that the Exchange Units, the Private
            Exchange Units and the Units, if any, will be deemed one class of
            security (subject to the provisions of the Indenture) and entitled
            to participate in all the respective security granted by the

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            Issuers pursuant to the Collateral Agreements and in any Subsidiary
            Guarantee (as such terms are defined in the Indenture) on an equal
            and ratable basis.

      (j)   If: (i) applicable interpretations of the staff of the SEC would not
            permit the consummation of the Exchange Offer; (ii) subsequent to
            the consummation of the Private Exchange, any Holder of Private
            Exchange Units so requests; (iii) the Exchange Offer is not
            consummated by the 210th day following the Closing Date; or (iv) (A)
            any Holder is prohibited by law or Commission policy form
            participating in the Exchange Offer, (B) if the Initial Purchaser so
            requests with respect to Units not eligible to be exchanged for
            Exchange Units in the Exchange Offer, (C) any Holder participating
            in the Exchange Offer receives Exchange Units that may not be sold
            without restriction under state and federal securities laws (other
            than due solely to the status of such Holder as an affiliate of the
            Issuers within the meaning of the Securities Act) or (D) any
            broker-dealer holds Units acquired directly from the Issuers or any
            of their affiliates and, in each such case contemplated by this
            clause (v), and such Holder notifies the Issuers within six months
            of consummation of the Exchange Offer, then the Issuers shall
            promptly (and in any event within five Business Days) deliver to the
            Holders (or in the case of an occurrence of any event described in
            clause (v) of this Section 2(j), to any such Holder) and the Trustee
            written notice thereof (the "Shelf Notice") and shall promptly (but
            in no event later than the Shelf Filing Date) file an Initial Shelf
            Registration pursuant to Section 3.

3.    SHELF REGISTRATION

      If a Shelf Notice is delivered pursuant to Section 2(j), then this Section
3 shall apply to all Registrable Units. Otherwise, upon consummation of the
Exchange Offer in accordance with Section 2, the provisions of this Section 3
shall apply solely with respect to (i) Units held by any Holder thereof not
permitted to participate in the Exchange Offer, (ii) Units held by any
broker-dealer that acquired such Units directly from the Issuers or any of their
affiliates and (iii) Exchange Units that are not freely tradeable as
contemplated by Section 2(j)(v) hereof, provided in each case that the relevant
Holder has duly notified the Issuers within six months of the Exchange Offer as
required by Section 2(j)(v).

      (a)   Initial Shelf Registration. The Issuers shall (and shall cause each
            Subsidiary Guarantor to), promptly, file with the SEC a Registration
            Statement for an offering to be made on a continuous basis pursuant
            to Rule 415 covering all of the Registrable Units (the "Initial
            Shelf Registration"). If the Issuers (and any Subsidiary Guarantor)
            have not yet filed an Exchange Registration Statement, the Issuers
            shall (and shall cause each Subsidiary Guarantor to) file with the
            SEC the Initial Shelf Registration on or prior to the Filing Date
            and shall use their reasonable best efforts to cause such Initial
            Shelf Registration to be declared effective under the Securities Act
            on or prior to the Effectiveness Date. Otherwise, the Issuers shall
            (and shall cause each Subsidiary Guarantor to) use their reasonable
            best efforts to file with the SEC the Initial Shelf Registration
            within 30 days of the delivery of the Shelf Notice and shall use
            their reasonable best efforts to cause such Shelf Registration to be
            declared effective under the

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            Securities Act as promptly as practicable thereafter (but in no
            event more than 90 days after delivery of the Shelf Notice). The
            Initial Shelf Registration shall be on Form S-1 or another
            appropriate form permitting registration of such Registrable Units
            for resale by Holders in the manner or manners reasonably designated
            by them (including, without limitation, one or more underwritten
            offerings). The Issuers and Subsidiary Guarantors shall not permit
            any securities other than the Registrable Units to be included in
            any Shelf Registration. The Issuers shall (and shall cause each
            Subsidiary Guarantor to) use their reasonable best efforts to keep
            the Initial Shelf Registration continuously effective under the
            Securities Act until the date which is 24 months from the Closing
            Date (subject to extension pursuant to the last paragraph of Section
            6(v) (the "Effectiveness Period"), or such shorter period ending
            when (i) all Registrable Units covered by the Initial Shelf
            Registration have been sold in the manner set forth and as
            contemplated in the Initial Shelf Registration (ii) a Subsequent
            Shelf Registration covering all of the Registrable Units covered by
            and not sold under the Initial Shelf Registration or an earlier
            Subsequent Shelf Registration has been declared effective under the
            Securities Act or (iii) there cease to be any outstanding
            Registrable Units.

      (b)   Subsequent Shelf Registrations. If the Initial Shelf Registration or
            any Subsequent Shelf Registration (as defined below) ceases to be
            effective for any reason at any time during the Effectiveness Period
            (other than because of the sale of all of the securities registered
            thereunder), the Issuers shall (and shall cause each Subsidiary
            Guarantor to) use their reasonable best efforts to obtain the prompt
            withdrawal of any order suspending the effectiveness thereof, and in
            any event shall within 30 days of such cessation of effectiveness
            amend such Shelf Registration in a manner designed to obtain the
            withdrawal of the order suspending the effectiveness thereof, or
            file (and cause each Subsidiary Guarantor to file) an additional
            "shelf" Registration Statement pursuant to Rule 415 covering all of
            the Registrable Units (a "Subsequent Shelf Registration"). If a
            Subsequent Shelf Registration is filed, the Issuers shall (and shall
            cause each Subsidiary Guarantor to) use their reasonable best
            efforts to cause the Subsequent Shelf Registration to be declared
            effective as soon as practicable after such filing and to keep such
            Subsequent Shelf Registration continuously effective for a period
            equal to the number of days in the Effectiveness Period less the
            aggregate number of days during which the Initial Shelf Registration
            or any Subsequent Shelf Registration was previously effective. As
            used herein the term "Shelf Registration" means the Initial Shelf
            Registration and any Subsequent Shelf Registrations

      (c)   Supplements and Amendments. The Issuers shall promptly supplement
            and amend any Shelf Registration if required by the rules,
            regulations or instructions applicable to the registration form used
            for such Shelf Registration, if required by the Securities Act, or
            if requested in writing by the Holders of a majority in aggregate
            principal amount of the Registrable Units covered by such Shelf
            Registration or if reasonably requested by any underwriter of such
            Registrable Units.

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4.    ADDITIONAL INTEREST

      (a)   The Issuers acknowledge and agree that the Holders of Registrable
            Units will suffer damages if the Issuers fail to fulfill their
            material obligations under Section 2 or Section 3 hereof and that it
            would not be feasible to ascertain the extent of such damages with
            precision. Accordingly, the Issuers agree to pay additional cash
            interest on the Notes ("Additional Interest") under the
            circumstances and to the extent set forth below (each of which shall
            be given independent effect):

            (i)   if neither the Exchange Registration Statement nor the Initial
                  Shelf Registration has been filed on or prior to the Filing
                  Date, Additional Interest shall accrue on the Notes over and
                  above any stated interest at a rate of 0.25% per annum of the
                  principal amount of such Notes for the first 90 days
                  immediately following the Filing Date, such Additional
                  Interest rate increasing by an additional 0.25% per annum at
                  the beginning of each subsequent 90-day period;

            (ii)  if neither the Exchange Registration Statement nor the Initial
                  Shelf Registration is declared effective on or prior to the
                  Effectiveness Date, Additional Interest shall accrue on the
                  Notes over and above any stated interest at a rate of 0.25%
                  per annum of the principal amount of such Notes for the first
                  90 days immediately following the Effectiveness Date, such
                  Additional Interest rate increasing by an additional 0.25% per
                  annum at the beginning of each subsequent 90-day period;

            (iii) if (A) the Issuers have not exchanged Exchange Units for all
                  Units validly tendered in accordance with the terms of the
                  Exchange Offer on or prior to 30 days after the Effectiveness
                  Date, (B) the Exchange Registration Statement ceases to be
                  effective at any time prior to the expiration of 20 Business
                  Days thereafter, (C) if applicable, a Shelf Registration has
                  been declared effective and such Shelf Registration ceases to
                  be effective at any time prior to the second anniversary of
                  its effective date (other than such time as all Units have
                  been disposed of thereunder) and is not declared effective
                  again within 30 days, or (D) pending the announcement of a
                  material corporate transaction, the Issuers issue a written
                  notice pursuant to Section 6(e)(v) or (vi) that a Shelf
                  Registration Statement or Exchange Registration Statement is
                  unusable and the aggregate number of days in any 365-day
                  period for which all such notices issued or required to be
                  issued, have been, or were required to be, in effect exceeds
                  120 days in the aggregate or 30 days consecutively, in the
                  case of a Shelf Registration statement, or 15 days in the
                  aggregate in the case of an Exchange Registration Statement,
                  then Additional Interest shall accrue on the Notes, over and
                  above any stated interest, at a rate of 0.25% per annum of the
                  principal amount of such Notes commencing on (w) the 31st day
                  after the Effectiveness Date, in the case of (A) above, or (x)
                  the date the Exchange Registration Statement ceases to be
                  effective without being declared effective again within 30
                  days, in the case of clause (B) above, or (y) the

<PAGE>

                  day such Shelf Registration ceases to be effective in the case
                  of (C) above, or (z) the day the Exchange Registration
                  Statement or Shelf Registration ceases to be usable in case of
                  clause (D) above, such Additional Interest rate increasing by
                  an additional 0.25% per annum at the beginning of each such
                  subsequent 90-day period;

            provided, however, that the maximum Additional Interest rate on the
            Notes may not exceed at any one time in the aggregate 1.00% per
            annum; and provided further, that (1) upon the filing of the
            Exchange Registration Statement or Initial Shelf Registration (in
            the case of (i) above), (2) upon the effectiveness of the Exchange
            Registration Statement or Initial Shelf Registration (in the case of
            (ii) above), or (3) upon the exchange of Exchange Units for all
            Units tendered (in the case of (iii)(A) above), or upon the
            effectiveness of the Exchange Registration Statement that had ceased
            to remain effective (in the case of clause (iii)(B) above), or upon
            the effectiveness of a Shelf Registration which had ceased to remain
            effective (in the case of (iii)(C) above), Additional Interest on
            the Notes as a result of such clause (or the relevant subclause
            thereof) or upon the effectiveness of such Registration Statement or
            Exchange Registration Statement (in the case of clause (iii)(D)
            above), as the case may be, shall cease to accrue.

      (b)   The Issuers shall notify the Trustee within 5 Business Days after
            each and every date on which an event occurs in respect of which
            Additional Interest is required to be paid (an "Event Date"). Any
            amounts of Additional Interest due pursuant to clause (a)(i),
            (a)(ii) or (a)(iii) of this Section 4 will be payable in cash, on
            the dates and in the manner provided in the Indenture and whether or
            not any cash interest would then be payable on such date, commencing
            with the first such semi-annual date occurring after any such
            Additional Interest commences to accrue. The amount of Additional
            Interest will be determined by multiplying the applicable Additional
            Interest rate by the principal amount of the Notes, multiplied by a
            fraction, the numerator of which is the number of days such
            Additional Interest rate was applicable during such period
            (determined on the basis of a 360-day year comprised of twelve
            30-day months and, in the case of a partial month, the actual number
            of days elapsed), and the denominator of which is 360.

5.    HOLD-BACK AGREEMENTS

      The Issuers agree that they will not effect any public or private sale or
distribution (including a sale pursuant to Regulation D under the Securities
Act) of any securities the same as or similar to those covered by a Registration
Statement filed pursuant to Section 2 or 3 hereof (other than Additional Units
(as defined in the Indenture) issued under the Indenture), or any securities
convertible into or exchangeable or exercisable for such securities, during the
10 days prior to, and during the 90-day period beginning on, the effective date
of any Registration Statement filed pursuant to Sections 2 and 3 hereof unless
the Holders of a majority in the aggregate principal amount of the Registrable
Units to be included in such Registration Statement consent, if the managing
underwriter thereof so requests in writing.

<PAGE>

6.    REGISTRATION PROCEDURES

      In connection with the filing of any Registration Statement pursuant to
Sections 2 or 3 hereof, the Issuers shall (and shall cause each Subsidiary
Guarantor to) effect such registrations to permit the sale of such securities
covered thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto and in connection with any Registration Statement
filed by the Issuers hereunder, the Issuers shall (and shall cause each
Subsidiary Guarantor to):

      (a)   Prepare and file with the SEC on or prior to the Filing Date, the
            Exchange Registration Statement or if the Exchange Registration
            Statement is not filed because of the circumstances contemplated by
            Section 2(j), a Shelf Registration as prescribed by Section 3, and
            use their reasonable best efforts to cause each such Registration
            Statement to become effective and remain effective as provided
            herein; provided that, if (1) a Shelf Registration is filed pursuant
            to Section 3 or (2) a Prospectus contained in an Exchange
            Registration Statement filed pursuant to Section 2 is required to be
            delivered under the Securities Act by any Participating
            Broker-Dealer who seeks to sell Exchange Units during the Applicable
            Period relating thereto, before filing any Registration Statement or
            Prospectus or any amendments or supplements thereto the Issuers
            shall (and shall cause each Subsidiary Guarantor to), if requested,
            furnish to and afford the Holders of the Registrable Units to be
            registered pursuant to such Shelf Registration Statement, each
            Participating Broker-Dealer, the managing underwriters, if any, and
            each of their respective counsel, a reasonable opportunity to review
            copies of all such documents (including copies of any documents to
            be incorporated by reference therein and all exhibits thereto)
            proposed to be filed (in each case at least 5 Business Days prior to
            such filing). The Issuers and each Subsidiary Guarantor shall not
            file any such Registration Statement or Prospectus or any amendments
            or supplements thereto in respect of which the Holders must provide
            information for the inclusion therein without the Holders being
            afforded an opportunity to review such documentation if the holders
            of a majority in aggregate principal amount of the Registrable Units
            covered by such Registration Statement, or any such Participating
            Broker-Dealer, as the case may be, the managing underwriters, if
            any, or any of their respective counsel shall reasonably object in
            writing on a timely basis. A Holder shall be deemed to have
            reasonably objected to such filing if such Registration Statement,
            amendment, Prospectus or supplement, as applicable, as proposed to
            be filed, contains an untrue statement of a material fact or omits
            to state any material fact necessary to make the statements therein
            not misleading or fails to comply with the applicable requirements
            of the Securities Act.

      (b)   Provide an indenture trustee for the Registrable Units, the Exchange
            Units or the Private Exchange Units, as the case may be, and cause
            the Indenture (or other indenture relating to the Registrable Units)
            to be qualified under the TIA not later than the effective date of
            the first Registration Statement; and in connection therewith, to
            effect such changes to such indenture as may be required for such
            indenture to be so qualified in accordance with the terms of the
            TIA; and execute,

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            and use their reasonable best efforts to cause such trustee to
            execute, all documents as may be required to effect such changes,
            and all other forms and documents required to be filed with the SEC
            to enable such indenture to be so qualified in a timely manner.

      (c)   Prepare and file with the SEC such pre-effective amendments and
            post-effective amendments to each Shelf Registration or Exchange
            Registration Statement, as the case may be, as may be necessary to
            keep such Registration Statement continuously effective for the
            Effectiveness Period or the Applicable Period, as the case may be;
            cause the related Prospectus to be supplemented by any Prospectus
            supplement required by applicable law, and as so supplemented to be
            filed pursuant to Rule 424 (or any similar provisions then in force)
            promulgated under the Securities Act; and comply with the provisions
            of the Securities Act and the Exchange Act applicable to them with
            respect to the disposition of all securities covered by such
            Registration Statement as so amended or in such Prospectus as so
            supplemented and with respect to the subsequent resale of any
            securities being sold by a Participating Broker-Dealer covered by
            any such Prospectus. The Issuers and each Subsidiary Guarantor shall
            not, during the Applicable Period, voluntarily and knowingly take
            any action that would result in selling Holders of the Registrable
            Units covered by a Registration Statement or Participating
            Broker-Dealers seeking to sell Exchange Units not being able to sell
            such Registrable Units or such Exchange Units during that period,
            unless such action, in the reasonable judgment of the Issuers, is
            required by applicable law, rule or regulation or permitted by this
            Agreement.

      (d)   Furnish to such selling Holders and Participating Broker-Dealers who
            so request in writing (i) upon the Issuers' receipt, a copy of the
            order of the SEC declaring such Registration Statement and any
            post-effective amendment thereto effective, (ii) such reasonable
            number of copies of the Prospectus included in such Registration
            Statement (including each preliminary Prospectus) and each amendment
            and supplement thereto, and such reasonable number of copies of the
            final Prospectus as filed by the Issuers and each Subsidiary
            Guarantor pursuant to Rule 424(b) under the Securities Act, in
            conformity with the requirements of the Securities Act and each
            amendment and supplement thereto, and (iii) such other documents
            (including any amendments required to be filed pursuant to clause
            (c) of this Section), as any such Person may reasonably request in
            writing. The Issuers and the Subsidiary Guarantors hereby consent to
            the use of the Prospectus by each of the selling Holders of
            Registrable Units or each such Participating Broker-Dealer, as the
            case may be, and the underwriters or agents, if any, and dealers, if
            any, in connection with the offering and sale of the Registrable
            Units covered by, or the sale by Participating Broker-Dealers of the
            Exchange Units pursuant to, such Prospectus and any amendment or
            supplement thereto.

      (e)   If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
            Prospectus contained in an Exchange Registration Statement filed
            pursuant to Section 2 is required to be delivered under the
            Securities Act by any Participating Broker-Dealer who seeks to sell
            Exchange Units during the Applicable Period relating

<PAGE>

            thereto, the Issuers shall notify in writing the selling Holders of
            Registrable Units, or each such Participating Broker-Dealer, as the
            case may be, the managing underwriters, if any, and each of their
            respective counsel promptly (but in any event within 2 Business
            Days) (i) when a Prospectus or any Prospectus supplement or
            post-effective amendment has been filed, and, with respect to a
            Registration Statement or any post-effective amendment, when the
            same has become effective, (ii) of the issuance by the SEC of any
            stop order suspending the effectiveness of a Registration Statement
            or of any order preventing or suspending the use of any Prospectus
            or the initiation of any proceedings for that purpose, (iii) if at
            any time when a Prospectus is required by the Securities Act to be
            delivered in connection with sales of the Registrable Units the
            representations and warranties of the Issuers and any Subsidiary
            Guarantor contained in any agreement (including any underwriting
            agreement) contemplated by Section 6(n) hereof cease to be true and
            correct in all material respects, (iv) of the receipt by the Issuers
            or any Subsidiary Guarantor of any notification with respect to the
            suspension of the qualification or exemption from qualification of a
            Registration Statement or any of the Registrable Units or the
            Exchange Units to be sold by any Participating Broker-Dealer for
            offer or sale in any jurisdiction, or the initiation or threatening
            of any proceeding for such purpose, (v) of the happening of any
            event, the existence of any condition of any information becoming
            known that makes any statement made in such Registration Statement
            or related Prospectus or any document incorporated or deemed to be
            incorporated therein by reference untrue in any material respect or
            that requires the making of any changes in, or amendments or
            supplements to, such Registration Statement, Prospectus or documents
            so that, in the case of the Registration Statement and the
            Prospectus, it will not contain any untrue statement of a material
            fact or omit to state any material fact required to be stated
            therein or necessary to make the statements therein, in light of the
            circumstances under which they were made, not misleading, (vi) of
            any reasonable determination by the Issuers or any Subsidiary
            Guarantor that a post-effective amendment to a Registration
            Statement would be appropriate and (vii) of any request by the SEC
            for amendments to the Registration Statement or supplements to the
            Prospectus or for additional information relating thereto.

      (f)   Use their reasonable best efforts to prevent the issuance of any
            order suspending the effectiveness of a Registration Statement or of
            any order preventing or suspending the use of a Prospectus or
            suspending the qualification (or exemption from qualification) of
            any of the Registrable Units or the Exchange Units to be sold by any
            Participating Broker-Dealer, for sale in any jurisdiction, and, if
            any such order is issued, to use their reasonable best efforts to
            obtain the withdrawal of any such order at the earliest possible
            date.

      (g)   If (A) a Shelf Registration is filed pursuant to Section 3, (B) a
            Prospectus contained in an Exchange Registration Statement filed
            pursuant to Section 2 is required to be delivered under the
            Securities Act by any Participating Broker-Dealer who seeks to sell
            Exchange Units during the Applicable Period or (C) reasonably
            requested in writing by the managing underwriters, if any, or the

<PAGE>

            Holders of a majority in aggregate principal amount of the
            Registrable Units being sold in connection with an underwritten
            offering, (i) promptly incorporate in a Prospectus supplement or
            post-effective amendment such information or revisions to
            information therein relating to such underwriters or selling Holders
            as the managing underwriters, if any, or such Holders or any of
            their respective counsel reasonably request in writing to be
            included or made therein, and reasonably acceptable to the Issuers
            and (ii) make all required filings of such Prospectus supplement or
            such post-effective amendment as soon as practicable after the
            Issuers have received notification of the matters to be incorporated
            in such Prospectus supplements or post-effective amendment.

      (h)   Prior to any public offering of Registrable Units or any delivery of
            a Prospectus contained in the Exchange Registration Statement by any
            Participating Broker-Dealer who seeks to sell Exchange Units during
            the Applicable Period, use their reasonable best efforts to register
            or qualify, and to cooperate with the selling Holders of Registrable
            Units or each such Participating Broker-Dealer, as the case may be,
            the underwriters, if any, and their respective counsel in connection
            with the registration or qualification (or exemption from such
            registration or qualification) of such Registrable Units or Exchange
            Units, as the case may be, for offer and sale under the securities
            or Blue Sky laws of such jurisdictions within the United States as
            any selling Holder, Participating Broker-Dealer or any managing
            underwriter or underwriters, if any, reasonably request in writing;
            provided that where Exchange Units held by Participating
            Broker-Dealers or Registrable Units are offered other than through
            an underwritten offering, the Issuers and each Subsidiary Guarantor
            agree to cause their counsel to perform Blue Sky investigations and
            use their reasonable best efforts to file any registrations and
            qualifications required to be filed pursuant to this Section 6(h),
            use their reasonable best efforts to keep each such registration or
            qualification (or exemption therefrom) effective during the period
            such Registration Statement is required to be kept effective and use
            their reasonable best efforts to do any and all other acts or things
            reasonably necessary or advisable to enable the disposition in such
            jurisdictions of the Exchange Units held by Participating
            Broker-Dealers or the Registrable Units covered by the applicable
            Registration Statement; provided that neither the Issuers nor any
            Subsidiary Guarantor shall be required to (A) qualify generally to
            do business in any jurisdiction where it is not then so qualified,
            (B) take any action that would subject it to general service of
            process in any such jurisdiction where it is not then so subject or
            (C) subject itself to taxation in any such jurisdiction where it is
            not then so subject.

      (i)   If (A) a Shelf Registration is filed pursuant to Section 3 or (B) a
            Prospectus contained in an Exchange Registration Statement filed
            pursuant to Section 2 is requested to be delivered under the
            Securities Act by any Participating Broker-Dealer who seeks to sell
            Exchange Units during the Applicable Period, cooperate in all
            reasonable respects with the selling Holders of Registrable Units
            and the managing underwriter or underwriters, if any, to facilitate
            the timely preparation and delivery of certificates representing
            Registrable Units to be sold, which certificates shall not bear any
            restrictive legends and shall be in a form eligible for

<PAGE>

            deposit with The Depository Trust Company, and enable such
            Registrable Units to be in such denominations and registered in such
            names as the managing underwriter or underwriters, if any, or
            Holders may reasonably request.

      (j)   Use their reasonable best efforts to cause the Registrable Units
            covered by any Registration Statement to be registered with or
            approved by such governmental agencies or authorities as may be
            necessary to enable the seller or sellers thereof or the
            underwriter, if any, to consummate the disposition of such
            Registrable Units, except as may be required solely as a consequence
            of the nature of such selling Holder's business, in which case the
            Issuers shall (and shall cause each Subsidiary Guarantor to)
            cooperate in all reasonable respects with the filing of such
            Registration Statement and the granting of such approvals; provided
            that neither the Issuers nor any existing Subsidiary Guarantor shall
            be required to (A) qualify generally to do business in any
            jurisdiction where it is not then so qualified, (B) take any action
            that would subject it to general service of process in any
            jurisdiction where it is not then so subject or (C) subject itself
            to taxation in any such jurisdiction where it is not then so
            subject.

      (k)   If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
            Prospectus contained in an Exchange Registration Statement filed
            pursuant to Section 2 is required to be delivered under the
            Securities Act by any Participating Broker-Dealer who seeks to sell
            Exchange Units during the Applicable Period, upon the occurrence of
            any event contemplated by paragraph 6(e)(v) or 6(e)(vi) hereof, as
            promptly as practicable, prepare and file with the SEC, at the
            expense of the Issuers and the Subsidiary Guarantors , a supplement
            or post-effective amendment to the Registration Statement or a
            supplement to the related Prospectus or any document incorporated or
            deemed to be incorporated therein by reference, or file any other
            required document so that, as thereafter delivered to the purchasers
            of the Registrable Units being sold thereunder or to the purchasers
            of the Exchange Units to whom such Prospectus will be delivered by a
            Participating Broker-Dealer, such Prospectus will not contain an
            untrue statement of a material fact or omit to state a material fact
            required to be stated therein or necessary to make the statements
            therein, in light of the circumstances under which they were made,
            not misleading, and, if SEC review is required, use their reasonable
            best efforts to cause such post-effective amendment to be declared
            effective as soon as possible.

      (l)   Use their reasonable best efforts to cause the Registrable Units
            covered by a Registration Statement to be rated with such
            appropriate rating agencies, if so requested in writing by the
            Holders of a majority in aggregate principal amount of the
            Registrable Units covered by such Registration Statement or the
            managing underwriter or underwriters, if any.

      (m)   Prior to the initial issuance of the Exchange Units, (i) provide the
            Trustee with one or more certificates for the Registrable Units in a
            form eligible for deposit with The Depository Trust Company and (ii)
            provide a CUSIP number for the Exchange Units.

<PAGE>

      (n)   If a Shelf Registration is filed pursuant to Section 3, enter into
            such agreements (including an underwriting agreement in form, scope
            and substance as is customary in underwritten offerings of debt
            securities similar to the Units, as may be appropriate in the
            circumstances) and take all such other actions in connection
            therewith (including those reasonably requested in writing by the
            managing underwriters, if any, or the Holders of a majority in
            aggregate principal amount of the Registrable Units being sold) in
            order to expedite or facilitate the registration or the disposition
            of such Registrable Units, and in such connection, whether or not an
            underwriting agreement is entered into and whether or not the
            registration is an Underwritten Registration, (i) make such
            representations and warranties to the Holders and the underwriters,
            if any, with respect to the business of the Issuers and their
            subsidiaries as then conducted, and the Registration Statement,
            Prospectus and documents, if any, incorporated or deemed to be
            incorporated by reference therein, in each case, in form, substance
            and scope as are customarily made by issuers to underwriters in
            underwritten offerings of debt securities similar to the Units, as
            may be appropriate and reasonable in the circumstances, and confirm
            the same if and when reasonably required; (ii) use reasonable best
            efforts to obtain an opinion of counsel to the Issuers and the
            Subsidiary Guarantors and updates thereof (which counsel and
            opinions (in form, scope and substance) shall be reasonably
            satisfactory to the managing underwriters, if any, and the Holders
            of a majority in aggregate principal amount of the Registrable Units
            being sold), addressed to each selling Holder and each of the
            underwriters, if any, covering the matters customarily covered in
            opinions of counsel to the Issuers and the Subsidiary Guarantors
            requested in underwritten offerings of debt securities similar to
            the Units, as may be appropriate in the circumstances; (iii) use
            reasonable best efforts to obtain "cold comfort" letters and updates
            thereof (which letters and updates (in form, scope and substance)
            shall be reasonably satisfactory to the managing underwriters) from
            the independent certified public accountants of the Issuers and the
            Subsidiary Guarantors (and, if necessary, any other independent
            certified public accountants of any subsidiary of the Issuers or of
            any business acquired by the Issuers for which financial statements
            and financial data are, or are required to be, included in the
            Registration Statement), addressed to each of the underwriters, such
            letters to be in customary form and covering matters of the type
            customarily covered in "cold comfort" letters in connection with
            underwritten offerings of debt securities similar to the Units, as
            may be appropriate in the circumstances, and such other matters as
            reasonably requested in writing by the underwriters; and (iv)
            deliver such documents and certificates as may be reasonably
            requested in writing by the Holders of a majority in aggregate
            principal amount of the Registrable Units being sold and the
            managing underwriters, if any, to evidence the continued validity in
            all material respects of the representations and warranties of the
            Issuers and their subsidiaries made pursuant to clause (i) above and
            to evidence compliance in all material respects with any conditions
            contained in the underwriting agreement or other similar agreement
            entered into by the Issuers or any Subsidiary Guarantor.

      (o)   If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
            Prospectus contained in an Exchange Registration Statement filed
            pursuant to Section 2 is

<PAGE>

            required to be delivered under the Securities Act by any
            Participating Broker-Dealer who seeks to sell Exchange Units during
            the Applicable Period, make available for inspection by any selling
            Holder of such Registrable Units being sold, or each such
            Participating Broker-Dealer, as the case may be, any underwriter
            participating in any such disposition of Registrable Units, if any,
            and any attorney, accountant or other agent retained by any such
            selling Holder or each such Participating Broker-Dealer, as the case
            may be, or underwriter (collectively, the "Inspectors"), at the
            offices where normally kept, during reasonable business hours and in
            a manner so as not to be disruptive to the business or operations of
            the Issuers and/or Subsidiary Guarantors, all financial and other
            records and pertinent corporate documents of the Issuers and their
            subsidiaries (collectively, the "Records") as shall be reasonably
            necessary to enable them to exercise any applicable due diligence
            responsibilities, and cause the officers, directors and employees of
            the Issuers and their subsidiaries to supply all information
            reasonably requested in writing by any such Inspector in connection
            with such Registration Statement. Each Inspector shall agree in
            writing, in a form reasonably acceptable to the Issuers, that it
            will keep the Records confidential and not disclose any of the
            Records unless (i) the disclosure of such Records is necessary to
            avoid or correct a misstatement or omission in such Registration
            Statement, (ii) the release of such Records is ordered pursuant to a
            subpoena or other order from a court of competent jurisdiction,
            (iii) the information in such Records is public or has been made
            generally available to the public other than as a result of a
            disclosure or failure to safeguard by such Inspector or (iv)
            disclosure of such information is, in the reasonable written opinion
            of counsel for any Inspector, necessary or advisable in connection
            with any action, claim, suit or proceeding, directly or indirectly,
            involving or potentially involving such Inspector and arising out
            of, based upon, related to, or involving this Agreement, or any
            transaction contemplated hereby or arising hereunder. Each selling
            Holder of such Registrable Units and each such Participating
            Broker-Dealer will be required to agree that information obtained by
            it as a result of such inspections shall be deemed confidential and
            shall not be used by it as the basis for any market transactions in
            the securities of the Issuers unless and until such is made
            generally available to the public. Each Inspector, each selling
            Holder of such Registrable Units and each such Participating
            Broker-Dealer will be required to further agree that it will, upon
            learning that disclosure of such Records is sought in a court of
            competent jurisdiction, give notice to the Issuers and, to the
            extent practicable, use their best efforts to allow the Issuers, at
            their expense, to undertake appropriate action to prevent disclosure
            of the Records deemed confidential at their expense.

      (p)   Comply with all applicable rules and regulations of the SEC and make
            generally available to the security holders of the Issuers with
            regard to any Applicable Registration Statement earning statements
            satisfying the provisions of section 11(a) of the Securities Act and
            Rule 158 thereunder (or any similar rule promulgated under the
            Securities Act) no later than 45 days after the end of any 12-month
            period (or 90 days after the end of any 12-month period if such
            period is a fiscal year) (i) commencing at the end of any fiscal
            quarter in which

<PAGE>

            Registrable Units are sold to underwriters in a firm commitment or
            best efforts underwritten offering and (ii) if not sold to
            underwriters in such an offering, commencing on the first day of the
            first fiscal quarter of the Issuers after the effective date of a
            Registration Statement, which statements shall cover said 12-month
            periods.

      (q)   Upon consummation of an Exchange Offer or Private Exchange, use
            reasonable best efforts to obtain an opinion of counsel to the
            Issuers and the Subsidiary Guarantors (in form, scope and substance
            reasonably satisfactory to the Initial Purchaser), addressed to the
            Trustee for the benefit of all Holders participating in the Exchange
            Offer or Private Exchange, as the case may be, to the effect that
            (i) the Issuers and the Subsidiary Guarantors have duly authorized,
            executed and delivered the Exchange Units or the Private Exchange
            Units, as the case may be, and the Indenture, (ii) the Exchange
            Units or the Private Exchange Units, as the case may be, and the
            Indenture constitute legal, valid and binding obligations of the
            Issuers and the Subsidiary Guarantors, enforceable against the
            Issuers and the Subsidiary Guarantors in accordance with their
            respective terms, except as such enforcement may be subject to
            customary United States and foreign exceptions and (iii) all
            obligations of the Issuers and the Subsidiary Guarantors under the
            Exchange Units or the Private Exchange Units, as the case may be,
            and the Indenture are secured by Liens (as defined in the Indenture)
            on the assets securing the obligations of the Issuers and the
            Subsidiary Guarantors under the Units, Indenture and Collateral
            Agreements subject to customary assumptions, reliances, exceptions
            and exclusions.

      (r)   If the Exchange Offer or a Private Exchange is to be consummated,
            upon delivery of the Registrable Units by the Holders to the Issuers
            and the Subsidiary Guarantors (or to such other Person as directed
            by the Issuers and the Subsidiary Guarantors) in exchange for the
            Exchange Units or the Private Exchange Units, as the case may be,
            the Issuers and the Subsidiary Guarantors shall mark, or caused to
            be marked, on such Registrable Units that the Exchange Units or the
            Private Exchange Units, as the case may be, are being issued as
            substitute evidence of the indebtedness originally evidenced by the
            Registrable Units; provided that in no event shall such Registrable
            Units be marked as paid or otherwise satisfied.

      (s)   Cooperate with each seller of Registrable Units covered by any
            Registration Statement and each underwriter, if any, participating
            in the disposition of such Registrable Units and their respective
            counsel in connection with any filings required to be made with the
            NASD.

      (t)   Use their reasonable best efforts to take all other steps reasonably
            necessary to effect the registration of the Registrable Units
            covered by a Registration Statement contemplated hereby.

      (u)   The Issuers may require each seller of Registrable Units or
            Participating Broker-Dealer as to which any registration is being
            effected to furnish to the Issuers such information regarding such
            seller or Participating Broker-Dealer and the

<PAGE>

            distribution of such Registrable Units as the Issuers may, from time
            to time, reasonably request in writing. The Issuers may exclude from
            such registration the Registrable Units of any seller who fails to
            furnish such information within a reasonable time (which time in no
            event shall exceed 15 days) after receiving such request. Each
            seller of Registrable Units or Participating Broker-Dealer as to
            which any registration is being effected agrees to furnish promptly
            to the Issuers all information required to be disclosed in order to
            make the information previously furnished by such seller not
            materially misleading.

      (v)   Each Holder of Registrable Units and each Participating
            Broker-Dealer agrees by acquisition of such Registrable Units or
            Exchange Units to be sold by such Participating Broker-Dealer, as
            the case may be, that, upon receipt of any notice from the Issuers
            of the happening of any event of the kind described in Section
            6(e)(ii), 6(e)(iv), 6(e)(v), or 6(e)(vi), such Holder will forthwith
            discontinue disposition of such Registrable Units covered by a
            Registration Statement and such Participating Broker-Dealer will
            forthwith discontinue disposition of such Exchange Units pursuant to
            any Prospectus and, in each case, forthwith discontinue
            dissemination of such Prospectus until such Holder's or
            Participating Broker-Dealer's receipt of the copies of the
            supplemented or amended Prospectus contemplated by Section 6(k), or
            until it is advised in writing (the "Advice") by the Issuers that
            the use of the applicable Prospectus may be resumed, and has
            received copies of any amendments or supplements thereto and, if so
            directed by the Issuers, such Holder or Participating Broker-Dealer,
            as the case may be, will deliver to the Issuers all copies, other
            than permanent file copies, then in such Holder's or Participating
            Broker-Dealer's possession, of the Prospectus covering such
            Registrable Units current at the time of the receipt of such notice.
            In the event the Issuers and the Subsidiary Guarantors shall give
            any such notice, the Applicable Period shall be extended by the
            number of days during such periods from and including the date of
            the giving of such notice to and including the date when each
            Participating Broker-Dealer shall have received (x) the copies of
            the supplemented or amended Prospectus contemplated by Section 6(k)
            or (y) the Advice.

7.    REGISTRATION EXPENSES

      (a)   All fees and expenses incident to the performance of or compliance
            with this Agreement by the Issuers and the Subsidiary Guarantors
            shall be borne by the Issuers and the Subsidiary Guarantors, whether
            or not the Exchange Offer or a Shelf Registration is filed or
            becomes effective, including, without limitation, (i) all
            registration and filing fees, including, without limitation, (A)
            fees with respect to filings required to be made with the NASD in
            connection with any underwritten offering and (B) fees and expenses
            of compliance with state securities or Blue Sky laws as provided in
            Section 6(h) hereof, (ii) printing expenses, including, without
            limitation, expenses of printing Prospectuses if the printing of
            Prospectuses is requested by the managing underwriter or
            underwriters, if any, or by the Holders of a majority in aggregate
            principal amount of the Registrable Units included in any
            Registration Statement or by any

<PAGE>

            Participating Broker-Dealer during the Applicable Period, as the
            case may be, (iii) messenger, telephone and delivery expenses
            incurred in connection with the performance of their obligations
            hereunder, (iv) fees and disbursements of counsel for the Issuers,
            the Subsidiary Guarantors and, subject to 7(b), the Holders, (v)
            fees and disbursements of all independent certified public
            accountants referred to in Section 6 (including, without limitation,
            the expenses of any special audit and "cold comfort" letters
            required by or incident to such performance), (vi) rating agency
            fees and the fees and expenses incurred in connection with the
            listing of the Securities to be registered on any securities
            exchange, (vii) Securities Act liability insurance, if the Issuers
            and the Subsidiary Guarantors desire such insurance, (viii) fees and
            expenses of all other Persons retained by the Issuers and the
            Subsidiary Guarantors, (ix) fees and expenses of any "qualified
            independent underwriter" or other independent appraiser
            participating in an offering pursuant to Section 3 of Schedule E to
            the By-laws of the NASD, but only where the need for such a
            "qualified independent underwriter" arises due to a relationship
            with the Issuers and the Subsidiary Guarantors, (x) internal
            expenses of the Issuers and the Subsidiary Guarantors (including,
            without limitation, all salaries and expenses of officers and
            employees of the Issuers or the Subsidiary Guarantors performing
            legal or accounting duties), (xi) the expense of any annual audit,
            (xii) the fees and expenses of the Trustee and the Exchange Agent
            and (xiii) the expenses relating to printing, word processing and
            distributing all Registration Statements, underwriting agreements,
            securities sales agreements, indentures and any other documents
            necessary in order to comply with this Agreement.

      (b)   The Issuers and the Subsidiary Guarantors shall reimburse the
            Holders for the reasonable fees and disbursements of not more than
            one counsel chosen by the Holders of a majority in aggregate
            principal amount of the Registrable Units to be included in any
            Registration Statement. The Issuers and the Subsidiary Guarantors
            shall pay all documentary, stamp, transfer or other transactional
            taxes attributable to the issuance or delivery of the Exchange Units
            or Private Exchange Units in exchange for the Units; provided that
            the Issuers shall not be required to pay taxes payable in respect of
            any transfer involved in the issuance or delivery of any Exchange
            Unit or Private Exchange Unit in a name other than that of the
            Holder of the Unit in respect of which such Exchange Unit or Private
            Exchange Unit is being issued. The Issuers and the Subsidiary
            Guarantors shall reimburse the Holders for fees and expenses
            (including reasonable fees and expenses of counsel to the Holders)
            relating to any enforcement of any rights of the Holders under this
            Agreement.

8.    INDEMNIFICATION

      (a)   Indemnification by the Issuers and the Subsidiary Guarantors. The
            Issuers and the Subsidiary Guarantors jointly and severally agree to
            indemnify and hold harmless each Holder of Registrable Units,
            Exchange Units or Private Exchange Units and each Participating
            Broker-Dealer selling Exchange Units during the Applicable Period,
            each Person, if any, who controls each such Holder (within the

<PAGE>

            meaning of Section 15 of the Securities Act or Section 20(a) of the
            Exchange Act) and the officers, directors and partners of each such
            Holder, Participating Broker-Dealer and controlling person, to the
            fullest extent lawful, from and against any and all losses, claims,
            damages, liabilities, costs (including, without limitation,
            reasonable costs of preparation and reasonable attorneys' fees as
            provided in this Section 8) and expenses (including, without
            limitation, reasonable costs and expenses incurred in connection
            with investigating, preparing, pursuing or defending against any of
            the foregoing) (collectively, "Losses"), as incurred, insofar as
            such Losses arise out of or are based upon any untrue or alleged
            untrue statement of a material fact contained in any Registration
            Statement, Prospectus or form of prospectus, or in any amendment or
            supplement thereto, or in any preliminary prospectus, or any
            omission or alleged omission to state therein 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, except insofar as such Losses are solely based upon
            information relating to such Holder or Participating Broker-Dealer
            and furnished in writing to the Issuers and the Subsidiary
            Guarantors (or reviewed and approved in writing) by such Holder or
            Participating Broker-Dealer or their counsel expressly for use
            therein; provided, however, that the Issuers and the Subsidiary
            Guarantors will not be liable to any Indemnified Party (as defined
            below) under this Section 8 to the extent Losses were solely caused
            by an untrue statement or omission or alleged untrue statement or
            omission that was contained or made in any preliminary prospectus
            and corrected in the Prospectus or any amendment or supplement
            thereto if (i) the Prospectus does not contain any other untrue
            statement or omission or alleged untrue statement or omission of a
            material fact that was the subject matter of the related proceeding,
            (ii) any such Losses resulted from an action, claim or suit by any
            Person who purchased Registrable Units or Exchange Units which are
            the subject thereof from such Indemnified Party and (iii) it is
            established in the related proceeding that such Indemnified Party
            failed to deliver or provide a copy of the Prospectus (as amended or
            supplemented) to such Person with or prior to the confirmation of
            the sale of such Registrable Units or Exchange Units sold to such
            Person if required by applicable law, unless such failure to deliver
            or provide a copy of the Prospectus (as amended or supplemented) was
            a result of noncompliance by the Issuers with Section 6 of this
            Agreement. The Issuers and the Subsidiary Guarantors also agree to
            indemnify underwriters, selling brokers, dealer managers and similar
            securities industry professionals participating in the distribution,
            their officers, directors, agents and employees and each Person who
            controls such Persons (within the meaning of Section 5 of the
            Securities Act or Section 20(a) of the Exchange Act) to the same
            extent as provided above with respect to the indemnification of the
            Holders or the Participating Broker-Dealer.

      (b)   Indemnification by Holder. In connection with any Registration
            Statement, Prospectus or form of prospectus, any amendment or
            supplement thereto, or any preliminary prospectus in which a Holder
            is participating, such Holder shall furnish to the Issuers and the
            Subsidiary Guarantors in writing such information as the Issuers and
            the Subsidiary Guarantors reasonably request for use in

<PAGE>

            connection with any Registration Statement, Prospectus or form of
            prospectus, any amendment or supplement thereto, or any preliminary
            prospectus and shall indemnify and hold harmless the Issuers, the
            Subsidiary Guarantors, their respective directors and each Person,
            if any, who controls the Issuers and the Subsidiary Guarantors
            (within the meaning of Section 15 of the Securities Act and Section
            20(a) of the Exchange Act), and the directors, officers and partners
            of such controlling persons, to the fullest extent lawful, from and
            against all Losses insofar as such Losses arise out of or are based
            upon any untrue or alleged untrue statement of a material fact
            contained in any Registration Statement, Prospectus or form of
            prospectus or in any amendment or supplement thereto or in any
            preliminary prospectus, or any omission or alleged omission to state
            therein a material fact required to be stated therein or necessary
            to make the statements therein, in the light of the circumstances
            under which they were made, not misleading to the extent, but only
            to the extent, that such losses are finally judicially determined by
            a court of competent jurisdiction in a final, unappealable order to
            have resulted solely from an untrue statement or alleged untrue
            statement of a material fact or omission or alleged omission of a
            material fact contained in or omitted from any information so
            furnished in writing by such Holder to the Issuers and the
            Subsidiary Guarantors expressly for use therein. Notwithstanding the
            foregoing, in no event shall the liability of any selling Holder be
            greater in amount than such Holder's Maximum Contribution Amount (as
            defined below).

      (c)   Conduct of Indemnification Proceedings. If any proceeding shall be
            brought or asserted against any Person entitled to indemnity
            hereunder (an "Indemnified Party"), such Indemnified Party shall
            promptly notify the party or parties from which such indemnity is
            sought (the "Indemnifying Party" or "Indemnifying Parties", as
            applicable) in writing; provided, that the failure to so notify the
            Indemnifying Parties shall not relieve the Indemnifying Parties from
            any obligation or liability except to the extent (but only to the
            extent) that it shall be finally determined by a court of competent
            jurisdiction (which determination is not subject to appeal) that the
            Indemnifying Parties have been prejudiced materially by such
            failure.

      The Indemnifying Party shall have the right, exercisable by giving written
notice to an Indemnified Party, within 20 Business Days after receipt of written
notice from such Indemnified Party of such proceeding, to assume, at its
expense, the defense of any such proceeding, provided, that an Indemnified Party
shall have the right to employ separate counsel in any such proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or parties unless: (1) the
Indemnifying Party has agreed to pay such fees and expenses; or (2) the
Indemnifying Party shall have failed promptly to assume the defense of such
proceeding or shall have failed to employ counsel reasonably satisfactory to
such Indemnified Party; or (3) the named parties to any such proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party or any of its affiliates or controlling persons, and such
Indemnified Party shall have been advised by counsel that there may be one or
more defenses available to such Indemnified Party that are in addition to, or in
conflict with, those defenses available to the Indemnifying Party or such
affiliate or controlling person (in which case, if such Indemnified

<PAGE>

Party notifies the Indemnifying Parties in writing that it elects to employ
separate counsel at the expense of the Indemnifying Parties, the Indemnifying
Parties shall not have the right to assume the defense and the reasonable fees
and expenses of such counsel shall be at the expense of the Indemnifying Party;
it being understood, however, that, the Indemnifying Party shall not, in
connection with any one such proceeding or separate but substantially similar or
related proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such Indemnified Party).

      No Indemnifying Party shall be liable for any settlement of any such
proceeding effected without its written consent, which shall not be unreasonably
withheld, but if settled with its written consent, or if there be a final
judgment for the plaintiff in any such proceeding, 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 by reason of such settlement or judgment. The
Indemnifying Party shall not consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to each Indemnified Party of a release, in form and
substance reasonably satisfactory to the Indemnified Party, from all liability
in respect of such proceeding for which such Indemnified Party would be entitled
to indemnification hereunder (whether or not any Indemnified Party is a party
thereto).

      (d)   Contribution. If the indemnification provided for in this Section 8
            is unavailable to an Indemnified Party or is insufficient to hold
            such Indemnified Party harmless for any Losses in respect of which
            this Section 8 would otherwise apply by its terms (other than by
            reason of exceptions provided in this Section 8), then each
            applicable Indemnifying Party, in lieu of indemnifying such
            Indemnified Party, shall have a joint and several obligation to
            contribute to the amount paid or payable by such Indemnified Party
            as a result of such Losses, in such proportion as is appropriate to
            reflect the relative fault of the Indemnifying Party, on the one
            hand, and such Indemnified Party, on the other hand, in connection
            with the actions, statements or omissions that resulted in such
            Losses as well as any other relevant equitable considerations. The
            relative fault of such Indemnifying Party, on the one hand, and
            Indemnified Party, on the other hand, shall be determined by
            reference to, among other things, whether any untrue or alleged
            untrue statement of a material fact or omission or alleged omission
            to state a material fact relates to information supplied by such
            Indemnifying Party or Indemnified Party, and the parties' relative
            intent, knowledge, access to information and opportunity to correct
            or prevent any such statement or omission. The amount paid or
            payable by an Indemnified Party as a result of any Losses shall be
            deemed to include any legal or other fees or expenses incurred by
            such party in connection with any proceeding, to the extent such
            party would have been indemnified for such fees or expenses if the
            indemnification provided for in Section 8(a) or 8(b) was available
            to such party.

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding

<PAGE>

paragraph. Notwithstanding the provisions of this Section 8(d), a selling Holder
shall not be required to contribute, in the aggregate, any amount in excess of
such Holder's Maximum Contribution Amount. A selling Holder's "Maximum
Contribution Amount" shall equal the excess of (i) the aggregate proceeds
received by such Holder pursuant to the sale of such Registrable Units or
Exchange Units over (ii) the aggregate amount of damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of the Registrable Securities held by each Holder hereunder and not joint. The
Issuers' and Subsidiary Guarantors' obligations to contribute pursuant to this
Section 8(d) are joint and several.

      The indemnity and contribution agreements contained in this Section 8 are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

9.    RULES 144 AND 144A

      The Issuers covenant that they shall (a) file the reports required to be
filed by them (if so required) under the Securities Act and the Exchange Act in
a timely manner and, if at any time the Issuers are not required to file such
reports, they will, upon the written request of any Holder of Registrable Units,
make publicly available other information necessary to permit sales pursuant to
Rule 144 and 144A and (b) take such further action as any Holder may reasonably
request in writing, all to the extent required from time to time to enable such
Holder to sell Registrable Units without registration under the Securities Act
pursuant to the exemptions provided by Rule 144 and Rule 144A. Upon the request
of any Holder, the Issuers shall deliver to such Holder a written statement as
to whether they have complied with such information and requirements.

10.   UNDERWRITTEN REGISTRATIONS OF REGISTRABLE UNITS

      If any of the Registrable Units covered by any Shelf Registration is to be
sold in an underwritten offering, the investment banker or investment bankers
and manager or managers that will manage the offering will be selected by the
Holders of a majority in aggregate principal amount of such Registrable Units
included in such offering; provided, however, that such investment banker or
investment bankers and manager or managers must be reasonably acceptable to the
Issuers.

      No Holder of Registrable Units may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Units on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.

<PAGE>

11.   SEPARATION EVENT

      If a Separation Event occurs at any time prior to the consummation of the
Exchange Offer of the Units pursuant to this Agreement, all terms and conditions
set forth under this Agreement shall apply to each of the U.S. Notes and Dutch
Notes (as independent securities) and each of the defined terms "U.S. Notes" and
the "Dutch Notes" shall replace "Units" where appropriate and applicable so that
the U.S. Notes and Dutch Notes shall have the same rights and obligations under
this Agreement as the Units had under this Agreement prior to the occurrence of
such Separation Event.

12.   MISCELLANEOUS

      (a)   Remedies. In the event of a breach by either the Issuers or any of
            the Subsidiary Guarantors of any of their respective obligations
            under this Agreement, each Holder, in addition to being entitled to
            exercise all rights provided herein, in the Indenture or, in the
            case of the Initial Purchaser, in the Purchase Agreement, or granted
            by law, including recovery of damages, will be entitled to specific
            performance of its rights under this Agreement. The Issuers and the
            Subsidiary Guarantors agree that monetary damages would not be
            adequate compensation for any loss incurred by reason of a breach by
            either the Issuers or any of the Subsidiary Guarantors of any of the
            provisions of this Agreement and hereby further agree that, in the
            event of any action for specific performance in respect of such
            breach, the Issuers shall (and shall cause each Subsidiary Guarantor
            to) waive the defense that a remedy at law would be adequate.

      (b)   No Inconsistent Agreements. The Issuers and each of the Subsidiary
            Guarantors have not entered, as of the date hereof, and the Issuers
            and each of the Subsidiary Guarantors shall not enter, after the
            date of this Agreement, into any agreement with respect to any of
            its securities that is inconsistent with the rights granted to the
            Holders of Securities in this Agreement or otherwise conflicts with
            the provisions hereof. The Issuers and each of the Subsidiary
            Guarantors have not entered and will not enter into any agreement
            with respect to any of their securities that will grant to any
            Person piggy-back rights with respect to a Registration Statement.

      (c)   Adjustments Affecting Registrable Units. The Issuers shall not,
            directly or indirectly, take any action with respect to the
            Registrable Units as a class that would adversely affect the ability
            of the Holders to include such Registrable Units in a registration
            undertaken pursuant to this Agreement.

      (d)   Amendments and Waivers. The provisions of this Agreement may not be
            amended, modified or supplemented, and waivers or consents to
            departures from the provisions hereof may not be given, otherwise
            than with the prior written consent of the Holders of not less than
            a majority in aggregate principal amount of the then outstanding
            Registrable Units in circumstances that would adversely affect any
            Holders of Registrable Units; provided, however, that Section 8 and
            this Section 12(d) may not be amended, modified or supplemented
            without the

<PAGE>

            prior written consent of each Holder. Notwithstanding the foregoing,
            a waiver or consent to depart from the provisions hereof with
            respect to a matter that relates exclusively to the rights of
            Holders of Registrable Units whose securities are being tendered
            pursuant to the Exchange Offer or sold pursuant to a Units
            Registration Statement and that does not directly or indirectly
            affect, impair, limit or compromise the rights of other Holders of
            Registrable Units may be given by Holders of at least a majority in
            aggregate principal amount of the Registrable Units being tendered
            or being sold by such Holders pursuant to such Units Registration
            Statement.

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

            (i)   if to a Holder of Securities or to any Participating
                  Broker-Dealer, at the most current address of such Holder or
                  Participating Broker-Dealer, as the case may be, set forth on
                  the records of the registrar of the Units, with a copy in like
                  manner to the Initial Purchaser as follows:

                           Jefferies & Company, Inc.
                           1100 Santa Monica Blvd. 10th Floor
                           Los Angeles, California  90025
                           Facsimile No.: (310) 575-5165
                           Attention:  Lloyd H. Feller, Esq.

                  with a copy to:

                           Mayer, Brown, Rowe & Maw LLP
                           1675 Broadway
                           New York, New York  10019
                           Facsimile No.:  (212) 262-1910
                           Attention:  Ronald S. Brody, Esq.

            (ii)  if to the Initial Purchaser, at the address specified in
                  Section 11(e)(1);

            (iii) if to the Issuers or any Subsidiary Guarantor, as follows:

                           Phibro Animal Health Corporation
                           One Parker Plaza, 400 Kelby Street
                           Fort Lee, NJ 07024
                           Facsimile No.:
                           Attention: Corporate Legal Department

                  with a copy to:

<PAGE>

                           Golenbock Eiseman Assor Bell & Peskoe LLP
                           437 Madison Avenue
                           New York, NY 10022
                           Facsimile No.: (212) 754-0330
                           Attention: Lawrence M. Bell, Esq.

      All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the United States mail, postage prepaid, if mailed, one
business day after being deposited in the United States mail, postage prepaid,
if mailed; one business day after being timely delivered to a next-day air
courier guaranteeing overnight delivery; and when receipt is acknowledged by the
addressee, if telecopied.

      Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.

      (f)   Successors and Assigns. This Agreement shall inure to the benefit of
            and be binding upon the successors and assigns of each of the
            parties hereto, including, without limitation and without the need
            for an express assignment, subsequent Holders of Securities.

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

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

      (i)   Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
            ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
            PRINCIPLES OF CONFLICT OF LAW. THE ISSUERS HEREBY IRREVOCABLY SUBMIT
            TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE
            BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
            SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
            RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
            TO THIS AGREEMENT, AND IRREVOCABLY ACCEPT FOR THEIR AND IN RESPECT
            OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
            THE AFORESAID COURTS. THE ISSUERS IRREVOCABLY WAIVE, TO THE FULLEST
            EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY
            JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
            LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
            ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR

<PAGE>

            PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
            INCONVENIENT FORUM. THE ISSUERS IRREVOCABLY CONSENT, TO THE FULLEST
            EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE
            SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
            ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
            OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUERS AT THEIR SAID
            ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
            MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO
            SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
            LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS IN ANY
            OTHER JURISDICTION.

      (j)   Severability. 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.

      (k)   Securities Held by the Issuers or Their Affiliates. Whenever the
            consent or approval of Holders of a specified percentage of
            Securities is required hereunder, Securities held by the Issuers or
            their affiliates (as such term is defined in Rule 405 under the
            Securities Act) shall not be counted in determining whether such
            consent or approval was given by the Holders of such required
            percentage.

      (l)   Third Party Beneficiaries. Holders and Participating Broker-Dealers
            are intended third party beneficiaries of this Agreement and this
            Agreement may be enforced by such Persons.

      (m)   Entire Agreement. This Agreement, together with the Purchase
            Agreement, the Indenture and the Collateral Agreements, is intended
            by the parties as a final and exclusive statement of the agreement
            and understanding of the parties hereto in respect of the subject
            matter contained herein and therein and any and all prior oral or
            written agreements, representations, or warranties, contracts,
            understanding, correspondence, conversations and memoranda between
            the Initial Purchaser on the one hand and the Issuers and the
            Subsidiary Guarantors on the other, or between or among any agents,
            representatives, parents, subsidiaries, affiliates, predecessors in
            interest or successors in interest with respect to the subject
            matter hereof and thereof are merged herein and replaced hereby.

<PAGE>

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

                             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

                                                   REGISTRATION RIGHTS AGREEMENT
<PAGE>

ACCEPTED AND AGREED TO:

JEFFERIES & COMPANY, INC.

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

                                                   REGISTRATION RIGHTS AGREEMENT<PAGE>

                                                                     EXHIBIT 4.3

                             RIGHTS AGENCY AGREEMENT

            RIGHTS AGENCY AGREEMENT (this "Agreement"), dated as of , 2005,
between EMBRATEL PARTICIPACOES S.A. (the "Company"), a Brazilian corporation,
and THE BANK OF NEW YORK, a New York banking corporation (the "Rights Agent").

            WHEREAS, the Company will grant to existing holders of American
Depositary Shares ("ADSs") issued under the Amended and Restated Deposit
Agreement dated as of June 16, 2003 (the "Deposit Agreement"), among the
Company, The Bank of New York, as Depositary (the "Depositary") and all owners
and beneficial owners from time to time of American Depositary Receipts ("ADRs")
issued thereunder that are registered on the books of the Depositary (the "ADS
Holders") as of     , 2005 (the "Record Date"), the right to purchase new ADSs
at an estimated ADS subscription price of U.S.$     per ADS, payable only in
U.S. dollars (the "Rights Offer"). Each ADS holder will receive one (1) ADS
right ("ADS Right") for every     ADSs held on the Record Date, and each ADS
Right will entitle the holder to purchase one new ADS in the Rights Offer. Each
ADS represents 5,000 preferred shares ("Shares") of the Company.

            WHEREAS, pursuant to the Rights Offer, each ADS Holder may subscribe
for additional ADSs in excess of the number of ADSs that such ADS Holder is
entitled to purchase. Following the expiration of the subscription period in
connection with the related share rights offering by the Company in Brazil (the
"Share Rights Offering"), to the extent unsubscribed Shares are reoffered to the
Depositary as a result of unexercised share rights and ADS Rights, each ADS
Holder will be allocated additional new ADSs in proportion to the number of
additional ADSs for which such ADS Holder has subscribed.

            WHEREAS, the Rights Offer is expected to commence on or about ,
2005. The Rights Offer will be made to each ADS Holder by means of the
prospectus dated on or about     , 2005 (the "Prospectus"), which will be
accompanied by an ADS Rights Certificate ("ADS Rights Certificate"),
instructions with respect to the number of ADSs that may be purchased, the
method for subscribing and the delivery of payment (the "Instructions") and
certain other documents. The ADS Rights Certificates are to be used by the ADS
Holders to subscribe for new ADSs in the Rights Offer.

            WHEREAS, the ADS Rights will be listed for trading on the New York
Stock Exchange, evidenced by certificates in registered form and transferable by
their holders.

            NOW, THEREFORE, in consideration of the premises and mutual
agreements herein, the Company and the Rights Agent hereby agree as follows:

<PAGE>

                  ARTICLE I. - APPOINTMENT OF THE RIGHTS AGENT

            The Company hereby appoints The Bank of New York as the Rights Agent
of the Company in connection with the Rights Offer in accordance with the terms
and conditions of this Agreement, and The Bank of New York hereby accepts such
appointment and agrees to be bound by the terms and conditions of this Agreement
upon execution and delivery of this Agreement.

                       ARTICLE II. - TERMS OF RIGHTS OFFER

            1. The subscription period will commence on or about     , 2005 (the
"Commencement Date") and will end on     , 2005 (the "Expiration Date"). The
Commencement Date through 5:00 p.m. (New York City time) on the Expiration Date
will constitute the subscription period (the "Subscription Period").

            2. ADS Holders on the Record Date will be entitled to purchase ADSs
pursuant to the Rights Offer at an estimated ADS subscription price of U.S.$ per
ADS (the "Subscription Price"), payable only in U.S. dollars, which is the ADS
subscription price of R$     per ADS translated into U.S. dollars at the Central
Bank of Brazil's commercial selling rate of R$     = U.S.$1.00 on     , 2005,
plus an additional 7%, which represents an allowance for potential fluctuations
in the exchange rate between the real and the U.S. dollar and for the payment of
ADS issuance fees of the Depositary pursuant to the Deposit Agreement, currency
conversion expenses and financial transaction taxes in Brazil.

    ARTICLE III. - DELIVERY OF RIGHTS OFFER MATERIAL; EXECUTION, VALIDITY AND
                       TRANSFER OF ADS RIGHTS CERTIFICATES

            1. On or before    , 2005, the Company shall deliver to the Rights
Agent sufficient copies of the Prospectus, the ADS Rights Certificates and the
Instructions (including a Substitute Form W-9).

            2. Unless otherwise instructed in writing by the Company, on or
about    , 2005, the Rights Agent shall send to each ADS Holder as of the Record
Date (i) a Prospectus, (ii) an ADS Rights Certificate, (iii) a copy of the
Instructions, and (iv) a return envelope addressed to the Rights Agent for use
by such ADS Holder (such material, collectively, the "Rights Offer Material").

            3. In the event that the Rights Offer Material is returned to the
Rights Agent for any reason and a proper delivery thereof cannot be effected to
an ADS Holder, the Rights Agent shall hold such Rights Offer Material, and the
related ADS Holder's right to purchase ADSs under the Rights Offer will be
treated as unexercised. The Rights Agent shall supply the Company with such
information as the Company may request with respect to any Rights Offer Material
that cannot be delivered to an ADS Holder.

                                       2
<PAGE>

            4. In the event that, prior to the Expiration Date, any ADS Holder
notifies the Rights Agent that the Rights Offer Material to which such ADS
Holder is entitled has not been delivered, or has been lost, stolen or
destroyed, the Rights Agent will furnish to such ADS Holder a copy of the Rights
Offer Material (subject, in the case of any ADS Rights Certificate, to
compliance by the ADS Holder with the provisions of paragraph 7 of this
Article). The Company agrees to supply the Rights Agent with sufficient copies
of the Rights Offer Material for such purposes.

            5. The ADS Rights Certificates shall be substantially in form of
Exhibit A to this Agreement. The ADS Rights Certificates shall be executed on
behalf of the Company by any authorized officer of the Company (an "Authorized
Officer"), which need not be the same authorized signatory for all of the ADS
Rights Certificates, either manually or by facsimile signature. The ADS Rights
Certificates shall be countersigned by an authorized signatory of the Rights
Agent, either manually or by facsimile signature, which need not be the same
signatory for all of the ADS Rights Certificates, and no ADS Rights Certificate
shall be valid for any purpose unless so countersigned.

            The Rights Agent shall, upon written instructions of an Authorized
Officer, initially countersign and deliver ADS Rights Certificates for all ADS
Rights issuable in the Rights Offer as of the Record Date, and thereafter shall
countersign and deliver ADS Rights Certificates as otherwise provided in this
Agreement.

            In case any Authorized Officer of the Company that signed any of the
ADS Rights Certificates ceases to be an Authorized Officer of the Company before
countersignature by the ADS Rights Agent and issuance and delivery by the
Company, such ADS Rights Certificates, nevertheless, may be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though the
person who signed such ADS Rights Certificates had not ceased to be such officer
of the Company; and any ADS Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such ADS
Rights Certificate, shall be an Authorized Officer of the Company authorized to
sign such ADS Rights Certificate, although at the date of the execution of this
Agreement any such person was not such an Authorized Officer.

            The Rights Agent will keep or cause to be kept, at one of its
offices in New York City, books for registration and transfer of the ADS Rights
issued hereunder. Such books shall show the names and addresses of the
respective registered holders of the ADS Rights (each, a "Holder"), the number
of ADS Rights evidenced by each of the ADS Rights Certificates and the date of
each of the ADS Rights Certificates.

            6. At any time after the close of business on the date hereof, and
at or prior to the close of business on the Expiration Date, a transfer of any
ADS Rights may be registered and any ADS Rights Certificate or ADS Rights
Certificates may be split up, combined or exchanged for another ADS Rights
Certificate or ADS Rights Certificates

                                       3
<PAGE>

evidencing the same number of ADS Rights as the ADS Rights Certificate or ADS
Rights Certificates surrendered. Any Holder desiring to register the transfer of
ADS Rights or to split up, combine or exchange any ADS Rights Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
to the Rights Agent the ADS Rights Certificate or ADS Rights Certificates
evidencing the ADS Rights the transfer of which is to be registered or that is
or are to be split up, combined or exchanged and, in the case of registration of
transfer, shall provide a signature guarantee. Thereupon, the ADS Rights Agent
shall countersign and deliver to the person entitled thereto an ADS Rights
Certificate or ADS Rights Certificates, as the case may be, as so requested. The
Company and the Rights Agent may require payment, by the Holder requesting a
registration of transfer of ADS Rights or a split-up, combination or exchange of
an ADS Rights Certificate, of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with such registration of transfer,
split-up, combination or exchange, together with reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto.

            7. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
an ADS Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security in customary form and amount, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the ADS Rights
Certificate if mutilated, the Rights Agent shall, on behalf of the Company,
countersign and deliver a new ADS Rights Certificate of like tenor to the Holder
in lieu of the ADS Rights Certificate so lost, stolen, destroyed or mutilated.

                   ARTICLE IV. - ACCEPTANCE OF SUBSCRIPTIONS

            1. The Rights Agent is hereby authorized and directed to receive
subscriptions for ADSs on behalf of the Company throughout the Subscription
Period and to receive ADS Rights Certificates until 5:00 p.m. (New York City
time) on the Expiration Date. Any funds that the Rights Agent receives during
the Subscription Period from ADS Holders in respect of payments for ADSs shall
be deposited in a non-interest bearing account at the Rights Agent that the
Rights Agent designates solely for such purpose (the "Deposit Account"). Such
funds shall remain in the Deposit Account until they are distributed to the
Company in accordance with Article VI hereof.

            2. As promptly as practicable after the Rights Agent receives each
ADS Rights Certificate, the Rights Agent shall determine whether the Holder
sending such ADS Rights Certificate has properly completed and executed such ADS
Rights Certificate and has submitted the correct payment for the ADSs. If such
ADS Rights Certificate is not properly completed, is unexecuted or if such
Holder did not send the correct payment amount, then the Rights Agent will send
a notice to such Holder instructing such Holder to amend its ADS Rights
Certificate or submit the proper payment amount, as the case may be. Except as
set forth below in this Article IV, if such

                                       4
<PAGE>

Holder does not amend its ADS Rights Certificate or submit the proper payment
amount, as the case may be, by the Expiration Date, such Holder's right to
purchase ADSs in the Rights Offer shall be deemed to be unexercised.

            3. Notwithstanding the foregoing, without further authorization from
the Company, except where otherwise specified or as otherwise notified in
writing by the Company prior to the Expiration Date, an ADS Rights Certificate
shall be deemed to be properly completed in any of the following circumstances:

            (a) any subscription with respect to which a Holder has failed to
      execute an ADS Rights Certificate in the manner provided by the terms
      thereof, provided that (1) the Holder has indicated on such ADS Rights
      Certificate or by written communication the manner in which the Holder
      wishes to subscribe and (2) proper payment has been made by such Holder;

            (b) any subscription by an individual (and not by a corporation,
      partnership or fiduciary) which is accompanied by a check drawn by an
      individual (and not by a corporation, partnership or fiduciary) other than
      the Holder, provided that (1) the ADS Rights Certificate submitted
      therewith has been duly executed by the Holder, (2) the check tendered in
      payment of such subscription is drawn for the proper amount and to the
      order of The Bank of New York and is otherwise in order, and (3) there is
      no evidence actually known to the Rights Agent indicating that such check
      was delivered to the Holder by the drawer thereof for any purpose other
      than the payment of the accompanying subscription;

            (c) any subscription by a custodian on behalf of a minor which is
      accompanied by a check drawn by an individual (and not by a corporation,
      partnership or fiduciary) other than the Holder, if the provisos set forth
      in clause (b) above are satisfied; or

            (d) any subscription by an individual (and not by a corporation,
      partnership or fiduciary) which is accompanied by a check drawn by a
      corporation, partnership or fiduciary other than the Holder, if the
      provisos set forth in clause (b) above are satisfied.

            4. The Rights Agent is authorized to waive proof of authority to
sign (including the right to waive signatures of co-fiduciaries and proof of
appointment or authority of any fiduciary or other person acting in a
representative capacity) in connection with any subscription with respect to
which:

            (a) the ADSs to which the ADS Rights Certificate relates are
      registered in the name of an executor, administrator, trustee, custodian
      for a minor or other fiduciary and the ADS Rights Certificate has been
      executed by such

                                       5
<PAGE>

      Holder, provided that the ADSs purchased are to be issued in the name of
      such Holder in that same capacity;

            (b) the ADSs to which the ADS Rights Certificate relates are
      registered in the name of a corporation and the ADS Rights Certificate has
      been executed by an officer of such corporation, provided that the ADSs
      purchased are to be issued in the name of such corporation;

            (c) the ADS Rights Certificate has been executed by a bank, trust
      company or broker as agent for the Holder, provided that the ADSs
      purchased are to be issued in the name of such Holder; or

            (d) the ADS Rights to which such ADS Rights Certificate relates are
      registered in the name of a decedent and the ADS Rights Certificate has
      been executed by a person who purports to act as the executor or
      administrator of such decedent's estate, provided that (1) the ADSs are to
      be issued in the name of such person as executor or administrator of such
      decedent's estate, (2) the check tendered in payment of such subscription
      is drawn for the proper amount and to the order of The Bank of New York
      and is otherwise in order, and (3) there is no evidence actually known to
      the Rights Agent indicating that such person is not the duly authorized
      representative which such person purports to be.

            5. ADS Holders will only receive a whole number of ADS Rights. The
Rights Agent will aggregate and arrange for the sale of any fractional ADS
Rights (or the underlying Share right), and will distribute the net proceeds, if
any, of such sale pro rata to the ADS Holders entitled to them.

                    ARTICLE V. - REPORTS BY THE RIGHTS AGENT

            1. The Rights Agent will advise the Company by facsimile
transmission (i) on the Commencement Date as to the total number of ADS Holders
and the total number of ADSs outstanding; and (ii) on a daily basis during the
Subscription Period as to (1) the total number of subscriptions for ADSs
pursuant to the Rights Offer that the Rights Agent has received (which have been
properly completed and executed and for which the correct payment amount was
received), and (2) the aggregate amount of funds received by the Rights Agent in
payment of such subscriptions.

            2. Not later than 7:00 p.m. (New York City time) on the Expiration
Date, the Rights Agent will advise the Company by facsimile transmission as to
(i) the total number of ADSs subscribed for in the Rights Offer and the total
number of Shares represented thereby, (ii) the total number of additional ADSs
to be subscribed for following any reoffering and the total number of Shares
represented thereby, and (iii) the

                                       6
<PAGE>

aggregate amount of funds received by the Rights Agent in payment of such
subscriptions.

 ARTICLE VI. - PAYMENTS; REFUNDS; DEDUCTIONS; INTEREST ON SUBSCRIPTION PAYMENTS

            1. (a) Promptly after the Expiration Date and prior to the
expiration of the subscription period in connection with the Share Rights
Offering, the Rights Agent shall instruct the Depositary to (i) exercise the
Share rights underlying the ADS Rights in respect of which the Rights Agent has
received a properly completed and executed ADS Rights Certificate and correct
payment (except as otherwise set forth in Article IV) and (ii) upon receipt by
Banco Itau S.A., as custodian under the Deposit Agreement (the "Custodian"), of
the Shares delivered upon exercise of those Share rights, deliver the ADSs
issuable in respect of those Shares to the Rights Agent. The Rights Agent shall
deliver those ADSs to the Holders entitled to them as promptly as practical. The
Rights Agent shall purchase, at any commercially reasonable rate on or about
, 2005, reais sufficient to exercise the amount of Share rights specified in
clause (i) above and to pay the Brazilian financial transaction taxes, if any,
applicable to that exercise and pay that amount of reais to the Company through
the Custodian on or about     , 2005.

(b) The Company shall notify the Rights Agent if and when unsubscribed Shares
are allocated to the Depositary in respect of subscriptions received by the
Rights Agent from Holders in excess of the amount of Shares represented by ADSs
to which the ADS Rights relate and the amount of Shares so allocated. To the
extent the Rights Agent has received properly executed subscriptions for ADSs to
represent unsubscribed Shares and correct payment for those ADSs, the Rights
Agent shall (i) no later than the deadline to subscribe for unsubscribed shares
in the applicable reoffering round, instruct the Depositary to exercise the
right to purchase such number of unsubscribed Shares as is equal to the lesser
of (A) the number of unsubscribed Shares allocated to the Depositary and (B) the
total number of unsubscribed Shares represented by ADSs for which Holders have
properly subscribed and have made correct payment to the Rights Agent, (ii) as
promptly as practical after the receipt of notice under the preceding sentence
(and, in any event, in sufficient time to enable the Depositary to subscribe for
unsubscribed shares in the applicable reoffering round prior to the deadline
therefor), purchase, at any commercially reasonable rate, reais sufficient to
purchase the number of Shares determined pursuant to clause (i) and to pay the
Brazilian financial transaction taxes applicable to that purchase and pay that
amount of reais to the Company through the Custodian and (iii) instruct the
Depositary, as promptly as practical upon receipt by the Custodian of Shares, to
deliver the ADSs issuable in respect of those Shares to the Rights Agent. Each
Holder that has properly subscribed for ADSs representing any such unsubscribed
Shares and has made correct payment therefor shall be entitled to receive its
pro rata portion of the ADSs delivered pursuant to the preceding sentence, pro
rata based on relationship that the number of additional ADSs for which such
Holder has subscribed bears to the total

                                       7
<PAGE>

additional ADSs representing unsubscribed Shares allocated to the Depositary.
The Rights Agent shall perform such pro rata calculation with respect to each
applicable Holder and shall deliver such ADSs to the Holders entitled thereto as
promptly as practical. If the number of additional ADSs representing
unsubscribed Shares available in the final reoffering round of such unsubscribed
Shares is insufficient to satisfy the additional subscription of any Holder in
full, the Subscription Price relating to any additional ADSs not delivered to
such Holder shall be returned to such Holder in U.S. dollars without interest.

            2. In connection with each exchange rate conversion and payment of
the subscription price for any new ADS to the Company, the Rights Agent shall
deduct from the applicable Holder's subscription payment the ADR issuance fees
payable to the Depositary pursuant to the Deposit Agreement, currency conversion
expenses and any financial transaction taxes payable to the Brazilian government
in respect of such subscription. The Rights Agent shall instruct the Custodian
to pay those financial transaction taxes to the Brazilian government.

            3. If a Holder's subscription payment is insufficient to pay the
amount of the subscription price in reais plus ADS issuance fees, currency
conversion expenses and financial transaction taxes in respect of new ADSs
subscribed for and allocated, the Rights Agent shall advance the deficiency on
behalf of such Holder to the extent the deficiency does not exceed 20% of such
Holder's payment. The Rights Agent shall not be required to deliver new ADSs to
any Holder until it has received from such Holder payment of any deficiency
advanced by the Rights Agent. If the Holder does not pay the amount of the
deficiency financed by the Rights Agent by , 2005, the Rights Agent may sell
enough of the Holder's new ADSs to cover the amount of the deficiency. In such
event, the Rights Agent shall send the Holder promptly a new ADR representing
the remaining new ADSs and a check in the amount of any excess proceeds, net of
ADS issuance fees, currency conversion expenses, financial transaction taxes and
the commissions on the sale. If, however, the amount of excess proceeds from the
sale of the Holder's new ADSs, after deductions for ADS issuance fees, currency
conversion expenses, financial transaction taxes and the commissions on the sale
is less than U.S.$5.00, the Rights Agent shall aggregate it and pay it to the
Company.

            4. If, and to the extent that, the amount of any deficiency exceeds
20% of the amount of a Holders' payment, the Rights Agent (i) shall not be
required to advance the amount of that deficiency and (ii) may reduce the amount
of each Holder's subscription for new ADSs pro rata, unless the Holder delivers
to the Rights Agent sufficient funds to cover the deficiency prior to the
relevant deadlines for subscription in the Share Rights Offering.

            5. As soon as practicable following the expiration of the Share
Rights Offering and the closing date following the last reoffering or public
auction at the Sao

                                       8
<PAGE>

Paulo Stock Exchange of remaining unsubscribed Shares, if applicable, the
Company shall deposit the Shares underlying the ADSs with the Custodian.

            6. If for any reason the Company instructs the Rights Agent in
writing that the Share Rights Offering will not proceed, the Rights Agent shall
refund the Subscription Price paid in U.S. dollars, without interest and net of
financial transaction taxes and currency conversion expenses, to the subscribing
Holders entitled thereto.

                         ARTICLE VII. - ISSUANCE OF ADRS

            1. The Rights Agent shall instruct the Depositary to execute and
deliver ADRs evidencing new ADSs purchased pursuant to the Rights Offer as soon
as practicable after receipt of the underlying Shares by the Custodian.
Following receipt from the Depositary of the ADSs properly purchased pursuant to
the Rights Offer, the Rights Agent will mail or deliver, including by book-entry
transfer, to each Holder that subscribed for new ADSs in the Rights Offer, the
number of ADSs for which such Holder has subscribed and purchased as instructed
by that Holder.

            2. For those Holders for which ADRs will be mailed, as instructed by
such Holder, the Rights Agent will mail the ADRs by first class mail under a
blanket surety bond protecting the Rights Agent and the Company from any loss or
liability arising out of the nonreceipt or nondelivery of any such ADR or the
replacement thereof. If the market value of ADRs to be mailed in any one
shipment will exceed U.S.$1,000,000, such shipment will be sent by registered
mail and will be insured separately for the replacement value of its contents.

                     ARTICLE VIII. - LIMITATIONS OF DUTIES

            1. The Rights Agent shall have no duties or obligations other than
those specifically set forth herein, including any duties or obligations under
any other agreement, and no implied duties or obligations shall be read into
this Agreement against the Rights Agent.

            2. The Rights Agent makes no, and will not be deemed to have made,
representations with respect to, and shall have no duties, responsibilities or
obligations with respect to determining, the validity, sufficiency, value or
genuineness of any Shares, ADS Rights Certificate or other documents deposited
with or delivered to it or any signature or endorsement set forth on or in
connection with such documents (except to the limited extent expressly set forth
in Article IV).

            3. The Rights Agent shall not be obligated to commence or
voluntarily participate in any suit, action or proceeding arising out of or
related to this Agreement.

                                       9
<PAGE>

            4. The Rights Agent shall not be liable or responsible for any of
the statements of fact or recitals contained in this Agreement, any other Rights
Offer Materials, or any other document or security delivered to it in connection
with this Agreement, and shall not be required to, and shall not, verify or
determine the correctness, validity or accurateness of any such statements or
recitals contained therein.

            5. The Rights Agent may rely upon and comply with, and shall incur
no liability and shall be fully indemnified and held harmless for relying upon
and complying with the Rights Offer Material, or other certificate, instrument,
opinion of counsel, notice, letter, telegram, records, or other document or
security delivered to it in connection with this Agreement and believed by it in
good faith to be genuine and to have been signed or presented by the proper
party or parties.

            6. The Rights Agent may consult with legal counsel for the Company
or its own counsel (which may be in-house counsel) and rely upon any opinion of
such counsel, and shall have no liability in respect of any action taken,
omitted or suffered by the Rights Agent hereunder in reliance upon, and in
accordance with, any such opinion.

            7. The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Company, and to apply to the Company for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five business
days after the date the Company actually receives such application, unless the
Company shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

            8. The Rights Agent may perform any duties hereunder either directly
or by or through its nominees, correspondents, designees, agents, subagents or
subcustodians and shall not be responsible for any misconduct or negligence on
the part of any nominee, correspondent, designee, agent, subagent or
subcustodian appointed with due care by it hereunder.

                                       10
<PAGE>

                ARTICLE IX. - COMPENSATION; PAYMENT OF EXPENSES

            1. In consideration for the services rendered herein, the Company
shall compensate the Rights Agent in accordance with and pursuant to the written
fee schedule separately agreed to by the Rights Agent and the Company, plus the
Rights Agent's reasonable and necessary disbursements, charges, out-of-pocket
expenses and counsel fees and expenses incurred in connection with the
preparation and execution of this Agreement and the services rendered by the
Rights Agent hereunder.

            2. Except to the limited extent expressly set forth in Article IV,
paragraph 3, no provision of this Agreement shall require the Rights Agent to
expend or risk the Rights Agent's own funds or otherwise incur any financial
liability in the performance of any of the Rights Agent's duties hereunder or in
the exercise of the Rights Agent's rights.

                       ARTICLE X. - TERMINATION OF AGENCY

            1. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days after the Expiration Date (the "Termination Date"). On
the business day following the Termination Date, the Rights Agent shall deliver
to the Company any Rights Offer entitlements, if any, held by the Rights Agent
under this Agreement. The Rights Agent's right to be reimbursed for fees,
charges and out-of-pocket expenses as provided in Article IX paragraph 1 above
and the indemnification provisions of Article XI below shall survive the
termination of this Agreement.

             ARTICLE XI. - LIMITATION OF LIABILITY; INDEMNIFICATION

            1. The Rights Agent shall not be liable for any Losses (as defined
below) or action taken or omitted or for any loss or injury resulting from its
actions or performance or lack of performance of its duties hereunder in the
absence of gross negligence or willful misconduct on its part. In no event shall
the Rights Agent be liable for (i) acting in accordance with the instructions
from the Company or its counsel or any agent appointed by the Company to act on
behalf of the Company, (ii) special, consequential or punitive damages, for lost
profits or for loss of business or (iii) any Losses due to forces beyond the
control of the Rights Agent, including without limitation, strikes, work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services.

            2. The Company shall be liable for and shall indemnify and hold
harmless the Rights Agent from and against any and all claims, losses,
liabilities, damages, expenses or judgments (including reasonable attorney's
fees and expenses) (collectively referred to herein as "Losses") howsoever
arising from or in connection with this Agreement or the performance of the
Rights Agent's duties hereunder, the

                                       11
<PAGE>

enforcement of this Agreement and disputes between the parties hereto; provided,
however, that nothing contained herein shall require that the Rights Agent be
indemnified for the Losses arising from its gross negligence or willful
misconduct.

                          ARTICLE XII. - MISCELLANEOUS

            1. NOTICES. All reports, notices and other communications required
or permitted to be given hereunder shall be addressed to the following on behalf
of the respective parties hereto and delivered by hand, by courier or by
first-class mail, postage prepaid, or by telecopy promptly confirmed in writing,
as follows or to such other address as may be specified in writing from time to
time:

            To the Company:

            Embratel Participacoes S.A.
            Rua Regente Feijo, 166, Sala 1687-B
            20060-060  Rio de Janeiro - RJ, Brazil
            Attn:  General Counsel
            Tel:  (5521) 2121-8182

            To the Rights Agent:

            The Bank of New York
            Reorganization Administration
            101 Barclay Street, 11-E
            New York, New York 10286
            Attn:  Kelly Gallagher
            Tel:  212-815-3491
            Fax:  212-815-7048

            2. CONFIDENTIALITY. All information as to the Rights Offer shall be
held by the Rights Agent and its offices, employees, representatives and agents
in strict confidence and shall be disclosed only as required by law, regulation
or any judicial, regulatory or administrative authority, including, for the
avoidance of doubt, any banking or regulatory agency with jurisdiction over the
Rights Agent.

            3. ASSIGNMENT. Neither the Rights Agent nor the Company shall assign
this Agreement without first obtaining the written consent of the other party
hereto.

                                       12
<PAGE>

            4. HEADINGS. The Article and Paragraph headings contained herein are
for convenience and reference only and are not intended to define or limit the
scope of any provision of this Agreement.

            5. ENTIRE AGREEMENT; AMENDMENT. This Agreement shall constitute the
entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto. References to
any other document or agreement shall not incorporate by reference such other
document or agreement into this Agreement and shall not impose any duties or
responsibilities, obligations or liabilities on the Rights Agent under such
other document or agreement. Except as otherwise specifically provided herein,
this Agreement may be amended only by an instrument in writing duly executed by
both parties hereto.

            6. GOVERNING LAW; JURISDICTION; CERTAIN WAIVERS. (a) This Agreement
shall be interpreted and construed in accordance with the laws of the State of
New York. All actions and proceedings brought by the Rights Agent relating to or
arising from, directly or indirectly, this Agreement shall be litigated in
courts located within the State of New York. The Company hereby submits to the
personal jurisdiction of such courts and consents that any service of process
may be made by certified or registered mail, return receipt requested, directed
to the Company at its address last specified for notices hereunder. Each of the
parties hereto hereby waives the right to a trial by jury in any action or
proceeding arising out of or relating to this Agreement.

            (b) The invalidity, illegality or unenforceability of any provision
      of this Agreement shall in no way affect the validity, legality or
      enforceability of any other provision; and if any provision is held to be
      unenforceable as a matter of law, the other provisions shall not be
      affected thereby and shall remain in full force and effect.

            7. RIGHTS AND REMEDIES. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any such right
or remedy shall not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder shall not preclude or
inhibit the subsequent exercise of such right or remedy.

            8. REPRESENTATIONS AND WARRANTIES. The Company hereby represents,
warrants and covenants that:

            (a) The Company is a corporation duly organized and validly existing
      under the laws of the Republic of Brazil.

            (b) This Agreement has been duly authorized, executed and delivered
      on its behalf and constitutes the legal, valid and binding obligation of
      the Company. The execution, delivery and performance of this Agreement by
      the

                                       13
<PAGE>

      Company does not and will not violate any applicable law or regulation and
      does not require the consent of any governmental or other regulatory body
      except for such consents and approvals as have been obtained and are in
      full force and effect. For the avoidance of doubt, all Shares and ADSs to
      be issued and delivered hereunder have been registered with the Securities
      and Exchange Commission, and the sale by the Company of the Shares and
      ADSs in the Rights Offer is in compliance with, and not in violation of,
      the Securities Act of 1933, as amended, and the Securities Exchange Act of
      1934, as amended.

            9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

            10. NO THIRD PARTY BENEFICIARIES. This Agreement is for the
exclusive benefit of the parties hereto and shall not be deemed to give any
legal or equitable right, remedy or claim whatsoever to any other person.

                                       14
<PAGE>

            IN WITNESS WHEREOF, EMBRATEL PARTICIPACOES S.A. and THE BANK OF NEW
YORK have duly executed this agreement as of the day and year first set forth
above.

                                         EMBRATEL PARTICIPACOES S.A.

                                         By:____________________________
                                         Name:
                                         Title:

                                         THE BANK OF NEW YORK,
                                          as Rights Agent

                                         By:____________________________
                                         Name:
                                         Title:

                                       15
<PAGE>

                                                                       EXHIBIT A

                           EMBRATEL PARTICIPACOES S.A.
                         FORM OF ADS RIGHTS CERTIFICATE

                     NOT EXERCISABLE AFTER __________, 2005

      This certifies that the person whose name and address appears below, or
registered assigns, is the registered owner of the number of ADS Rights set
forth below. Each ADS Right entitles its registered holder to purchase from
Embratel Participacoes S.A. (the "Company") at any time prior to 5:00 P.M. (New
York City time) on _________, 2005, at the designated office of The Bank of New
York, as rights agent (the "Rights Agent") set forth below, one American
depositary share of the Company (each, an "ADS"), each ADS representing 5,000
preferred shares of the Company (each, a "Share"), at an estimated subscription
price of U.S.$______ per ADS (the "Deposit Amount"), which is the ADS
subscription price translated into U.S. dollars at the Central Bank of Brazil's
commercial selling rate of R$________ = U.S.$1.00 on ________, 2005, plus an
additional 7%, which represents an allowance for potential fluctuations in the
exchange rate between the Brazilian real and the U.S. dollar, the payment of ADS
issuance fees of the depositary, currency conversion expenses and financial
transaction taxes in Brazil. ADS Rights may be exercised by presenting this ADS
Rights certificate to the Rights Agent with the Form of Election to Purchase
duly executed, and in the case of a transfer, a signature guarantee, and such
other and further documentation as the Rights Agent may reasonably request.
Payment of ADS subscription price must be in U.S. dollars. Payment may be made
by certified bank check or money order payable to the order of the Rights Agent.

      This ADS Rights Certificate is subject to all of the terms, provisions and
conditions of the Company rights offer, as described in the Company's Prospectus
dated on or about _________, 2005.

      This ADS Rights Certificate, with or without other ADS Rights
Certificates, upon surrender at the designated office of the Rights Agent, may
be exchanged for another ADS Rights Certificate or ADS Rights Certificates
evidencing the same number of ADS Rights as the ADS Rights Certificate or ADS
Rights Certificates surrendered. A transfer of the ADSs Rights evidenced hereby
may be registered under surrender of this ADSs Rights Certificate at the
designated office of the Rights Agent by the registered holder in person or by a
duly authorized attorney, properly endorsed or accompanied by proper instruments
of transfer, and duly stamped as may be required by the laws of the State of New
York and of the United States of America.

      This ADS Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.

      WITNESS the facsimile signature of a proper officer of the Company.

                                          EMBRATEL PARTICIPACOES S.A.

                                          By:___________________________________
                                             Name:
                                             Title:

Dated:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent

By:___________________________________
     Authorized Signatory

<PAGE>

                               PLEASE DETACH HERE

--------------------------------------------------------------------------------
Certificate No.:_________                        Number of ADS Rights:__________

                           ADS RIGHTS CUSIP: ________

                           EMBRATEL PARTICIPACOES S.A.

      THIS ADS RIGHTS CERTIFICATE MUST BE RECEIVED BY THE RIGHTS AGENT, TOGETHER
WITH PAYMENT IN FULL, BY 5:00 P.M., NEW YORK CITY TIME, ON __________, 2005.
FAILURE TO SUBMIT THIS ADS RIGHTS CERTIFICATE TO THE RIGHTS AGENT BY THAT TIME
WILL RESULT IN A FORFEITURE OF YOUR ADS RIGHTS. ANY SUBSCRIPTION FOR ADSS IN
THIS RIGHTS OFFERING IS IRREVOCABLE.

      COMPLETE THE ELECTION TO PURCHASE FORM OR THE ASSIGNMENT FORM ON THE
REVERSE OF THIS CARD, AS APPLICABLE. ANY IMPROPERLY COMPLETED OR UNEXECUTED
RIGHTS CERTIFICATE FOR NEW ADSS MAY CAUSE THE RIGHTS AGENT IN ITS SOLE
DISCRETION TO REJECT SUCH RIGHTS CERTIFICATE. IF YOU HAVE ANY QUESTIONS, CONTACT
THE RIGHTS AGENT AT 800-507-9357.

      [Name & Address of Holder]            THE BANK OF NEW YORK
                                            Rights Agent

                                            By mail:
                                            Tender and Exchange Department
                                            P.O. Box 11248
                                            Church Street Station
                                            New York, New York 10286-1248

                                            By hand or overnight courier:
                                            Tender and Exchange Department
                                            101 Barclay Street, l-E
                                            New York, New York 10286

<PAGE>

                          FORM OF ELECTION TO PURCHASE

THE REGISTERED HOLDER OF THIS ADS RIGHTS CERTIFICATE IS ENTITLED TO EXERCISE THE
NUMBER OF ADS RIGHTS SHOWN IN THE UPPER RIGHT HAND CORNER OF THE OTHER SIDE OF
THIS CARD AND MAY SUBSCRIBE FOR ADDITIONAL ADSS UPON THE TERMS AND CONDITIONS
SPECIFIED IN THE PROSPECTUS.

The undersigned hereby notifies the Rights Agent of its irrevocable election to
subscribe for new ADSs in the following amounts:

1. ___________ new ADSs to be purchased pursuant to exercise of ADS Rights.

2. ___________ additional new ADSs to be subscribed for following the reoffering
of unsubscribed Shares, including subsequent reofferings, as described in the
Prospectus.

This subscription is subject to the terms and conditions specified in the
Prospectus. I hereby acknowledge receipt of the Prospectus.

Signature of subscriber:  _______________________________________

Dated:  _________________, 2005

(JOINT OWNERS SHOULD EACH SIGN. IF SIGNING AS EXECUTOR, ADMINISTRATOR, ATTORNEY,
TRUSTEE OR GUARDIAN, GIVE YOUR TITLE AS SUCH. IF A CORPORATION, SIGN IN THE FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. IF A PARTNERSHIP, SIGN IN THE NAME OF
AN AUTHORIZED PERSON.)

TO BE EXECUTED ONLY BY NON-UNITED STATES RESIDENTS:
I hereby certify that the foregoing subscription for new ADSs has been effected
in accordance with the applicable laws of the jurisdiction in which I reside.

Signature of subscriber:________________________________________

                                       2

<PAGE>

                                 ASSIGNMENT FORM
             (To be executed by the registered holder if such holder
                  desires to register a transfer of ADS Rights)

      FOR VALUE RECEIVED, _____ hereby sells, assigns and transfers unto

Name:___________________________________________________________________________

Address:________________________________________________________________________
the ADS Rights evidenced hereby, and does hereby irrevocably constitute and
appoint

____________________________________________________________________________
attorney to transfer those ADS Rights on the books of the Company, with full
power of substitution in the premises.

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

Dated:______________________________, 2005

                                                     Signature:

Signature Guaranteed:                                ___________________________

                                                     NOTICE

         The signature to the foregoing assignment must correspond to the name
         as written upon the face of this Rights Certificate in every
         particular, without alteration or enlargement or any change whatsoever.
         Signatures must be guaranteed by a financial institution that is a
         participant in the Security Transfer Agents Medallion Program, the
         Stock Exchange Medallion Program or the New York Stock Exchange Inc.
         Medallion Signature Program.

                                       3

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