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<SEC-DOCUMENT>0000950123-05-002591.txt : 20050303
<SEC-HEADER>0000950123-05-002591.hdr.sgml : 20050303
<ACCEPTANCE-DATETIME>20050303165210
ACCESSION NUMBER:		0000950123-05-002591
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20050228
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Termination of a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050303
DATE AS OF CHANGE:		20050303

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PHIBRO ANIMAL HEALTH CORP
		CENTRAL INDEX KEY:			0001069899
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				131840497
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-64641
		FILM NUMBER:		05658527

	BUSINESS ADDRESS:	
		STREET 1:		ONE PARKER PLZ
		CITY:			FORT LEE
		STATE:			NJ
		ZIP:			07024
		BUSINESS PHONE:		2019446020

	MAIL ADDRESS:	
		STREET 1:		ONE PARKET PLZ
		CITY:			FORT LEE
		STATE:			NJ
		ZIP:			07024

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPP BROTHERS CHEMICALS INC
		DATE OF NAME CHANGE:	19980908
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>y06443e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>FORM 8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>


<P align="center" style="font-size: 10pt">Current Report



<P align="center" style="font-size: 12pt"><B>Pursuant to Section&nbsp;13 OR 15(d) of the Securities Exchange Act of 1934</B>


<P align="center" style="font-size: 10pt">Date of report (date of earliest event reported): February&nbsp;28, 2005


<P align="center" style="font-size: 24pt"><B>Phibro Animal Health Corporation</B>


<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="center" valign="top">New York<BR>
(State or other jurisdiction<BR>
of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">333-64641<BR>
(Commission<BR>
File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">13-1840497<BR>
(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">65 CHALLENGER ROAD<BR>
RIDGEFIELD PARK, NEW JERSEY 07660<BR>
(Address of principal executive offices) (Zip Code)



<P align="center" style="font-size: 10pt">(201)&nbsp;329-7300<BR>
(Registrant&#146;s telephone number, including area code)



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:

<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD></TD><TD colspan="8"><A HREF="#000">Item&nbsp;1.01 Entry into a Material Definitive Agreement.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">Item&nbsp;1.02 Termination of a Material Definitive Agreement.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">Item&nbsp;9.01 Financial Statements and Exhibits.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">Exhibit&nbsp;Index</A></TD></TR>
<TR><TD colspan="9"><A HREF="y06443exv3w1wa.htm">EX-3.1.A: CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y06443exv10w39.htm">EX-10.39: REDEMPTION AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y06443exv99w1.htm">EX-99.1: PRESS RELEASE</A></TD></TR>
</TABLE>
</CENTER>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<!-- link2 "Item&nbsp;1.01 Entry into a Material Definitive Agreement." -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;1.01 Entry into a Material Definitive Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth in Item&nbsp;1.02 is incorporated in this Item&nbsp;1.01 by reference.

<!-- link2 "Item&nbsp;1.02 Termination of a Material Definitive Agreement." -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;1.02 Termination of a Material Definitive Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phibro Animal Health Corporation (the &#147;Company)&#148; issued a press release on February&nbsp;28, 2005,
announcing the consummation of the redemption of its Series&nbsp;C Preferred Stock, all of which was
held by Palladium Equity Partners II, L.P. and certain of its affiliates, for $26.4&nbsp;million. The
funds used for such redemption were contributed to the capital of the Company by PAHC Holdings
Corporation (&#147;PAHC Holdings&#148;), a holding company for the capital stock of the Company recently
formed by certain of the shareholders of the Company. On February&nbsp;10, 2005, PAHC Holdings
successfully completed a private offering of $29&nbsp;million of its senior secured notes due 2010
(&#147;HoldCo Notes&#148;). The proceeds from the sale of the HoldCo Notes have been held in escrow to
finance the redemption. A copy of the press release is attached as Exhibit&nbsp;99.1 to this Report.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the redemption, the Stockholders Agreement, dated as of November&nbsp;30, 2000, as
further amended, by and among the Company, Palladium Equity Partners II, L.P. and certain of its
affiliates, and Jack C. Bendheim, terminated and the right of the Palladium investors to
representation on the Company&#146;s Board of Directors also terminated. In addition, the directors of
the Company representing the Palladium investors tendered their resignations effective February&nbsp;28,
2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAHC Holdings was formed by Jack Bendheim, Marvin S. Sussman and trusts for the benefit of Mr.
Bendheim and his family. PAHC Holdings now owns all of the outstanding capital stock of all
classes of the Company, and Mr.&nbsp;Bendheim, Mr.&nbsp;Sussman and trusts for the benefit of Mr.&nbsp;Bendheim&#146;s
family own the same number and class of shares of PAHC Holdings as they previously owned of the
Company, and having the same designations, relative rights, privileges and limitations as the
Company&#146;s shares of such class.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The HoldCo Notes are secured by all of PAHC Holding&#146;s assets (now consisting substantially of
all of the outstanding capital stock of the Company). The HoldCo Notes and such security interest
are effectively subordinated to all liabilities, including the Company&#146;s and its subsidiaries&#146;
trade payables, as well the Company&#146;s indenture indebtedness. Interest on the HoldCo Notes is
payable at the option of PAHC Holdings in cash or pay-in-kind HoldCo Notes. The Company is not
obligated on the HoldCo Notes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the redemption, the Company, PAHC Holdings, the Palladium investors and the
principal stockholders of PAHC Holdings entered into an agreement dated as of February&nbsp;28, 2005
(the &#147;Redemption Agreement&#148;) with respect to (1)&nbsp;the redemption price (consisting of $19.6&nbsp;million
of liquidation preference and $6.8&nbsp;million of equity value), (2)&nbsp;amending the terms of the
post-redemption redemption price adjustment set forth in the certificate of incorporation of the
Company (A)&nbsp;from an amount payable upon the occurrence of certain capital stock transactions
determined with respect to the value of the Company upon the occurrence of such capital stock
transaction, to a liquidated amount of $4&nbsp;million, payable only after the occurrence of certain
capital stock transactions and the receipt by the current


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">stockholders of PAHC Holdings, on a cumulative basis, of an aggregate of $24&nbsp;million of dividends
and distributions in respect of such capital stock transactions, and (B)&nbsp;to remove the one-year
time period for such adjustment of the redemption price, and (3)&nbsp;terminating the backstop
indemnification obligation of the Company to the Palladium investors of up to $4&nbsp;million incurred
in connection with the sale by the Company to the Palladium investors in December&nbsp;2003 of The
Prince Manufacturing Company. A copy of the Certificate of Amendment of Certificate of
Incorporation of the Company is attached as Exhibit&nbsp;3.1(a) to this Report.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The above description of the Redemption Agreement is not complete and is qualified in its
entirety by the full text of the Redemption Agreement, a copy of which is attached as Exhibit&nbsp;10.39
to this Report and is incorporated herein by reference.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This report includes statements that, to the extent that they are not recitations of
historical fact, constitute &#147;forward-looking statements&#148; within the meaning of the Private
Securities Litigation Reform Act of 1995, Section&nbsp;21E of the Securities Exchange Act of 1934. Such
forward-looking information involves risks and uncertainties that could cause actual results to
differ materially from those expressed in any such forward-looking statements. These risks and
uncertainties include, but are not limited to, the Company&#146;s substantial leverage and potential
inability to service its debt; the Company&#146;s dependence on distributions from its subsidiaries;
risks associated with the Company&#146;s international operations and significant foreign assets; the
Company&#146;s dependence on its Israeli operations; competition in each of the Company&#146;s markets;
potential environmental liability; potential legislation affecting the use of medicated feed
additives; extensive regulation by numerous government authorities in the United States and other
countries; the Company&#146;s reliance on the continued operation and sufficiency of our manufacturing
facilities; the Company&#146;s reliance upon unpatented trade secrets; the risks of legal proceedings
and general litigation expenses; potential operating hazards and uninsured risks; the risk of work
stoppages; the Company&#146;s dependence on key personnel; and other factors discussed in the Company&#146;s
filings with the U.S. Securities and Exchange Commission.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undue reliance should not be placed on forward-looking statements, which speak only as of the
date of this Report.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All subsequent written and oral forward-looking statements attributable to the Company or any
person acting on its behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this Report and any other cautionary statements that may accompany such
forward-looking statements. The Company does not undertake any obligation to release publicly any
revisions to these forward-looking statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unanticipated events, unless the securities laws
require the Company to do so.


<P align="center" style="font-size: 10pt">3
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;9.01 Financial Statements and Exhibits." -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;9.01 Financial Statements and Exhibits.


<P align="left" style="font-size: 10pt">(c)&nbsp;Exhibits.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.1</TD>
    <TD nowrap valign="top">(a)</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certificate of Amendment of Certificate of Incorporation of Phibro Animal Health
Corporation, dated February&nbsp;28, 2005</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.39</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Redemption Agreement, dated as of February&nbsp;28, 2005, among the Company, PAHC Holdings
Corporation, Palladium Capital Management, L.L.C., Palladium Equity Partners II, L.P.,
Palladium Equity Partners II-A, L.P., Palladium Equity Investors II, L.P., Jack C. Bendheim
and Marvin S. Sussman</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Press Release dated February&nbsp;28, 2005</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center" style="font-size: 10pt"><U><B>SIGNATURES</B></U>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PHIBRO ANIMAL HEALTH CORPORATION</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: March&nbsp;1, 2005
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard G. Johnson</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard G. Johnson<BR>
Chief Financial Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<!-- link1 "Exhibit&nbsp;Index" -->
<DIV align="left"><A NAME="004"></A></DIV>


<P align="center" style="font-size: 10pt"><U><B>Exhibit&nbsp;Index</B></U>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.1</TD>
    <TD nowrap valign="top">(a)</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certificate of Amendment of Certificate of Incorporation of Phibro Animal Health
Corporation, dated February&nbsp;28, 2005</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.39</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Redemption Agreement, dated as of February&nbsp;28, 2005, among the Company, PAHC Holdings
Corporation, Palladium Capital Management, L.L.C., Palladium Equity Partners II, L.P.,
Palladium Equity Partners II-A, L.P., Palladium Equity Investors II, L.P., Jack C. Bendheim
and Marvin S. Sussman</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Press Release dated February&nbsp;28, 2005</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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<DOCUMENT>
<TYPE>EX-3.1.A
<SEQUENCE>2
<FILENAME>y06443exv3w1wa.htm
<DESCRIPTION>EX-3.1.A: CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
<TEXT>
<HTML>
<HEAD>
<TITLE>EXHIBIT 3.1.A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="right" style="font-size: 10pt"><U>Exhibit&nbsp;3.1(a)</U>



<P align="center" style="font-size: 10pt"><B>CERTIFICATE OF AMENDMENT</B>



<P align="center" style="font-size: 10pt"><B>OF</B>



<P align="center" style="font-size: 10pt"><B>CERTIFICATE OF INCORPORATION</B>



<P align="center" style="font-size: 10pt"><B>OF</B>



<P align="center" style="font-size: 10pt"><B>PHIBRO ANIMAL HEALTH CORPORATION</B>



<P align="center" style="font-size: 10pt">(Under Section&nbsp;805 of the Business Corporation Law)



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, being respectively the President and Secretary of the below-named
corporation, hereby certify as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST: The name of the Corporation is Phibro Animal Health Corporation (the &#147;Corporation&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECOND: The original certificate of incorporation of the Corporation was filed by the
Department of State on May&nbsp;11, 1946 (such certificate of incorporation, as amended and in effect
thereafter, the &#147;Certificate of Incorporation&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIRD: The amendment of the Certificate of Incorporation effected hereby is the amendment of
various aspects of Section&nbsp;3 of Article&nbsp;FOURTH, of the certificate of amendment of the certificate
of incorporation of the Corporation filed on November&nbsp;30, 2000, as heretofore amended (the
&#147;Certificate of Amendment&#148;), relating to the redemption of Series&nbsp;C Preferred Shares and the
calculation and payment of the Capital Stock Transaction Amount as defined in said Section&nbsp;3.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOURTH: To accomplish the foregoing amendment:



<P align="left" style="margin-left:3%; font-size: 10pt">1. Clause (i)&nbsp;of Section 3(a) of Article&nbsp;FOURTH of the Certificate of Amendment shall be
amended by adding to the end thereof the following:



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;; provided that if all, but not less than all, of the issued and
outstanding Series&nbsp;C Preferred Shares are called for redemption on
or prior to February&nbsp;28, 2005, then, in lieu of the foregoing
payments, the Corporation may redeem the same by payment in cash
for each share of Series&nbsp;C Preferred Shares redeemed in an amount
equal to $26.4&nbsp;million.&#148;



<P align="left" style="margin-left:3%; font-size: 10pt">2. Clause (iii)&nbsp;of Section 3(a) of Article&nbsp;FOURTH of the Certificate of Amendment shall be
deleted in its entirety.


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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:3%; font-size: 10pt">3. Clause (iv)&nbsp;of Section 3(a) of Article&nbsp;FOURTH of the Certificate of Amendment shall be
amended by adding to the end thereof the following:



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;; provided that if all, but not less than all, of the issued and
outstanding Series&nbsp;C Preferred Shares are called for redemption on
or prior to February&nbsp;28, 2005, then such record date may be the
date of notice of redemption as herein provided.&#148;



<P align="left" style="margin-left:3%; font-size: 10pt">4. The second sentence of Clause (iv)&nbsp;of Section 3(a) of Article&nbsp;FOURTH of the Certificate
of Amendment shall be amended by adding to the end thereof the following:



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;; provided that if all, but not less than all, of the issued and
outstanding Series&nbsp;C Preferred Shares are called for redemption on
or prior to February&nbsp;28, 2005, then, in lieu of the aforesaid
period prior to the date of redemption during which notice of
redemption may be delivered, notice of redemption may instead be
given on the date of redemption.&#148;



<P align="left" style="margin-left:3%; font-size: 10pt">5. Sections&nbsp;3(c)(i) and (ii)&nbsp;of Article&nbsp;FOURTH of the Certificate of Amendment shall be
deleted in their entirety and a new Section 3(c) substituted therefore, to read as follows:



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;(c) <U>Capital Stock Transaction Adjustment</U>. If (i)&nbsp;the
Corporation, a member of the Bendheim Group (as defined below), or
PAHC Holdings Corporation (&#147;<U>Holdings</U>&#148;) shall effect a
Capital Stock Transaction (as defined below) and (ii)&nbsp;in the case of
a Capital Stock Transaction referred to in clause (1)&nbsp;of the
definition thereof, as a result of such transaction or a combination
of such transactions, members of the Bendheim Group in the aggregate
shall receive cash or capital stock or other securities of a class
that is registered under the Securities Act of 1933, as amended,
with respect to or in exchange for capital stock of the Corporation
or Holdings owned by members of the Bendheim Group, on a cumulative
basis from and after the Redemption Date, in excess of $24&nbsp;million,
then within three (3)&nbsp;business days after the later of the
consummation of the Capital Stock Transaction or receipt of the $24
million, the Corporation shall pay the Capital Stock Transaction
Amount (as defined below) to the Investor Stockholders.


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<P align="left" style="margin-left:6%; font-size: 10pt">&#147;<U>Bendheim Group</U>&#148; means, collectively, (i)&nbsp;Jack C. Bendheim,
(ii)&nbsp;each of his spouse, siblings, ancestors, descendants (whether
by blood, marriage or adoption, and including stepchildren), and the
spouses, siblings, ancestors and descendents thereof (whether by
blood, marriage or adoption, and including stepchildren), and the
beneficiaries, estates and legal representatives of any of the
foregoing, including, without limitation and for the avoidance of
doubt, Marvin S. Sussman, (iii)&nbsp;all trusts of which any of the
foregoing, individually or in the aggregate, are the majority in
interest beneficiaries or grantors, (iv)&nbsp;all corporations,
partnerships, limited liability companies, investment funds or other
persons or entities principally owned by and/or organized or
operating for the benefit of any of the foregoing, and (v)&nbsp;all
affiliates of Jack C. Bendheim and Marvin S. Sussman.



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;<U>Capital Stock Transaction</U>&#148; means (1)&nbsp;any of the following:
(A)&nbsp;any recapitalization of the Corporation or Holdings of any of
its or their capital stock, (B)&nbsp;any consolidation, merger or
combination of the Corporation or Holdings with or into another
corporation or entity, (C)&nbsp;any sale or conveyance of assets of the
Corporation or Holdings to any person or entity, (D)&nbsp;any sale or
transfer for value by any member or members of the Bendheim Group of shares of capital stock of Holdings, other than to or among members
of the Bendheim Group, or (E)&nbsp;any redemption, acquisition or other
purchase by Holdings or any subsidiary thereof of, or any dividend
or distribution on, any shares of Holdings beneficially owned by any
member or members of the Bendheim Group, other than pursuant to the
Phibro-Tech Agreement (as such agreement is defined below); and (2)
any initial public offering of any capital stock of Holdings
pursuant to an effective registration statement under the Securities
Act of 1933, as amended, at a pre-money valuation for the capital
stock owned by the Bendheim Group of more than $24&nbsp;million. For
purposes hereof, (i)&nbsp;a bona fide pledge, encumbrance or
hypothecation of capital stock as security for indebtedness of the
Corporation, Holdings or a subsidiary thereof or in connection with
a guaranty thereof, or any related foreclosure or assignment in lieu
of foreclosure, shall not be a sale or transfer within the meaning
or intent of clause (1)(D) above, and (ii)&nbsp;if members of the
Bendheim Group shall contribute their shares of Holdings to and form
a holding company for Holdings, references in this Section (c)&nbsp;to
&#147;Holdings&#148; shall be deemed to include such new holding company.


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<P align="left" style="margin-left:6%; font-size: 10pt">&#147;<U>Capital Stock Transaction Amount</U>&#148; means $4&nbsp;million, less
all amounts (if any) previously paid in respect of the Capital Stock
Transaction Amount.



<P align="left" style="margin-left:6%; font-size: 10pt">&#147;<U>Phibro-Tech Agreement</U>&#148; means the Stockholders Agreement,
dated February&nbsp;21, 1995, between Phibro-Tech, Inc., I. David Paley,
Nathan Bistricer and James O. Herlands, as amended and in effect on
the date hereof, and as thereafter amended, except for any amendment
subsequent to the date hereof which causes the terms of such
agreement to be less favorable in any respect to the Corporation or
to any Investor Stockholder.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIFTH: These amendments to the Certificate of Incorporation were authorized and approved by
the Board of Directors of the Corporation at a meeting duly held therefore, followed by the written
consent of holders of all of the outstanding shares of the Corporation entitled to vote on the said
amendment of the Certificate of Incorporation, which has been given in accordance with Section&nbsp;615
of the Business Corporation Law.


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">IN WITNESS WHEREOF, the undersigned are authorized to act on behalf of the Corporation and have
signed and executed this certificate of amendment, in their respective capacities as indicated
below, as of February&nbsp;28, 2005.



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">                                              /s/  Jack C. Bendheim
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Jack C. Bendheim, President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">                                              /s/  Steven L. Cohen
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Steven L. Cohen, Assistant Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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<DOCUMENT>
<TYPE>EX-10.39
<SEQUENCE>3
<FILENAME>y06443exv10w39.htm
<DESCRIPTION>EX-10.39: REDEMPTION AGREEMENT
<TEXT>
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<TITLE>EXHIBIT 10.39</TITLE>
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<P align="right" style="font-size: 10pt"><U>Exhibit&nbsp;10.39</U>



<P align="right" style="font-size: 10pt">Execution Copy



<P align="center" style="font-size: 10pt">Agreement



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agreement, dated as of February&nbsp;28, 2005 (this &#147;<U>Agreement</U>&#148;), among PHIBRO ANIMAL
HEALTH CORPORATION (formerly known as Philipp Brothers Chemicals, Inc.), a New York corporation
(the &#147;<U>Corporation</U>&#148;), PAHC HOLDINGS CORPORATION, a Delaware corporation
(&#147;<U>Holdings</U>&#148;), PALLADIUM CAPITAL MANAGEMENT, L.L.C., a Delaware limited liability company
(&#147;<U>Palladium</U>&#148;), PALLADIUM EQUITY PARTNERS II, L.P. a Delaware limited partnership (&#147;<U>PEP
II</U>&#148;), PALLADIUM EQUITY PARTNERS II-A, L.P., a Delaware limited partnership (&#147;<U>PEP
II-A</U>&#148;), and PALLADIUM EQUITY INVESTORS II, L.P., a Delaware limited partnership (&#147;<U>PEI</U>&#148;
and together with PEP II and PEP II-A, the &#147;<U>Investor Stockholders</U>&#148;) (each a &#147;<U>Party</U>&#148;
and, together, the &#147;<U>Parties</U>&#148;), and for the limited purposes set forth in Section&nbsp;3 hereof,
Jack C. Bendheim and Marvin S. Sussman (each a &#147;<U>Principal</U> <U>Stockholder</U>&#148; and,
together, the &#147;<U>Principal Stockholders</U>&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the parties desire to reflect certain agreements regarding, among other things, (i)
the Stockholders Agreement, dated as of November&nbsp;30, 2000, by and among the Corporation, the
Investor Stockholders and the stockholders signatory thereto (as amended, modified and/or waived,
the &#147;<U>Stockholders Agreement</U>&#148;), (ii)&nbsp;certain provisions of the Certificate of Incorporation
of the Company, as amended (the &#147;<U>Charter</U>&#148;) and (iii)&nbsp;that certain Purchase and Sale
Agreement dated as of December&nbsp;26, 2003 among the Corporation, the Investor Stockholders, The
Prince Manufacturing Company and others (the &#147;<U>Prince Agreement</U>&#148;);


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW</B>, <B>THEREFORE</B>, in consideration of the premises, mutual promises and mutual benefits to be
derived and the covenants contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Each of the Investor Stockholders hereby agrees that, notwithstanding anything to the
contrary contained in the Stockholders Agreement or in the Charter:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Corporation shall be entitled to call for redemption, and to redeem, on February&nbsp;28,
2005 (the &#147;<U>Redemption Date</U>&#148;), all of the issued and outstanding Series&nbsp;C Redeemable
Participating Preferred Shares, par value $100.00 per share, of the Corporation (the &#147;<U>Series&nbsp;C
Preferred Shares</U>&#148;), for an aggregate redemption price for all such shares of $26.4&nbsp;million
(which corresponds to a per share redemption price of $2,492.68) (the &#147;<U>Redemption Price</U>&#148;),
to be allocated among the Investor Stockholders, pro rata in accordance with their respective
shares of Series&nbsp;C Preferred


<P align="center" style="font-size: 10pt">1
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<P align="left" style="font-size: 10pt">Shares, as provided in Schedule&nbsp;I hereto. The Redemption Price shall be in consideration of
the Redemption and the other matters set forth in this Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Investor Stockholders shall tender to the Corporation at its principal executive
office all of the issued and outstanding shares of Series&nbsp;C Preferred Shares, and all certificates
therefor, duly endorsed, or accompanied by duly executed stock powers, in blank, on the Redemption
Date (the &#147;<U>Redemption</U>&#148;), in consideration of the wire transfer of the Redemption Price,
consistent with <U>Schedule&nbsp;I</U> hereto, to the account specified on said <U>Schedule&nbsp;I</U>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Redemption Price, the Redemption and the Capital Stock Transaction Adjustment herein
agreed to shall be in lieu of and in full satisfaction of the following:



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any and all amounts provided for in the Charter and/or any calculations as to
redemption price and/or any such amounts required pursuant thereto, and all other
provisions of the Charter providing for any redemption of Series&nbsp;C Preferred Shares or
otherwise applicable in respect of the Redemption and/or any of the Holding Company
Transactions (as defined herein); provided that the provisions of Section 3(c) of Article
FOURTH of the Certificate of Amendment of Certificate of Incorporation of the Corporation,
dated November&nbsp;30, 2000, as amended (the &#147;<U>Amendment</U>&#148;), as amended by Section&nbsp;2
below, shall apply to any Capital Stock Transaction (as defined below);



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any and all amounts now or hereafter due or payable in respect of the Backstop
Indemnification Amount referred to in section 4.3 of the Prince Agreement; and



<P align="left" style="margin-left:5%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any and all liabilities and obligations in respect of the foregoing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Each of the Investor Stockholders hereby waives any deficiencies in or with respect to any
notice of redemption given by the Corporation, or to be given by the Corporation with respect to
the Redemption, and without limiting the foregoing hereby waives, to the maximum extent permitted
by applicable law, any requirement that notice of the Redemption be given within any required
period prior thereto. Without limiting the foregoing, the Investor Stockholders hereby acknowledge
the Notice of Redemption by the Corporation dated February&nbsp;17, 2005, and agree that no other or
further notice of the Redemption need be given by the Corporation, and such notice, together with
this Agreement, shall be in lieu of the notice and notice period specified in Section&nbsp;3(a)(iv) of
Article&nbsp;FOURTH of the Amendment, and the record date of the determination of the Series&nbsp;C Preferred
Shares to be redeemed may be the date of such notice.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;If the aforesaid Redemption pursuant to this Agreement shall occur, then Section&nbsp;3(a)(iii)
of Article&nbsp;FOURTH of the Amendment shall be deleted in its entirety. In addition, Section&nbsp;3(c)(i)
thereof shall be amended to read as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(c) <U>Capital Stock Transaction Adjustment</U>. If (i)&nbsp;the Corporation, a member of the
Bendheim Group (as defined below), or PAHC Holdings Corporation (&#147;<U>Holdings</U>&#148;) shall effect a
Capital Stock Transaction (as defined below) and (ii)&nbsp;in the case of a Capital Stock Transaction
referred to in clause (1)&nbsp;of the definition thereof, as a result of such transaction or a
combination of such transactions, members of the Bendheim Group in the aggregate shall receive cash
or capital stock or other securities of a class that is registered under the Securities Act of
1933, as amended, with respect to or in exchange for capital stock of the Corporation or Holdings
owned by members of the Bendheim Group, on a cumulative basis from and after the Redemption Date,
in excess of $24&nbsp;million, then within three (3)&nbsp;business days after the later of the consummation
of the Capital Stock Transaction or receipt of the $24&nbsp;million, the Corporation shall pay the
Capital Stock Transaction Amount (as defined below) to the Investor Stockholders.



<P align="left" style="margin-left:5%; font-size: 10pt">&#147;<U>Bendheim Group</U>&#148; means, collectively, (i)&nbsp;Jack C. Bendheim, (ii)&nbsp;each of his
spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and
including stepchildren), and the spouses, siblings, ancestors and descendents thereof
(whether by blood, marriage or adoption, and including stepchildren), and the
beneficiaries, estates and legal representatives of any of the foregoing, including,
without limitation and for the avoidance of doubt, Marvin S. Sussman, (iii)&nbsp;all trusts of
which any of the foregoing, individually or in the aggregate, are the majority in interest
beneficiaries or grantors, (iv)&nbsp;all corporations, partnerships, limited liability
companies, investment funds or other persons or entities principally owned by and/or
organized or operating for the benefit of any of the foregoing, and (v)&nbsp;all affiliates of
Jack C. Bendheim and Marvin S. Sussman.



<P align="left" style="margin-left:5%; font-size: 10pt">&#147;<U>Capital Stock Transaction</U>&#148; means (1)&nbsp;any of the following: (A)&nbsp;any
recapitalization of the Corporation or Holdings of any of its or their capital stock, (B)
any consolidation, merger or combination of the Corporation or Holdings with or into
another corporation or entity, (C)&nbsp;any sale or conveyance of assets of the Corporation or
Holdings to any person or entity, (D)&nbsp;any sale or transfer for value by any member or
members of the Bendheim Group of shares of capital stock of Holdings, other than to or
among members of the Bendheim Group, or (E)&nbsp;any redemption, acquisition or other purchase
by Holdings or any subsidiary thereof of, or any dividend or distribution on, any shares of
Holdings beneficially owned by any member or members of the Bendheim Group, other than
pursuant to the Phibro-Tech Agreement (as such agreement is defined below); and (2)&nbsp;any
initial public offering of any capital stock of Holdings pursuant to an effective
registration statement under the Securities Act of 1933,


<P align="center" style="font-size: 10pt">3
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<P align="left" style="margin-left:5%; font-size: 10pt">as amended, at a pre-money valuation for the capital stock owned by the Bendheim Group of
more than $24&nbsp;million. For purposes hereof, (i)&nbsp;a bona fide pledge, encumbrance or
hypothecation of capital stock as security for indebtedness of the Corporation, Holdings or
a subsidiary thereof or in connection with a guaranty thereof, or any related foreclosure
or assignment in lieu of foreclosure, shall not be a sale or transfer within the meaning or
intent of clause (1)(D) above, and (ii)&nbsp;if members of the Bendheim Group shall contribute
their shares of Holdings to and form a holding company for Holdings, references in this
Section (c)&nbsp;to &#147;Holdings&#148; shall be deemed to include such new holding company.



<P align="left" style="margin-left:5%; font-size: 10pt">&#147;<U>Capital Stock Transaction Amount</U>&#148; means $4&nbsp;million, less all amounts (if any)
previously paid in respect of the Capital Stock Transaction Amount.



<P align="left" style="margin-left:5%; font-size: 10pt">&#147;<U>Phibro-Tech Agreement</U>&#148; means the Stockholders Agreement, dated February&nbsp;21, 1995,
between Phibro-Tech, Inc., I. David Paley, Nathan Bistricer and James O. Herlands, as
amended and in effect on the date hereof, and as thereafter amended, except for any
amendment subsequent to the date hereof which causes the terms of such agreement to be less
favorable in any respect to the Corporation or to any Investor Stockholder.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The Charter shall be amended to reflect the provisions of Sections&nbsp;1 and 2 hereof, pursuant
to a Certificate of Amendment substantially in the form of <U>Exhibit&nbsp;3</U> hereto (the &#147;<U>New
Amendment</U>&#148;). The Corporation, Holdings, the Principal Stockholders and the Investor
Stockholders hereby irrevocably consent to and approve the New Amendment, and irrevocably agree to
vote in favor of the New Amendment at any meeting of shareholders or holders of any class or series
of shares of the Corporation at which such vote is to be taken. Anything to the contrary contained
in this Agreement notwithstanding, the Redemption shall be conditioned upon the filing with the
Secretary of State of the State of New York of a Certificate of Amendment to the Charter consistent
with the New Amendment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;The Investor Stockholders hereby consent to the Holding Company Transactions to the extent
any aspect thereof requires any consent pursuant to the Stockholders Agreement or the Charter. The
&#147;<U>Holding Company Transactions</U>&#148; means (a)&nbsp;the contribution by each holder of capital stock
of the Corporation, other than the Investor Stockholders, of the capital stock held by them,
respectively, to Holdings in exchange for substantially the same number and class of shares of
capital stock of Holdings, (b)&nbsp;the issuance of $29&nbsp;million of 15% senior secured notes due 2010 of
Holdings, with interest payable at the election of Holdings in cash or pay-in-kind notes, and the
pledge of and grant of security interests in substantially all of the assets of Holdings (which as
of the date hereof consist solely of capital stock of the Corporation and proceeds of such notes)
to secure the indebtedness and obligations of Holdings in respect of such notes and/or the
indenture and related instruments and agreements


<P align="center" style="font-size: 10pt">4
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">pursuant to which such notes were issued and such pledge and grant of security interests are to be
made, and (c)&nbsp;the use of the proceeds from the sale of such notes, upon release from escrow, by
Holdings, directly or indirectly, to redeem the Series&nbsp;C Preferred Shares of the Corporation either
by (i)&nbsp;making a capital contribution to the Corporation to contemporaneously finance the redemption
of the Series&nbsp;C Preferred Shares, or (ii)&nbsp;purchase a new series of preferred stock of the
Corporation, referred to as Series&nbsp;D Preferred Shares, that may be issued by the Corporation to
finance the redemption of the Series&nbsp;C Preferred Shares.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;The Corporation reserves the right to abandon or terminate the Redemption (even after any
call or notice thereof) and any of the Holding Company Transactions at any time and for any reason
without liability to Palladium or the Investor Stockholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Each Investor Stockholder hereby waives any and all provisions of the Stockholders
Agreement, the Charter and/or any other document that requires any Investor Director, Investor
Stockholder or holder of Series&nbsp;C Preferred Shares to approve the Redemption or the Holding Company
Transactions, or which conditions consummation of the Redemption or the Holding Company
Transactions on any Investor Director, Investor Stockholder or holder of Series&nbsp;C Preferred Shares
approval thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;The parties hereto agree that, upon the Redemption, the Stockholders Agreement shall
terminate, the right of the Investor Stockholders to representation on the Board of Directors shall
terminate, and the former holders of Series&nbsp;C Preferred Shares will have no voting or consent
rights, except that the Corporation, without the prior consent or affirmative vote of the holders
of at least two-thirds of the holders of Series&nbsp;C Preferred Shares on the date of Redemption, given
in person or by proxy, either in writing or at a meeting called therefore, shall not amend, alter
or change the rights, preferences, privileges or powers of the Series&nbsp;C Preferred Shares contained
in the Certificate of Incorporation in any manner that adversely affects any shares thereof or
present or future holders thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;(a)&nbsp;Palladium and each of the Investor Stockholders hereby fully releases and forever
discharges the Corporation and all of its subsidiary companies and their present and former
officers, directors, employees, shareholders, agents, attorneys, insurance carriers, and other
representatives, and all of their respective successors, heirs, assigns, predecessors, departments,
affiliated companies, associated companies and ventures, from and on account of any and all claims,
demands, or actions of any nature whatsoever, now known or anticipated or unknown or unanticipated,
which it ever had, now has, might have, or might claim to have, for or arising out of or relating
to the Released Claims (as defined below).


<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein, the Released Claims do not include, and
specifically exclude, any and all claims, demands, or actions of any nature whatsoever, now known
or anticipated or unknown or unanticipated, which Palladium and each of the Investor Stockholders
ever had, now has, might have, or might claim to have, for or arising out of or relating to
indemnification and any other obligations expressly set forth in the documents set forth on
<U><B>Schedule&nbsp;8(a)</B></U> hereto, in each case including all schedules and exhibits thereto; provided
that any claim or cause of action under the Prince Agreement (as defined in said Schedule&nbsp;8(a)) or
any certificate or other document delivered pursuant thereto with respect to a breach of Section
5.30 of the Prince Agreement or indemnification in respect thereof, including without limitation,
any Fraud Claim (as defined therein), shall be Released Claims.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes hereof, the &#147;<U>Released Claims</U>&#148; shall mean any and all claims, causes of
action, liabilities and obligations related to or arising out of the Series&nbsp;C Preferred Shares or
any provisions of the Charter relating thereto, or the Holding Company Transactions, and shall
include, but shall not be limited to, any claim or cause of action, or any liabilities or
obligations, arising out of the redemption or repurchase of any shares of Class&nbsp;C Preferred Stock,
under any federal or state securities or other law, regulation or ordinance, or any public policy,
whether by contract, by reason of any tort, or under common law, and whether for fraud (including
but not limited to fraud in the inducement), failure to disclose or misleading or inadequate
disclosure of information, or otherwise, and any and all claims for costs, fees or other expenses,
including attorneys&#146; fees, incurred in connection with any of the foregoing; it being understood
that the rights and obligations under this Agreement (including, as contemplated by Section&nbsp;2
hereof, rights and obligations under the Charter with respect to any Capital Stock Transaction) do
not constitute Released Claims.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Palladium and each of the Investor Stockholders represents and warrants that it has not
assigned, transferred or otherwise encumbered or purported to assign, encumber or transfer to any
person or entity any of the Released Claims or any part or portion of any of the Released Claims.
Palladium and each of the Investor Stockholders agrees that the release set forth in this Section&nbsp;8
shall not be deemed or construed at any time to be an admission by the Corporation or any other
person or entity of any improper or unlawful conduct or breach of contract.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Corporation represents that its Quarterly Report on Form 10-Q for the period ended
December&nbsp;31, 2004 and Post-Effective Amendment No.&nbsp;1 to Registration Statement on Form S-4 filed
February&nbsp;25, 2005, its most recent public securities filings with the Securities and Exchange
Commission, present fairly in all material respects all material facts about the Corporation, its
business and financial condition.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Until the Capital Stock Transaction Amount shall be paid in full, the Corporation shall
deliver to the Investor Stockholders by first class mail, postage


<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">prepaid, a notice certifying the amount of cash and capital stock and other securities of a class
that is registered under the Securities Act of 1933, as amended, received by members of the
Bendheim Group (as defined in Section&nbsp;2 above) in the aggregate with respect to or in exchange for
capital stock of the Corporation or Holdings owned by members of the Bendheim Group, as a result of
a Capital Stock Transaction or a combination of Capital Stock Transactions effected by the
Corporation, a member of the Bendheim Group or Holdings. Each such notice shall be sent within
ninety (90)&nbsp;days after the end of each fiscal year of the Corporation and, if a Capital Stock
Transaction Amount shall be payable, within three (3)&nbsp;business days after the Capital Stock
Transaction or dividend or distribution giving rise to the payment obligation with respect to such
Capital Stock Transaction Amount. Each such notice shall state the following: (A)&nbsp;the amount of
proceeds of Capital Stock Transactions and dividends or distributions in each case counting towards
the $24&nbsp;million threshold in the Capital Stock Transaction Adjustment (if any) during such period
and the cumulative amount received by members of the Bendheim Group in the aggregate counting
towards such $24&nbsp;million threshold from the date hereof, and (B)&nbsp;if applicable, the Capital Stock
Transaction Amount payable and the method of calculation therefor.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Corporation and the Investor
Stockholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;It is the desire and intent of the parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the
remaining provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions
of this Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Except as expressly provided herein, this Agreement shall not confer any rights or
remedies upon any person or entity other than the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned by any party hereto without the prior
written consent of the other parties. Any attempted assignment without such consent shall be void.
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns, as applicable.


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;All notices or other communications pursuant to this Agreement shall be in writing and
shall be deemed to be sufficient if delivered personally, telecopied, sent by
nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;if to Palladium or any Investor Stockholder, to:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="67%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">c/o Palladium Capital Management, L.L.C.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1270 Avenue of the Americas, Suite&nbsp;2200</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New York, New York 10020</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: <FONT style="font-variant: SMALL-CAPS"> (212)&nbsp;218-5150</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile: (212)&nbsp;218-5155</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attention: Marcos A. Rodriguez</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with a copy to:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">O&#146;Melveny &#038; Myers LLP</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Times Square Tower</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7 Times Square</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New York, New York 10036</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: (212)&nbsp;408-2469</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telecopier: (212)&nbsp;326-2061</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attention: Gregory Gilbert, Esq.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(i) if to the Corporation, to:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Phibro Animal Health Corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">65 Challenger Road, Third Floor</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ridgefield Park, New Jersey 07660</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: <FONT style="font-variant: SMALL-CAPS">(201)&nbsp;329-7300</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile: (201)&nbsp;329-7399</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attention: Mr.&nbsp;Jack Bendheim</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with a copy to:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Golenbock Eiseman Assor Bell &#038; Peskoe LLP</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">437 Madison Avenue</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New York, New York 10022</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: (212)&nbsp;907-7300</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telecopier: (212)&nbsp;754-0330</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attention: Lawrence M. Bell, Esq.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">All such notices and other communications shall be deemed to have been given and received (A)&nbsp;in
the case of personal delivery, on the date of such delivery, (B)&nbsp;in the case of delivery by
telecopy, on the date of such delivery, (C)&nbsp;in the case of delivery by nationally-recognized,
overnight courier, on the business day following dispatch, and (D)&nbsp;in the case of mailing, on the
third business day following such mailing.


<P align="left" style="font-size: 10pt">Each party may change its address from time to time for purposes of notice or other communication
hereunder by giving notice to the other parties hereto in accordance with this section. Each
notice or other communication shall for all purposes of this Agreement be treated as being
effective or having been given upon receipt unless otherwise indicated herein.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;This Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered (by facsimile or otherwise) to the other party, it
being understood that all parties need not sign the same counterpart. Any counterpart or other
signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and
valid execution and delivery of this Agreement by such party.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;THE PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND FULLY PERFORMED WITHIN THE
STATE OF NEW YORK BY RESIDENTS OF THE STATE OF NEW YORK</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;Each of the parties hereto hereby irrevocably and unconditionally submits, for itself or
himself and its or his property, to the exclusive jurisdiction of any New York state court or
federal court of the United States of America sitting in New York County, New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereunder or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in any such New York
state court or, to the extent permitted by law, in any such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it or
he may legally and effectively do so, any objection that it or he may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to the Agreement or
the transactions contemplated hereby in any New York state or federal court sitting in New York
County, New York. Each of the parties hereto


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties hereto further agree that the mailing by certified or registered mail, return
receipt requested, of any process required by any such court shall constitute valid and lawful
service of process against them, without the necessity for service by any other means provided by
law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;Where specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict in any manner the
construction of the general statement to which it relates. The language used in this Agreement
shall be deemed to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against any party.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;The parties shall each have and retain all other rights and remedies existing in their
favor at law or equity, including, without limitation, any actions for specific performance and/or
injunctive or other equitable relief to enforce or prevent any violations of the provisions of this
Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.&nbsp;EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;Each party hereto shall bear its own costs and expenses in connection with this Agreement
and the transactions contemplated hereby.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;The Schedules identified in this Agreement are incorporated herein by reference and made a
part hereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;Whenever the context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;This Agreement shall terminate and be of no further force immediately if the Corporation
does not stand ready and able to effect the Redemption prior to March&nbsp;1, 2005. Notwithstanding the
foregoing and for the avoidance of doubt, in the event that this Agreement is terminated in
accordance with the preceding sentence, the consents in this Agreement and waivers set forth in
this Agreement shall survive with respect to all actions theretofore taken by the Corporation in
reliance thereon, and the release set forth in Section&nbsp;8 hereof will become null and void as though
this Agreement had never been executed or delivered and such release not given.


<P align="center" style="font-size: 10pt">&#091;Remainder of this Page Intentionally Left Blank&#093;



<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF, </B>each of the parties hereto has duly executed this Agreement as of the date
first written above.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
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<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PHIBRO ANIMAL HEALTH CORPORATION</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard G. Johnson</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Richard G. Johnson</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PALLADIUM EQUITY PARTNERS II, L.P.<BR>By: Palladium Equity Partners II, L.L.C.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Peter Joseph</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Peter Joseph</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Member</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PALLADIUM EQUITY PARTNERS II-A, L.P.<BR>By: Palladium Equity Partners II, L.L.C.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Peter Joseph</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Peter Joseph</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Member</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PALLADIUM EQUITY INVESTORS II, L.P.<BR>By: Palladium Equity Partners II, L.L.C.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Peter Joseph</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Peter Joseph</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Member</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">PALLADIUM CAPITAL MANAGEMENT,<BR>L.L.C.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Peter Joseph</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Peter Joseph</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Managing Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AS TO SECTION 3 OF THE AGREEMENT ONLY:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Jack C. Bendheim</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jack C. Bendheim:</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AS TO SECTION 3 OF THE AGREEMENT ONLY:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Marvin S. Sussman</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Marvin S. Sussman</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">11
</DIV>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>y06443exv99w1.htm
<DESCRIPTION>EX-99.1: PRESS RELEASE
<TEXT>
<HTML>
<HEAD>
<TITLE>EXHIBIT 99.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="right" style="font-size: 10pt"><U>Exhibit&nbsp;99.1</U>



<P align="left" style="font-size: 10pt"><B>For release: IMMEDIATELY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>For additional information contact: Richard G. Johnson, Chief Financial Officer &#150; (201)&nbsp;329-7300</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PHIBRO ANIMAL HEALTH CORPORATION ANNOUNCES REDEMPTION OF SERIES C PREFERRED STOCK FROM
PALLADIUM</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Ridgefield Park, New Jersey, February&nbsp;28, 2005 &#150; </B>Phibro Animal Health Corporation (the
&#147;Company&#148;), announced today the consummation of the redemption of its Series&nbsp;C Preferred Stock, all
of which was held by Palladium Equity Partners II LP and certain of its affiliates, for $26.4
million. The funds used for such redemption were contributed to the capital of the Company by PAHC
Holdings Corporation (&#147;PAHC Holdings&#148;), a holding company for the capital stock of the Company
recently formed by certain of the shareholders of the Company. On February&nbsp;10, 2005, PAHC Holdings
successfully completed a private offering of $29&nbsp;million of its senior secured notes due 2010
(&#147;HoldCo Notes&#148;). The proceeds from the sale of the HoldCo Notes have been held in escrow to
finance the redemption.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAHC Holdings was formed by Jack Bendheim, Marvin S. Sussman and trusts for the benefit of Mr.
Bendheim and his family. PAHC Holdings now owns all of the outstanding capital stock of all
classes of the Company, and Mr.&nbsp;Bendheim, Mr.&nbsp;Sussman and trusts for the benefit of Mr.&nbsp;Bendheim&#146;s
family own the same number and class of shares of PAHC Holdings as they previously owned of the
Company, and having the same designations, relative rights, privileges and limitations as the
Company&#146;s shares of such class.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The HoldCo Notes are secured by all of PAHC Holding&#146;s assets (now consisting substantially of
all of the outstanding capital stock of the Company). The HoldCo Notes and such security interest
are effectively subordinated to all liabilities, including the Company&#146;s and its subsidiaries&#146;
trade payables, as well the Company&#146;s indenture indebtedness. Interest on the HoldCo Notes is
payable at the option of PAHC Holdings in cash or pay-in-kind HoldCo Notes. The Company is not
obligated on the HoldCo Notes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the redemption, the Company, PAHC Holdings, the Palladium investors and the
principal stockholders of PAHC Holdings entered into an agreement with respect to (1)&nbsp;the
redemption price (consisting of $19.6&nbsp;million of liquidation preference and $6.8&nbsp;million of equity
value), (2)&nbsp;amending the terms of the post-redemption redemption price adjustment set forth in the
certificate of incorporation of the Company (A)&nbsp;from an amount payable upon the occurrence of
certain capital stock transactions determined with respect to the value of the Company upon the
occurrence of such capital stock transaction, to a liquidated amount of $4&nbsp;million, payable only
after the occurrence of certain capital stock transactions and the receipt by the current
stockholders of PAHC Holdings, on a cumulative basis, of an aggregate of $24&nbsp;million of dividends
and distributions in respect of such capital stock transactions, and (B)&nbsp;to remove the one-year
time period for such adjustment of the redemption price, and (3)&nbsp;eliminating the backstop
indemnification obligation of the Company to the Palladium investors of up to $4&nbsp;million incurred
in connection with the sale by the Company to the Palladium investors in December&nbsp;2003 of The
Prince Manufacturing Company.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Company Description</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is a leading diversified global manufacturer and marketer of a broad range of
animal health and nutrition products, specifically medicated feed additives (&#147;MFAs&#148;) and
nutritional feed additives, which the Company sells throughout the world predominantly to the
poultry, swine and cattle markets. MFAs are used preventively and therapeutically in animal feed
to produce healthy livestock. The Company is also a specialty chemicals manufacturer and marketer,
serving numerous markets.


<P align="left" style="font-size: 10pt"><B>Forward-Looking Statements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This news release contains statements that, to the extent that they are not recitations of
historical fact, constitute &#147;forward-looking statements&#148; within the meaning of the Private
Securities Litigation Reform Act of 1995, Section&nbsp;21E of the Securities Exchange Act of 1934. Such
forward-looking information involves risks and uncertainties that could cause actual results to
differ materially from those expressed in any such forward-looking statements. These risks and
uncertainties include, but are not limited to, the Company&#146;s substantial leverage and potential
inability to service its debt; the Company&#146;s dependence on distributions from its subsidiaries;
risks associated with the Company&#146;s international operations and significant foreign assets; the
Company&#146;s dependence on its Israeli operations; competition in each of the Company&#146;s markets;
potential environmental liability; potential legislation affecting the use of medicated feed
additives; extensive regulation by numerous government authorities in the United States and other
countries; the Company&#146;s reliance on the continued operation and sufficiency of our manufacturing
facilities; the Company&#146;s reliance upon unpatented trade secrets; the risks of legal proceedings
and general litigation expenses; potential operating hazards and uninsured risks; the risk of work
stoppages; the Company&#146;s dependence on key personnel; and other factors discussed in the Company&#146;s
filings with the U.S. Securities and Exchange Commission.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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