AMENDMENT TO GUARANTY AND SUBSIDIARY TIE-IN AGREEMENT
              -----------------------------------------------------


           THIS AMENDMENT TO GUARANTY AND SUBSIDIARY TIE-IN  AGREEMENT,  made as
of May __, 1997,  among the  undersigned  Borrowers and  Guarantors,  is for the
benefit of the Lenders and Agent.  All  capitalized  terms used herein which are
not otherwise  defined herein shall have the same meanings herein as ascribed to
them in the Second Restated and Amended Revolving Credit and Security Agreement,
dated as of June 6, 1996,  as amended from time to time,  among the  undersigned
Borrowers, the Agent and the Lenders (the "Loan Agreement").

                                   WITNESSETH:

           WHEREAS,  the  Borrowers,  the Agent and the Lenders have  previously
executed and delivered  that certain  Revolving  Credit and Security  Agreement,
dated  December  10,  1991,  as amended and restated by the Restated and Amended
Revolving  Credit  and  Security  Agreement,  dated as May 9,  1994,  as further
amended as of August 24, 1994, March 23, 1995, August 7, 1995,  October 2, 1995,
February  27,  1996  and  March  12,  1996  (as  so  amended,  the  "Prior  Loan
Agreement");

           WHEREAS, as contemplated by the terms of the Prior Loan Agreement and
the Loan Agreement,  the Borrowers  executed and delivered with the Lenders that
certain  Subsidiary Tie-In Agreement,  dated as of December 10, 1991, as amended
from time to time (as amended, the "Subsidiary Tie-In Agreement");

           WHEREAS,  also  as  contemplated  by  the  terms  of the  Prior  Loan
Agreement and the Loan  Agreement,  the Guarantors  executed and delivered those
certain Limited Guaranties,  dated as of December 10, 1991, as amended from time
to  time  (as  amended,   individually,  a  "Guaranty"  and  collectively,   the
"Guaranties"); and

           WHEREAS,  the Fifth Amendment to the Loan Agreement is a continuation
of the Loan  Agreement  and further  amends the Loan  Agreement  to increase the
Maximum  Amount to  $110,000,000.00  and to reflect  the  addition of Bank Leumi
Trust Company of New York as one of the Lenders.

           NOW, THEREFORE, for good and valuable consideration,  the receipt and
adequacy  of which is hereby  acknowledged,  the  Borrowers  and the  Guarantors
hereby agree as follows:

           1. From and after the date hereof,  each of the Guaranties are hereby
amended as follows:

                      (i) The first  sentence of the preamble to the Guaranty is
           hereby  further  amended to insert the  following  after the zip code
           "10116-3138,":  "; Bank Leumi Trust Company of New York ('BLT'),  562
           Fifth Avenue, New York, New York, 10036."; and



<PAGE>



                      (ii) Section 12 of the Guaranty is hereby further  amended
           to insert the following  immediately after the zip-code  "10116-3138,
           Attention  Mr.  Christopher  Young,  Assistant  Vice  President":  ";
           Attention:  Mr.  Paul  Tine,  Vice  President,  if to BLT,  562 Fifth
           Avenue, New York, New York, 10036.";

                      (iii) The Guaranty is hereby amended to include Section 15
           as follows:

                      HETER  ISKA.  This  Guaranty  is being  provided to BLT in
           accordance with BLT's heter iska.

           2. From and after the date hereof, the Subsidiary Tie-In Agreement is
hereby further amended as follows:

                      The  first  sentence  of the  preamble  to the  Subsidiary
           Tie-In  Agreement is hereby  further  amended to insert the following
           after the zip code  "10116-3138":  "; Bank Leumi Trust Company of New
           York  ("BLT"),  with an address at 562 Fifth  Avenue,  New York,  New
           York, 10036. (BKB, IBJS, SBC, LBC, BOT and BLT are hereafter referred
           to collectively as the "Lenders')".

           IN  WITNESS   WHEREOF,   the  parties   hereto  have   executed  this
Acknowledgment and Agreement under seal on the day and year first above written.

                                     THE BORROWERS:
                                     --------------

                                     ALLOU HEALTH & BEAUTY CARE, INC.
                                     ALLOU DISTRIBUTORS, INC.
                                     ALLOU PERSONAL CARE CORPORATION
                                     M. SOBOL, INC.
                                     SUPERBUY OF NEW YORK, INC.
                                     RONA BEAUTY SUPPLIES, INC.
                                     HEMPSTEAD HEALTH & BEAUTY AIDS, INC.
                                     PASTEL COSMETIC AND BEAUTY AIDS, INC.
                                     HBA NATIONAL SALES CORP.
                                     HBA DISTRIBUTORS, INC.
                                     RUSS KALVIN PERSONAL CARE CORP.
                                     STANFORD PERSONAL CARE
                                     MANUFACTURING, INC.
                                     COSMETIC PLUS TWO, INC.

                                     By:  /s/ David Shamilzadeh
                                          --------------------------------------
                                          In his capacity as Senior V.P., C.F.O.
                                          of each of the above-named entities

                       (Signatures continued on next page)

                                       -2-

<PAGE>



                                     GUARANTORS:

                                     /s/ Victor Jacobs
                                     ---------------------------------
                                     Victor Jacobs

                                     /s/ Herman Jacobs
                                     ---------------------------------
                                     Herman Jacobs

                                     /s/ Jacob Jacobs
                                     ---------------------------------
                                     Jacob Jacobs



ACKNOWLEDGED AS OF THE DATE
FIRST SET FORTH ABOVE


THE FIRST NATIONAL BANK OF BOSTON


By:/s/
   --------------------------------
      Title:   Vice President


IBJ SCHRODER BANK & TRUST COMPANY


By:/s/
   --------------------------------
   Title:


SANWA BUSINESS CREDIT CORPORATION


By:/s/
   --------------------------------
   Title:


LASALLE BUSINESS CREDIT, INC.


By:/s/
   --------------------------------
   Title:

                       (Signatures continued on next page)

                                       -3-

<PAGE>


THE BANK OF TOKYO - MITSUBISHI TRUST COMPANY


By:/s/
   --------------------------------
   Title:

BANK LEUMI TRUST COMPANY OF NEW YORK


By:/s/
   --------------------------------
   Title:


                                       -4-