Document:

Exhibit 10.32

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                 INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

                                      among

                           WELLS FARGO FOOTHILL, INC.,
                                   as Lender,

                                 HSBC BANK USA,
                              as Collateral Agent,

                        PHIBRO ANIMAL HEALTH CORPORATION,
                        and certain of its SUBSIDIARIES,
                           as Borrowers and Guarantors

                          Dated as of October 21, 2003

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                 INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

      THIS  INTERCREDITOR AND LIEN  SUBORDINATION  AGREEMENT dated as of October
21, 2003 (this "Agreement") is made by and among WELLS FARGO FOOTHILL,  INC., as
senior  secured  lender (the  "Original  Lender") under and pursuant to the Loan
Agreement (as  hereinafter  defined),  HSBC BANK USA,  solely in its capacity as
collateral agent under the Indenture Loan Documents (as hereinafter defined) (in
such  capacity,  together  with  its  successors  and  assigns  (if any) in such
capacity, the "Collateral Agent"), PHIBRO ANIMAL HEALTH CORPORATION,  a New York
corporation  (the "Parent" ) and those certain  subsidiaries of the Parent party
hereto (the "Subsidiaries" and, together with the Parent, the "Credit Parties").

                                    RECITALS

      A. Certain of the Credit Parties,  certain other foreign subsidiaries (the
"Foreign Indenture  Obligors") of the Parent (including,  among others,  Philipp
Brothers Netherlands III B.V. (the "Dutch Issuer" and, together with the Parent,
the "Issuers")),  the Collateral Agent, and HSBC, in its capacity as Trustee (in
such  capacity,  together  with  its  successors  and  assigns  (if any) in such
capacity,  the "Trustee"),  have entered into an Indenture,  dated as of October
21, 2003 (as amended, restated,  supplemented or otherwise modified from time to
time in conformance  with the provisions of this  Agreement,  the  "Indenture"),
pursuant to which the Issuers have issued 105,000 Units (and,  together with any
additional  units that may be issued from time to time  thereunder  or exchanged
therefor or for such additional  units, the "Units"),  consisting of $85,000,000
aggregate  principal amount of 13.0% Senior Secured Notes due 2007 issued by the
Parent (and, together with any additional notes that may be issued by the Parent
from time to time thereunder or exchanged therefor or for such additional notes,
the "U.S.  Notes") and $20,000,000  aggregate  principal  amount of 13.0% Senior
Secured  Notes due 2007  issued  by the Dutch  Issuer  (and,  together  with any
additional  notes  that may be  issued  by the  Dutch  Issuer  from time to time
thereunder or exchanged therefor or for such additional notes, the "Dutch Notes"
and, together with the U.S. Notes, the "Notes").  The repayment of the Indenture
Secured Obligations (as hereinafter  defined) is secured by, among other things,
security  interests in and liens on the assets and  properties  described in the
Domestic  Collateral  Agreements (as defined in the  Indenture)  dated as of the
date  hereof (in each case,  as amended,  restated,  supplemented  or  otherwise
modified from time to time in conformance with the provisions of this Agreement,
the "Indenture Domestic Collateral  Agreements" and, together with the Indenture
and all  Control  Agreements  (as  defined in the U.S.  Security  Agreement  (as
defined in the Indenture)) executed and delivered in connection  therewith,  the
"Indenture  Agreements"),  made by certain of the Credit Parties in favor of the
Collateral Agent for the benefit of the Collateral  Agent, the Trustee,  and the
Noteholders.

      B. The Credit Parties and the Original Lender have entered into a Loan and
Security  Agreement dated as of October 21, 2003 (the "Original Loan Agreement")
and

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the Credit  Parties and the  Original  Lender have  entered  into those  certain
guaranties, guarantor security agreements (as amended, restated, supplemented or
otherwise  modified from time to time in conformance with the provisions of this
Agreement,  the  "Security  Documents")  pursuant to which the  Original  Lender
agreed, upon the terms and conditions stated therein, to make loans and advances
to and to issue  letters of credit for the  account of the Credit  Parties up to
the principal amount of $40,000,000 (of which no more than $25,000,000  would be
available  for the  issuance  of letters of credit and no more than  $15,000,000
would be available for advances), together with the fees, interest, expenses and
other  obligations due under the Original Loan  Agreement.  The repayment of the
Obligations  (as that term is defined in the Original Loan Agreement) is secured
by first priority security  interests in and liens on the Collateral (as defined
below).

      C. The Original Lender and the Collateral  Agent desire to enter into this
Agreement  concerning  the  respective  rights of the Lender and the  Collateral
Agent with respect to the priority of their respective security interests in and
liens on the Collateral (as defined below).

      D. The terms of the  Indenture  permit  the  Parent  and the other  Credit
Parties to enter into the Lender Loan Documents (as defined  below),  subject to
compliance with certain  conditions,  and in connection  therewith authorize and
direct  the   Collateral   Agent  to  enter  into  a   subordination   agreement
substantially in the form of this Agreement.

      E. In order to induce the Original  Lender to extend  credit to the Credit
Parties and for purposes of certain  conditions  precedent  and covenants of the
Original Loan  Agreement,  the Original  Lender and the Collateral  Agent hereby
agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      Section  1.01 Terms  Defined  Above and in the  Recitals.  As used in this
Agreement,  the following terms shall have the respective  meanings indicated in
the opening paragraph hereof and in the above Recitals:

            "Agreement"
            "Collateral Agent"
            "Credit Parties"
            "Dutch Issuer"
            "Dutch Notes"
            "Foreign Indenture Obligors"
            "HSBC"
            "Indenture"
            "Indenture Domestic Collateral Agreements"
            "Indenture Agreements"
            "Issuers"

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            "Notes"
            "Original Lender"
            "Original Loan Agreement"
            "Parent"
            "Security Documents"
            "Subsidiaries"
            "Trustee"
            "U.S. Notes"
            "Units"

      Section 1.02 Original Loan Agreement  Definitions.  All capitalized  terms
which are used but not  defined  herein  shall  have the same  meaning as in the
Original Loan Agreement, as in effect on the date hereof.

      Section 1.03 Other Definitions.  As used in this Agreement,  the following
terms shall have the meanings set forth below:

            "Bank  Product  Obligations"  means  all  obligations,  liabilities,
contingent  reimbursement  obligations,  fees,  and expenses owing by the Credit
Parties to any Bank  Product  Provider  (as that term is defined in the Original
Loan Agreement) pursuant to or evidenced by the Bank Product Agreements (as that
term is defined in the Original Loan Agreement) and  irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all such amounts
that Credit  Parties are obligated to reimburse the Original  Lender as a result
of the Original Lender purchasing  participations from, or executing indemnities
or  reimbursement  obligations  to, a Bank Product  Provider with respect to the
Bank Products (as that term is defined in the Original Loan Agreement)  provided
by such Bank Product Provider to the Credit Parties.

            "Bank Product Reserve" means, as of any date of  determination,  the
lesser  of  (a)  $10,000,000   and  (b)  the  total  Bank  Product   Obligations
outstanding.

            "Bankruptcy Code" means title 11 of the United States Code.

            "Capital  Stock" means (a) in the case of a  corporation,  corporate
stock, (b) in the case of an association or business entity, any and all shares,
interests,  participations,  rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability  company,
partnership  or membership  interests  (whether  general or limited) and (d) any
other interest or participation  that confers on a Person the right to receive a
share of the profits and losses of, or distributions of property of, the issuing
Person.

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            "Cash  Collateral"  means any Collateral  consisting of cash or cash
equivalents,  any security  entitlement  (as defined in the New York  Commercial
Code) and any financial assets (as defined in the New York Commercial Code).

            "Collateral"  means  all of each  Credit  Party's  right,  title and
interest  in, to,  and under all  property  and  assets of the  Credit  Parties,
including without limitation, all "Collateral" as defined in the Loan Agreement;
provided,  however, that the term "Collateral" shall not include any property or
asset of any Foreign Indenture Obligor.

            "Collateral Agent Standstill  Notice" means a written notice from or
on behalf of Lender to the Collateral Agent stating that an Event of Default has
occurred and is continuing and stating that such written notice is a "Collateral
Agent Standstill Notice".

            "Collateral  Agent  Standstill  Period" has the meaning set forth in
Section 2.03.

            "Control   Collateral"   means  any   Collateral   consisting  of  a
certificated  security (as defined in the New York Commercial Code),  investment
property (as defined in the New York  Commercial  Code),  a deposit  account (as
defined in the New York Commercial  Code and any other  Collateral as to which a
Lien may be perfected through possession or control by the secured party, or any
agent therefor.

            "Discharge of Loan Agreement Secured  Obligations"  means payment in
full in  cash  of the  Loan  Agreement  Secured  Obligations  (other  than  Loan
Agreement   Secured   Obligations   consisting  of  contingent   indemnification
obligations  under the Lender Loan  Documents)  up to (but not in excess of) the
Maximum Lender Priority Debt Amount including, with respect to amounts available
to  be  drawn  under  outstanding   letters  of  credit  issued  thereunder  (or
indemnities  issued  pursuant  thereto  in  respect  of  outstanding  letters of
credit),  delivery of cash  collateral or backstop  letters of credit in respect
thereof in compliance with the terms of the Loan Agreement,  in each case, after
or concurrently with termination of all commitments to extend credit thereunder.

            "DIP Financing" has the meaning set forth in Section 6.01.

            "Equity Interests" means Capital Stock and all warrants,  options or
other rights to acquire  Capital Stock (but  excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

            "Indenture  Event of  Default"  means an event of default  under the
Indenture Loan Documents.

            "Indenture Loan Documents" shall mean the Indenture,  the Units, the
Notes,  the Indenture  Agreements,  and such other  agreements,  instruments and
certificates as defined or referred to in the Indenture.

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            "Indenture   Secured   Obligations"   shall  mean  all  indebtedness
represented by the Units,  the Notes,  together with interest,  premiums,  fees,
costs and expenses in respect thereof (including, without limitation,  attorneys
fees and  disbursements  and including  interest accrued after the initiation of
any Insolvency Proceeding, whether or not allowed or allowable in any Insolvency
Proceeding).

            "Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy  Code or under any other state,
federal or foreign bankruptcy or insolvency law,  assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization,  arrangement, or other similar
relief.

            "Lender" means the Original  Lender,  together with all  successors,
assigns, transferees,  participants,  replacement or refinancing lenders, of the
Original  Lender,  including  any Person  designated  as a Lender under any Loan
Agreement;  provided, that for purposes of this Agreement,  the Collateral Agent
shall be entitled to deal only with the  Original  Lender until such time as the
Original  Lender  shall have  assigned  to another  Lender all of its rights and
obligations hereunder to such other Lender pursuant to an assignment,  notice of
which has been provided by the Original Lender to the Collateral Agent and until
receipt  thereof,  Collateral  Agent  shall not be liable for any such  dealings
(including  the  turning  over of any  Collateral  or  proceeds  thereof  to the
Original  Lender at a time when any other Lender and not the Original Lender was
entitled thereto).

            "Lender  Loan  Documents"  means the Loan  Agreement,  the  Security
Documents,  the "Loan Documents" as defined in the Original Loan Agreement,  the
collateral  documents  and  instruments  executed and  delivered  in  connection
therewith or in connection  with any other Loan  Agreement  hereunder,  and such
other agreements, instruments and certificates as defined in a Loan Agreement.

            "Lien" means any interest in an asset  securing an  obligation  owed
to, or a claim by, any Person other than the owner of the asset, irrespective of
whether (a) such interest is based on the common law, statute, or contract,  (b)
such interest is recorded or perfected, and (c) such interest is contingent upon
the  occurrence  of some future event or events or the  existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term "Lien" includes the lien or security  interest arising from a mortgage,
deed  of  trust,  encumbrance,   pledge,  hypothecation,   assignment,   deposit
arrangement,  security  agreement,  conditional sale or trust receipt, or from a
lease,  consignment,  or  bailment  for  security  purposes  and  also  includes
reservations,  exceptions, encroachments,  easements, rights-of-way,  covenants,
conditions,  restrictions,  leases,  and other title exceptions and encumbrances
affecting Real Property. In addition, as used in this Agreement, the term "Lien"
means a Lien of the  Collateral  Agent or the Lender solely in respect of all or
any portion of the Collateral and not in respect of any asset or property of any
Foreign Indenture Obligor.

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            "Lien  Priority" means with respect to any Lien of the Lender or the
Collateral  Agent in the  Collateral,  the  order of  priority  of such  Lien as
specified in Section 2.01.

            "Loan  Agreement"  means the  Original  Loan  Agreement  as amended,
restated,  modified,  renewed, refunded,  replaced, or refinanced in whole or in
part from time to time,  including  any  agreement  extending  the  maturity of,
consolidating,   otherwise  restructuring   (including  adding  Subsidiaries  or
affiliates of the Parent or any other Persons as parties thereto) or refinancing
all or any portion of the  Obligations or Commitments as those terms are defined
in the Original Loan Agreement (or in any other  agreement that itself is a Loan
Agreement  hereunder)  and whether by the same or any other  agent,  lender,  or
group of lenders and whether or not increasing the amount of  indebtedness  that
may be incurred thereunder.

            "Loan Agreement Secured  Obligations"  means all Obligations and all
other  amounts  owing or due under the terms of a Loan  Agreement  and the other
Lender Loan Documents, including any and all amounts payable under or in respect
of the Lender Loan Documents, as amended, restated, modified, renewed, refunded,
replaced,  or  refinanced  in whole  or in part  from  time to  time,  including
principal,  premium,  interest, fees, attorneys' fees, costs, charges, expenses,
reimbursement obligations,  any obligation to post cash collateral in respect of
letters of credit or indemnities in respect  thereof,  indemnities,  guarantees,
and all other amounts payable  thereunder or in respect thereof  (including,  in
each case, all amounts  accruing on or after the  commencement of any Insolvency
Proceeding  relating to any Credit  Party or any other  Person  irrespective  of
whether a claim for all or any portion of such  amounts is  allowable or allowed
in any Insolvency Proceeding).

            "Loan  Documents"  means the Lender Loan Documents and the Indenture
Loan Documents.

            "Maximum  Lender  Priority  Debt  Amount"  means,  as of any date of
determination,  (a) the undrawn amount of all outstanding letters of credit plus
unreimbursed  drawings  in  respect  thereof  that  are Loan  Agreement  Secured
Obligations as of such date up to, but not in excess of,  $25,000,000,  plus (b)
the  principal  amount of Advances (as that term is defined in the Original Loan
Agreement)  or revolving  loans under any Loan  Agreement as of such date up to,
but not in  excess  of,  $15,000,000,  plus  (c) any  premium,  interest,  fees,
attorneys' fees, costs, charges,  expenses,  indemnities,  and all other amounts
payable under a Loan  Agreement or other Lender Loan  Documents or in respect of
the Loan Agreement Secured  Obligations  (including,  without  duplication,  all
guaranties in respect  thereof),  plus (d) the Bank Product  Obligations  not to
exceed the Bank Product  Reserve;  and including,  for each amount  specified in
clauses (a), (b), (c), and (d) all amounts accruing on or after the commencement
of any  Insolvency  Proceeding  relating to any Credit Party or any other Person
irrespective of whether a

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claim for all or any  portion  of such  amount is  allowable  or  allowed in any
Insolvency Proceeding.

            "Notes" means the Domestic Notes and the Dutch Notes.

            "Noteholders"  means  each of the  holders  of the Units  and/or the
Notes.

            "Party" means Lender and Collateral Agent.

            "Person" means any natural person,  corporation,  limited  liability
company,   limited   partnership,   general   partnership,   limited   liability
partnership,  joint  venture,  trust,  land  trust,  business  trust,  or  other
organization,  irrespective of whether such organization is a legal entity,  and
shall include a government and any agency or political subdivision thereof.

            "Proceeds"  means (i) all  "proceeds" as defined in Article 9 of the
New York Commercial  Code with respect to the  Collateral,  and (ii) whatever is
recoverable  or recovered  when  Collateral is sold,  exchanged,  collected,  or
disposed of, whether voluntarily or involuntarily.

            "Real  Property" means any estates or interests in real property and
the improvements thereto.

            "Recovery" has the meaning set forth in Section 5.03.

      Section 1.04 Rules of  Construction.  Unless the context of this Agreement
clearly  requires  otherwise,  references  to the plural  include the  singular,
references  to the  singular  include the plural,  the term  "including"  is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning  represented  by the  phrase  "and/or."  The words  "hereof,"  "herein,"
"hereby,"  "hereunder,"  and  similar  terms  in this  Agreement  refer  to this
Agreement  as a whole and not to any  particular  provision  of this  Agreement.
Article,  section,  subsection,  clause, schedule, and exhibit references herein
are to  this  Agreement  unless  otherwise  specified.  Any  reference  in  this
Agreement  to  any  agreement,   instrument,   or  document  shall  include  all
alterations,   amendments,   changes,   extensions,   modifications,   renewals,
replacements,  substitutions,  joinders, and supplements thereto and thereof, as
applicable  (subject  to  any  restrictions  on  such  alterations,  amendments,
changes,  extensions,  modifications,  renewals,  replacements,   substitutions,
joinders,  and supplements set forth herein). Any reference herein to any Person
shall be construed to include such Person's successors and assigns.

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                                   ARTICLE II.

                                  LIEN PRIORITY

      Section 2.01 Agreement to  Subordinate.  Notwithstanding  the date,  time,
method, manner or order of grant, attachment, or perfection of any Liens granted
to the Collateral  Agent,  the Trustee,  or the Noteholders in respect of all or
any portion of the  Collateral  or of any Liens granted to the Lender in respect
of all or any  portion  of the  Collateral,  or the  order or time of  filing or
recordation  of any document or instrument  for perfecting the Liens in favor of
Lender  or the  Collateral  Agent  (or the  Trustee  or any  Noteholder)  in any
Collateral or any provision of the Uniform Commercial Code, any other applicable
law, the Loan Documents or any other circumstance whatsoever, each of the Lender
and the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders,
hereby agrees that:

            (a) (i) any Lien in respect of all or any portion of the  Collateral
now or hereafter held by or on behalf of the Collateral  Agent, the Trustee,  or
any  Noteholder  that  secures  all or any  portion  of  the  Indenture  Secured
Obligations,  shall in all  respects  be  junior  and  subordinate  to all Liens
granted to the Lender in the Collateral to secure all or any portion of the Loan
Agreement  Secured  Obligations  up to (but not in excess of) the Maximum Lender
Priority Debt Amount,  and (ii) any Lien in respect of all or any portion of the
Collateral  now or hereafter held by or on behalf of the Lender that secures all
or any  portion  of the Loan  Agreement  Secured  Obligations  in  excess of the
Maximum  Lender  Priority  Debt  Amount,  shall in all  respects  be junior  and
subordinate  to all Liens granted to the  Collateral  Agent,  the Trustee or any
Noteholder  in the  Collateral  to secure all or any  portion  of the  Indenture
Secured Obligations,

            (b) (i) any Lien in respect of all or any portion of the  Collateral
now or  hereafter  held by or on behalf of the Lender  that  secures  all or any
portion of the Loan Agreement  Secured  Obligations up to (but not in excess of)
the Maximum  Lender  Priority  Debt Amount  shall in all  respects be senior and
prior to all  Liens  granted  to the  Collateral  Agent (or the  Trustee  or any
Noteholder)  in the  Collateral  to secure all or any  portion of the  Indenture
Secured  Obligations,  and (ii) any Lien in respect of all or any portion of the
Collateral now or hereafter held by or on behalf of the  Collateral  Agent,  the
Trustee,  or any  Noteholder  that  secures all or any portion of the  Indenture
Secured  Obligations,  shall in all  respects  be senior  and prior to all Liens
granted to the Lender in the Collateral to secure all or any portion of the Loan
Agreement  Secured  Obligations  in excess of the Maximum  Lender  Priority Debt
Amount.

            The Collateral  Agent, for and on behalf of itself,  the Trustee and
the Noteholders, acknowledges and agrees that, concurrently herewith, the Lender
has been granted Liens upon all of the Collateral in which the Collateral  Agent
has been granted Liens and the Collateral  Agent hereby  consents  thereto.  The
Lender  acknowledges  and agrees that the Collateral  Agent,  for the benefit of
itself, the Trustee, and the Noteholders,

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has been  granted  Liens  upon all of the  Collateral  in which  Lender has been
granted Liens and the Lender hereby consents thereto. The subordination of Liens
in the  Collateral  (up to the  Maximum  Lender  Priority  Debt  Amount)  by the
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders in favor
of the Lender herein shall not be deemed to subordinate  the Collateral  Agent's
Liens to the  Liens  of any  other  Person.  The  subordination  of Liens in the
Collateral  (in excess of the Maximum  Lender  Priority Debt Amount) in favor of
the Collateral Agent, for the benefit of itself, the Trustee and the Noteholders
herein shall not be deemed to subordinate the Lender's Liens to the Liens of any
other Person.

            Section 2.02 Waiver of Right to Contest Liens.  The Collateral Agent
agrees, on behalf of itself, the Trustee, and the Noteholders,  that it and they
shall  not (and  hereby  waives,  on  behalf  of  itself,  the  Trustee  and the
Noteholders  any right to) take any action to contest or challenge (or assist or
support any other Person in contesting or challenging),  directly or indirectly,
whether or not in any proceeding (including in any Insolvency  Proceeding),  the
validity, priority,  enforceability, or perfection of the Liens of the Lender in
respect of the Collateral. The Collateral Agent, for itself, the Trustee, and on
behalf  of the  Noteholders,  agrees  that  none of the  Collateral  Agent,  the
Trustee,  or the Noteholders will take any action that would hinder any exercise
of remedies  undertaken by the Lender under the Lender Loan Documents in respect
of the  Collateral,  including  any public or  private  sale,  lease,  exchange,
transfer,  or other  disposition  of the  Collateral,  whether by foreclosure or
otherwise.  The Collateral Agent, for itself, the Trustee,  and on behalf of the
Noteholders,  hereby  waives  any  and  all  rights  it,  the  Trustee,  or  the
Noteholders may have as a junior lien creditor or otherwise to contest, protest,
object to,  interfere  with the manner in which the Lender  seeks to enforce the
Liens in any portion of the Collateral (it being  understood and agreed that the
terms of this Agreement shall govern with respect to the Collateral, even if any
portion  of the  Liens  securing  the Loan  Agreement  Secured  Obligations  are
avoided,  disallowed,  set  aside,  or  otherwise  invalidated  in any  judicial
proceeding or otherwise). The Lender agrees that it shall not (and hereby waives
any right to) take any action to contest or challenge  (or assist or support any
other Person in contesting or challenging),  directly or indirectly,  whether or
not in any proceeding  (including in any Insolvency  Proceeding),  the validity,
priority,  enforceability, or perfection of the Liens of the Collateral Agent in
respect of the Collateral.

            Section 2.03 Collateral Agent Remedies Standstill. At any time after
the occurrence and during the  continuation  of an Event of Default under any of
the Lender Loan  Documents,  the Lender may send a Collateral  Agent  Standstill
Notice to the Collateral Agent. The Collateral  Agent, on behalf of itself,  the
Trustee, and the Noteholders, agrees that from and after the date of its receipt
of any Collateral Agent  Standstill  Notice,  none of the Collateral  Agent, the
Trustee,  or any  Noteholder  will  exercise  any of its rights or  remedies  in
respect of the collection on, set off against, marshalling of, or foreclosure on
the  Collateral or any other right  relating to any  Collateral  (including  the
exercise  of any  voting  rights  relating  to any  Capital  Stock

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constituting  Collateral) under the Indenture Loan Documents,  applicable law or
otherwise as a secured  creditor and will not take or receive any  Collateral in
connection with the exercise of any such right or remedy  (including  recoupment
or set-off),  whether under the Indenture Loan Documents,  applicable law, in an
Insolvency Proceeding or otherwise unless and until (a) the Lender has expressly
waived or acknowledged the cure of the applicable Event of Default in writing or
the Discharge of the Loan Agreement Secured Obligations shall have occurred,  or
(b) 210 days shall have elapsed from the date of the Collateral  Agent's receipt
of  such  Collateral  Agent  Standstill  Notice,  except  with  respect  to  any
Collateral  as to which  the  Lender  is  diligently  exercising  its  rights or
remedies as a secured creditor to effect the collection,  foreclosure,  sale, or
other realization upon or disposition of such Collateral. The time period during
which the Collateral Agent is not permitted to exercise rights or remedies under
this section is referred to herein as the "Collateral Agent Standstill  Period".
From and after the earliest to occur of (i) the  Collateral  Agent's  receipt of
such waiver or cure  notice,  (ii) the date on which the  Discharge  of the Loan
Agreement Secured Obligations shall have occurred, or (iii) the elapsing of such
210th day period,  any of the Collateral  Agent, the Trustee,  or any Noteholder
may commence to exercise  any of its rights and  remedies as a secured  creditor
with respect to the Collateral  under the Indenture Loan  Documents,  applicable
law or otherwise (subject to the provisions of this Agreement, including Section
4.02  hereof and except  with  respect  to any such  Collateral  as to which the
Lender is effecting the collection,  foreclosure, sale or other realization upon
or  disposition  of or is otherwise  exercising  its secured  creditor  remedies
diligently  and in good  faith).  The  Lender may only send 3  Collateral  Agent
Standstill  Notices  prior to the Maturity Date whether  delivered  hereunder or
under any corresponding provision of any other agreement similar hereto that may
be delivered  pursuant to Section  7.16)and the Lender may not send a subsequent
Collateral Agent Standstill  Notice  consecutive days have elapsed following the
last day of a Collateral Agent Standstill period.

      Section 2.04 Exercise of Rights.

            (a) No Other  Restrictions.  Except as  expressly  set forth in this
Agreement,  each of the Collateral Agent, the Trustee, the Noteholders,  and the
Lender  shall  have any and all rights  and  remedies  it may have as a creditor
under  applicable law,  including the rights to exercise all rights and remedies
in  foreclosure or otherwise  with respect to any of the  Collateral;  provided,
however,  that any such  exercise by the  Collateral  Agent,  the Trustee or the
Noteholders,  and any collection or sale of all or any portion of the Collateral
by the Collateral Agent, the Trustee or the Noteholders, shall be subject to the
Liens of the Lender on the Collateral to the extent provided in Section 2.01 and
to the provisions of this Agreement including Section 4.02 hereof. In exercising
rights and remedies with respect to the  Collateral,  the Lender may enforce the
provisions of the Lender Loan Documents and exercise remedies thereunder, all in
such order and in such manner as it may  determine  in the  exercise of its sole
discretion.  Such  exercise  and

                                       10
<PAGE>

enforcement shall include the sale, lease,  license, or other disposition of all
or any  portion of the  Collateral  by private or public sale or any other means
permissible  under applicable law;  provided,  that the Lender agrees to provide
copies of any notices that it is required under applicable law to deliver to the
Credit Parties to the Collateral Agent;  provided  further,  that the failure to
provide  any such  copies to the  Collateral  Agent  shall not impair any of the
Lender's rights hereunder.

            (b) Collateral  Agent's  Release of Liens.  In the event of any such
private or public sale of the Collateral,  Collateral Agent agrees, on behalf of
itself, the Trustee, and the Noteholders,  that such sale will be free and clear
of the Liens on any such Collateral  securing the Indenture Secured  Obligations
and,  if the sale or other  disposition  includes  the Equity  Interests  in any
Credit  Party  which are subject to any Liens  securing  the  Indenture  Secured
Obligations, agrees to release the entities whose Equity Interests are sold from
all Indenture  Secured  Obligations so long as Lender also releases the entities
whose Equity Interests are sold from all Loan Agreement Secured Obligations.  In
furtherance  thereof,  Collateral  Agent agrees that it will execute any and all
Lien releases or other documents  reasonably requested by Lender with respect to
the Collateral in connection  therewith,  so long as the proceeds from such sale
or other  disposition of the Collateral are applied in accordance with the terms
of this Agreement.

            (c) No Waiver of Collateral Agent's Rights. Subject to Section 3.01,
the Collateral Agent, the Trustee and the Noteholders may exercise,  and nothing
herein  shall  constitute a waiver of, any right it may have at law or equity to
receive  notice of, or to commence or join with any creditor in  commencing  any
Insolvency  Proceeding or to join or participate in, any action or proceeding or
other activity described in Section 3.01;  provided,  however,  that exercise of
any such right by the Collateral  Agent shall be subject to all of the terms and
conditions of this  Agreement,  including the obligation to turn over Collateral
and  Proceeds  to the  Lender  for  application  to the Loan  Agreement  Secured
Obligations as provided in Section 4.02.

            (d)  Collateral  Agent's  Right to File  Claims  to  Prevent  Waiver
Thereof.  The  Collateral  Agent may make such  demands  or file such  claims in
respect of the Indenture Secured  Obligations as may be necessary to prevent the
waiver or bar of such claims under  applicable  statutes of limitations or other
statutes,  court  orders or rules of  procedure,  but except as provided in this
Section 2.04, the Collateral Agent shall not take any actions restricted by this
Agreement in respect of the  Collateral  until the  Discharge of Loan  Agreement
Secured Obligations shall have occurred.

            (e) Rights of  Collateral  Agent  Following  the  Discharge  of Loan
Agreement Secured Obligations. Following the Discharge of Loan Agreement Secured
Obligations,  the other  provisions  of this  Section  2.04  shall  apply to the
Collateral Agent, for the benefit of itself,  the Trustee and the Noteholders as
if it was the Lender and the Lender was the Collateral Agent, mutatis mutandis.

                                       11
<PAGE>

                                  ARTICLE III.

                             ACTIONS OF THE PARTIES

      Section  3.01  Limitation  on  Certain  Actions by the  Collateral  Agent.
Notwithstanding  any  other  provision  hereof,   during  any  Collateral  Agent
Standstill Period prior to the date that the Discharge of Loan Agreement Secured
Obligations occurs, the Collateral Agent will not:

            (a) commence  receivership  or foreclosure  proceedings  against any
Credit Party in respect of any Collateral;

            (b)  sell,  collect,  transfer  or  dispose  of  any  Collateral  or
Proceeds; or

            (c) notify third party account debtors to make payment in respect of
Collateral  directly to it or any of its agents or other  Persons  acting on its
behalf.

      Section 3.02 Agent for  Perfection.  Each of the Lender and the Collateral
Agent,  for and on  behalf of  itself,  the  Trustee,  and each  Noteholder,  as
applicable,  agree to hold all Control  Collateral and Cash  Collateral  that is
part of the Collateral in its respective possession,  custody, or control (or in
the  possession,  custody,  or  control  of agents or  bailees  for  either,  as
applicable)  as agent for the other  solely for the  purpose of  perfecting  the
security interest granted to each in such Control  Collateral or Cash Collateral
subject to the terms and  conditions of this Section  3.02.  None of the Lender,
the Collateral Agent, the Trustee, or the Noteholders, as applicable, shall have
any obligation whatsoever to the others to assure that the Control Collateral is
genuine or owned by any Credit Party or any other  Person or to preserve  rights
or benefits of any Person. The duties or  responsibilities of the Lender and the
Collateral  Agent  under this  Section  3.02 are and shall be limited  solely to
holding or maintaining control of the Control Collateral and the Cash Collateral
as  agent  for the  other  for  purposes  of  perfecting  the  Lien  held by the
Collateral Agent or the Lender,  as applicable.  The Lender is not and shall not
be deemed to be a fiduciary of any kind for the Collateral  Agent,  the Trustee,
the Noteholders or any other Person.  The Collateral  Agent is not and shall not
be deemed to be a fiduciary  of any kind for the  Lender.  In the event that (a)
any of the  Collateral  Agent,  the  Trustee,  or any  Noteholder  receives  any
Proceeds or Collateral in contravention of the Lien Priority,  or (b) the Lender
receives any  Collateral or  Collateral  Proceeds in  contravention  of the Lien
Priority, it shall promptly pay over such Proceeds or Collateral, as applicable,
to (i) in the case of clause (a), the Lender, or (ii) in the case of clause (b),
the  Collateral  Agent,  in  the  same  form  as  received  with  any  necessary
endorsements,  for application in accordance with the provisions of Section 4.02
of this Agreement.

                                       12
<PAGE>

                                   ARTICLE IV.

                       NOTICES AND APPLICATION OF PROCEEDS

      Section 4.01 Notices of  Exercise.  Concurrently  with any exercise by the
Collateral  Agent of any of its rights and  remedies  under the  Indenture  Loan
Documents  following  the  occurrence  of any  Indenture  Event of Default,  the
Collateral Agent shall give notice of such exercise to the Lender and shall only
exercise such rights or remedies in a manner  consistent  with the terms of this
Agreement. Concurrently with any exercise by the Lender of any of its rights and
remedies under the Lender Loan  Documents  following the occurrence of any Event
of  Default,  the Lender  shall give notice of such  exercise to the  Collateral
Agent and shall only  exercise  such rights or  remedies in a manner  consistent
with the terms of this Agreement.

      Section 4.02 Application of Proceeds.

            (a) Revolving Nature of Loan Agreement Secured Obligations.  As long
as the Lender is not exercising any of its remedies as a secured  creditor under
the Lender Loan Documents and including  during any Collateral  Agent Standstill
Period,  the Lender may apply any and all of the Proceeds in accordance with the
provisions  of the Lender  Loan  Documents,  subject to the  provisions  of this
Agreement,  including  Sections 3.02 and 4.02 hereof.  The Collateral Agent, for
and  on  behalf  of  itself,  the  Trustee,   and  the  Noteholders,   expressly
acknowledges  and agrees that (a) any such  application  of the  Proceeds or the
release  of any  Lien by the  Lender  upon  any  portion  of the  Collateral  in
connection  with a  Permitted  Disposition  (as that term is defined in the Loan
Agreement)  shall not be  considered  to be the exercise of remedies  under this
Agreement;  and (b) all Proceeds received by Lender in connection  therewith may
be applied, reversed, reapplied, credited or reborrowed, in whole or in part, as
Loan Agreement Secured  Obligations without reducing the Maximum Lender Priority
Debt Amount.

            (b) Turnover of Cash Collateral After Payment. Upon the Discharge of
the  Loan  Agreement  Secured  Obligations,  the  Lender  shall  deliver  to the
Collateral  Agent  or  execute  such  documents  as  the  Collateral  Agent  may
reasonably  request to cause the Collateral  Agent to have control over any Cash
Collateral  or  Control  Collateral  still in  Lender's  possession,  custody or
control in the same form as received,  with any necessary  endorsements  or as a
court of  competent  jurisdiction  may  otherwise  direct,  to be applied by the
Collateral Agent to the Indenture  Secured  Obligations in the manner prescribed
by the  Indenture.  Proceeds  from any exercise by the Lender or the  Collateral
Agent,  as applicable,  of any of their  respective  secured  creditor rights or
remedies under any of the Loan  Documents,  under  applicable  law, or otherwise
with respect to any Collateral or Proceeds,  shall be (a) until the Discharge of
the Loan  Agreement  Secured  Obligations,  retained  by the Lender or  promptly
turned over by the Collateral Agent, the Trustee, or any Noteholder, as the case
may  be,  to the  Lender  in the  same  form as  received,  with  any  necessary
endorsements,  (b) after the Discharge of the Loan

                                       13
<PAGE>

Agreement Secured  Obligations and until all Indenture Secured  Obligations have
been paid in full in cash,  retained by the Collateral  Agent or promptly turned
over by the Lender to the  Collateral  Agent in the same form as received,  with
any  necessary  endorsements,  and (c) if there are any Loan  Agreement  Secured
Obligations  outstanding  in excess of the Maximum  Lender  Priority Debt Amount
after the payment in full in cash of all Indenture Secured Obligations, it shall
be retained by the Lender or promptly turned over by the Collateral Agent to the
Lender in the same form as received, with any necessary endorsements.

            (c)  Application of Proceeds.  The Lender and the  Collateral  Agent
hereby agree that all  Collateral  and all  Proceeds  received by either of them
upon the exercise of any their secured  creditor rights or remedies under any of
the Loan Documents, applicable law, or otherwise shall be applied,

            first,  ratably to the payment of costs and  expenses of the Lender,
or of the Collateral Agent, the Trustee, and the Noteholders,  as applicable, in
connection with such exercise,

            second, to the payment of the Loan Agreement Secured  Obligations up
to (but not in excess of) the Maximum Lender Priority Debt Amount,

            third,  to the payment of the Indenture  Secured  Obligations in the
manner prescribed by the Indenture, and

            fourth, to the payment of any Loan Agreement Secured  Obligations in
excess of the Maximum Lender Priority Debt Amount.

In exercising remedies,  whether as a secured creditor or otherwise,  the Lender
shall have no obligation or liability to the Collateral  Agent, the Trustee,  or
to any Noteholder and the Collateral Agent shall have no obligation or liability
to the  Lender  regarding  the  adequacy  of any  Proceeds  or for any action or
omission  save and except solely an action or omission that breaches the express
obligations undertaken by each Party under the terms of this Agreement.

      Section 4.03 Specific  Performance.  Each of the Lender and the Collateral
Agent is hereby  authorized to demand  specific  performance of this  Agreement,
whether  or not the  Parent,  any  Subsidiary  or any  Credit  Party  shall have
complied with any of the  provisions of any of the Loan  Documents,  at any time
when the other shall have failed to comply  with any of the  provisions  of this
Agreement   applicable  to  it;  provided,   however,  the  remedy  of  specific
performance  shall not be available,  and the  asserting  party shall be free to
assert any and all legal  defenses it may  possess,  if such remedy would result
in, or  otherwise  constitute,  a violation of the  Employee  Retirement  Income
Security Act of 1974, as amended.  Each of the Lender and the  Collateral  Agent
hereby  irrevocably waives any defense based on the adequacy of a remedy at law,
which might be asserted as a bar to such remedy of specific performance.

                                       14
<PAGE>

                                   ARTICLE V.

                   INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

      Section 5.01 Notice of Acceptance and Other Waivers.

            (a) All Loan  Agreement  Secured  Obligations  at any  time  made or
incurred  by any Credit  Party  shall be deemed to have been made or incurred in
reliance upon this Agreement, and the Collateral Agent, on behalf of itself, the
Trustee, and the Noteholders,  hereby waives (i) notice of acceptance,  or proof
of reliance, by the Lender of this Agreement,  and (ii) notice of the existence,
renewal, extension,  accrual, creation, or non-payment of all or any part of the
Loan  Agreement  Secured  Obligations.   Neither  the  Lender  nor  any  of  its
affiliates,  directors,  officers,  employees,  or agents  shall be  liable  for
failure to demand,  collect,  or realize upon any of the  Collateral  or for any
delay in doing so or shall be under any obligation to sell or otherwise  dispose
of any  Collateral  or to take any other  action  whatsoever  with regard to the
Collateral  or any  part  thereof,  except  as  specifically  provided  in  this
Agreement.  If the Lender honors (or fails to honor) a request by the any Credit
Party for an  extension of credit  pursuant to the Loan  Agreement or any of the
Lender Loan  Documents,  whether  Lender has knowledge  that the honoring of (or
failure to honor) any such request would constitute a default under the terms of
the Indenture or any  Indenture  Loan  Document or an act,  condition,  or event
that,  with  the  giving  of  notice  or the  passage  of time,  or both,  would
constitute  such a default,  or if Lender  otherwise  should exercise any of its
contractual  rights or remedies under the Lender Loan Documents  (subject to the
express  terms and  conditions  hereof),  Lender  shall  not have any  liability
whatsoever to the Collateral Agent, the Trustee or any Noteholder as a result of
such action, omission, or exercise (so long as any such exercise does not breach
the express terms and provisions of this Agreement). The Lender will be entitled
to  manage  and  supervise  its loans and  extensions  of credit  under the Loan
Agreement  and other  Lender  Loan  Documents  as the  Lender  may,  in its sole
discretion, deem appropriate, and the Lender may manage its loans and extensions
of credit without  regard to any rights or interests that the Collateral  Agent,
the  Trustee,  or any of the  Noteholders  have in the  Collateral  or otherwise
except as otherwise expressly set forth in this Agreement. The Collateral Agent,
on behalf of itself,  the Trustee,  and the Noteholders,  agrees that the Lender
shall not incur any liability as a result of a sale,  lease,  license,  or other
disposition of the Collateral,  or any part thereof, pursuant to the Lender Loan
Documents conducted in accordance with mandatory provisions of applicable law.

            (b) None of Collateral Agent, Trustee, or any of the Noteholders nor
any of their  affiliates,  directors,  officers,  employees,  or agents shall be
liable for failure to demand,  collect, or realize upon any of the Collateral or
for any delay in doing so or shall be under any  obligation to sell or otherwise
dispose of any Collateral or to take any other action  whatsoever with regard to
the  Collateral or any part  thereof,  except as  specifically  provided in this
Agreement.  If  Collateral  Agent,  Trustee,  or any of the  Noteholders  should
exercise  any of their  contractual  rights  or  remedies  under  the  Indenture

                                       15
<PAGE>

Agreements  (subject  to the  express  terms  and  conditions  hereof),  none of
Collateral  Agent,  Trustee,  or any of the Noteholders shall have any liability
whatsoever to the Lender as a result of such action,  omission,  or exercise (so
long as any such exercise  does not breach the express  terms and  provisions of
this Agreement). The Collateral Agent, Trustee, and Noteholders will be entitled
to manage and supervise their loans and extensions of credit under the Indenture
Agreements as they may, in their sole discretion, deem appropriate, and they may
manage  their loans and  extensions  of credit  without  regard to any rights or
interests that the Lender has in the Collateral or otherwise except as otherwise
expressly  set forth in this  Agreement.  Subject  to Section  2.03,  the Lender
agrees that none of the Collateral Agent, the Trustee,  or the Noteholders shall
incur any liability as a result of a sale, lease,  license, or other disposition
of the  Collateral,  or any part thereof,  pursuant to the Indenture  Agreements
conducted in accordance with mandatory provisions of applicable law.

      Section  5.02   Modifications  to  Lender  Loan  Documents  and  Indenture
Agreements.

            (a) The Collateral Agent, on behalf of itself, the Trustee,  and the
Noteholders,  hereby  agrees that,  without  affecting  the  obligations  of the
Collateral Agent, the Trustee and the Noteholders hereunder,  the Lender may, at
any time and from time to time, in its sole discretion without the consent of or
notice to the Collateral  Agent,  the Trustee or any  Noteholder  (except to the
extent such notice or consent is required pursuant to the express  provisions of
this Agreement),  and without  incurring any liability to the Collateral  Agent,
the Trustee or any  Noteholder  or  impairing  or  releasing  the  subordination
provided for herein, amend, restate,  supplement,  replace,  refinance,  extend,
consolidate,  restructure,  or otherwise modify the Loan Agreement or any of the
Lender Loan Documents in any manner whatsoever, including, to

                  (i) change the  manner,  place,  time,  or terms of payment or
            renew or alter, all or any of the Loan Agreement Secured Obligations
            or otherwise amend, restate,  supplement, or otherwise modify in any
            manner,  or grant any waiver or release  with respect to, all or any
            part of the Loan Agreement Secured  Obligations or any of the Lender
            Loan Documents,

                  (ii) retain or obtain a Lien on any  property of any Person to
            secure any of the Loan Agreement  Secured  Obligations,  and in that
            connection to enter into any additional Lender Loan Documents,

                  (iii) amend,  or grant any waiver,  compromise or release with
            respect to, or consent to any departure  from, any guaranty or other
            obligations  of any  Person  obligated  in any  manner  under  or in
            respect of the Loan Agreement Secured Obligations,

                  (iv) release its Lien on any Collateral or other property,

                                       16
<PAGE>

                  (v) exercise or refrain from exercising any rights against any
            Credit Party or any other Person,

                  (vi) retain or obtain the primary or secondary  obligation  of
            any other Person with respect to any of the Loan  Agreement  Secured
            Obligations, and

                  (vii)  otherwise  manage  and  supervise  the  Loan  Agreement
            Secured Obligations as the Lender shall deem appropriate.

            (b) The Lender hereby  agrees that  Collateral  Agent,  on behalf of
itself, the Trustee, and the Noteholders may, at any time and from time to time,
in its sole discretion without the consent of or notice to the Lender (except to
the extent such notice or consent is required pursuant to the express provisions
of this  Agreement),  and  without  incurring  any  liability  to the  Lender or
impairing or releasing the subordination  provided for herein,  amend,  restate,
supplement,  replace, refinance, extend, consolidate,  restructure, or otherwise
modify the Indenture  Agreements in any manner  whatsoever,  provided,  however,
that in no event shall Collateral Agent, the Trustee, or any Noteholder obtain a
Lien on any assets of any Credit  Party not subject to a Lien in favor of Lender
unless (i) Lender also obtains a Lien on such assets or (ii) Lender  declines in
a writing to Collateral Agent to obtain a Lien on such assets.

            (c)  Notwithstanding  anything to the contrary herein,  this Section
5.02 shall not be construed to constitute a waiver by the Collateral  Agent, the
Trustee, or any Noteholder of Section 4.12 of the Indenture.

            (d)  Notwithstanding  anything to the contrary  herein,  in no event
shall  Indebtedness  represented  by any units or notes  issued  pursuant to the
Indenture, including any Units or Notes (or represented by any other evidence of
indebtedness for borrowed money under the Units, the Notes, the Indenture or the
guarantees  related  thereto) at any time exceed an aggregate  principal  amount
equal to $105,000,000.

      Section 5.03 Reinstatement and Continuation of Agreement.

            (a) If Lender is required in any Insolvency  Proceeding or otherwise
to  turn  over  or  otherwise  pay  to the  estate  of  the  Parent,  any of its
Subsidiaries,  any Credit Party or any other  Person any amount (a  "Recovery"),
then the Loan Agreement Secured Obligations shall be reinstated to the extent of
such  Recovery.  If this  Agreement  shall  have been  terminated  prior to such
Recovery,  this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release,  discharge,  impair, or otherwise
affect the  obligations of the parties  hereto from such date of  reinstatement.
All rights, interests,  agreements, and obligations of the Collateral Agent, the
Trustee,  the Lender,  and the Noteholders  under this Agreement shall remain in
full force and effect and shall continue irrespective of the commencement of, or
any  discharge,  confirmation,   conversion,  or  dismissal  of  any  Insolvency
Proceeding by or against Parent,  any of its

                                       17
<PAGE>

Subsidiaries or any Credit Party or any other circumstance which otherwise might
constitute a defense available to, or a discharge of the Parent,  any Subsidiary
or any Credit Party in respect of the Loan  Agreement  Secured  Obligations.  No
priority or right of the Lender shall at any time be  prejudiced  or impaired in
any way by any act or failure to act on the part of the Credit Party, any of its
Subsidiaries or any Credit Party or by the  noncompliance by any Person with the
terms,  provisions,  or covenants of the Loan Agreement, the Indenture or any of
the other Loan Documents,  regardless of any knowledge  thereof which the Lender
may have.

            (b) If Collateral Agent, the Trustee,  or any Noteholder is required
in any  Insolvency  Proceeding or otherwise to turn over or otherwise pay to the
estate of any Credit  Party or any other Person a Recovery,  then the  Indenture
Secured  Obligations  shall be  reinstated  to the extent of such  Recovery.  No
priority or right of the Collateral Agent, the Trustee,  or any Noteholder shall
at any time be prejudiced or impaired in any way by any act or failure to act on
the part of the  Borrower,  any of its  Subsidiaries  or any Guarantor or by the
noncompliance by any Person with the terms, provisions, or covenants of the Loan
Agreement, the Indenture or any of the other Indenture Agreements, regardless of
any knowledge thereof which the Collateral Agent, the Trustee, or any Noteholder
may have.

                                   ARTICLE VI.

                             INSOLVENCY PROCEEDINGS

      Section 6.01 DIP Financing.  If the Parent, any of its Subsidiaries or any
Credit Party shall be subject to any Insolvency  Proceeding and the Lender shall
desire, prior to the Discharge of Loan Agreement Secured Obligations,  to permit
the use of cash collateral or to permit Parent,  any of its  Subsidiaries or any
Credit Party to obtain financing under Section 363 or Section 364 of Title 11 of
the United States Code or any similar  provision under the law applicable to any
Insolvency  Proceeding ("DIP  Financing") to be secured by all or any portion of
the Collateral, then the Collateral Agent, on behalf of itself, the Trustee, and
the  Noteholders,  agrees  that it will raise no  objection  to such use of cash
collateral  or DIP  Financing  and will not request  adequate  protection or any
other relief in  connection  with its or their  interest in any such  Collateral
except to the extent specified in Section 6.02. To the extent the Liens securing
the Loan Agreement Secured  Obligations are subordinated or pari passu with such
DIP Financing,  the Collateral Agent, for and on behalf of itself,  the Trustee,
and the  Noteholders,  hereby agrees that its Liens in the  Collateral  shall be
subordinated to such DIP Financing (and all obligations  relating thereto) up to
(but not in excess of) the Maximum  Lender  Priority  Debt Amount upon the terms
and  conditions  specified  in  this  Agreement.  Until  the  Discharge  of Loan
Agreement Secured  Obligations has occurred,  the Collateral Agent, on behalf of
itself,  the Trustee,  and the Noteholders,  agrees that none of them shall seek
relief from the automatic stay or any other stay in any Insolvency Proceeding in
respect of the  Collateral  and will not  provide  or offer to  provide  any DIP
Financing  secured by a

                                       18
<PAGE>

Lien senior to or pari passu with the Liens securing the Loan Agreement  Secured
Obligations,  in each case unless the Lender  otherwise has provided its express
written consent.

      Section 6.02 No Contest.  The Collateral  Agent, on behalf of itself,  the
Trustee,  and the  Noteholders,  agrees  that,  prior to the  Discharge  of Loan
Agreement Secured Obligations,  none of them shall contest (or support any other
Person contesting) (a) any request by the Lender for adequate protection, or (b)
any objection by the Lender to any motion,  relief,  action, or proceeding based
on Lender  claiming that their  interests in the  Collateral  are not adequately
protected or any other similar request under any law applicable to an Insolvency
Proceeding.  Notwithstanding the foregoing, in any Insolvency Proceeding, if the
Lender is granted  adequate  protection in the form of additional  collateral in
connection with any DIP Financing or use of cash collateral under Section 363 or
Section 364 of Title 11 of the United States Code or any similar law  applicable
to any Insolvency  Proceeding,  then the Collateral  Agent, on behalf of itself,
the Trustee, or any of the Noteholders,  may seek or request adequate protection
in the form of a Lien on such  additional  collateral,  which Lien hereby is and
shall be deemed to be  subordinated  to the Liens  securing  the Loan  Agreement
Secured  Obligations  up to (but not in excess of) the Maximum  Lender  Priority
Debt Amount and such DIP Financing (and all obligations relating thereto) on the
same basis as the Lien Priority. In the event the Collateral Agent, on behalf of
itself, the Trustee, and the Noteholders,  seeks or requests adequate protection
and such  adequate  protection  is  granted  in the form of Liens in  respect of
additional  collateral,  then the  Collateral  Agent,  on behalf of itself,  the
Trustee,  and each of the  Noteholders,  agrees  that the  Lender  also shall be
granted a Lien on such additional  collateral as security for the Loan Agreement
Secured  Obligations  (and for any such DIP Financing) and that any Lien on such
additional  collateral  securing  the  Indenture  Secured  Obligations  shall be
subordinated to the Liens in respect of such additional  collateral securing the
Loan  Agreement  Secured  Obligations  and any such DIP  Financing and any other
Liens  granted to the  Lender as  adequate  protection  on the same basis as the
other Liens securing the Indenture  Secured  Obligations are subordinated to the
Loan Agreement Secured Obligations under this Agreement up to the Maximum Lender
Priority Debt Amount.  All such Liens granted to the Lender or to the Collateral
Agent in  respect  of such  additional  collateral  shall be subject to the Lien
Priority.  Nothing  contained  herein  shall  prohibit  or in any way  limit the
Lender,  prior to the  Discharge of Loan  Agreement  Secured  Obligations,  from
objecting in any  Insolvency  Proceeding or otherwise to any action taken by the
Collateral  Agent, the Trustee or any of the Noteholders,  including the seeking
by the Collateral Agent, the Trustee or any Noteholder of adequate protection or
the asserting by the Collateral  Agent,  the Trustee or any Noteholder of any of
its rights and remedies under the Indenture Loan Documents or otherwise.

      Section  6.03 Asset  Sales.  The  Collateral  Agent  agrees,  on behalf of
itself,  the  Trustee,  and the  Noteholders,  that it will not  oppose any sale
consented  to by Lender of pursuant to Section  363(f) of Title 11 of the United
States Code (or any similar provision

                                       19
<PAGE>

in any other applicable Bankruptcy Law) so long as the proceeds of such sale are
applied in accordance with this Agreement.

      Section 6.04 Enforceability. The provisions of this Agreement are intended
to be and  shall be  enforceable  under  Section  510 of Title 11 of the  United
States  Code.  The Lender and the  Collateral  Agent,  on behalf of itself,  the
Trustee,  and the  Noteholders,  each  agrees  that all  distributions  that the
Lender,  the Collateral  Agent, the Trustee,  or any Noteholder  receives in any
Insolvency  Proceeding  on account of the  Collateral  shall be held in trust by
such Person and turned over to the Lender for  application  in  accordance  with
Section 4.02 of this Agreement.  To the extent that any amounts  received by the
Lender,  the Collateral  Agent, the Trustee,  or any Noteholder are paid over in
connection  with this provision,  the obligations  owed by the Credit Parties to
such Person will be deemed to be reinstated to the extent of the amounts so paid
over.

                                  ARTICLE VII.

                                  MISCELLANEOUS

      Section 7.01 Rights of  Subrogation.  The Collateral  Agent agrees that no
payment  or  distribution  to the  Lender  pursuant  to the  provisions  of this
Agreement shall entitle the Collateral Agent, the Trustee,  or any Noteholder to
exercise any rights of  subrogation  in respect  thereof  until the Discharge of
Loan Agreement Secured Obligations shall have occurred.  Following the Discharge
of Loan  Agreement  Secured  Obligations,  the  Lender  agrees to  execute  such
documents,  agreements,  and instruments as the Collateral Agent, the Trustee or
any Noteholder may reasonably request to evidence the transfer by subrogation to
any such  Person  of an  interest  in the  Loan  Agreement  Secured  Obligations
resulting from payments or distributions  to the Lender by such Person,  so long
as  all  costs  and  expenses   (including   all   reasonable   legal  fees  and
disbursements)  incurred in connection  therewith by the Lender are paid by such
Person upon request for payment thereof.

      Section 7.02 Further  Assurances.  The Parties  will, at their own expense
and at any time and from time to time,  promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable,  or that either Party may reasonably request, in order to protect any
right or interest  granted or  purported  to be granted  hereby or to enable the
Lender or the  Collateral  Agent to exercise and enforce its rights and remedies
hereunder;  provided,  however,  that no Party shall be required to pay over any
payment or distribution, execute any instruments or documents, or take any other
action  referred to in this  Section  7.02 to the extent that such action  would
contravene  any law,  order or other  legal  requirement,  and in the event of a
controversy or dispute, such Party may interplead any payment or distribution in
any court of competent  jurisdiction,  without further responsibility in respect
of such payment or distribution under this Section 7.02.

                                       20
<PAGE>

      Section 7.03 Representations.  The Original Lender represents and warrants
to the Collateral  Agent that it has the requisite power and authority under the
Original Loan Agreement to enter into, execute, deliver, and carry out the terms
of this  Agreement on behalf of itself and the Lenders  under the Original  Loan
Agreement.  The  Collateral  Agent  represents  and  warrants  that  it has  the
requisite  power and  authority  under the  Indenture  to enter  into,  execute,
deliver,  and carry out the terms of this  Agreement  on behalf of  itself,  the
Trustee, and the Noteholders.

      Section 7.04  Amendments.  No amendment or waiver of any provision of this
Agreement  nor consent to any  departure  by any Party hereto shall be effective
unless it is in a written  agreement  executed by the  Collateral  Agent and the
Lender,  and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

      Section  7.05  Addresses  for  Notices.  All  demands,  notices  and other
communications  provided  for  hereunder  shall  be in  writing  and,  if to the
Collateral Agent, mailed or sent by telecopy or delivered to it, addressed to it
as follows:

                  HSBC Bank USA
                  452 5th Avenue
                  New York, New York  10018
                  Facsimile:  212.525.1300
                  Attention:  Issuer Services

With a copy to:

                  Mayer, Brown, Rowe & Maw LLP
                  1675 Broadway
                  New York, NY 10019-5820
                  Facsimile:  212.262.1910
                  Attn:  Ron Brody

and if to the Lender,  mailed,  sent or  delivered  thereto,  addressed to it as
follows:

                  Wells Fargo Foothill, Inc.
                  One Boston Place, Suite 1800
                  Boston, MA 02108
                  Facsimile:  617.523.1697
                  Attention:  Business Finance Division Manager

With a copy to:

                  Paul, Hastings, Janofsky & Walker LLP
                  515 South Flower Street, 25th Floor
                  Los Angeles, California 90071
                  Facsimile:  213.627.0705
                  Attention:  John Francis Hilson, Esq.

                                       21
<PAGE>

or as to any party at such other address as shall be designated by such party in
a written notice to the other parties complying as to delivery with the terms of
this Section 7.05. All such demands,  notices and other  communications shall be
effective,  when mailed,  two business days after deposit in the mails,  postage
prepaid,  when sent by telecopy,  when receipt is  acknowledged by the receiving
telecopy  equipment  (or at the opening of the next  business  day if receipt is
after normal business hours),  or when delivered,  as the case may be, addressed
as aforesaid.

      Section 7.06 No Waiver,  Remedies.  No failure on the part of any Party to
exercise,  and no delay in exercising,  any right  hereunder  shall operate as a
waiver thereof;  nor shall any single or partial exercise of any right hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right.  The remedies  herein  provided are  cumulative  and not exclusive of any
remedies provided by law.

      Section 7.07 Continuing Agreement,  Transfer of Secured Obligations.  This
Agreement  is a  continuing  agreement  and shall (i)  remain in full  force and
effect until the Discharge of the Loan Agreement Secured  Obligations shall have
occurred and the  Indenture  Secured  Obligations  shall have been paid in full,
(ii) be binding upon the Parties and their  successors  and  assigns,  and (iii)
inure to the benefit of and be enforceable  by the Parties and their  respective
successors,  transferees  and assigns.  Without  limiting the  generality of the
foregoing clause (iii), the Lender or the Collateral Agent, the Trustee,  or any
Noteholder  may  assign or  otherwise  transfer  all or any  portion of the Loan
Agreement  Secured  Obligations  or  the  Indenture  Secured   Obligations,   as
applicable,  to any other  Person  (other than  Parent,  any Credit Party or any
Affiliate of Parent and any Subsidiary of Parent or any Credit Party),  and such
other Person shall  thereupon  become vested with all the rights and obligations
in respect thereof granted to the Lender or the Collateral  Agent,  the Trustee,
or any Noteholder, as the case may be, herein or otherwise.

      Section 7.08  Governing Law:  Entire  Agreement.  This Agreement  shall be
governed by, and construed in accordance with, the laws of the State of New York
except  as  otherwise  preempted  by  applicable  federal  law.  This  Agreement
constitutes  the entire  agreement  and  understanding  among the  Parties  with
respect to the  subject  matter  hereof  and  supersedes  any prior  agreements,
written or oral, with respect thereto.

      Section 7.09 Counterparts.  This Agreement maybe executed in any number of
counterparts,  and it is not  necessary  that the  signatures  of all Parties be
contained on any one counterpart  hereof,  each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.

      Section 7.10 No Third Party Beneficiary.  This Agreement is solely for the
benefit  of the  Parties  (and  their  permitted  assignees).  No  other  Person
(including  Parent,

                                       22
<PAGE>

any Credit Party or any Affiliate of Parent and any  Subsidiary of Parent or any
Credit Party) shall be deemed to be a third party beneficiary of this Agreement.

      Section 7.11  Headings.  The headings of the articles and sections of this
Agreement  are  inserted  for  purposes  of  convenience  only and  shall not be
construed to affect the meaning or construction of any of the provisions hereof

      Section 7.12  Severability.  If any of the  provisions  in this  Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such  invalidity,  illegality  or  unenforceability  shall not  affect any other
provision of this  Agreement and shall not  invalidate  the Lien Priority or any
other priority set forth in this Agreement.

      Section 7.13 Collateral  Agent Status.  Nothing in this Agreement shall be
construed to operate as a waiver by the  Collateral  Agent,  with respect to the
Parent,  any  of  its  Subsidiaries,  any  Credit  Party,  the  Trustee,  or any
Noteholder,  of the benefit of any exculpatory rights,  privileges,  immunities,
indemnities,  or reliance rights  contained in the Indenture or any of the other
Indenture Loan  Documents.  For all purposes of this  Agreement,  the Collateral
Agent may (a) rely in good faith,  as to matters of fact, on any  representation
of fact  believed  by the  Collateral  Agent  to be true  (without  any  duty of
investigation) and that is contained in a written  certificate of any authorized
representative  of the  Parent or of the  Lender,  and (b)  assume in good faith
(without  any  duty of  investigation),  and rely  upon,  the  genuineness,  due
authority,  validity,  and accuracy of any certificate,  instrument,  notice, or
other  document  believed by it in good faith to be genuine and presented by the
proper person.  Parent and Lender expressly  acknowledge that the  subordination
and related  agreements set forth herein by the Collateral Agent are made solely
in its  capacity as  Collateral  Agent under the  Indenture  with respect to the
Units and the Notes issued thereunder and the other Indenture Loan Documents and
are not made by the Collateral Agent in its individual commercial capacity.

      Section 7.14  Acknowledgment.  Each of Parent and each Credit Party hereby
acknowledges that it has received a copy of this Agreement and consents thereto,
and  agrees to  recognize  all  rights  granted  thereby  to the  Lender and the
Collateral  Agent and will not do any act or perform any obligation which is not
in accordance  with the agreements set forth in this  Agreement.  Each of Parent
and each Credit Party further acknowledges and agrees that it is not an intended
beneficiary or third party beneficiary under this Agreement.

      Section 7.15 VENUE; JURY TRIAL WAIVER.

            (a) THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS  LOCATED IN THE CITY OF NEW YORK OR THE SOUTHERN  DISTRICT OF
NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING

                                       23
<PAGE>

ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER'S
OPTION,  IN THE COURTS OF ANY  JURISDICTION  WHERE  LENDER  ELECTS TO BRING SUCH
ACTION OR WHERE  SUCH  COLLATERAL  OR OTHER  PROPERTY  MAY BE FOUND.  EACH PARTY
HERETO WAIVES,  TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7.15.

            (b) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE  RIGHTS TO A JURY
TRIAL OF ANY  CLAIM  OR  CAUSE  OF  ACTION  BASED  UPON OR  ARISING  OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS  CONTEMPLATED  HEREIN,  INCLUDING  CONTRACT
CLAIMS,  TORT  CLAIMS,  BREACH  OF DUTY  CLAIMS,  AND ALL  OTHER  COMMON  LAW OR
STATUTORY CLAIMS.  EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
AND IT  KNOWINGLY  AND  VOLUNTARILY  WAIVES  ITS  JURY  TRIAL  RIGHTS  FOLLOWING
CONSULTATION  WITH LEGAL  COUNSEL.  IN THE EVENT OF  LITIGATION,  A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

      Section 7.16 Intercreditor Agreement.  This Agreement is the Intercreditor
Agreement referred to in the Indenture.  If this Agreement or all or any portion
of either  Party's  rights or  obligations  hereunder  are assigned or otherwise
transferred to any other Person,  such other Person shall execute and deliver an
agreement  containing terms  substantially  identical to those contained in this
Agreement.

                                       24
<PAGE>

      IN WITNESS WHEREOF,  the Lender, the Collateral Agent, the Parent and each
other Credit Party has caused this  Agreement to be duly  executed and delivered
as of the date first above written.

LENDER:                              WELLS FARGO FOOTHILL, INC.,
                                     a California corporation

                                     By: /s/ Renee D. LeFebvre
                                         ------------------------------------
                                         Name: Renee D. LeFebvre
                                         Title: VP

<PAGE>

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

                                     By: /s/ Herawattee Alli
                                         ------------------------------------
                                         Name: Herawattee Alli
                                         Title: Corporate Trust Officer

<PAGE>

Parent:

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

By: /s/ Richard G. Johnson
    ------------------------------------
    Name: Richard G. Johnson
    Title: Vice President & Chief Financial Officer

Subsidiaries:

PHIBRO ANIMAL HEALTH HOLDINGS, INC.,
a Delaware corporation

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

PRINCE AGRIPRODUCTS, INC.,
a  Delaware corporation

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

PHIBRO-TECH, INC.,
a  Delaware corporation

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

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

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

PHIBROCHEM, INC.,
a  New Jersey corporation

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

WESTERN MAGNESIUM CORP.,
a  California corporation

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

CP CHEMICALS, INC.,
a  New Jersey corporation

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

PHIBRO CHEMICALS, INC.,
a  New York corporation

By: /s/ David C. Storbeck
    ------------------------------------
    Name: David C. Storbeck
    Title: Vice PresidentExhibit 10.1

                           SECOND AMENDMENT AGREEMENT

      SECOND AMENDMENT AGREEMENT, dated September 15, 2003, by and among
BRANDPARTNERS GROUP, INC., a Delaware corporation with a principal place of
business at 777 Third Avenue, 30th Floor, New York, New York ("BPTR"), WILLEY
BROTHERS, INC., a New Hampshire corporation with a principal place of business
at Rochester, New Hampshire (the "Company"); JAMES M. WILLEY of Rye, New
Hampshire, individually and THOMAS P. WILLEY of Stratham, New Hampshire,
individually (collectively, the "Employees" or the "Consultants," and
individually an "Employee" or a "Consultant"); James M. Willey as trustee of the
JAMES M. WILLEY TRUST - 1995 and Thomas P. Willey as trustee of THE THOMAS P.
WILLEY REVOCABLE TRUST OF 1998 (collectively the "Holders" and individually a
"Holder"), and Nixon Peabody LLP (the "Escrow Agent").

      WHEREAS, BPTR, the Company and each of the Holders and Employees entered
into an Agreement, dated May 15, 2003, as amended by Amendment Agreement dated
June 16, 2003, (the "Original Agreement"), providing for the amendment of
certain terms and conditions of the Employment Agreements, SPA, Term Notes,
24-Month Notes and Earn Out (as each of such terms is defined in the Original
Agreement) under certain conditions;

      WHEREAS, in connection with the Original Agreement, BPTR, the Company,
each of the Holders and Employees and the Escrow Agent have entered into an
Escrow Agreement, dated as of May 15, 2003, as amended by Amendment Agreement
dated June 16, 2003, (the "Original Escrow Agreement"), pursuant to which the
Escrow Agent agreed to serve as escrow agent and hold the Escrowed Property (as
such term is defined in the Original Escrow Agreement) in accordance with the
terms and conditions set forth therein; and

      WHEREAS, BPTR, the Company and each of the Holders and Employees now wish
to extend the effectiveness of the Original Agreement and to amend certain terms
contained therein and in the Original Escrow Agreement.

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

      1. Definition of Terms. Terms not otherwise defined herein shall have the
meanings ascribed to them in the Original Agreement.

      2. Effectiveness of Second Extension. The parties hereby agree that,
effective upon the payment of the Second Extension Payments to the Holders, and
without further action by any of the parties, the Second Extension shall be
activated and fully effective.
<PAGE>

      3. Legal Fees. Contemporaneously with the payment of the Second Extension
Payments to the Holders, BPTR will deliver or cause to be delivered to McLane,
Graf, Raulerson & Middleton a payment of up to an amount of $1,800.00, such
payment representing the payment in full of the unpaid balance of the legal fees
and expenses incurred by the Holders and Employees through the date hereof in
connection with, relating to or arising out of the negotiation, preparation,
execution and delivery and performance of the Original Agreement and the
consummation of the transactions contemplated thereby, as set forth in Section
10.5 of the Original Agreement.

      4. Option for Third Extension. The parties hereby agree that BPTR shall
have the right, at its option and without further action on the part of the
Holders, to further extend the Second Extension from October 31, 2003 until
November 30, 2003 (the "Third Extension"), provided that (i) BPTR shall give the
Holders, with a copy to the Escrow Agent, written notice of its intent to
exercise its right to the Second Extension on or prior to October 15, 2003, (ii)
BPTR shall certify in such written notice that it has received a letter of
intent which provides for payment in full of the Note Payments and does not
directly prejudice or otherwise affect the Holders'or the Employees' rights
under the Original Agreement, as amended, and (iii) BPTR shall deliver to each
of the Holders contemporaneously with the delivery of such notice an additional,
non-refundable payment in the amount of $5,000 (the "Third Extension Payments").
In the event that BPTR elects to activate the Third Extension as set forth
above, the date "October 31, 2003" as it appears in Sections 1.1, 10.5 and 10.8
of the Original Agreement, as amended, and Section 3 of the Original Escrow
Agreement, as amended, shall be deemed deleted and the date "November 30, 2003"
deemed inserted in place thereof without further action. In addition, in the
event that the Third Extension is activated by BPTR, the maturity date of each
of the 24-Month Notes shall be extended until November 30, 2003. The parties
acknowledge and agree that the Third Extension Payments constitute consideration
for granting the Third Extension as described above, and shall not be applied
to, set off against, or in any manner result in any reduction of any other
payment obligations pursuant to the 24-Month Notes, the Term Notes, or the
Original Agreement, including, without limitation, the Note Payments.

      5. Term Sheet; No Required Consent. BPTR and the Company represent to the
Holders and Employees that (i) BPTR has received a term sheet which contemplates
the payment in full of the Note Payments, and (ii) the execution, delivery and
performance of this Second Amendment Agreement by BPTR and the Company,
including without limitation the payment of the Second Extension Payments and,
if applicable, the Third Extension Payments, does not require the consent of
Fleet Capital Corporation.

      6. Full Force and Effect. Except as otherwise amended hereby, the Original
Agreement and the Original Escrow Agreement shall remain in full force and
effect.

      7. Modification; Waiver; Severability; Counterparts; Facsimile Execution.
No modification or termination of this Second Amendment Agreement shall be valid
unless such modification or termination is in writing and signed by each of the
parties hereto. No waiver of any provision of this Second Amendment Agreement
shall be valid unless

                                       2
<PAGE>

in writing and signed by the person or party against whom charged. The
invalidity or unenforceability of any particular provision of this Second
Amendment Agreement shall not affect the other provisions of this Second
Amendment Agreement, and this Second Amendment Agreement shall be construed as
if the invalid or unenforceable provision was omitted. This Second Amendment
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original instrument and all of which together shall constitute a
single document. Signatures and other longhand notations transmitted by
electronic facsimile shall be deemed to be original for purposes of the
construction and enforcement of this Second Amendment Agreement.

                                       3
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have set their hands, duly
authorized where applicable, as of the date and year first above written.

                                    THOMAS P. WILLEY

                                    /s/ Thomas P. Willey
                                    ---------------------------------

                                    JAMES M. WILLEY

                                    /s/ James M. Willey
                                    ---------------------------------

                                    THE THOMAS P. WILLEY REVOCABLE TRUST OF 1998

                                    By:  /s/ Thomas P. Willey
                                         ----------------------------
                                         Thomas P. Willey, Trustee

                                    JAMES M. WILLEY TRUST - 1995

                                    By:  /s/ James M. Willey
                                         ----------------------------
                                         James M. Willey, Trustee

                                    BRANDPARTNERS GROUP, INC.

                                    By:  /s/ Sharon Burd
                                         ----------------------------
                                    Name:   Sharon Burd
                                    Title:  Chief Financial Officer

                                    WILLEY BROTHERS, INC.

                                    By:  /s/ James F. Brooks
                                         ----------------------------
                                    Name:  James F. Brooks
                                    Title: Chief Operating Officer

                                       4
<PAGE>

Accepted and Agreed as to
  Sections 2 and 4 above:

NIXON PEABODY LLP, as Escrow Agent

By:  /s/ James C. Hood
     ----------------------------------
     Name:  James C. Hood
     Title: Partner

                                       5

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