Document:

Exhibit 10.31.3

              AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT

      THIS  AMENDMENT  NUMBER  THREE  TO  LOAN  AND  SECURITY   AGREEMENT  (this
"Amendment"),  dated as of  September  24,  2004,  is entered  into by and among
PHIBRO ANIMAL HEALTH  CORPORATION,  a New York  corporation  ("Parent"),  PHIBRO
ANIMAL HEALTH U.S., INC., a Delaware corporation ("PAHUS"), PHIBRO ANIMAL HEALTH
HOLDINGS, INC., a Delaware corporation ("Holdings"),  PRINCE AGRIPRODUCTS, INC.,
a Delaware  corporation  ("Prince"),  PHIBRO-TECH,  INC.  ("PTI";  together with
Parent,  PAHUS, and Holdings,  the  "Borrowers"),  the lenders from time to time
party to the Loan and Security  Agreement  referenced below (each a "Lender" and
collectively,   the  "Lenders"),   WELLS  FARGO  FOOTHILL,  INC.,  a  California
corporation,  as the arranger and administrative agent for the Lenders ("Agent";
and together with the Lenders, collectively the "Lender Group"), in light of the
following:

                               W I T N E S S E T H

      WHEREAS,  Borrowers  and the Lender Group are parties to that certain Loan
and  Security  Agreement,  dated as of October 21, 2003 (as  amended,  restated,
supplemented,  or otherwise  modified from time to time, the "Loan  Agreement");
and

      WHEREAS,  Borrowers,  Agent,  and  Lenders  have  agreed to amend the Loan
Agreement.

      NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt and
sufficiency  of which are hereby  acknowledged,  the parties  agree to amend the
Loan Agreement as follows:

1.  DEFINITIONS.  Capitalized terms used herein and not otherwise defined herein
shall  have the  meanings  ascribed  to them in the Loan  Agreement,  as amended
hereby.

2. AMENDMENT TO LOAN AGREEMENT.

      (a) Section 1.1 of the Loan  Agreement  is hereby  amended by deleting the
definitions  of  "Additional  Indebtedness",  "EBITDA",  and  "Maximum  Revolver
Amount" and replacing them with the following definitions, respectively:

            ""Additional  Indebtedness"  means  Indebtedness  of Parent  and its
      Subsidiaries (other than Advances) that is "Permitted  Indebtedness" under
      the New Indenture because it fits only within Section 4.12(xvii) thereof."

            ""EBITDA" means, with respect to any fiscal period, consolidated net
      earnings  (or loss),  minus  extraordinary  gains,  interest  income,  and
      intercompany allocations plus interest expense, income taxes, depreciation
      and amortization for such period,  charges which are both nonrecurring and
      noncash  charges for such  period,  and charges  and  expenses  related to
      unsuccessful  acquisitions  and related  financings in an aggregate amount
      not to exceed $5,300,000 for the period

<PAGE>

      beginning  January 1, 2004 and ending  June 30,  2004,  as  determined  in
      accordance with GAAP."

            ""Maximum Revolver Amount" means up to $32,500,000."

      (b) Section 1.1 of the Loan  Agreement is hereby  amended by deleting "and
(j) Investments  comprising the PMC Sale  Transactions."  from the definition of
"Permitted Investments" and replacing it with the following:

      "(j)  Investments  comprising  the PMC Sale  Transactions,  and (k)  other
      Investments  made during the period from  January 1, 2004 through June 30,
      2004 in an aggregate amount not to exceed $336,000."

      (c) Section 7.13 of the Loan  Agreement is hereby amended by deleting "(e)
Permitted  Investments pursuant to clauses (e), (f) and (i) of the definition of
Permitted Investments" and replacing it with the following:

      "(e)  Permitted  Investments  pursuant to clauses (e), (f), (i) and (k) of
      the definition of Permitted Investments".

      (d) Section 7.18(i) of the Loan Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:

            "(i) Minimum Domestic EBITDA. Fail to maintain or achieve EBITDA for
      Parent and its Domestic Subsidiaries, measured on a month-end basis, of at
      least  the  required  amount  set  forth in the  following  table  for the
      applicable period set forth opposite thereto:

            ----------------------- -------------------------------------------
               Applicable Amount             Applicable Period
            ----------------------- -------------------------------------------
                  $2,700,000              For the 2 month period
                                         ending November 30, 2003
            ----------------------- -------------------------------------------
                  $4,100,000              For the 3 month period
                                         ending December 31, 2003
            ----------------------- -------------------------------------------
                  $5,000,000              For the 4 month period
                                          ending January 31, 2004
            ----------------------- -------------------------------------------
                  $6,000,000              For the 5 month period
                                         ending February 29, 2004
            ----------------------- -------------------------------------------
                  $8,000,000              For the 6 month period
                                           ending March 31, 2004
            ----------------------- -------------------------------------------
                  $9,000,000              For the 7 month period
                                           ending April 30, 2004
            ----------------------- -------------------------------------------

<PAGE>

            ----------------------- -------------------------------------------
                  $10,000,000             For the 8 month period
                                            ending May 31, 2004
            ----------------------- -------------------------------------------
                  $12,000,000             For the 9 month period
                                           ending June 30, 2004
            ----------------------- -------------------------------------------
                  $13,200,000             For the 10 month period
                                           ending July 31, 2004
            ----------------------- -------------------------------------------
                  $14,520,000             For the 11 month period
                                          ending August 31, 2004
            ----------------------- -------------------------------------------
                  $15,972,000             For the 12 month period
                                         ending September 30, 2004
            ----------------------- -------------------------------------------
                  $16,000,000            For each 12 month period
                                         ending October 31, 2004,
                                            November 30, 2004,
                                            December 31, 2004,
                                             January 31, 2005,
                                            February 28, 2005,
                                              March 31, 2005,
                                              April 30, 2005,
                                             May 31, 2005, and
                                              June 30, 2005"
            ----------------------- -------------------------------------------

      (e) Section  7.18(ii) of the Loan  Agreement is hereby amended by deleting
it in its entirety and replacing it with the following:

            "(ii)  Consolidated  Minimum  EBITDA.  Fail to  maintain  or achieve
      EBITDA for Parent and its Subsidiaries,  measured on a month-end basis, of
      at least the  required  amount  set forth in the  following  table for the
      applicable period set forth opposite thereto:

            ----------------------- -------------------------------------------
               Applicable Amount             Applicable Period
            ----------------------- -------------------------------------------
                  $5,200,000              For the 2 month period
                                         ending November 30, 2003
            ----------------------- -------------------------------------------
                  $7,500,000              For the 3 month period
                                         ending December 31, 2003
            ----------------------- -------------------------------------------
                  $10,000,000             For the 4 month period
                                          ending January 31, 2004
            ----------------------- -------------------------------------------
                  $12,000,000             For the 5 month period
                                         ending February 29, 2004
            ----------------------- -------------------------------------------

<PAGE>

            ----------------------- -------------------------------------------
                  $15,500,000             For the 6 month period
                                           ending March 31, 2004
            ----------------------- -------------------------------------------
                  $18,000,000             For the 7 month period
                                           ending April 30, 2004
            ----------------------- -------------------------------------------
                  $21,000,000             For the 8 month period
                                            ending May 31, 2004
            ----------------------- -------------------------------------------
                  $24,000,000             For the 9 month period
                                           ending June 30, 2004
            ----------------------- -------------------------------------------
                  $26,400,000             For the 10 month period
                                           ending July 31, 2004
            ----------------------- -------------------------------------------
                  $29,040,000             For the 11 month period
                                          ending August 31, 2004
            ----------------------- -------------------------------------------
                  $31,944,000             For the 12 month period
                                         ending September 30, 2004
            ----------------------- -------------------------------------------
                  $32,000,000            For each 12 month period
                                         ending October 31, 2004,
                                            November 30, 2004,
                                            December 31, 2004,
                                             January 31, 2005,
                                            February 28, 2005,
                                              March 31, 2005,
                                              April 30, 2005,
                                             May 31, 2005, and
                                              June 30, 2005"
            ----------------------- -------------------------------------------

      (f) Section 7.18(c) of the Loan Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:

            "(c)  Determination of Future Levels.  Agent shall, in its Permitted
      Discretion,  establish the monthly minimum EBITDA and capital expenditures
      covenant  levels for each  succeeding  trailing 12 month period after June
      30, 2005 based upon Borrowers'  Projections for such fiscal year delivered
      pursuant to Section 6.3(c) of this Agreement, which Borrowers' Projections
      shall be  satisfactory  to Agent in all respects.  Borrowers shall execute
      any  amendment  to this  Section  7.18  requested by Agent to document the
      inclusion of such covenant levels. If Borrowers fail to timely deliver the
      Borrowers'  Projections  pursuant to Section  6.3(c),  the minimum  EBITDA
      covenant level for each succeeding trailing 12 month period after June 30,
      2005 shall be measured on a monthly basis at an

<PAGE>

      amount equal to 100.83% of the monthly  minimum EBITDA  covenant level for
      the last trailing 12 months."

      (g) Schedule C-1 to the Loan  Agreement is hereby  deleted in its entirety
and replaced with the attached Exhibit A.

3.  CONDITIONS  PRECEDENT TO THIS  AMENDMENT.  The  satisfaction  of each of the
following shall  constitute  conditions  precedent to the  effectiveness of this
Amendment and each and every provision hereof:

      (a) Agent shall have received this Amendment, duly executed by the parties
hereto, and the same shall be in full force and effect;

      (b) Agent  shall  have  received  the  reaffirmation  and  consent of each
Guarantor,  attached  hereto as Exhibit B, duly  executed  and  delivered  by an
authorized official of such Guarantor;

      (c) Agent shall have received a schedule of the  outstanding  Indebtedness
of Parent and its Subsidiaries detailing the particular section,  subsection, or
clause of the New Indenture permitting such outstanding Indebtedness,  certified
as of the date  hereof by the  chief  financial  officer  of Parent on behalf of
Parent as being a true,  correct,  and complete  description of the same,  which
shall be in form and substance satisfactory to Agent;

      (d) Borrowers has paid to Agent, for the benefit of Lender Group, a fee in
the amount of $50,000, which fee shall be fully earned when paid;

      (e) The representations and warranties in the Loan Agreement and the other
Loan Documents  shall be true and correct in all material  respects on and as of
the date  hereof,  as though  made on such date  (except to the extent that such
representations and warranties relate solely to an earlier date), and except for
changes permitted by the Loan Documents;

      (f) No Default or Event of Default  shall have  occurred and be continuing
on the date hereof or as of the date of the effectiveness of this Amendment; and

      (g) No injunction,  writ,  restraining order, or other order of any nature
prohibiting,  directly  or  indirectly,  the  consummation  of the  transactions
contemplated  herein  shall  have  been  issued  and  remain  in  force  by  any
Governmental Authority against Borrowers, Guarantors, or the Lender Group.

4. COVENANTS. Borrowers hereby covenant and agree that they will satisfy each of
the following on or before the date  specified  below (the failure to so satisfy
any of the following to constitute an immediate Event of Default):

      (a) By December 20, 2004,  deliver to Agent a Collateral  Access Agreement
executed by the landlord for the premises  located at 65  Challenger  Boulevard,
Ridgefield  Park,  NJ and in form  and  substance  satisfactory  to Agent in its
Permitted Discretion; and

<PAGE>

      (b) By December 20, 2004, deliver to Agent an updated Schedule 5.5 to the
Loan Agreement and an updated Schedule 5.7 to the Loan Agreement, in form and
substance satisfactory to Agent.

5. EFFECTIVE DATE. The effective date of Section 2(a) of this Amendment shall be
June 30, 2004,  the effective  date of Section 2(b) of this  Amendment  shall be
January  1,  2004,  and  the  effective  date of each  other  provision  in this
Amendment shall be the date hereof.

6.  GOVERNING  LAW.  THIS  AMENDMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  IN
ACCORDANCE  WITH, THE LAW OF THE STATE OF NEW YORK  APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.

7. ENTIRE  AMENDMENT;  EFFECT OF AMENDMENT.  This  Amendment,  and the terms and
provisions hereof,  constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior or contemporaneous
amendments  relating to the subject matter hereof.  Except for the amendments to
the Loan Agreement  expressly set forth in Section 2 hereof,  the Loan Agreement
and other Loan Documents shall remain unchanged and in full force and effect. To
the extent any terms or provisions of this Amendment  conflict with those of the
Loan  Agreement  or other  Loan  Documents,  the  terms and  provisions  of this
Amendment shall control. This Amendment is a Loan Document.  Except as expressly
set forth herein,  the execution,  delivery,  and  performance of this Amendment
shall not operate as a waiver of or as an  amendment  of, any right,  power,  or
remedy of the Lender Group as in effect prior to the date hereof. The agreements
set forth  herein are  limited  to the  specifics  hereof,  shall not apply with
respect  to any  facts or  occurrences  other  than  those on which the same are
based,  shall not excuse future  non-compliance  under the Loan  Agreement,  and
shall not  operate as a consent to any further or other  matter,  under the Loan
Documents.

8. COUNTERPARTS;  TELEFACSIMILE EXECUTION. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same  instrument  and any of the parties  hereto may execute  this  Amendment by
signing  any such  counterpart.  Delivery  of an  executed  counterpart  of this
Amendment  by  telefacsimile  shall be equally as  effective  as  delivery of an
original  executed  counterpart  of this  Amendment.  Any  party  delivering  an
executed  counterpart of this Amendment by  telefacsimile  also shall deliver an
original executed  counterpart of this Amendment,  but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.

9. MISCELLANEOUS.

      (a) Upon the  effectiveness of this Amendment,  each reference in the Loan
Agreement to "this Agreement",  "hereunder", "herein", "hereof" or words of like
import  referring  to the  Loan  Agreement  shall  mean  and  refer  to the Loan
Agreement as amended by this Amendment.

      (b) Upon the  effectiveness of this Amendment,  each reference in the Loan
Documents to the "Loan Agreement",  "thereunder",  "therein", "thereof" or words
of like import  referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

<PAGE>

                            [Signature page follows.]

<PAGE>

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

                                            PHIBRO ANIMAL HEALTH CORPORATION,
                                            a New York corporation

                                            By: /s/ Richard G. Johnson
                                               ---------------------------------
                                            Title: Chief Financial Officer

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

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

                                            PHIBRO ANIMAL HEALTH HOLDINGS, INC.,
                                            a Delaware corporation

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

                                            PRINCE AGRIPRODUCTS, INC.,
                                            a Delaware corporation

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

                                            PHIBRO-TECH, INC.,
                                            a Delaware corporation

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

                                            WELLS FARGO FOOTHILL, INC.,
                                            a California  corporation,  as Agent
                                            and a Lender

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

<PAGE>

                                  Schedule C-1
                                   Commitments

     ==========================================================================
           Lender                  Revolver Commitment    Total Commitment
     ==========================================================================
     Wells Fargo Foothill, Inc.       $32,500,000          $32,500,000
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     All Lenders                      $32,500,000          $32,500,000
     ==========================================================================

<PAGE>

                                    Exhibit B

                            REAFFIRMATION AND CONSENT

      All capitalized  terms used herein but not otherwise  defined herein shall
have the  meanings  ascribed to them in that certain  AMENDMENT  NUMBER THREE TO
LOAN AND SECURITY AGREEMENT (the  "Amendment"),  dated as of September 24, 2004.
The undersigned each hereby (a) represents and warrants to the Lender Group that
the execution,  delivery,  and performance of this Reaffirmation and Consent are
within  its  corporate  powers,  have  been  duly  authorized  by all  necessary
corporate action,  and are not in contravention of any law, rule, or regulation,
or any order, judgment,  decree, writ,  injunction,  or award of any arbitrator,
court, or governmental  authority,  or of the terms of its charter or bylaws, or
of any material  contract or  undertaking to which it is a party or by which any
of its  properties  may be bound or  affected;  (b)  consents to the  execution,
delivery,  and performance of the Amendment;  (c) acknowledges and reaffirms its
obligations  owing to the Lender Group under the Loan Documents to which it is a
party;  and (d) agrees that each of the Loan Documents to which it is a party is
and shall remain in full force and effect in accordance  with the terms thereof.
Although the  undersigned  has been informed of the matters set forth herein and
has acknowledged and agreed to same, it understands that the Lender Group has no
obligations  to  inform  it of  such  matters  in  the  future  or to  seek  its
acknowledgement  or  agreement  to future  consents or  amendments,  and nothing
herein shall  create such a duty.  Delivery of an executed  counterpart  of this
Reaffirmation  and Consent by  telefacsimile  shall be equally as  effective  as
delivery of an original executed  counterpart of this Reaffirmation and Consent.
Any party delivering an executed  counterpart of this  Reaffirmation and Consent
by  telefacsimile  also shall deliver an original  executed  counterpart of this
Reaffirmation  and  Consent  but the  failure to deliver  an  original  executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of New York.

                            [Signature page follows.]

<PAGE>

      IN WITNESS WHEREOF,  the parties hereto have caused this Reaffirmation and
Consent  Agreement to be executed by their  respective  officers  thereunto duly
authorized, as of the date first above written.

                                                  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 President

                                       S-1Exhibit 10.38

                                 FIRST AMENDMENT
                             TO FACTORING AGREEMENT

      THIS FIRST  AMENDMENT  (this  "Amendment")  to the Factoring  Agreement is
entered  into as of the 29th day of July,  2004,  by and between  DynTek,  Inc.,
DynTek Services,  Inc.  (individually and collectively,  "Customer") and SYSTRAN
Financial Services Corporation ("SYSTRAN").

                                    RECITALS:

      A. As of July 1, 2003,  Customer and SYSTRAN executed a certain  Factoring
Agreement  and  Addendum to Factoring  Agreement  (the  "Factoring  Agreement"),
setting  forth the terms upon which SYSTRAN  would  purchase  certain Bills from
Customer; and

      B. In  connection  with the  Factoring  Agreement,  Customer  executed and
delivered to SYSTRAN certain other documents,  agreements,  guarantees,  deposit
account control agreements, consents,  certificates,  assignments, and financing
statements  in  connection  with the  obligations  referred to in the  Factoring
Agreement  (all of the  foregoing,  together with the Factoring  Agreement,  are
hereinafter collectively referred to as the "Transaction Documents"); and

      C. Customer has requested  that SYSTRAN amend and modify certain terms and
covenants in the Factoring  Agreement,  and SYSTRAN is willing to do so upon the
terms and conditions contained herein.

      NOW, THEREFORE,  in consideration of the mutual covenants,  agreements and
promises  contained  herein,  the  receipt and  sufficiency  of which are hereby
acknowledged,  and  intending  to be  legally  bound,  the  parties  hereto  for
themselves  and their  successors  and assigns do hereby  agree,  represent  and
warrant as follows:

      1.  Definitions.  All capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Factoring Agreement.

      2. The Addendum  dated July 1, 2003 to the  Factoring  Agreement  shall be
deleted in its entirety and replaced by this Amendment.

      3.  Paragraph 2.1 under Section 2,  entitled,  "PURCHASE OF BILLS," of the
Factoring Agreement is hereby amended to recite in its entirety as follows:

      "2.1 Customer agrees to present on a monthly basis, a Minimum  Anticipated
      Volume  of  Bills  for  SYSTRAN  to  purchase  which  shall  be  equal  to
      $2,500,000.00.  SYSTRAN, at its sole discretion,  may purchase such Bills.
      Bill(s) and or Special  Purchase  Bill(s)  shall  herein  collectively  be
      referred to as the "Bill(s)".  Customer shall instruct all Debtors to make
      all payments  directly to the lockbox address of SYSTRAN as follows:  P.O.
      Box 643703, Pittsburgh, PA 15264-3703 or such other address as SYSTRAN may
      designate  (the  "SYSTRAN  Designated   Address").   SYSTRAN  shall  allow
      Customer,  so long as an event of default has not occurred  under any term
      of  the  Agreement  and  Customer  is  otherwise  fulfilling  all  of  its
      obligations  under the  Agreement,  to send the original Bills directly to
      the Debtors provided that Customer  submits a copy to SYSTRAN,  whether in
      the form of a photocopy, a facsimile copy or a scanned copy via Electronic
      Data Interchange. Upon notice from SYSTRAN that an

                                       1
<PAGE>

      event of default  has  occurred  under the  Agreement  or  Customer is not
      fulfilling its obligations under the Agreement, Customer shall immediately
      begin to submit to SYSTRAN an  original  and one (1) copy,  along with any
      document  that SYSTRAN deems  necessary,  of each Bill which shall contain
      the legend  contemplated  under  Section  2.4 below and be  attached  to a
      schedule  form  provided  by  SYSTRAN.   Should  any  Debtor  require  any
      additional documentation as a prerequisite to payment,  Customer will also
      provide such documentation  with each Bill. For a Transportation  Account,
      Customer shall also submit one (1) copy of the respective  bill of lading.
      The bill of lading must be signed by the  Customer,  the shipper,  and the
      consignee if the consignee's signature is necessary for payment."

Except as provided below,  the remainder of Section 2 shall remain as originally
written.

      4.  Paragraph 2.4 under Section 2,  entitled,  "PURCHASE OF BILLS," of the
Factoring Agreement is hereby amended to recite in its entirety as follows:

      "2.4 SYSTRAN at any time may give notice to the Debtors of the  assignment
      of the Bill(s) by placing a legend on the Bill(s) stating the Bill(s) have
      been sold and assigned to SYSTRAN and are payable to SYSTRAN at an address
      designated  by  SYSTRAN.  However,  SYSTRAN  agrees to  refrain  from such
      practice so long as SYSTRAN deems in its reasonable  discretion  (from the
      perspective of a factor of accounts  receivable)  that an event of default
      has not occurred  and Customer is  fulfilling  its  obligations  under the
      Agreement.  Customer will not attempt to direct payment to any place other
      than to the SYSTRAN Designated  Address.  Customer agrees to pay all costs
      and  expenses  incurred by SYSTRAN in giving such notices  provided  under
      this Section.  All proceeds of the Bill(s)  received by Customer  shall be
      delivered immediately to SYSTRAN in the identical form of payment received
      by Customer.  In the event that Customer collects directly from the Debtor
      the Bill(s) that have been sold to SYSTRAN and  Customer  does not deliver
      immediately to SYSTRAN the identical form of payment received by Customer,
      Customer will be charged an  administrative  fee equal to fifteen  percent
      (15%) of the face  amount  of the  Bill(s)  collected  directly.  Customer
      agrees  that any  collection  directly  from the Debtor by Customer of the
      Bill(s)  that have been sold to SYSTRAN  will be  considered  a default by
      Customer in the  performance  of its  obligations  under the terms of this
      Agreement. Nothing in this Section shall limit SYSTRAN from exercising its
      rights to collect Bills  directly from Debtors after the  occurrence of an
      event of default or the failure of  Customer  to fulfill  its  obligations
      under this Agreement."

Except as provided above,  the remainder of Section 2 shall remain as originally
written.

      5.  Paragraph 4.1 under Section 4,  entitled,  "DEPOSIT," of the Factoring
Agreement is hereby amended to recite in its entirety as follows:

      "4.1 In order to secure Customer's Obligations  hereunder,  Customer shall
      deliver a deposit (the "Deposit") to SYSTRAN for each purchased Bill equal
      to the  following:  (a) 15% for Bills that SYSTRAN in its sole  discretion
      designates  as class A Bills;  (b) 40% for Bills that  SYSTRAN in its sole
      discretion designates as class B Bills; and (c) 50% for Bills that SYSTRAN
      in its sole discretion designates as class C Bills."

                                       2
<PAGE>

The remainder of Section 4 shall remain as originally written.

      6.  Section  12,  entitled,  "FINANCIAL  INFORMATION,"  of  the  Factoring
Agreement is hereby amended to recite in its entirety as follows:

      "12. FINANCIAL INFORMATION AND FIELD EXAMINATIONS.  Customer covenants and
      agrees with SYSTRAN as follows:

      12.1 FINANCIAL INFORMATION. Customer shall deliver to SYSTRAN:

            1.  Quarterly  financial  statements,  including  balance  sheet and
            income  statement  prepared in accordance  with  Generally  Accepted
            Accounting  Principles (GAAP) within 45 days of each quarter end and
            certified as correct by Customer's CEO or CFO; and

            2.  Annual  Fiscal  Year  End  financial  statements,   prepared  in
            accordance  with GAAP by an accounting  firm  acceptable to SYSTRAN,
            within 120 days of each fiscal year end; and

            3. Invoice schedules submitted no less frequently than weekly; and

            4. Any other reports reasonably  requested by SYSTRAN,  including by
            not limited to accounts  receivable  and accounts  payable agings in
            form reasonably satisfactory to SYSTRAN within 30 days of each month
            end.

      12.2 FIELD  EXAMINATIONS.  One or more  employees or agents of SYSTRAN may
      perform  field  examinations  of the books,  records  and other  assets of
      Customer.  SYSTRAN shall perform a one-day field  examination once a month
      and a complete field examination each quarter (4 times each year),  unless
      an event of default  occurs or Customer  fails to fulfill its  obligations
      under the terms of the  Agreement.  Customer  shall pay to SYSTRAN a field
      examination fee (the "Field  Examination  Fee") in an amount equal to $850
      for each day spent by each such  employee  or agent in  performing  and/or
      summarizing  the  results of such  examination  (including  all  necessary
      travel  time) plus all  reasonable  "out of pocket"  expenses.  Each Field
      Examination  Fee shall be payable by Customer  to SYSTRAN,  in whole or in
      part, as appropriate,  on the date(s) on which such field  examination was
      performed."

      7. Paragraph 18.1 under Section 18, entitled,  "TERM AND  TERMINATION," of
the Factoring Agreement is hereby amended to recite in its entirety as follows:

      "This Agreement is for a term of thirty six (36) full months, which begins
      on the July 1, 2003. The term of this Agreement shall renew  automatically
      for consecutive () month terms unless sooner terminated in accordance with
      the  terms  of  the  Agreement.  Customer  may  terminate  this  Agreement
      effective at the end of any term by giving  thirty (30) days prior written
      notice to SYSTRAN at the address set forth in this Agreement. Customer may
      continue  to offer any of the  Bill(s) to SYSTRAN  during such thirty (30)
      day period.  SYSTRAN may terminate  this Agreement at any time and for any
      reason by notifying Customer in writing of such termination."

Except as provided below, the remainder of Section 18 shall remain as originally
written.

                                       3
<PAGE>

      8. Paragraph 18.3 under Section 18, entitled,  "TERM AND  TERMINATION," of
the Factoring Agreement is hereby amended to recite in its entirety as follows:

      "18.3 Notwithstanding the foregoing,  Customer has the option to terminate
      this Agreement  prior to the end of any term by giving SYSTRAN thirty (30)
      days prior  written  notice.  Customer  may  continue  to offer any of the
      Bill(s) to SYSTRAN  during such thirty (30) day period.  Customer shall be
      deemed to have  terminated  this Agreement prior to the end of any term on
      the date that Customer shall have ceased presenting the Bill(s) to SYSTRAN
      in the  normal  course  for an  uninterrupted  period of thirty  (30) days
      ("Deemed Termination"). Upon notice of early termination, or the date of a
      Deemed  Termination by Customer,  prior to the end of any term, whether or
      not Customer  continues to offer the Bill(s) to SYSTRAN  during the thirty
      (30) day notice period applicable to Customer, Customer shall be obligated
      to pay to  SYSTRAN,  and  Customer's  Deposit  may be  charged,  an  early
      termination  premium  ("Early  Termination  Premium") in the amount of two
      percent (2%) of the Maximum  Approved  Credit Line if terminated  prior to
      July 31, 2005 and one percent (1%) of the Maximum  Approved Credit Line if
      terminated thereafter.  Notwithstanding the above, if an Early Termination
      of the Agreement  results from the occurrence of an event of default under
      this  Agreement,  then Customer shall pay an Early  Termination Fee in the
      amount of four percent (4%) of the Maximum Approved Credit Line."

Except as provided above and below,  the remainder of Section 18 shall remain as
originally written.

      9. A new  Paragraph  18.6  is  hereby  added  at the  end of  Section  18,
entitled, "TERM AND TERMINATION," of the Factoring Agreement as follows:

      "Customer  understands  that  SYSTRAN and its  affiliates,  which  include
      without  limitation  Textron  Financial  Corporation,  offer a receivables
      purchasing product commonly known as a Receivables Sale Agreement ("RSA").
      Customer hereby  acknowledges that SYSTRAN and its affiliates  underwrite,
      document and manage the RSA in a manner that is materially  different from
      the arrangement contemplated under the Agreement.  Customer hereby further
      acknowledges  that any proposal by SYSTRAN or its affiliates to provide an
      RSA  to  Customer  shall  be  subject  to  additional  due  diligence  and
      documentation  that is  satisfactory  in the sole discretion of SYSTRAN or
      its  affiliates.  After  the  date  of the  Agreement,  if  SYSTRAN  or an
      affiliate  enters  into an RSA with  Customer  that  serves to replace the
      Agreement,  then Customer and SYSTRAN  understand and agree that any early
      termination premium  contemplated under the documentation  related to such
      RSA shall replace and not be in addition to the Early Termination  Premium
      required under  Paragraph 18.3 of the Agreement.  Customer  further agrees
      that any  costs  or  expenses  that  SYSTRAN  or an  affiliate  incurs  in
      connection  with the due  diligence  or  documentation  of an RSA proposal
      shall  constitute  expenses that are reimbursable to SYSTRAN under Section
      20 of  the  Agreement.  Customer  shall  receive  pro-rata  credit  of the
      Facility Fee to be applied towards the Receivables Sale Agreement  ("RSA")
      Facility."

Except as provided above, the remainder of Section 18 shall remain as originally
written.

                                       4
<PAGE>

      10. The last sentence of Section 21, entitled,  "JURISDICTION  AND VENUE,"
to the Factoring  Agreement is hereby  deleted in its entirety and replaced with
the following:

      "Customer expressly authorizes service of process in any suit or action on
      its behalf upon the  Registered  Agents at the address  below or upon such
      other  agent as  SYSTRAN  may  approve in  writing,  as its agent for such
      purposes  and that  service  may be  deemed  complete  upon  delivery  via
      expedited national overnight delivery service.

      Customer:                      Registered Agent:
      ---------                      -----------------
      DynTek, Inc.                   National Corp. Research, Ltd.
                                     615 South Dupont Hwy
                                     Dover, DE 19901

      DynTek Services, Inc.          Corporation Services Company
                                     2711 Centerville Rd., Ste. 400
                                     Wilmington, DE 19808"

The remainder of Section 21 shall remain as originally written.

      11. Exhibit A of the Factoring  Agreement shall be deleted in its entirety
and replaced with the following:

              "Exhibit A to Factoring Agreement dated July 1, 2003

      The terms used in this Exhibit A have the same  definitions  as those used
      in the  Factoring  Agreement.  In  case of  conflict  of  definition,  the
      definitions in this Exhibit "A" shall prevail.

      Customer  shall pay a discount fee of fifteen tenths of one percent (.15%)
      of the face amount of all Bills purchased  ("Discount  Fee"). In addition,
      Customer shall pay a fee at an annual rate equal to prime plus two percent
      (2.0%) of all funds employed to purchase  Bills ("Prime Plus Fee").  Prime
      is defined as the prime rate as announced by Wells Fargo Bank,  N.A. Funds
      employed  shall be calculated by SYSTRAN on a daily basis based upon bills
      unpaid and outstanding, less the deposit. The above Discount Fee and Prime
      Plus Fee may be  deducted  from  Customer's  funding  for Bills  purchased
      pursuant to the Factoring Agreement or SYSTRAN may bill Customer. A change
      in the Prime Plus Fee due to a prime rate  change will be  effective  upon
      the  date  of the  change,  which  will  be  indicated  on the  settlement
      statement.

      Customer  shall pay an annual line fee equal to  $70,000.00  (the  "Annual
      Line Fee").  The Annual  Line Fee is payable  and shall be  deducted  from
      Customer's  funding on the  effective  date of the First  Amendment to the
      Factoring Agreement and on each anniversary date thereof.

      A managed  account  shall  also be created  for all Bills that  SYSTRAN is
      unable to  purchase  and all Bills that  Customer  does not want to factor
      (the  "Managed  Account").  Customer  shall pay  one-tenth  of one percent
      (.10%) of the face amount of all Managed Account Bills  ("Managed  Account
      Fee"). The deposit on the Managed Account is 100%."

                                       5
<PAGE>

      12. Conditions of Effectiveness.  This Amendment shall become effective as
of  July  29,  2004,  upon  satisfaction  of  all of  the  following  conditions
precedent:

      (a)  SYSTRAN  shall have  received  one (1) duly  executed  copies of this
Amendment; and

      (b)  SYSTRAN  shall have  received  the  Annual  Line Fee in the amount of
$70,000; and

      (c) The  representations  contained in paragraph 13 of the Amendment below
shall be true and accurate.

      13.  Customer  represents  and warrants  that after giving  effect to this
Amendment,  (a) each and every one of the representations and warranties made by
or on behalf of Customer in the  Factoring  Agreement is true and correct in all
respects  on and as of the date  hereof,  except to the extent  that any of such
representations and warranties  related, by the expressed terms thereof,  solely
to a date prior hereto; (b) Customer has duly and properly  performed,  complied
with and observed each of its covenants, agreements and obligations contained in
the Factoring Agreement; and (c) no event has occurred or is continuing,  and no
condition  exists which would constitute an event of default under the Factoring
Agreement.

      14. Amendment to Factoring  Agreement.  (a) Upon the effectiveness of this
Amendment,  each reference in the Factoring Agreement to "Factoring  Agreement,"
"Agreement," the prefix "herein," "hereof," or words of similar import, and each
reference in the Transaction  Documents to the Factoring  Agreement,  shall mean
and be a reference to the Factoring  Agreement as amended hereby.  (b) Except as
modified herein, all of the representations,  warranties,  terms,  covenants and
conditions of the Factoring Agreement,  the Transaction  Documents and all other
agreements  executed in connection  therewith shall remain as written originally
and in full force and effect in  accordance  with their  respective  terms,  and
nothing  herein  shall  affect,  modify,  limit or impair  any of the rights and
powers which SYSTRAN may have  thereunder.  The amendment set forth herein shall
be limited  precisely  as provided  for herein,  and shall not be deemed to be a
waiver of,  amendment of, consent to or modification of any of SYSTRAN'S  rights
under  or of any  other  term or  provisions  of the  Factoring  Agreement,  any
Transaction Document, or other agreement executed in connection therewith, or of
any term or provision of any other  instrument  referred to therein or herein or
of any  transaction or future action on the part of Customer which would require
the  consent of SYSTRAN,  including,  without  limitation,  waivers of events of
default  which may exist after  giving  effect  hereto.  Customer  ratifies  and
confirms each term, provision, condition and covenant set forth in the Factoring
Agreement and the Transaction  Documents and acknowledges that the agreement set
forth  therein  continue  to  be  legal,  valid  and  binding  agreements,   and
enforceable in accordance with their respective terms.

      15. Authority. Customer hereby represents and warrants to SYSTRAN that (a)
Customer has legal power and  authority  to execute and deliver this  Amendment;
(b) the officer  executing  this  Amendment  on behalf of Customer has been duly
authorized to execute and deliver the same and bind Customer with respect to the
provisions  provided  for  herein;  (c) the  execution  and  delivery  hereof by
Customer and the performance and observance by Customer of the provisions hereof
do not violate or conflict with the articles of  incorporation,  regulations  or
by-laws of Customer or any law applicable to Customer or result in the breach of
any provision of

                                       6
<PAGE>

or constitute a default under any agreement, instrument or document binding upon
or enforceable against Customer;  and (d) this Amendment constitutes a valid and
legally binding obligation upon Customer in every respect.

      16.  Waiver of  Claims.  Customer  waives  any and all  defenses,  claims,
counterclaims  and  offsets  against  SYSTRAN  that may have  arisen or  accrued
through the date of this Amendment.  Customer  acknowledges that SYSTRAN and its
employees,  agents and attorneys have made no representations or promises except
as specifically  reflected in this Amendment and in the written  agreements that
have been previously executed.

      17.  Counterparts.   This  Amendment  may  be  executed  in  two  or  more
counterparts,  each of  which,  when so  executed  and  delivered,  shall  be an
original,  but all of which together shall constitute one and the same document.
Separate counterparts may be executed with the same effect as if all parties had
executed the same counterparts.

      18. Costs and  Expenses.  Customer  agrees to pay on demand in  accordance
with the terms of the  Factoring  Agreement all costs and expenses of SYSTRAN in
connection with the  preparation,  reproduction,  execution and delivery of this
Amendment  and all  other  Transaction  Documents  entered  into  in  connection
herewith,  including the reasonable fees and out-of-pocket expenses of SYSTRAN'S
counsel with respect thereto.

      19.  Governing Law. This  Amendment  shall be governed by and construed in
accordance with the law of Oregon.

      IN WITNESS WHEREOF,  Customer and SYSTRAN have hereunto set their hands as
of the date first set forth above.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       7
<PAGE>

SYSTRAN Financial Services Corporation

By: _____________________________
Title: __________________________
Dated:     ______________________, 2004

DynTek, Inc.

By:______________________________
Print Name: _____________________
Title: __________________________
Dated:     _______________________, 2004

DynTek Services, Inc.

By:______________________________
Print Name: _____________________
Title: __________________________
Dated:     _______________________, 2004

                              CONSENT OF GUARANTOR

      Each of the  undersigned,  being a guarantor of Customer's  obligations to
SYSTRAN pursuant to a certain guaranty  agreement with SYSTRAN,  hereby consents
and  agrees to be bound by the  terms,  conditions  and  execution  of the above
Amendment  and hereby  further  agrees  that  guarantor's  obligations  shall be
continuing as provided in said guaranty  agreement,  and said guaranty agreement
shall remain as written  originally and continue in full force and effect in all
respects.

Date:  ________________                 ____________________________________
                                                  Wade R. Stevenson

Date:  ________________                 ____________________________________
                                                  Steven J. Ross

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

                                       8
<PAGE>

                                           Tekinsight Research, Inc.

Date: ________________                     _____________________________________
                                           Print Name:
                                           Print Title:

                                           Bugsolver.com, Inc.

Date: ________________                     _____________________________________
                                           Print Name:
                                           Print Title:

                                           Newport Acquisition Corp.

Date: ________________                     _____________________________________
                                           Print Name:
                                           Print Title:

                                           Tekinsight E-Government Service, Inc.

Date: ________________                     _____________________________________
                                           Print Name:
                                           Print Title:

                                       9

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