Grant of Exclusive Manufacturing Rights

AMENDMENT NO. 1 TO
GRANT OF EXCLUSIVE MANUFACTURING RIGHTS


THIS AMENDMENT NO. 1 is made as of the 31st day of December, 1997 (this "Amendment"), between FAMOUS VALUE BRANDS, a division of PHILIP MORRIS INCORPORATED, a Virginia corporation with offices at 120 Park Avenue, New York, New York 10017 ("Manufacturer"), CORE-MARK INTERNATIONAL INC., a Nevada corporation with offices at 395 Oyster Point Boulevard, Suite 415, South San Francisco, California 94080 ("Parent"), CORE-MARK INTERRELATED COMPANIES, INC., a California corporation with offices at 395 Oyster Point Boulevard, Suite 415, South San Francisco, California 94080 ("Licensor"), and C/M PRODUCTS, INC., a California corporation with offices at 395 Oyster Point Boulevard, Suite 415, South San Francisco, California 94080 ("C/M Products").


PRELIMINARY STATEMENTS


A. Manufacturer and Grantor entered into that certain Grant of Exclusive Manufacturing Rights dated as of July 1, 1993 (the "Grant Agreement"), providing for, among other things, each of Parent, Licensor and C/M Products to grant and convey to Manufacturer exclusive rights to manufacture for Grantor (as defined therein) any and all proprietary private label brand cigarettes


for sale and distribution in the United States, including cigarettes utilizing the trademark(s) and package designs identified on EXHIBIT A attached thereto.


B. Manufacturer and each of Parent, Licensor and C/M Products desire to amend certain provisions of the Grant Agreement as more particularly described herein, and to continue the Grant Agreement, as amended hereby, the Manufacturing Agreement for "Best Buy" Cigarettes, dated as of July 1, 1993, as amended by Amendment No. 1 dated as of the date hereof, between Manufacturer and C/M Products (the "Private Label Manufacturing Agreement"), and the Amended and Restated Trademark License Agreement, dated as of July 1, 1993, as amended by Amendment No. 1 dated as of the date hereof, between Manufacturer and Licensor (the "Amended and Restated Trademark License Agreement"), in full force and effect on the terms contained therein and herein.


NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree as follows:


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ARTICLE I


AMENDMENTS

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