AMENDMENT #1 TO THE

                        EXCLUSIVE DISTRIBUTION AGREEMENT



         THIS  AMENDMENT (the  "AMENDMENT")  is entered into and effective as of

the 22nd day of June,  2004 (the  "AMENDMENT  DATE"),  by and between  Federated

Merchandising Group ("FMG"), an unincorporated  division of Federated Department

Stores, Inc., a Delaware corporation ("FEDERATED"),  and Private Brands, Inc., a

California corporation ("PB").



         WHEREAS, FMG and PB entered into an Exclusive Distribution Agreement on

the 1st day of April, 2003 (the "DISTRIBUTION AGREEMENT"); and



         WHEREAS,  FMG and PB desire to amend certain terms of the  Distribution

Agreement as hereinafter provided.



         NOW, THEREFORE, in consideration of the mutual covenants and conditions

set forth herein,  the receipt and sufficiency of which are hereby  acknowledged

by each party, FMG and PG agree to amend the Distribution Agreement as follows:



         1. All  capitalized  terms not  defined  herein  shall have the meaning

given to them in the Distribution Agreement.



         2.  Section 5.1 of the  Distribution  Agreement  is hereby  amended and

restated as of the Amendment Date to read in its entirety as follows:



"5.1     ANNUAL  MINIMUM  PURCHASES.  In order to preserve its rights under this

         Agreement,  including its rights to exclusivity as set forth in Section

         2.2 and its right of first  refusal  as set forth in Section  2.3,  FMG

         shall order,  during each Contract Year of the Term,  Merchandise  with

         the  minimum  values  (based on the  purchase  price  payable  for such

         Merchandise)   set  forth   below   (the   "ANNUAL   MINIMUM   PURCHASE

         REQUIREMENTS"):



          Contract      Contract       Contact      Contract     Contract Year 5

           Year 1        Year 2        Year 3        Year 4      through Year 10

         -----------   -----------   -----------   -----------   ---------------



         $25 million   $25 million   $40 million   $68 million     $90 million



         The Annual Minimum Purchase  Requirements for each Contract Year of the

         first  Renewal Term shall be equal to the average of the total  amounts

         of Ordered Merchandise during each of Contract Years six through ten of

         the Initial  Term,  provided  that in no event shall the amount used in

         any Contract Year to calculate the Annual Minimum Purchase Requirements

         for the first Renewal Term be less than $90 million.  Furthermore,  the

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