Wholesale Supply Agreement

indicates the omission of confidential portions for which confidential treatment has been requested. Such confidential information has been filed separately with the Securities and Exchange Commission.


SECOND AMENDMENT TO
WHOLESALE SUPPLY AGREEMENT


This second amendment ("SECOND AMENDMENT") dated June 2, 2004 amends the Wholesale Supply Agreement dated January 1, 2004 ("AGREEMENT") and subsequently amended on May 26, 2004 between CVS and Cardinal Health. CVS and Cardinal Health ("PARTIES") desire to enter into this Second Amendment to amend Section 1 and Section 12 Disclosure Schedule to include two (2) mail-order facilities being acquired by CVS' affiliate PharmaCare Management Services Inc. ("PharmaCare") located in Pittsburgh, Pennsylvania and Largo, Florida (MAIL-ORDER FACILITIES").


The Parties agree as follows:


1. Effective Date of Amendment. This Second Amendment shall be effective
as of the date of the closing of the transaction pursuant to which CVS
will purchase from J.C. Penney Company, Inc. ("JC PENNEY")
approximately 1,260 retail pharmacies, approximately three (3)
distribution centers, and approximately two (2) mail-order facilities
located in Pittsburgh, Pennsylvania and Largo, Florida (to be acquired
by CVS' affiliate PharmaCare from Eckerd Health Services) as publicly
announced by CVS on April 5, 2004 ("TRANSACTION"). In the event that
the Transaction does not close on or before September 1, 2004, then
this Second Amendment shall become null and void and shall be of no
force or effect. Furthermore, CVS reserves the right to provide
Cardinal with notification ("NOTICE") before the close of the
Transaction that CVS has determined in its sole discretion that it
will not undertake the wholesale supply arrangement as described in
the Second Amendment in which case this Second Amendment shall become
null and void and shall be of no force or effect.


2. Scope. Notwithstanding anything else in the Agreement, as amended, in
no event will CVS, at any time, be obligated to designate Cardinal as
a primary means of pharmaceutical products replenishment for the
Mail-order Facilities, if such Mail-order Facilities are subject to an
existing wholesaler agreement which cannot be terminated by CVS or its
affiliates for any reason, or which, if terminated by CVS or its
affiliates in its business judgment, may result in breach of
contractual obligations, termination penalties/fees of any type, or
result in CVS or its affiliates compromising its business operations.


3. Disclosure Schedules. The Agreement is amended by deleting therefrom
the following disclosure schedules in their entirety:


"Section 1", and


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"Section 12 Disclosure Schedule"


and replacing them with the following new Disclosure Schedules:


"Section 1", and


"Section 12 Disclosure Schedule"


attached to this Second Amendment and incorporated into this Second
Amendment and into the Agreement by this reference, which shall be
attached by the Parties to their respective copies of the Agreement.


4. Generally. It is the Parties' intent for the Agreement and this
Amendment (if the Transaction closes on or before September 1, 2004
and CVS has not provided Cardinal with Notice before the close of the
Transaction) to be applied and construed as a single instrument. The
Agreement, as modified by this Second Amendment, remains in full force
and effect and constitutes the entire agreement among the Parties
regarding this subject matter and supersedes all prior or
contemporaneous writings and understandings among the Parties with
respect thereto. This Second Amendment will be binding on the Parties
and their successor and assigns. If any term or provision of this
Second Amendment is determined to be illegal or unenforceable by a
court of competent jurisdiction, the remaining terms and provisions of
this Second Amendment and the Agreement will remain in full force and
effect. Only a subsequent writing signed by both Parties may amend
this Second Amendment or further amend the Agreement.


CVS Pharmacy, Inc Cardinal Health*


By: /s/ Matthew J. Leonard By: /s/ Michael J. Bender
--------------------------------- ------------------------------------ Print Name: Matthew J. Leonard Print Name: Michael J. Bender Title: VP Pharmacy Merchandising Title: EVP, Retail Sales & Marketing


*The term "CARDINAL HEALTH" means the following pharmaceutical distribution companies: Cardinal Health 106, Inc. (formerly known as James W. Daly, Inc.), a Massachusetts corporation (Peabody, Massachusetts); Cardinal Health 103, Inc. (formerly known as Cardinal Southeast, Inc.), a Mississippi corporation (Madison, Mississippi); Cardinal Health 110, Inc. (formerly known as Whitmire Distribution Corporation), a Delaware corporation (Folsom, California) and any other subsidiary of Cardinal Health, Inc., an Ohio corporation ("CHI"), as may be designated by CHI.


Cc: Tina Egan, Assistant General Counsel CVS
Paul Williams, General Counsel Cardinal Health


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SECTION 1
AMENDED JUNE 2, 2004


SECTION 1. DESIGNATION AS PRIMARY WHOLESALER.


(a) Retail Pharmacies. During the term of this Agreement, CVS will designate Cardinal as the primary wholesale pharmaceutical supplier to designated pharmacies operated by CVS (collectively, the "PHARMACIES" and individually, a "PHARMACY") subject to Section 1(a) Disclosure Schedule. A list of the Pharmacies (the "DESIGNATED PHARMACY LIST") will be provided by CVS to Cardinal from time to time during the term of this Agreement.


(b) Distribution Centers. During the term of this Agreement, CVS will designate Cardinal as the primary wholesale pharmaceutical supplier to all distribution centers operated by CVS ("CVS PHARMACY DCS") subject to Section 1(b) Disclosure Schedule. A comprehensive list of all of the CVS Pharmacy DCs as of January 1, 2004 (the date of this agreement) (the "TOTAL DC LIST") is set forth in the Section 1(b) Disclosure Schedule.


(c) CVS PharmaCare. This Agreement specifically excludes purchases which are made by CVS on behalf of the CVS division known as PharmaCare with the following one exception: In return for an [***]% ([***] % [***]%) [***] the [***] as described in the Section 12 Disclosure Schedule, CVS will service the [***] and [***] facilities that were acquired from JC Penney and operated by PharmaCare ("[***] FACILITIES") from a CVS Pharmacy DC being serviced by Cardinal for a period of [***] ("FIRST TERM"). If at anytime after the First Term, CVS discontinues servicing said [***] Facilities from a CVS Pharmacy DC being serviced by Cardinal, then the [***] as described in the Section 12 Disclosure Schedule will [***]% [***]%. If CVS continues servicing said [***] Facilities from a CVS Pharmacy DC being serviced by Cardinal after the First Term, then the [***] as described in the Section 12 Disclosure Schedule will [***] at [***]% for as long as CVS continues servicing said [***] from a CVS Pharmacy DC being serviced by Cardinal.


This Agreement specifically excludes any secondary, drop ships, direct, or direct-store-delivery purchases made by PharmaCare on behalf of the Mail-order Facilities.


As it concerns the Mail-order Facilities only, in the event either party desires not to continue to service the Mail-order Facilities from a CVS Pharmacy DC being serviced by Cardinal at the expiration of the First Term or any renewal term, that party shall provide the other party with at least [***] ([***]) days written notice prior to the expiration of the then current term. In the event such notification is not provided with at least the [***] ([***]) day notice or if no notice is given, the then current term shall be extended for a period of [***] ([***]) days after the expiration of such term to provide for an adequate transition period.


(d) CVS Commitment. This Agreement pertains only to CVS' Pharmacies and CVS Pharmacy DCs as of January 1, 2004 plus or minus the organic growth related to Pharmacies.


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SECTION 12 DISCLOSURE SCHEDULE
AMENDED JUNE 2, 2004


WAREHOUSE LOGISTICS PROGRAM


The goal of the "WAREHOUSE LOGISTICS PROGRAM" (WLP") is to develop the most efficient purchasing and distribution processes for CVS with pharmaceutical manufacturers under which Cardinal will [***] ([***]%) of CVS' purchase requirements for [***] Rx Products (excluding repack ite ...