<PAGE>   1
                 THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
                 ----------------------------------------------

         This Third Amendment to Loan and Security Agreement (the "Third
Amendment") is made as of this 10th day of December, 1999 by and between

                  BankBoston Retail Finance Inc. (in such capacity, herein the
         "AGENT"), a Delaware corporation with offices at 40 Broad Street,
         Boston, Massachusetts 02109, as agent for the ratable benefit of the
         "LENDERS", who are party to the Agreement (defined below)

                  and

                  Drug Emporium, Inc. (hereinafter, the "BORROWER"), a Delaware
         corporation with its principal executive offices at 155 Hidden Ravines
         Drive, Powell, Ohio 43065

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.


                              W I T N E S S E T H:


         WHEREAS, on October 28, 1998 the Agent, the Lenders and the Borrower
entered in a certain Loan and Security Agreement, as amended by a First
Amendment to Loan and Security Agreement dated May 5, 1999 and a Second
Amendment to Loan and Security Agreement dated September 10, 1999 (the
"Agreement"); and

         WHEREAS, the Borrower, the Agent, and the Lender desire to amend
certain of the provisions of the Agreement;

         NOW, THEREFORE, it is hereby agreed among the Agent, the Lenders and
the Borrower as follows:

         1.       Capitalized Terms. All capitalized terms used herein and not
                  otherwise defined shall have the same meaning herein as in the
                  Agreement.

         2.       Amendment to Article 1. The definition of "Base Margin Rate"
                  set forth in Article 1 of the Agreement is hereby amended to
                  read as follows:

                  "BASE MARGIN RATE": Base plus one-quarter percent (.25%).

         3.       Amendment to Article 1. The definition of "Commitment" set
                  forth in Article 1 of the Agreement is hereby amended to read
                  as follows:

<PAGE>   2
                  "COMMITMENT":     Subject to Section 2-21, as follows:



<TABLE>
<CAPTION>
LENDER                   DOLLAR COMMITMENT      COMMITMENT
                                                PERCENTAGE
------                   -----------------      ----------
<S>                      <C>                    <C>
BankBoston Retail        $39,500,000.00            35.90%
Finance Inc.

National City            $26,000,000.00            23.64%
Commercial Finance,
Inc.

LaSalle Business         $25,000,000.00            22.73%
Credit, Inc.

American National Bank   $19,500,000.00            17.73%
and Trust Company of
Chicago
</TABLE>


         4.       Amendment to Article 1. The definition of "Loan Ceiling" set
                  forth in Article 1 of the Agreement is hereby amended to read
                  as follows:

                  "LOAN CEILING": $110,000,000.00.

         5.       Amendment to Article 1. The LIBOR MARGIN PRICING GRID set
                  forth under the definition of "Libor Margin" in Article 1 of
                  the Agreement is hereby amended to read as follows:

<TABLE>
<CAPTION>
                            LIBOR MARGIN PRICING GRID
-------------------------------------------------------------------------------------------
TIER       FIXED CHARGE RATIO               TRAILING/ROLLING 12 MONTH         MARGIN (BASIS
                                            AVERAGE EXCESS AVAILABILITY       POINTS)
----       -------------------------        ---------------------------       -------------
<S>        <C>                              <C>                               <C>
I          Equal or Greater than 1.7        Equal or Greater than             150
                                            $20,000,000.00

II         Equal or Greater than 1.7        Less than $20,000,000.00          175

III        1.26 to 1.69                     N/A                               175

IV         1.25 or less                     N/A                               200
-------------------------------------------------------------------------------------------
</TABLE>


         6.       Waiver of Compliance with Sections 4-18, 4-19, 4-20 and 4-23.
                  The Lenders waive compliance by the Borrower with the terms of
                  Sections 4-18, 4-19, 4-20 and 4-23 of the Agreement in
                  connection with the investments in

                                       2
<PAGE>   3
                  and/or loans to be made to E-Commerce up to a maximum
                  aggregate amount of $17,500,00.00. No further amounts shall be
                  advanced to E-COMMERCE directly or indirectly, including by
                  way of any additional trade support. The Borrower shall be
                  required to pledge its stock or other investments in
                  E-Commerce and all notes or other indebtedness payable by
                  E-Commerce to the Agent and the Lenders. Provided that no
                  Event of Default is then occurring, the Agent shall release
                  such pledge at such time that E-COMMERCE procures initial
                  financing.

         7.       Amendment Fee. The Borrower shall pay to the Agent an
                  amendment fee as set forth in a separate fee letter between
                  the Agent and the Borrower.

         8.       Ratification of Loan Documents. Except as provided herein, all
                  terms and conditions of the Agreement and of the other Loan
                  Documents remain in full force and effect. Furthermore, except
                  as provided herein, all warranties and representations made in
                  the Agreement and in the other Loan Documents remain in full
                  force and effect.

         9.       Conditions to Effectiveness. This Third Amendment shall not be
                  effective until each of the following conditions precedent
                  have been fulfilled to the satisfaction of the Agent and the
                  Lenders:

                  (1)      This Third Amendment shall have been duly executed
                           and delivered by the respective parties hereto.

                  (2)      No Suspension Event shall have occurred and be
                           continuing.

                  (3)      The Borrower shall have provided such additional
                           instruments and documents to the Agent as the Agent
                           and the Agent's counsel may have reasonably
                           requested.

                  The Agent shall promptly notify the Borrowers when such
                  conditions are satisfied.

         10.      Miscellaneous.

                           (a) This Third Amendment may be executed in several
                  counterparts and by each party on a separate counterpart, each
                  of which when so executed and delivered shall be an original,
                  and all of which together shall constitute one instrument.

                           (b) This Third Amendment expresses the entire
                  understanding of the parties with respect to the transactions
                  contemplated hereby. No prior negotiations or discussions
                  shall limit, modify, or otherwise affect the provisions
                  hereof.

                           (c) Any determination that any provision of this
                  Third Amendment or any application hereof is invalid, illegal
                  or unenforceable in any respect and in any instance shall not
                  effect the validity, legality, or enforceability of such
                  provision in any other instance, or the validity, legality or
                  enforceability of any other provisions of this Third
                  Amendment.

                                       3

<PAGE>   4
                           (d) The Borrower shall pay on demand all costs and
                  expenses of the Agent, including, without limitation,
                  reasonable attorneys' fees, in connection with the
                  preparation, negotiation, execution and delivery of this Third
                  Amendment.

                           (e) The Borrower warrants and represents that the
                  Borrower has consulted with independent legal counsel of the
                  Borrower's selection in connection with this Third Amendment
                  and is not relying on any representations or warranties of any
                  Lender or the Agent or their respective counsel in entering
                  into this Third Amendment.

         IN WITNESS WHEREOF, the parties have caused this Third Amendment to
Loan and Security Agreement to be executed by their duly authorized officers as
a sealed instrument as of the date first above written.

                                    DRUG EMPORIUM, INC.
                                                        ("Borrower")

                                    By: /s/ Terry L. Moore
                                       ---------------------------------
                                    Name: Terry L. Moore
                                         -------------------------------
                                    Title: Chief Financial Officer
                                          ------------------------------

                                    BANKBOSTON RETAIL FINANCE INC.
                                                             ("Agent")


                                    By: /s/ James R. Dore
                                       ---------------------------------
                                    Name: James R. Dore
                                         -------------------------------
                                    Title: Vice President
                                          ------------------------------


                                  The "LENDERS"

                                    BANKBOSTON RETAIL FINANCE INC.

                                    By:  /s/ James R. Dore
                                       ---------------------------------
                                    Print Name: James R. Dore
                                               -------------------------
                                    Title: Vice President
                                          ------------------------------

                                       4

<PAGE>   5
                                    NATIONAL CITY COMMERCIAL FINANCE, INC.


                                    By: /s/ Robert G. Dracon, Jr.
                                       ---------------------------------
                                    Print Name: Robert G. Dracon, Jr.
                                               -------------------------
                                    Title: Vice President
                                          ------------------------------


                                    AMERICAN NATIONAL BANK AND
                                    TRUST COMPANY OF CHICAGO

                                    By: /s/ M. Martha Gaskin
                                       --------------------------------
                                    Print Name: M. Martha Gaskin
                                               ------------------------
                                    Title: Vice President
                                          -----------------------------

                                    LASALLE BUSINESS CREDIT, INC.

                                    By: /s/ Ellen T. Cook
                                       --------------------------------
                                    Print Name: Ellen T. Cook
                                               ------------------------
                                    Title: Vice President
                                          -----------------------------

                                       5