<PAGE>   1

                                                                   EXHIBIT 10.24


                             PRIME VENDOR AGREEMENT*







                                 TEL-DRUG, INC,


                                      AND


                             JEWETT DRUG CO., INC.








                                        1

*Confidential portion omitted and filed separately with the Commission.

<PAGE>   2




                             PRIME VENDOR AGREEMENT


This agreement is made as of the 21st day of March 1994, between TEL-DRUG, INC.
also known as CIGNA and JEWETT DRUG CO., INC. of Aberdeen, South Dakota,
hereinafter known as JDC.

1.   PRIME VENDOR

     The following describe the terms and conditions under which JDC, as a prime
     vendor, will provide pharmaceutical products and services to Tel-Drug.

2.   TERMS AND CONDITIONS

     A.   PRICE STRUCTURE

          JDC will supply all products under this agreement to Tel-Drug on the
          basis of the "cost" (as that term is defined an following page)
          plus [*}

          For purchases of non-contract product, "Cost" will be defined as the
          manufacturer's published wholesale acquisition cost on the date of
          JDC's invoice to Tel-Drug, adjusted to reflect normal and customary
          quantity discounts and special promotional allowances, excluding
          manufacturer's cash discounts. For purchases of contract product,
          "Cost" will be defined as the cost negotiated between the manufacturer
          and Tel-Drug; provided that JDC shall have an arrangement with the
          manufacturer regarding such contract cost satisfactory to JDC. The
          JDC system pricing logic is defined as best price. If a special
          promotional price is more favorable than the contract price, product
          will be priced at the lower amount.

          All orders to be transmitted to qualify for above pricing.
          Non-transmitted orders subject to cost plus [*] (excluding schedule
          II's, back orders and emergency orders).

     B.   TAXES

          Purchaser will pay any fees and taxes (other than taxes based upon
          JDC's net income or imposed upon it's inventory held in it's
          warehouses at the rate in effect on the date hereof) imposed or
          assessed upon sales by JDC to Purchaser (including any interest or
          penalties not arising from the negligence of JDC). For example:

          1.   Gross Receipts - Prices to Purchaser will include any taxes and
               fees



                                       2


*Confidential portion omitted and filed separately with the Commission.
<PAGE>   3




               payable by JDC based upon its gross receipts from Purchaser
               (except as provided above). Prices will be adjusted from
               time-to-time as necessary to include such amounts.

          2.   Sales Taxes - Purchaser will pay sales taxes imposed upon sales
               from JDC to Purchaser as invoiced by JDC, unless Purchaser has
               previously delivered to appropriate certificate of exemption.

     C.   COST VERIFICATION

          Upon request, JDC will make available on-site inspection of
          manufacturer's invoices to an authorized representative provided that
          such invoices are limited to the most recent 12 months.

     D.   PAYMENT

          Any extension of credit and/or the continued extension of credit shall
          be at the discretion of JDC. Extension of credit shall be based upon
          the receipt of a completed credit application and the review of any
          requested financial information.

          Weekly Deposit

          Tel-Drug will provide JDC a deposit equal to one week's average
          purchases. JDC will produce a statement for Tel-Drug on a weekly
          basis. Purchases made Friday through Thursday are due the following
          Tuesday. Deposit will be adjusted monthly based on most current
          purchasing levels.

          LATE PAYMENT

          A late fee of 12% per year or the highest rate allowed by law,
          whichever is less, will be charged on past due balances on subsequent
          invoices. JDC will immediately contact Tel-Drug management regarding
          late payment issues. A late payment penalty (as described above) will
          be assessed in the event of:

          1.   Payment still not being made within five (5) business days from
               the time Tel-Drug management was made aware of the situation.

          2.   Should Tel-Drug be consistently late with payments, JDC will
               immediately assess late penalties. JDC will continue to contact
               Tel-Drug management in such instances.



                                        3


<PAGE>   4



3.   SERVICES AND FEES

     A.   COMPREHENSIVE SERVICE PACKAGE

          REFER TO ATTACHED ADDENDUM






     B.   PROGRAM OPTIONS






     C.   DEPOT PROGRAM AND GROUP SUPPORT

          JDC understands that commitment to group contracts by the members and
          their distributor, is essential to the long term success of a contract
          program.

          JDC commits to support the contract efforts of Tel-Drug by:

               1.   Developing contracts file from award information submitted
                    by CIGNA.

               2.   Assigning only the CIGNA group contract file to each member.

               3.   Processing ancillary contracts only at the request of the
                    facility.

               4.   Providing the entire group contract file of whether contract
                    products are stocked locally.




                                       4
<PAGE>   5





               5.   Performing electronic bid check function comparing each
                    order to the entire CIGNA contract file for maximum contract
                    utilization.

               6.   Prioritizing CIGNA contract products in all system
                    applications.

               7.   Implementing systems designed to locate, confirm, and ship
                    first choice contract products ordered by Tel-Drug.

     D.   CONTRACT LOAD INFORMATION

          JDC loads bid files in the following manner in order to ensure initial
          and ongoing accuracy. Six weeks lead time is requested in order to
          complete this process before the membership begins purchasing.

          -    JDC loads the file electronically or manually depending on how
               the data is provided by CIGNA. JDC loads the file based on data
               provided by CIGNA.

          -    After the file is loaded, JDC will validate the accuracy of the
               entire file by comparing the file to hard copy contracts provided
               to JDC by the manufacturer.

               Approximately 80% of the vendors provide the data in hard copy.

          -    JDC will identify those manufacturers that do not provide hard
               copy verification. JDC will interact with the manufacturers and
               CIGNA in an aggressive effort to secure hard copy verification.

          -    Price discrepancies identified in the above process will be
               brought to the attention of the manufacturer and CIGNA in order
               to determine the correct price.

          -    JDC will load contract updates on the same day that the
               contract(s) are received from CIGNA.

     E.   PERFORMANCE AND SERVICE LEVEL

          Delivery

          1.   Daily Delivery:  JDC will provide a minimum of one delivery per
               day Monday through Friday. A second daily delivery and or
               Saturday delivery may be available. Delivery schedules to be
               provided by JDC.

                                        5


<PAGE>   6





          2.   Emergency Delivery: JDC provides 24-hour emergency service 7 days
               per week. Extraordinary delivery costs, i.e., air freight
               shipments and after hours delivery services, may be passed on to
               the facility.

          3.   To maintain the integrity of such products and to reduce any
               risks associated with such products to those receiving them, JDC
               will ship within a separate package all chemotherapeutic agents
               and related hazardous materials and so identify the outside of
               the package. JDC will adhere to all applicable OSHA standards of
               most recent date relating to this issue.

          Service Level

          JDC will guarantee a 96% line service level for each facility. Should
          the service level for my facility fall below 96% for two consecutive
          months, JDC will rebate such facility an amount equal to 0.1% of such
          facility's purchases during each subsequent month in which the line
          service level remains below 96%.

          The following provisions will apply:

          1.   Purchases must not exceed 120% of the prior month.

          2.   One month start up for new items. Excluding bid year transition.

          3.   CIGNA must submit bid awards a minimum of six weeks prior to bid
               transaction. If less than six weeks, a one month start up period
               will be allowed.

          4.   Service level calculation as per the computerized recap report
               generated by JDC.

          5.   The service level promise will not apply to new items; provided,
               however, that JDC will use commercially reasonable efforts to
               have items in stock as soon as possible after orders are placed
               by the facility.

          6.   Manufacturers' back orders, and re-orders of a product that occur
               within three (3) days of the initial order of the product
               hereunder, will not be counted in the service level calculation.

          7.   Partial line fills of orders will be counted as a percentage of
               the total line item filled. For example, if ten (10) pieces of
               one (1) item are ordered and one piece is delivered, the item
               will be counted as ten percent (10%) filled.



                                       6



<PAGE>   7



          8.   Subject to the foregoing, line service level is defined as
               follows:

                       IO-INS
               LSL =   ------  x 100
                       IO-CS

               where LSL  =   line service level
                     IO   =   total number of items ordered
                     INS  =   items not shipped (counting partially filled
                              lines)
                     CS   =   out of stocks or shorts due to manufacturer;
                              ineligible reorders; new items

     F.   SALES REPRESENTATION

          A JDC Sales-Representative will call on each facility at least once
          every two weeks or as requested by Tel-Drug with following objectives:

          1.   Optimization of service.

          2.   Implementation of true prime vendor service and participation of
               the facility within the context of the prime vendor concept.

          3.   Inventory management training. Inventory control and contract
               portfolio management.

4.   MANAGEMENT INFORMATION SERVICES - PHARMACY

     A.   CAPABILITIES

          REFER TO ATTACHED ADDENDUM



                                       7

<PAGE>   8






     B.   COMPUTER GENERATED MIN/MAX LABELS QUARTERLY

          Based upon a weighted forecasting method and desired product turn
          rates, these labels will show order points and order quantity to
          enhance inventory performance.

     C.   PRODUCT STICKERS

          Tel-Drug will receive product stickers with each item ordered,
          denoting: day, year purchased: invoice cost; third party information
          or NDC#; number of units purchased; average wholesale price; order
          entry number; retail price.

     D.   MICROFICHE (INVENTORY LISTING)

          Microfiche will be mailed at the beginning of each month denoting; JDC
          product listing; O/E number; third party information; average
          wholesale price; wholesale cost; NDC#. In addition, facilities will
          receive a contract price microfiche to coincide with the manufacturer
          bid year.

     E.   MANAGEMENT REPORTS

          JDC will provide monthly to Tel-Drug an Inventory Management Report.
          Report denotes: Products purchased; six months actual unit purchase
          history; 12 months total dollars purchase history; weighted forecasts;
          suggested order quantities; economic order quantities; ABC Product
          classification; price change information; overstock information;
          dollars purchased by Product and manufacturer.

          Options Include:


          1.   Alphabetically by vendor:

               a.   brand name
               b.   generic name

          2.   Therapeutic classification

               a.   brand name
               b.   generic name

          3.   An "A" Item Ranking Report denoting those products constituting
               "A" item purchases utilizing a weighted forecast method based on
               previous four (4) months history. The report can be generated in
               two formats:



                                       8
<PAGE>   9







               a.   brand name
               b.   generic name

          4.   Shelf Labels

               JDC will supply to each facility upon request, one set of Mylar
               shelf labels (listed by either generic or brand name). A unique
               set of color coded contractual labels supplied annually.

          5.   Controlled Substance Report

               JDC provides a monthly report listing all DEA scheduled
               pharmaceuticals purchased and delivered during the reporting
               month.

          6.   Electronic Order Confirmation

               Verification of all orders transmitted within minutes of order
               placement.

     F.   BID ITEM MICROFICHE

          A microfiche listing all Depot bid items to be supplied to each
          facility. Items sorted alphabetically by:  vendor; product
          description; generic description.

     G.   INVOICES

          The invoice format may be customized for Tel-Drug. JDC has the ability
          to produce invoices alphabetical, by trade name or generic name.
          Invoices denote bid products by printing a "B" in the right hand
          margin. Generic manufacturer must be noted if invoiced by generic
          name.

          JDC provides electronic invoicing on a daily basis utilizing industry
          standard formats (ANSIX12). JDC also has the capability of providing a
          computerized invoice review to Tel-Drug.

     H.   PHYSICAL INVENTORY SERVICE

          Through special data terminal - provides detailed listing of all
          inventory within the pharmacy. Includes capability to enter items not
          purchased from JDC.

     I.   INVENTORY MANAGEMENT WORKSHOP

          JDC will provide in inventory control workshop at the request of the
          facility. The workshop provides training in the concept of inventory
          management and cost containment, detailed explanation of the inventory
          management tools



                                       9
<PAGE>   10


          available, and ideas on the application of an inventory management
          program.

5.   MANAGEMENT INFORMATION SERVICES

     A.   REPORTS

          JDC has the capability to provide Tel-Drug with facility transaction
          data as requested by Tel-Drug. See the following:

           1.     Facility/Customer identification number
           2.     Invoice number
           3.     Invoice date
           4.     Order date
           5.     Facility/Customer purchase order number
           6.     Manufacturer name
           7.     Manufacturer product code number
           8.     Distributor product code number
           9.     Item description
          10.     Unit of sale
          11.     Unit price
          12.     Quantity shipped/billed

6.   CUSTOMER SERVICE

     JDC will provide customer service support staff to accept phone calls from
     facilities and to resolve problems related to a normal business
     relationship between JDC and Tel-Drug. JDC will also provide technical
     service support to facilitate communications, problem-solving, and the
     like.

7.   CONFIDENTIALITY

     The terms of this Agreement between CIGNA and JDC are confidential and
     neither CIGNA nor JDC will disclose the terms of the Agreement to any party
     without the written consent of the other.

8.   TERMINATION

     JDC or CIGNA may cancel this agreement at any time with sixty (60) days
     prior written notice. Subject to the foregoing, the term of this Agreement
     shall be from 3-21-94 through 3~21-97 with an option for a two year
     contract extension based upon mutual agreement of CIGNA and JDC.



                                       10



<PAGE>   11





Tel-Drug, Inc.                            Jewett Drug Co., Inc.
3101 So. Carolyn Avenue                   217 S.E. Railroad Avenue
Sioux Falls, South Dakota 57117           Aberdeen, South Dakota 57402-1240

By:  Agnes G. Harris, Pharm.D.            By:  James Brickson
     Assistant Vice President,                 President
     National Pharmacy

Signature:  /s/  Agnes G. Harris          Signature:   /s/ James Brickson
          ------------------------                   ---------------------------

Date:          4/26/94                    Date:            3/21/94
     -----------------------------             ---------------------------------




                                       11
<PAGE>   12


                       [JEWETT DRUG CO., INC. LETTERHEAD]





                              JEWETT DRUG COMPANY

                              ADDENDUM TO CONTRACT

3)       Services and Fees

         A)   Comprehensive Service Package - no fees

              Jewett Drug Co. will provide immediately and free of charge the
              following services:

              1)   Hand-held electronic ordering device
              2)   Toll free number to place orders
              3)   Invoices, shelf labels and pricing stickers with merchandise
              4)   Order confirmation by fax
              5)   Microfiche machine and semi-monthly microfiche catalog
                   listings
              6)   Weekly product pricing information on diskette
              7)   Volume purchases reports listing products purchased, total
                   units purchased, total dollar amount bought and min/max order
                   quantities
              8)   Hard copy multi-source generic and repack catalogs - monthly
              9)   Product purchased at contract bid prices are indicated with
                   a "T" on the invoices.
              10)  Detailed pharmacy inventory listing transmitted by hand-held
                   terminal on product purchased from Jewett Drug Co.
              11)  Monthly price increase bulletins

         B)   Comprehensive Service Packages - Services for a fee

              Jewett Drug is prepared to provide additional services which will
              become available on approximate implementation dates:

              Please note: As each service becomes available, Jewett Drug will
              contact Cigna to negotiate a mutually agreeable monthly fee. The
              services and their pending implementation dates are as follows:

              1)   August 1, 1994 - electronic ordering and confirmation
              2)   January 1, 1995 - electronic receipt of contract bid awards
                   and pricing
              3)   March 1, 1995 - daily electronic invoicing
              4)   After March 1, 1995 - any special reports required by Cigna
                   will be discussed and agreed upon at that time.

                               OVER 100 YEARS OF SERVICE

<PAGE>   13



                                                    August 22, 1995

         ADDENDUM II to contract dated March 21, 1994 between Tel-Drug, Inc.
         also known as CIGNA and Jewett Drug Co., Inc. of Aberdeen, South
         Dakota.

         Page 4

         3.   SERVICES AND FEES
              A.    COMPREHENSIVE SERVICE PACKAGE
                    12.   Jewett Drug Company shall construct a warehouse and
                          office facilities in Sioux Falls, S.D., within a close
                          proximity of Tel-Drug, of sufficient size, with
                          sufficient inventories and man power to act as a back-
                          up to or eliminate the need for, Tel-Drug's back-room
                          inventory.

                    13.   Jewett Drug Co. will provide multiple, meaning four or
                          more, scheduled deliveries to the Tel-Drug facilities
                          each day and will provide for additional emergency
                          order deliveries.

                    14.   Jewett Drug Co. will assist Tel-Drug in the
                          development of a new electronic ordering and receiving
                          system which will provide for a more rapid product
                          integration into Tel-Drug's working inventory.

         ***Note:  Completion and implementation of 12, 13, and 14 can be within
                   five (5) months or a short time thereafter, subsequent to the
                   completion of this contract extension agreement.

         Page 10

         8.   TERMINATION
              Jewett Drug Co. or CIGNA may cancel this agreement at any time
              with sixty(60) days prior written notice. Subject to the
              foregoing, the term of this agreement shall be from 9-01-1995
              thru 9-01-2000 with an option for a two-year contract extension
              based upon mutual agreement of CIGNA and Jewett Drug Co.

         Tel-Drug, Inc.                        Jewett Drug Co., Inc.
         4901 No. 4th Avenue                   217 S.E. Railroad Avenue
         Sioux Falls, South Dakota 57104       Aberdeen, South Dakota 57402-1240


         By: /s/ Judy Kelley                   By:  James Erickson
         -------------------------------            President

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

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

         Signature:   /s/  Judy Kelley         Signature:   /s/  James Erickson
                   ---------------------                 -----------------------

         Date:        8/31/95                  Date:             8/24/95
              --------------------------            ----------------------------


<PAGE>   14


         ADDENDUM III to Prime Vendor Agreement (the "Agreement") dated March
         21, 1994, between Tel-Drug, Inc. ("Tel-Drug") and Jewett Drug Company,
         Inc. ("JDC") of Aberdeen, South Dakota.

         Tel-Drug and JDC agree to amend the Agreement as follows:

         1.   The effective date of this Amendment shall be       6-1-97
                                                            --------------------

         2.   Section 2. of the Agreement is deleted in its entirety and
              replaced with the following:

         2.        TERMS AND CONDITIONS

                   A.    PRICE STRUCTURE

                         JDC will supply all products under this agreement to
                         Tel-Drug on the basis of the "cost", which is defined
                         as follows:

                         For Non Contracted Products
                         "Cost" is defined as the manufacturer's published
                         wholesale acquisition cost on the date of JDC's invoice
                         to Tel-Drug, plus additional adjustments to reflect
                         normal and customary quantity discounts and special
                         promotional allowances, excluding manufacturer's cash
                         discounts.

                         For Contract Products
                         "Cost" is defined as the cost negotiated between the
                         manufacturer and Tel-Drug; provided that JDC shall have
                         an arrangement with the manufacturer regarding such
                         contract cost satisfactory to JDC. The FDC system
                         pricing logic is defined as best price. If a special
                         promotional price is more Favorable than the contract
                         price, the product will be priced at the lower amount.

                         All orders must be electronically transmitted to
                         qualify for above pricing. Non-transmitted orders
                         subject to cost plus* (excluding schedule II's, back
                         orders and emergency orders).

                         Additional Volume Discounts
                         JDC will allow additional credits in the form of volume
                         discount percentages to Tel-Drug monthly based on
                         Tel-Drug's monthly net purchase volume with JDC. Such
                         credit for additional volume shall be in the form of a
                         check, payable to Tel-Drug (the "Payment") which shall
                         be delivered to Tel-Drug by the tenth (10th) working
                         day of each month. The amount of the Payment to Tel-
                         Drug will be based on the schedule below:


        *Confidential portion omitted and filed separately with the Commission.


<PAGE>   15
        [*]

         3.   The Agreement is amended by adding the following new sections:

                   9.    Warranty

                   JDC will indemnify and hold harmless Tel-Drug and its
                   subsidiaries and affiliates from and against those claims,
                   damages or liabilities (exclusive of any incidental or
                   consequential claims, damages or liabilities) directly
                   attributable to the failure of JDC to properly store, handle,
                   or distribute Products in accordance with the Agreement, it
                   being understood, however, that JDC is not the Manufacturer
                   of the Products, that JDC makes no warranty as to the
                   quality, condition, or performance of the Products, and that
                   no warranty or indemnification of any type is being provided
                   other than as specifically stated in this paragraph.

                   10.   General Responsibilities and Status of JDC

                   a. Insurance

                      JDC shall at all times during the terms of this Agreement
                      carry and maintain in full force and effect motor vehicle,
                      public liability and workers' compensation insurance
                      protecting Tel-Drug and JDC from claims which may arise
                      out of or result from JDC's performance under this
                      Agreement, whether such performance be by JDC or by any
                      subcontractor or agent or by anyone directly or indirectly
                      employed by any of them or by anyone for whose acts any of
                      them may be liable. The minimum amounts of insurance
                      coverage to be provided by JDC hereunder shall be the
                      greater of the amounts required by law and the following
                      minimum amounts:

                         Comprehensive General            Minimum Coverage
                         Liability Insurance

                         To include:
                         Bodily Injury, Property Damage   $1,000,000 each person
                         Products Liability, Completed    Combined single limit
                         Operations and Contractual
                         Liability

                         Workers' Compensation            Full statutory limit
                                                          each accident;
                                                          Employers Liability
                                                          coverage of $100,000



        *Confidential portion omitted and filed separately with the Commission.


<PAGE>   16



                                  Motor Vehicle       $1,000,000 Combined single
                                                      limit

                         Certificates of insurance acceptable to Tel-Drug shall
                         be delivered to Tel-Drug prior to commencement of the
                         services. Such certificates shall contain a provision
                         that the coverages provided under JDC's insurance will
                         not be canceled until at least thirty (30) days prior
                         written notice has been given to Tel-Drug.

                   b.    Indemnity

                         JDC will indemnify, defend with counsel reasonably
                         acceptable to Tel-Drug, and hold harmless Tel-Drug, its
                         subsidiaries and affiliates from and against all
                         liability, demands, claims, suits, losses, damages,
                         infringement of proprietary rights, causes of action,
                         fines, or judgments (including costs, attorneys' and
                         witnesses' fees and expenses incident thereto) for
                         violations of laws or regulations, injury or death to
                         persons, including its employees, servants, and agents,
                         or for damage, destruction, or loss of property arising
                         out of or in connection with its performance of, or
                         failure to perform, the duties provided for herein,
                         unless caused by the gross negligence or willful
                         misconduct of Tel-Drug.

                   c.    Licenses and Permits

                         JDC shall secure any licenses and/or permits required
                         for the proper performance of its duties hereunder,
                         paying the fees therefor, and shall take all reasonable
                         precautions to assure the safety of its employees and
                         agents who are engaged in the performance of the duties
                         provided for herein.

                   d.    Compliance with Laws

                         Both parties shall comply in all material respects with
                         all applicable federal, state, county and municipal
                         laws, ordinances, rules, regulations and orders.

                   e.    Affirmative Action

                         JDC shall comply with the requirements set forth in
                         U.S. Department of Labor regulations dealing with: (1)
                         equal employment opportunity obligations of government
                         contractors and subcontractors; (2) employment by
                         government contractors and subcontractors of
                         Vietnam-era and disabled veterans; and (3) employment
                         of the physically handicapped by government contractors
                         and subcontractors. All of the above referenced
                         regulations are hereby incorporated herein and
                         expressly made a part hereof, to the extent required by
                         law.

<PAGE>   17


                   f.    Non-use of Company's Name

                         JDC in the course of performance pursuant to this
                         Agreement of thereafter, shall not use or permit the
                         use of Tel-Drug's name, or the name of any of Tel-
                         Drug's subsidiaries or affiliates, in any advertising
                         or promotional materials prepared by it or on its
                         behalf without the prior written consent of Tel-Drug.

                   g.    Company Security Regulations

                         JDC, JDC's employees and any of JDC's subcontractors
                         who will be performing services on Tel-Drug's premises,
                         will abide by Tel-Drug's security regulations, which
                         have been established for the protection of all
                         concerned.

                   h.    Sale of Information

                         Except for data provided to Manufacturers in connection
                         with chargebacks or other Tel-Drug specific issues as
                         required by law or court order, JDC will not disclose
                         sales data specific to Tel-Drug without the approval
                         of Tel-Drug. "Blinded" sales data compiled by JDC which
                         includes (but is not specific to) any particular CIGNA
                         Company will not be subject to the disclosure
                         restrictions contained in the Agreement.


                         Except as required by law or court order, JDC will not
                         publish or otherwise disclose individual patient names,
                         addresses or telephone numbers.

                   11.   Arbitration

                   Any controversy or claim arising out of or relating to this
                   Agreement, or the breach thereof, shall be settled by
                   arbitration in accordance with the Commercial Arbitration
                   Rules of the American Arbitration Association, and judgment
                   upon the award rendered by the Arbitrator(s) may be entered
                   in any court having jurisdiction thereof.


                   12.   Year 2000

                   JDC represents and warrants that the products and services
                   are designed to be provided prior to, during, and after the
                   calendar year 2000 A.D., and that the products and services
                   will be provided during each time period without error
                   relating to date data which represents or references
                   different centuries or more than one century. JDC covenants
                   to maintain the products and services in such a manner as to
                   assure continued compliance with the foregoing representation
                   and warranty, and JDC agrees to make such modifications as
                   may be necessary or desirable to satisfy any new or modified
                   requirement, including, but not limited to, a new and
                   modified interpretation of any prior requirement. JDC agrees
                   to pay, hold harmless and indemnify Tel-Drug from and against
                   any and all losses, damages, claims, suits, actions,
                   judgments and costs (including reasonable attorney's and
                   witnesses' fees) which may arise from any failure of JDC to
                   comply with the terms of this section. Any and all costs
                   (capital

<PAGE>   18




                   or otherwise) incurred by JDC in satisfying the terms of this
                   section shall be solely paid by JDC and not passed on to
                   Tel-Drug as additional fees or otherwise.




         Tel-Drug, Inc.                        Jewett Drug Company, Inc.
         490l No. 4th Avenue                   217 S.E. Railroad Avenue
         Sioux Falls, South Dakota  57104      Aberdeen, South Dakota  57402

         By:                                   By:  James Erickson
            -----------------------------          -----------------------------
         Its:                                  Its:        President




         Signature:                         Signature:  /s/  James Erickson
                   ----------------------             -------------------------
         Date:                              Date:            5-22-97
              ---------------------------        ------------------------------


<PAGE>   19



         Addendum IV to Prime Vendor Agreement (the "Agreement") dated March 21,
         1994, between Tel-Drug, Inc. ("Tel-Drug") and Jewett Drug Company, Inc.
         ("JDC") of Aberdeen, South Dakota.

         Tel-Drug and JDC agree to amend the Agreement as follows:

         1.   The effective date of this Amendment shall be    JUNE 1ST, 1997  .
                                                           ---------------------
         2.   The Agreement is amended by changing the following section:



              9.   Warranty

              JDC will indemnify and hold harmless Tel-Drug and its
              subsidiaries and affiliates from and against those claims,
              damages or liabilities exclusive of any incidental or
              consequential claims, damages or liabilities) directly
              attributable to the failure of JDC to properly store, handle, or
              distribute Contract Products or Non Contracted Products
              (Collectively the "Products") in accordance with the Agreement,
              it being understood, however, that JDC is not the Manufacturer of
              the Products, that JDC makes no warranty as to the quality,
              condition, or performance of the Products, and that no warranty
              or indemnification of any type is being provided other than as
              specifically stated in this paragraph.


         Tel-Drug, Inc.                        Jewett Drug Company, Inc.
         4901 No. 4th Avenue                   217 S.E. Railroad Avenue
         Sioux Falls, South Dakota 57104       Aberdeen, South Dakota  57402



         By:  Ron Bertsch                      By:   James Erickson
            ----------------------------          ------------------------------
         Its: VP/GM                            Its:  Pres.


         Signature: /s/  Ron Bertsch           Signature: /s/  James Erickson
                    --------------------                  ----------------------
         Date:      5-28-97                    Date:      5-27-97
              --------------------------            ----------------------------

<PAGE>   20






         Addendum V to Prime Vendor Agreement (the "Agreement") dated March
         21, 1994, between Tel-Drug, Inc. ("Tel-Drug") and Jewett Drug Company,
         Inc. ("JDC") of Aberdeen, South Dakota.

         Tel-Drug and JDC agree to amend the Agreement as follows:

         1.   The effective date of this Amendment shall be 12-1-98.


         2.   Section 2. of the Agreement is deleted in its entirety and
              replaced with the following.

         2.   TERMS AND CONDITIONS

              A.   PRICE STRUCTURE

                   JDC will supply all products under this agreement to Tel-Drug
                   on the basis of the "cost", which is defined as follows:

                   For Non Contracted Products
                   "Cost" is defined as the manufacturer's published wholesale
                   acquisition cost on the date of JDC's invoice to Tel-Drug,
                   plus additional adjustments to reflect normal and customary
                   quantity discounts and special promotional allowances,
                   excluding manufacturer's cash discounts.

                   For Contract Products
                   "Cost" is defined as the cost negotiated between the
                   manufacturer and Tel-Drug; provided that JDC shall have an
                   arrangement with the manufacturer regarding such contract
                   cost satisfactory to JDC. The JDC system pricing logic is
                   defined as best price. If a special promotional price is more
                   favorable than the contract price, the product will be priced
                   at the lower amount.

                   All orders must be electronically transmitted to qualify for
                   above pricing. Non-transmitted orders subject to cost plus.
                   [*] (excluding schedule II's, back orders and
                   emergency orders).


                   Additional Volume Discounts
                   JDC will allow additional credits in the form of volume
                   discount percentages to Tel-Drug monthly based on Tel-Drug's
                   monthly net purchase volume with JDC. Such credit for
                   additional volume shall be in the form of a check, payable to
                   Tel-Drug (the "Payment") which shall be delivered to Tel-Drug
                   by the tenth (10th) working day of each month. The amount of
                   the payment to Tel-Drug will be based on the schedule below:

 *Confidential portion omitted and filed separately with the Commission.
<PAGE>   21
         [*]

         Tel-Drug, Inc.                        Jewett Drug Company, Inc.
         4901 No. 4th Avenue                   217 S.E. Railroad Avenue
         Sioux Falls, South Dakota  57104      Aberdeen, South Dakota  57402


         By:  Ron Bertsch                      By:      James Erickson
            -----------------------------         ------------------------------
         Its:                                  Its:     Pres

         Signature: /s/  Ron Bertsch           Signature:  /s/  James Erickson
                    ---------------------               ------------------------
         Date:     11/20/98                    Date:       11-16-98
              ---------------------------           ----------------------------


         *Confidential portion omitted and filed separately with the Commission.