Document:

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                                                                   EXHIBIT 10.3

                                   LOAN AGREEMENT

                                   July 31, 1999

Horizon Pharmacies, Inc.
275 West Princeton Drive
Princeton, Texas  75407

Ladies and Gentlemen:

       This Loan Agreement (the "LOAN AGREEMENT") will serve to set forth the
terms of the financing transactions by and between HORIZON PHARMACIES, INC.,
a Delaware corporation ("BORROWER"), and BANK ONE, TEXAS, NATIONAL
ASSOCIATION ("BANK"):

     1.       LINE OF CREDIT.  Subject to the terms and conditions set forth
in this Loan Agreement, the Tri-Party Agreement of even date herewith between
Borrower, Bank and Guarantor (as hereinafter defined) and the other
agreements, instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Loans, as hereinafter defined
(collectively, together with the Loan Agreement, referred to hereinafter as
the "LOAN DOCUMENTS"), Bank hereby agrees to lend to Borrower (the "LINE OF
CREDIT"), on a revolving basis from time to time during the period commencing
on the date hereof and continuing through the maturity date of the promissory
note evidencing the credit facility from time to time, such amounts as
Borrower may request hereunder, PROVIDED, HOWEVER, the total principal amount
outstanding at any time under the Line of Credit shall not exceed
$7,000,000.00 (the "COMMITTED SUM").  If at any time the aggregate principal
amount outstanding under the Line of Credit exceeds the Committed Sum,
Borrower agrees to immediately repay to Bank such excess amount, plus all
accrued but unpaid interest thereon.  Subject to the terms and conditions
hereof, Borrower may borrow, repay and reborrow hereunder.  The sum advanced
under the Line of Credit shall be used for working capital and general
corporate purposes, excluding acquisitions.

All advances under the Line of Credit shall be collectively called the
"LOANS". Bank reserves the right to require Borrower to give Bank not less
than one (1) business day prior notice to each requested advance under the
Line of Credit, specifying (i) the aggregate amount of such requested
advance, (ii) the requested date of such advance, and (iii) the purpose for
such advance, with such advances to be requested in a form satisfactory to
Bank.

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     2.     PROMISSORY NOTE.  The Line of Credit shall be evidenced by a
promissory note (such promissory note, together with any renewals, extensions
and increases thereof, the "NOTE") duly executed by Borrower and payable to
the order of Bank, in form and substance acceptable to Bank.  Interest on the
Note shall accrue at a rate set forth therein.  The principal of and interest
on the Note shall be due and payable in accordance with the terms and
conditions set forth in the Note and in this Loan Agreement.

     3.     GUARANTOR.  As a condition precedent to the Bank's obligation to
make the Loans to Borrower, Borrower agrees to cause McKesson HBOC, Inc. (the
"GUARANTOR") to execute and deliver to Bank contemporaneously herewith a
guaranty agreement, in form and substance satisfactory to Bank (the
"GUARANTY"). In the event the Guaranty is terminated for any reason, or Bank
believes that Guarantor will fail to honor the Guaranty with respect to
funded amounts or future advances under the Line of Credit, Bank shall have
no further obligation to make advances under the Line of Credit.

     4.     REPRESENTATIONS AND WARRANTIES.  Borrower hereby represents and
warrants, and upon each request for an advance under the Line of Credit,
further represents and warrants, to Bank as follows:

            (a)      EXISTENCE.  Borrower is a corporation duly organized,
       validly existing and in good stand standing under the laws of the State
       of Delaware and all other states where it is doing business (except where
       failure to qualify would not have a material adverse effect on Borrower),
       and has all requisite power and authority to execute and deliver the Loan
       Documents.

            (b)      BINDING OBLIGATIONS.  The execution, delivery, and
       performance of this Loan Agreement and all of the other Loan Documents by
       Borrower have been duly authorized by all necessary action by Borrower,
       and constitute legal, valid and binding obligations of Borrower,
       enforceable in accordance with their respective terms, except as limited
       by bankruptcy, insolvency or similar laws of general application relating
       to the enforcement of creditors' rights and except to the extent specific
       remedies may generally be limited by equitable principles.

            (c)      NO CONSENT.  The execution, delivery and performance of
       this Loan Agreement and the other Loan Documents, and the consummation of
       the transactions contemplated hereby and thereby, do not (i) conflict
       with, result in a violation of, or constitute a default under (A) any
       provision of its articles of certificate of incorporation or bylaws, if
       Borrower is a corporation, or its partnership agreement, if Borrower is a
       partnership, or any agreement or other instrument binding upon Borrower,
       or (B) any law, governmental regulation, court decree or order applicable
       to Borrower, or (ii) require the consent, approval or authorization of
       any third party.

            (d)      FINANCIAL CONDITION.  Each financial statement of Borrower
       supplied to the Bank truly discloses and fairly presents Borrower's
       financial condition as of the date of each such statement.  There has
       been no material adverse change in such financial condition or

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       results of operations of Borrower subsequent to the date of the most
       recent financial statement supplied to the Bank.

            (e)      LITIGATION.  There are no actions, suits or proceedings,
       pending or, to the knowledge of Borrower, threatened against or affecting
       Borrower or the properties of Borrower, before any court or governmental
       department, commission or board, which, if determined adversely to
       Borrower, would have a material adverse effect on the financial
       condition, properties, or operations of Borrower.

            (f)      TAXES; GOVERNMENTAL CHARGES.  Borrower has filed all
       federal, state and local tax reports and returns required by any law or
       regulation to be filed by it and has either duly paid all taxes, duties
       and charges indicated due on the basis of such returns and reports, or
       made adequate provision for the payment thereof, and the assessment of
       any material amount of additional taxes in excess of those paid and
       reported is not reasonably expected.

     5.     CONDITIONS PRECEDENT TO ADVANCES.  Bank's obligation to make any
advance under this Loan Agreement and the other Loan Documents shall be
subject to the conditions precedent that, as of the date of such advance and
after giving effect thereto (i) all representations and warranties made to
Bank in this Loan Agreement and the other Loan Documents shall be true and
correct, as of and as if made on such date, (ii) no material adverse change
in the financial condition of Borrower since the effective date of the most
recent financial statements furnished to Bank by Borrower shall have occurred
and be continuing, (iii) no event has occurred and is continuing, or would
result from the requested advance, which with notice or lapse of time, or
both, would constitute an Event of Default (as hereinafter defined), and (iv)
Bank's receipt of all Loan Documents appropriately executed by Borrower and
all other proper parties.

     6.     AFFIRMATIVE COVENANTS.  Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the
other Loan Documents are fully paid and satisfied, and (ii) the Bank has no
further commitment to lend hereunder, Borrower agrees and covenants that it
will, unless Bank shall otherwise consent in writing:

            (a)      ACCOUNTS AND RECORDS.  Maintain its books and records in
       accordance with generally accepted accounting principles.

            (b)      RIGHT OF INSPECTION.  Permit Bank to visit its properties
       and installations and to examine, audit and make and take away copies or
       reproductions of Borrower's books and records, at all reasonable times.

            (c)      RIGHT TO ADDITIONAL INFORMATION.  Furnish Bank with such
       additional information and statements, lists of assets and liabilities,
       tax returns, and other reports with respect to Borrower's financial
       condition and business operations as Bank may reasonably request from
       time to time.

            (d)      COMPLIANCE WITH LAWS.  Conduct its business in an orderly
       and efficient manner consistent with good business practices, and perform
       and comply in all material respects with all statutes, rules, regulations
       and/or ordinances imposed by any governmental

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       unit upon Borrower its businesses, operations and properties (including,
       without limitation, all applicable environmental statutes, rules,
       regulations and ordinances).

            (e)      TAXES.  Pay and discharge when due all of its indebtedness
       and obligations, including, without limitation, all assessments, taxes,
       governmental charges, levies and liens, of every kind of nature, imposed
       upon Borrower or its properties, income, or profits, prior to the date on
       which penalties would attach, and all lawful claims that, if unpaid,
       might become a lien or charge upon any of Borrower's properties, income,
       or profits; provided, however, Borrower will not be required to pay and
       discharge any such assessment, tax, charge, levy, lien or claim so long
       as (i) the legality of the same shall be contested in good faith by
       appropriate judicial, administrative or other legal proceedings, and (ii)
       Borrower shall have established on its books adequate reserves with
       respect to such contested assessment, tax, charge, levy, lien or claim in
       accordance with generally accepted accounting principles, consistently
       applied.

            (f)      INSURANCE.  Maintain insurance, including but not limited
       to, fire insurance, comprehensive property damage, public liability,
       worker's compensation, business interruption and other insurance deemed
       necessary or otherwise reasonably required by Bank.

            (g)      NOTICE OF INDEBTEDNESS.  Promptly inform Bank of creation,
       incurrence or assumption by Borrower of any actual or contingent
       liabilities not permitted under this Loan Agreement.

            (h)      NOTICE OF LITIGATION.  Promptly after the commencement
       thereof, notify Bank of all actions, suits and proceedings before any
       court or any governmental department, commission or board affecting
       Borrower or any of its properties to the extent any such action, suit or
       proceeding could reasonably expected to have a financial impact on Debtor
       in excess of $100,000.00.

            (i)      NOTICE OF MATERIAL ADVERSE CHANGE.  Promptly inform Bank of
       (i) any and all material adverse changes in Borrower's financial
       condition, and (ii) all claims made against Borrower which could
       materially affect the financial condition of Borrower.

            (j)      ADDITIONAL DOCUMENTATION.  Execute and deliver, or cause to
       be executed and delivered, any and all other agreements, instruments or
       documents which Bank may reasonably request in order to give effect to
       the transactions contemplated under this Loan Agreement and the other
       Loan Documents.

     7.     NEGATIVE COVENANTS.  Until (i) the Note and all other obligations
and liabilities of Borrower under this Loan Agreement and the other Loan
Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will not, without the prior written
consent of Bank:

            (a)      NATURE OF BUSINESS.  Make any material change in the nature
       of its business as carried on as of the date hereof.

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            (b)      LIQUIDATIONS, MERGERS, CONSOLIDATIONS.  Liquidate, merge or
       consolidate with or into any other entity, unless Borrower is the
       surviving entity.

            (c)      SALE OF ASSETS.  Sell, transfer or otherwise dispose of any
       of its assets or properties, other than (i) in the ordinary course of
       business or (ii) the grant of security interest to Guarantor.

            (d)      CHANGE IN MANAGEMENT.  Permit a change in the senior
       management of Borrower.

            (e)      LOANS.  Make any loans to any person or entity, other than
       loans to employees which do not exceed $25,000.00 in the aggregate per
       fiscal year.

            (f)      TRANSACTIONS WITH AFFILIATES.  Enter into any transaction,
       including, without limitation, the purchase, sale or exchange of property
       or the rendering of any service, with any Affiliates (as hereinafter
       defined) of Borrower, except in the ordinary course of and pursuant to
       the reasonable requirements of Borrower's business and upon fair and
       reasonable terms no less favorable to Borrower than would be obtained in
       a comparable arm's-length transaction with a person or entity not an
       Affiliate of Borrower.  As used herein, the term "AFFILIATE" means any
       individual or entity directly or indirectly controlling, controlled by,
       or under common control with, another individual or entity.

     8.     REPORTING REQUIREMENTS.  Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the
other Loan Documents are fully paid and satisfied, and (ii) the Bank has no
further commitment to lend hereunder, Borrower will, unless Bank shall
otherwise consent in writing, furnish to Bank:

            (a)      INTERIM FINANCIAL STATEMENTS.  As soon as available, and in
       any event within fifteen (15) days after filing with the Securities and
       Exchange Commission, a Quarterly Report on Form 10-Q, including a balance
       sheet, income statement and cash flow statement of Borrower.

            (b)      ANNUAL FINANCIAL STATEMENTS.  As soon as available and in
       any event within fifteen (15) days after filing with the Securities and
       Exchange Commission, an Annual Report on Form 10-K.

            (c)      OTHER REPORTS.  As soon as available, and in any event
       within fifteen (15) days after filing with the Securities and Exchange
       Commission, any Current Report on Form 8-K of Borrower.

     9.     EVENTS OF DEFAULT.  Each of the following shall constitute an
"EVENT OF DEFAULT" under this Loan Agreement:

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            (a)      The failure, refusal or neglect of Borrower to pay when due
       any part of the principal of, or interest on, the Note or any other
       indebtedness or obligations owing to Bank by Borrower from time to time,
       if such failure continues for ten (10) days.

            (b)      The failure of Borrower or any Obligated Party (as defined
       below) to timely and properly observe, keep or perform any covenant,
       agreement, warranty or condition required herein or in any of the other
       Loan Documents (including, without implied limitation, the failure of
       Guarantor to comply with the reporting obligations set out in the
       Guaranty), if such failure continues for twenty (20).

            (c)      The occurrence of an event of default under any of the
       other Loan Documents or under any other agreement now existing or
       hereafter arising between Bank and Borrower.

            (d)      Any representation contained herein or in any of the other
       Loan Documents made by Borrower or any Obligated Party is false or
       misleading in any material respect.

            (e)      The occurrence of any event which permits the acceleration
       of the maturity of any indebtedness owing by Borrower to any third party
       (including Guarantor) under any agreement or understanding.

            (f)      If Borrower or any Obligated Party:  (i) becomes insolvent,
       or makes a transfer in fraud of creditors, or makes an assignment for the
       benefit of creditors, or admits in writing its inability to pay its debts
       as such debts become due; (ii) generally is not paying its debts as such
       debts become due; (iii) has a receiver, trustee or custodian appointed
       for, or take possession of, all or substantially all of the assets of
       such party, either in a proceeding brought by such party or in a
       proceeding brought against such party or in a proceeding brought against
       such party and such appointment is not discharged or such possession is
       not terminated within sixty (60) days after the effective date thereof or
       such party consents to or acquiesces in such appointment or possession;
       (iv) files a petition for relief under the United States Bankruptcy Code
       or any other present or future federal or state insolvency, bankruptcy or
       similar laws (all of the foregoing hereinafter collectively called
       "APPLICABLE BANKRUPTCY LAW") or an involuntary petition for relief is
       filed against such party under any Applicable Bankruptcy Law and such
       involuntary petition is not dismissed within sixty (60) days after the
       filing thereof, or an order for relief naming such party is entered under
       any Applicable Bankruptcy Law, or any composition, rearrangement,
       extension, reorganization or other relief of debtors now or hereafter
       existing is requested or consented to by such party; (v) fails to have
       discharged within a period of thirty (30) days any attachment,
       sequestration or similar writ levied upon property of such party; or (vi)
       fails to pay within thirty (30) days any final money judgment against
       such party.

            (g)      The liquidation, dissolution, merger and consolidation of
       Borrower or any Obligated Party.

            (h)      The entry of any judgment against Borrower or the issuance
       or entry of any attachment or other lien against any of the property of
       Borrower for an amount in excess of

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       $200,000.00, if undischarged, unbonded or undismissed within thirty (30)
       days after such entry.

            (i)      The failure of Guarantor to maintain, as of the end of each
       calendar quarter, a Moody's Unsecured Debt rating of "Baa" or better, or
       a Standard and Poor's rating of "BBB" or better.

Nothing contained in this Loan Agreement shall be construed to limit the
events of default enumerated in any of the other Loan Documents and all such
events of default shall be cumulative.  The term "OBLIGATED PARTY", as used
herein, shall mean any party other than Borrower who securities, guarantees
and/or is otherwise obligated to pay all or any portion of the indebtedness
evidence by the Note.

     10.    REMEDIES.  Upon the occurrence of any one or more of the
foregoing Events of Default, (a) the entire unpaid balance of principal of
the Note, together with all accrued but unpaid interest thereon, and all
other indebtedness owing to Bank by Borrower at such time shall, at the
option of Bank, become immediately due and payable without further notice,
demand, presentation, notice of dishonor, notice of intent to accelerate,
notice of acceleration, protest or notice of protest of any kind, all of
which are expressly waived by Borrower, and (b) Bank may, at its option,
cease further advances under the Note; PROVIDED, HOWEVER, concurrently and
automatically with the occurrence of an Event of Default under SUBPARAGRAPH
(f) in the immediately preceding paragraph (i) further advances under the
Note shall cease, and (ii) the Note and all other indebtedness owing to Bank
by Borrower at such time shall, without any action by Bank, become due and
payable, without further notice, demand, presentation, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest of notice of
any kind, all of which are expressly waived by Borrower.  All rights and
remedies of Bank set forth in this Loan Agreement and in any of the other
Loan Documents may also be exercised by Bank, at its option to be exercised
in its sole discretion, upon the occurrence of an Event of Default.

     11.    RIGHTS CUMULATIVE.  All rights of Bank under the terms of this
Loan Agreement shall be cumulative of, and in addition to, the rights of Bank
under any and all other agreements between Borrower and Bank (including, but
not limited to, the other Loan Documents), and not in substitution or
diminution of any rights now or hereafter held by Bank under the terms of any
other agreement.

     12.    WAIVER AND AGREEMENT.  Neither the failure nor any delay on the
part of Bank to exercise any right, power or privilege herein or under any of
the other Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege. No waiver of any provision in this Loan Agreement or in any
other Loan Documents and no departure by Borrower therefrom shall be
effective unless the same shall be in writing and signed by Bank, and then
shall be effective only in the specific instance and for the purpose for
which given and to the extent specified in such writing.  No modification or
amendment to this Loan Agreement or to any of the other Loan Documents shall
be valid or effective unless the same is signed by the party against whom it
is sought to be enforced.

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     13.    BENEFITS.  This Loan Agreement shall be binding upon and inure to
the benefit of Bank and Borrower, and their respective successors and
assigns, provided, however, that Borrower may not, without the prior written
consent of Bank, assign any rights, powers, duties or obligations under this
Loan Agreement or any of the other Loan Documents.

     14.    NOTICES.  All notices, requests, demands or other communications
required or permitted to be given pursuant to this Agreement shall be in
writing and given by (i) personal delivery, (ii) expedited delivery service
with proof of delivery, or (iii) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent to the intended
addressee at the address set forth on the signature page hereof and shall be
deemed to have been received either, in the case of personal delivery, as of
the time of personal delivery, in the case of expedited delivery service, as
of the date of first attempted delivery at the address and in the manner
provided herein, or in the case of mail, upon deposit in a depository
receptacle under the care and custody of the United States Postal Service.
Either party shall have the right to change its address for notice hereunder
to any other location within the continental United States by notice to the
other party of such new address at least thirty (30) days prior to the
effective date of such new address.

     15.    CONSTRUCTION.  THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS
HAVE BEEN EXECUTED AND DELIVERED IN THE STATE OF TEXAS, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND SHALL BE
PERFORMABLE BY THE PARTIES HERETO IN THE COUNTY IN TEXAS WHERE THE BANK'S
ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF IS LOCATED.

     16.    INVALID PROVISIONS.  If any provision of this Loan Agreement or
any of the other Loan Documents is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully
severable and the remaining provisions of this Loan Agreement or any of the
other Loan Documents shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance.

     17.    EXPENSES AND FEES.  Borrower shall pay all costs and expenses
(including, without limitation, reasonable attorneys' fees) in connection
with (i) any action required in the course of administration of the
indebtedness and obligations evidenced by the Loan Documents, and (ii) any
action in the enforcement of Bank's rights upon the occurrence of Event of
Default.  Upon execution of this Agreement, Borrower shall pay all costs and
expenses, including Bank's legal fees, incurred in connection with the
closing of the Line of Credit, and an origination fee of $10,000.00.  In
addition, Borrower shall pay to Bank an unused fee, for the period commending
on the date of this Agreement and ending on and including the maturity date
of the Note evidencing the Line of Credit, computed at a rate equal to
one-fifth of one percent (.2%) per annum, calculated on the daily average
unused portion of the Line of Credit, such fee being payable quarterly in
arrears on the last calendar day of each calendar quarter and on the maturity
date of the Note.

     18.    PARTICIPATION OF THE LOANS.  Borrower agrees that Bank may, at
its option, sell interests in the Loans and its rights under this Loan
Agreement to a financial institution or institutions, and in connection with
each such sale, Bank may disclose any financial and other information
available to Bank concerning Borrower to each perspective purchaser.

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     19.    ENTIRE AGREEMENT.  This Loan Agreement (together with the other
Loan Documents) contains the entire agreement among the parties regarding the
subject matter hereof and supersedes all prior written and oral agreements
and understandings among the parties hereto regarding same.

     20.    CONFLICTS.  In the event any term or provision hereof is
inconsistent with or conflicts with any provision of the other Loan
Documents, the terms and provisions contained in this Loan Agreement shall be
controlling.

     21.    COUNTERPARTS.  This Loan Agreement may be separately executed in
any number of counterparts, each of which shall be an original, but all of
which, taken together, shall be deemed to constitute one and the same
instrument.

     22.    ARBITRATION.  Bank and Borrower agree that upon the written
demand of either party, whether made before or after the institution of any
legal proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from this Loan Agreement, the
Notes or any other Loan Document or otherwise, including, without limitation,
contract disputes and tort claims, shall be resolved by binding arbitration
pursuant to the Commercial Rules of the American Arbitration Association.
Any arbitration proceeding held pursuant to this arbitration provision shall
be conducted in the city nearest the Borrower's address having an AAA
regional office, or at any other place selected by mutual agreement of the
parties.  No act to take or dispose of any Collateral shall constitute a
waiver of this arbitration' agreement or be prohibited by this arbitration
agreement.  The arbitration provision shall not limit the right of either
party during any dispute, claim or controversy to seek, use, and employ
ancillary, or preliminary rights and/or remedies, judicial or otherwise, for
the purposes of realizing upon, preserving, protecting, foreclosing, upon or
proceeding under forcible entry and detainer for possession of, any real or
personal property, and any such action shall not be deemed an election of
remedies.  Such remedies include, without limitation, obtaining injunctive
relief or a temporary restraining order, invoking a power of sale under any
deed of trust or mortgage, obtaining a writ of attachment or imposition of a
receivership, or exercising any rights relating to personal property,
including taking or disposing of such property with or without judicial
process pursuant to Article 9 of the Uniform Commercial Code or when
applicable, a judgment by confession of judgment.  Any disputes, claims or
controversies concerning the lawfulness or reasonableness of an act, or
exercise of any right or remedy concerning any Collateral, including any
claim to rescind, reform, or otherwise modify any agreement relating to the
Collateral, shall also be arbitrated; provided, however, that no arbitrator
shall have the right or the power to enjoin or restrain any act of either
party.  Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction.  Nothing in this arbitration provision shall
preclude either party from seeking equitable relief from a court of competent
jurisdiction.  The statute of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought by
a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement of
any action for the purposes.  The Federal Arbitration Act (Title 9 of the
United States Code) shall apply to the construction, interpretatin, and
enforcement of this arbitration provision.

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     23.    JURY WAIVER.  TO THE EXTENT PERMITTED UNDER APPLICABLE LAW THE
UNDERSIGNED AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND BANK ARISING OUT OF OR IN ANY
WAY RELATED TO THIS DOCUMENT OR ANY OTHER RELATED DOCUMENT.  THIS PROVISION
IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED
HEREIN OR IN THE OTHER LOAN DOCUMENTS.

     If the foregoing correctly sets forth our mutual agreement, please so
acknowledge by signing and returning this Loan Agreement to the undersigned.

                                   Very truly yours,

                                   BANK ONE, TEXAS, N.A.

                                   By:   /s/ Julie Smith
                                      -------------------------------------
                                   Name:     Julie Smith
                                        -----------------------------------
                                   Title:    Vice President
                                         ----------------------------------

                                   BANK'S ADDRESS:

                                   1717 Main Street, 3rd Floor
                                   Dallas, Texas 75201
                                   Attn:  Julie Smith

     ACCEPTED as of the date first written above.

                                   BORROWER:

                                   HORIZON PHARMACIES, INC.,
                                   a Delaware corporation

                                   By:   /s/ John N. Stogner
                                      -------------------------------------
                                   Name:     John N. Stogner
                                        -----------------------------------
                                   Title:    CFO/Treasurer
                                         ----------------------------------

                                   BORROWER'S ADDRESS:

                                   531 West Main Street
                                   Suite 100
                                   Denison, Texas 75020

                                       10<PAGE>

                                PROMISSORY NOTE

$7,000,000.00                                                     July 31, 1999

        FOR VALUE RECEIVED, on or before July 31, 2000 ("MATURITY DATE"), the
undersigned HORIZON PHARMACIES, INC., a Delaware corporation ("BORROWER"),
promises to pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION
("BANK") at its offices in Dallas County, Texas at 1717 Main Street, 3rd
Floor, Dallas, Texas 75201, the principal amount of SEVEN MILLION AND NO/100
DOLLARS ($7,000,000.00) ("TOTAL PRINCIPAL AMOUNT"), or such amount less than
the Total Principal Amount which has been advanced to Borrower if the total
amount advanced under this Promissory Note ("NOTE") is less than the Total
Principal Amount, together with interest on such portion of the Total
Principal Amount which has been advanced to Borrower from the date advanced
until paid at a fluctuating rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate (as hereinafter defined), or (b)
a rate ("CONTRACT RATE"), calculated on the basis of the actual days elapsed
but computed as if each year consisted of three hundred sixty (360) days,
equal to the sum of (i) the Prime Rate of interest ("PRIME RATE") as
established from time to time by Bank (which may not be the lowest, best or
most favorable rate of interest which Bank may charge on loans to its
customers) LESS (ii) two percent (2%), each change in the rate to be charged
on this Note to become effective without notice to Borrower on the effective
date of each change in the Maximum Rate or the Prime Rate, as the case may
be; provided, however, that if at any time the Contract Rate shall exceed the
Maximum Rate, thereby causing the interest on this Note to be limited to the
Maximum Rate, then any subsequent reduction in the Prime Rate shall not
reduce the rate of interest on this Note below the Maximum Rate until the
total amount of interest accrued on this Note equals the amount of interest
which would have accrued on this Note if the Contract Rate had at all times
been in effect.

        Interest shall be due and payable monthly as it accrues, commencing
on the 1st day of September, 1999, and continuing on the 1st day of each
successive month thereafter during the term of this Note; and the outstanding
principal balance of this Note, together with all accrued but unpaid
interest, shall be due and payable on the Maturity Date.

        If a payment is ten (10) or more days late, Borrower will pay a
delinquency charge in an amount equal to the greater of (i) five percent (5%)
of the amount of the delinquent payment up to the maximum amount of $250.00,
or (ii) $25.00.  Upon an Event of Default, including failure to pay upon
final maturity, Bank, at its option, may also, if permitted under applicable
law, do one or both of the following:  (a) increase the Contract Rate three
(3.00) percentage points, and (b) ADD any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the rate
provided in this Note (including any increased Contract Rate).

        Borrower may from time to time prepay all or any portion of the
principal of this Note without premium or penalty. Unless otherwise agreed to
in writing, or otherwise required by applicable law, payments will be applied
first to unpaid accrued interest, then to principal, and any remaining amount
to any unpaid collection costs, delinquency charges and other charges;
provided, however, upon delinquency or other Event of Default, Bank reserves
the right to apply payments among principal, interest, delinquency charges,
collection costs and other charges, at its discretion. All prepayments shall
be applied to the indebtedness owing hereunder in such order and manner as

                                        1
<PAGE>

Bank may from time to time determine in its sole discretion.  All payments
and prepayments of principal of or interest on this Note shall be made in
lawful money of the United States of America in immediately available funds,
at the address of Bank indicated above, or such other place as the holder of
this Note shall designate in writing to Borrower.  If any payment of
principal of or interest on this Note shall become due on a day which is not
a Business Day (as hereinafter defined), such payment shall be made on the
next succeeding Business Day and any such extension of time shall be included
in computing interest in connection with such payment.  As used herein, the
term "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banking associations are authorized to be closed.
The books and records of Bank shall be PRIMA FACIE evidence of all
outstanding principal of and accrued and unpaid interest on this Note.

        This Note has been executed and delivered pursuant to that certain
Loan Agreement dated of even date herewith by and between Borrower and Bank
("LOAN AGREEMENT").  This Note, the Loan Agreement and all other documents
evidencing, securing, governing, guaranteeing and/or pertaining to this Note,
including, but not limited to, those documents described above, are
hereinafter collectively referred to as the "LOAN DOCUMENTS".  The holder of
this Note is entitled to the benefits and security provided in the Loan
Documents.

        Borrower agrees that no advances under this Note shall be used for
personal, family or household purposes, and that all advances hereunder shall
be used solely for business, commercial, investment, or other similar
purposes.

        Borrower agrees that upon the occurrence of any one or more of the
following events of default ("EVENT OF DEFAULT"):

                (a)  Failure of Borrower to pay any installment of principal
        of or interest on this Note or on any other indebtedness of Borrower to
        Bank when due if such failure shall continue for ten (10) days; or

                (b)  The occurrence of any event of default specified in any
        of the other Loan Documents; or

                (c)  The bankruptcy or insolvency of, the assignment for the
        benefit of creditors by, or the appointment of a receiver for any of
        the property of, or the liquidation, termination, dissolution or death
        or legal incapacity of, any party liable for the payment of this Note,
        whether as maker, endorser, guarantor, surety or otherwise;

the holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid
interest on this Note at once due and payable, (ii) refuse to advance any
additional amounts under this Note, (iii) foreclose all liens securing
payment hereof, (iv) pursue any and all other rights, remedies and recourses
available to the holder hereof, including, but not limited to, any such
rights, remedies or recourses under the Loan Documents, at law or in equity,
or (v) pursue any combination of the foregoing.

        The failure to exercise the option to accelerate the maturity of this
Note or any other right, remedy or recourse available to the holder hereof
upon the occurrence of an Event of Default

                                        2
<PAGE>

hereunder shall not constitute a waiver of the right of the holder of this
Note to exercise the same at that time or at any subsequent time with respect
to such Event of Default or any other Event of Default.  The rights, remedies
and recourses of the holder hereof, as provided in this Note and in any of
the other Loan Documents, shall be cumulative and concurrent and may be
pursued separately, successively or together as often as occasion therefore
shall arise, at the sole discretion of the holder hereof.  The acceptance by
the holder hereof of any payment under this Note which is less than the
payment i full of all amounts due and payable at the time of such payment
shall not (i) constitute a waiver of or impair, reduce, release or extinguish
any right, remedy or recourse of the holder hereof, or nullify any prior
exercise of any such right, remedy or recourse, or (ii) impair, reduce,
release or extinguish the obligations of any party liable under any of the
Loan Documents as originally provided herein or therein.

        This Note and all of the other Loan Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable usury laws.  If any provision hereof or of any of the other Loan
Documents or the application thereof to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, neither the
application of such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained shall be
affected thereby and shall be enforced to the greatest extent permitted by
law.  It is expressly stipulated and agreed to be the intent of the holder
hereof to at all times comply with the usury and other applicable laws now or
hereafter governing the interest payable on the indebtedness evidenced by
this Note.  If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to the indebtedness evidenced by this Note,
or if Bank's exercise of the option to accelerate the maturity of this Note,
or if any prepayment by Borrower results in Borrower having paid any interest
in excess of that permitted by law, then it is the express intent of Borrower
and Bank that all excess amounts theretofore collected by Bank be credited on
the principal balance of this Note (or, if this Note and all other
indebtedness arising under or pursuant to the other Loan Documents have been
paid in full, refunded to Borrower), and the provisions of this Note and the
other Loan Documents immediately be deemed reformed and the amounts
thereafter collectable hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder.  All sums paid, or agreed to be
paid, by Borrower for the use, forbearance, detention, taking, charging,
receiving or reserving of the indebtedness of Borrower to Bank under this
Note or arising under or pursuant to the other Loan Documents shall, to the
maximum extent permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full term of such indebtedness until payment in
full so that the rate or amount of interest on account of such indebtedness
does not exceed the usury ceiling from time to time in effect and applicable
to such indebtedness for so long as such indebtedness is outstanding.  To the
extent federal law permits Bank to contract for, charge or receive a greater
amount of interest, Bank will rely on federal law instead of the Texas
Finance Code, as supplemented by Texas Credit Title, for the purpose of
determining the Maximum Rate.  Additionally, to the maximum extent permitted
by applicable law now or hereafter in effect, Bank may, at its option and
from time to time, implement any other method of computing the Maximum Rate
under the Texas Finance Code, as supplemented by Texas Credit Title, or under
other applicable law, by giving notice, if required, to Borrower as provided
by applicable law now or hereafter in effect.  Notwithstanding anything to
the contrary contained herein

                                        3
<PAGE>

or in any of the other Loan Documents, it is not the intention of Bank to
accelerate the maturity of any interest that has not accrued at the time of
such acceleration or to collect unearned interest at the time of such
acceleration.

        In no event shall Chapter 346 of the Texas Finance Code (which
regulates certain revolving loan accounts and revolving tri-party accounts)
apply to this Note.  To the extent that Chapter 303 of the Texas Finance
Code, is applicable to this Note, the "WEEKLY CEILING" specified in such
Chapter 303 is the applicable ceiling; provided that, if any applicable law
permits greater interest, the law permitting the greatest interest shall
apply.

        If this Note is placed in the hands of an attorney for collection, or
is collected in whole or in part by suit or through probate, bankruptcy or
other legal proceedings of any kind, Borrower agrees to pay, in addition to
all other sums payable hereunder, all costs and expenses of collection,
including, but not limited to reasonable attorneys' fees.

        Borrower and any and all endorsers and guarantors of this Note
severally waive presentment for payment, notice of nonpayment, protest,
demand, notice of protest, notice of intent to accelerate, notice of
acceleration and dishonor, diligence in enforcement and indulgences of every
kind and without further notice hereby agrees to renewals, extensions,
exchanges or releases of collateral, taking of additional collateral,
indulgences or partial payments, either before or after maturity.

        THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT AS SUCH
LAWS ARE PREEMPTED BY APPLICABLE FEDERAL LAWS.

                                        BORROWER:

                                        HORIZON PHARMACIES, INC.,
                                        a Delaware corporation

                                        By: /s/ John N. Stogner
                                           ------------------------------------
                                        Printed Name: John N. Stogner
                                                     --------------------------
                                        Title: CFO
                                              ---------------------------------

                                        4

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