Document:

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                                                                   Exhibit 10.02

                             EMPLOYMENT AGREEMENT
                             --------------------

          THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of May
14, 2001 by and between SkyMall, Inc., a Nevada corporation ("Company"), and
Robert M. Worsley ("Executive").  Except for Section 9(b), which shall become
effective on the date hereof, this Agreement shall become effective ("Effective
Time") upon the merger of the Company with and into a wholly-owned subsidiary of
Gemstar-TV Guide International, Inc. ("Gemstar").

          WITNESSETH:

          WHEREAS, Company and Executive desire to set forth in this Agreement
the terms and conditions of Executive's employment with Company.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:

     1.   Period of Employment.
          --------------------

          Basic Term. The Company employs Executive to render services to the
          ----------
Company in the position and with the duties and responsibilities described in
Section 2 for the period (the "Period of Employment") commencing, without any
further action by either party, at the Effective Time and ending on the earlier
of (i) five (5) years following the date of the Effective Time and (ii) the date
the Period of Employment is terminated in accordance with Section 4.

     2.   Position, Duties and Responsibilities.
          -------------------------------------

          (a)  Position. Executive accepts, as of the Effective Time, employment
               --------
with the Company as its Chief Executive Officer, reporting directly to Elsie
Leung ("Supervisor"), Chief Financial Officer, Co-President and Co-Chief
Operating Officer of Gemstar, or in such other direct-reporting position(s) as
may be designated by Supervisor. In the event Supervisor is no longer employed
by Gemstar during the Term, the Supervisor to which Executive shall report shall
be the President of Gemstar.

          (b)  Constructive Termination.  In the event that the Executive has
               ------------------------
been reassigned by the Company to a position with responsibilities which are
substantially less than that described in Section 2(a) above, such assignment
shall constitute a "constructive termination" of Executive and shall entitle
Executive to be treated as being terminated without cause as provided in Section
4(d) below.

          (c)  Other Activities.  Executive, during the Period of Employment,
               ----------------
will not (i) accept any other employment, or (ii) engage in any other business
activity (whether or not pursued for pecuniary advantage) that is competitive
with, or that places him in a competing position to that of, the Company or any
controlled subsidiaries of the Company.  It shall not be a violation of this
Agreement for the Executive to (A) serve on corporate, civic or charitable
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boards (provided that the Executive shall obtain the Company's written consent
(not to be unreasonably withheld) prior to serving on the board of any for-
profit enterprise), or (B) make equity investments in any entity that is not
competitive with the Company, Gemstar or any of their respective subsidiaries.

     3.   Compensation, Benefits, Etc.
          ----------------------------

          (a)  Compensation.  In consideration of the services to be rendered
               ------------
hereunder, including, without limitation, services to any subsidiaries of the
Company, Executive shall be paid an annual salary of three hundred fifteen
thousand dollars ($315,000) (the "Annual Salary"), payable monthly in arrears,
with a non-negative annual adjustment based on the Consumer Price Index for all
urban Consumers, U.S. City Average, for all items as published by the Bureau of
Labor Statistics of the Department of Labor with the first adjustment on the
anniversary of the Effective Time, and subsequent adjustments on subsequent
anniversaries.

          (b)  Stock Options.  Within thirty (30) days after the Effective Time,
               -------------
the Company will arrange for Gemstar to grant to the Executive a nonqualified
stock option under Gemstar's 1994 Stock Incentive Plan to purchase 105,000
shares of Gemstar common stock, par value $.01 per share (the "Common Shares"),
with an exercise price equal to the fair market value of the Common Shares on
the day of the grant (the "Exercise Price"), vested in equal annual installments
over 5 years.  Such option shall be evidenced by a standard stock option
agreement utilized by Gemstar for the grant of other stock options under such
plan, a copy of which is attached hereto as Exhibit A and by this reference
incorporated herein; provided, that to the extent there are any inconsistencies
between the terms of this Agreement and the terms of such form of stock option
agreement, the terms of this Agreement shall govern, and, to the extent
necessary, the form of option agreement entered into by Executive and Gemstar
will be revised to make it consistent herewith..  "Daily Per Share Price" has
the meaning given to such term in the Merger Agreement.

          (c)  Benefits.  The Company shall provide Executive with the right to
               --------
participate in and to receive benefits from all present and future life,
accident, disability, medical, pension and savings plans and all similar
benefits made available generally to executives of the Company.  The amount and
extent of benefits to which Executive is entitled shall be governed by the
specific benefit plan, as it may be amended from time to time.

          (d)  Expenses.  The Company shall reimburse Executive for reasonable
               --------
travel and other business expenses incurred by Executive in the performance of
his duties hereunder in accordance with the Company's general policies, as they
may be amended from time to time during the term of this Agreement.

          (e)  Bonus.  Executive shall also be eligible to receive, in the sole
               -----
and absolute discretion of the Supervisor, as may be approved, if necessary, by
the Compensation Committee of Gemstar, an annual bonus.

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          (f)  Automobile Allowance.  As additional compensation for Executive's
               --------------------
services to the Company, the Company shall pay Executive a monthly automobile
allowance of $750 during the Period of Employment.

          (g)  Vacation.  Executive shall be entitled to three (3) weeks paid
               --------
vacation during each 12-month period during the Period of Employment.

          (h)  Relocation.  In the event that the Company relocates its office
               ----------
to a new location over 50 miles outside of the city limits of Phoenix, Arizona,
without prior approval by Executive, such relocation shall constitute a
"constructive termination" of Executive and shall entitle Executive to be
treated as being terminated without cause as provided in Section 4(d) below.

     4.   Termination of Employment.
          -------------------------

          (a)  By Death.  The Period of Employment shall terminate automatically
               --------
upon the death of Executive.  The Company shall pay to Executive's beneficiaries
or estate, as appropriate, the compensation to which he is entitled pursuant to
Section 3(a) through the end of the month in which death occurs.  Thereafter,
the Company's obligations hereunder shall terminate.  Nothing in this section
4(a) shall affect any entitlement of Executive's heirs to the benefits under any
life insurance plan.

          (b)  By Disability.  If, in the sole opinion of the Board of Directors
               -------------
of the Company, Executive shall be prevented from properly performing his duties
hereunder by reason of any physical or mental incapacity for a period of more
than 150 days in the aggregate or 120 consecutive days in any twelve-month
                               --
period, then, to the extent permitted by law, the Period of Employment shall
terminate on and the compensation to which Executive is entitled pursuant to
Section 3(a) shall be paid up through the last day of the month in which the
Board determines Executive to be disabled hereunder, and thereafter the
Company's obligations hereunder shall terminate.  Nothing in this section 4(b)
shall affect Executive's rights under any disability plan in which he is a
participant.

          (c)  By Company For Cause.  The Company may terminate this Agreement,
               --------------------
without liability, for Cause (as defined below) at any time upon notice to
Executive.  Termination shall be for "Cause" if: (i) Executive has engaged in
illegal or other wrongful conduct substantially detrimental to the business or
reputation of Gemstar or any subsidiary of Gemstar, or is charged with or
convicted of a felony; (ii) Executive refuses or fails to act in accordance with
any reasonable direction or order of the Supervisor and does not correct such
refusal or failure within five days after written notice thereof; or (iii)
Executive has engaged in any fraud, embezzlement, misappropriation or similar
conduct against Gemstar or any direct or indirect subsidiaries of Gemstar.

          (d)  By Company Without Cause. The Company may terminate the Period of
               ------------------------
Employment without Cause at any time upon written notice to Executive ("Notice
of Termination Without Cause").  Upon issuance of such Notice of Termination
Without Cause, the Company shall continue to employ Executive up to the date of
termination as specified in the

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Notice of Termination Without Cause, which shall be no later than thirty (30)
days after the date of the Notice of Termination, unless the Company and
Executive agree otherwise. On the date of termination, subject to the
Executive's signing of a standard general release of all claims in favor of the
Company, the Company shall pay Executive a lump sum payment of an amount equal
to the difference between (x) twenty-four (24) months of salary, based on the
then current Annual Salary, and (y) the cumulative salary received by Executive
commencing from the date of the Notice of Termination Without Cause through the
date of termination. The Company shall further pay Executive his cash equivalent
of any unused annual vacation time prior to the date of the Notice of
Termination Without Cause. In the event that on the date of Notice of
Termination Without Cause, the Executive has vested less than forty percent
(40%) of the stock options granted under Section 3(b) above, an additional
number of options shall accelerate and vest so that the percentage of vested
stock options granted under Section 3(b) above shall be equal to forty percent
(40%). Thereafter all obligations of the Company hereunder, including as to
unvested options, shall terminate.

          (e)  Termination Obligations.
               -----------------------

               (i)   Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, lists, blueprints and other documents, or materials, or copies
thereof, Proprietary Information (as defined below), furnished to or prepared by
Executive in the course of or incident to his employment, including, without
limitation, records and any other materials pertaining to Invention Ideas (as
defined below), belong to the Company.

               (ii)  Upon termination of the Period of Employment, Executive
shall be deemed to have resigned from all offices then held with Gemstar or any
of its subsidiaries (including the Company), including any seats on any board of
directors, subject to then applicable law.

               (iii) The agreements and covenants contained herein and
Executive's obligations under Sections 5, 6 and 7 shall survive termination of
the Period of Employment and the expiration of this Agreement.

     5.   Proprietary Information.
          -----------------------

          (a)  Defined.  "Proprietary Information" is all information and any
               -------
idea in whatever form, tangible or intangible, pertaining in any manner to the
business of Gemstar, the Company or any of their respective subsidiaries, or to
its clients, consultants or business associates, unless: (i) the information is
or becomes publicly known through lawful means other than Executive; (ii) the
information was rightfully in Executive's possession or part of his general
knowledge prior to his employment by the Company; or (iii) the information is
disclosed to Executive without confidential or proprietary restriction by a
third party who rightfully

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possesses the information (without confidential or proprietary restriction) and
did not learn of it, directly or indirectly, from Gemstar, the Company or any of
their respective subsidiaries.

          (b)  General Restrictions on Use.  Executive agrees to hold all
               ---------------------------
Proprietary Information in strict confidence and trust for the sole benefit of
Gemstar, the Company and their respective subsidiaries and not to, directly or
indirectly, disclose, use, copy, publish, summarize or remove from the premises
of Gemstar, the Company or any of their respective subsidiaries any Proprietary
Information (or remove from the premises any other property of Gemstar, the
Company or any of their respective subsidiaries), except (i) during the Period
of Employment to the extent necessary to carry out Executive's responsibilities
under this Agreement, and (ii) after termination of the Period of Employment as
specifically authorized in writing by the Supervisor.

          (c)  Interference with Business; Competitive Activities.  Executive
               --------------------------------------------------
acknowledges that pursuit of the activities prohibited by this Section 5(c)
would necessarily involve the use or disclosure of Proprietary Information in
breach of Section 5(b), but that proof of such breach would be extremely
difficult.  To prevent such disclosure, use and breach and in consideration of
employment under this Agreement, Executive agrees for a period of three (3) year
after termination of the Period of Employment, he shall not for himself or any
third party, directly or indirectly, (i) divert or attempt to divert from
Gemstar, the Company or any of their respective subsidiaries any business of any
kind in which it is engaged, including, without limitation, the solicitation of
or interference with any suppliers or customers of Gemstar, the Company or any
of their respective subsidiaries, (ii) employ, solicit for employment, or
recommend for employment any person employed by Gemstar, the Company or any of
their respective subsidiaries during the period of such person's employment and
for a period of one year thereafter, or (iii) engage in any business activity
that is competitive with Gemstar, the Company or any of their respective
subsidiaries, unless Executive can prove that action taken in contravention of
this Section 5(c)(iii) was done without the use of any Proprietary Information;
provided, that in no event shall Executive engage in such competitive activities
during the period which Executive continues to receive payments pursuant to
Section 4 above.  For purposes of this Section 5(c), "competitive activities"
shall be business activities that are directly competitive with an existing or
presently planned business of Gemstar, the Company or any of their respective
subsidiaries on the date of termination.

          (d)  Remedies.  Nothing in this Section 6 is intended to limit any
               --------
remedy of the Company under the California Uniform Trade Secrets Act (California
Civil Code (S) 3426), or otherwise available under law.

     6.   Executive Inventions and Ideas.
          ------------------------------

          (a)  Defined; Statutory Notice.  The term "Invention Ideas" means any
               -------------------------
and all ideas, processes, trademarks, service marks, inventions, technology,
computer programs, original works of authorship, designs, formulas, discoveries,
patents, copyrights, and all improvements, rights, and claims related to the
foregoing that are conceived, developed, or reduced to practice by the Executive
alone or with others except to the extent that California

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Labor Code Section 2870 lawfully prohibits the assignment of rights in such
ideas, processes, inventions, etc. Section 2870(a) provides:

          Any provision in an employment agreement which provides that an
Executive shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
Executive developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

               (i)  Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer.

               (ii) Result from any work performed by the Executive for the
employer.

          Executive hereby acknowledges that he understands the foregoing
limitations created by Section 2870.

          (b)  Disclosure.  Executive agrees to maintain adequate and current
               ----------
written records on the development of all Invention Ideas and to disclose
promptly to the Company all Invention Ideas and relevant records, which records
will remain the sole property of the Company.  Executive further agrees that all
information and records pertaining to any idea, process, trademark, service
mark, invention, technology, computer program, original work of authorship,
design, formula, discovery, patent, or copyright that Executive does not believe
to be an Invention Idea, but is conceived, developed, or reduced to practice by
Executive (alone or with others) during his Period of Employment or during the
one year period following termination of employment, shall be promptly disclosed
to the Company (such disclosure to be received in confidence).  The Company
shall examine such information to determine if in fact the idea, process, or
invention, etc., is an Invention Idea subject to this Agreement.

          (c)  Assignment.  Executive agrees to assign to the Company, without
               ----------
further consideration, his entire right, title, and interest (throughout the
United States and in all foreign countries), free and clear of all liens and
encumbrances, in and to each Invention Idea, which shall be the sole property of
the Company, whether or not patentable.  In the event any Invention Idea shall
be deemed by the Company to be patentable or otherwise registerable, Executive
shall assist the Company (at its expense) in obtaining letters patent,
copyright, trademark, or other applicable intellectual property registrations
thereon and shall execute all documents and do all other things (including
testifying at the Company's expense) necessary or proper to obtain letters
patent, copyright, trademark, or other applicable intellectual property
registrations thereon and to vest the Company, or any Controlled subsidiaries of
the Company specified by the Board, with full title thereto.  Should the Company
be unable to secure Executive's signature on any document necessary to apply
for, prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Invention Idea, whether due to the Executive's mental
or physical incapacity or any other cause, Executive hereby irrevocably
designates and appoints

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Company and each of its duly authorized officers and agents as the Executive's
agent and attorney in fact, to act for and in the Executive's behalf and stead
and to execute and file any such document, and to do all other lawfully
permitted acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or the rights or protections with the same force and effect as if
executed and delivered by Executive. Executive hereby agrees, at the Company's
request, to maintain, update, improve and modify the Invention Ideas, for so
long as he is living, regardless of whether the Period of Employment has
terminated; provided that, his reasonable costs incurred in connection with such
activities following the termination of this Agreement are reimbursed.

          (d)  Exclusions.  Executive acknowledges that there are no ideas,
               ----------
processes, trademarks, service marks, technology, computer programs, original
works of authorship, designs, formulas, inventions, discoveries, patents,
copyrights, or improvements to the foregoing that he desires to exclude from the
operation of this Agreement, except for the inventions and ideas of Executive
and his associates outside of the Company (i) which were or are developed
entirely by Executive and each such associate entirely outside of his or her
activities for the Company, (ii) which do not relate at the time of conception
or reduction to practice to the Company's business, or actually or demonstrably
anticipated research development, and (iii) which do not result from any work
performed by Executive for the Company.  To the best of the Executive's
knowledge, there is no existing contract in conflict with this Agreement or any
other contract to assign ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, or copyrights that is now in existence
between Executive and any other person or entity.

          (e)  Post-Termination Period.  Because of the difficulty of
               -----------------------
establishing when any idea, process, invention, etc., is first conceived or
developed by Executive, or whether it results from access to Proprietary
Information or the Company's equipment, facilities, and data, Executive agrees
that any idea, process, trademark, service mark, technology, computer program,
original work of authorship, design, formula, invention, discovery, patent,
copyright, or any improvement, rights, or claims related to the foregoing shall
be presumed to be an Invention Idea if it is conceived, developed, used, sold,
exploited, or reduced to practice by Executive or with the aid of Executive
within one (1) year after termination of the Period of Employment.  Executive
can rebut the above presumption if he proves that the invention, idea, process,
etc., (i) was first conceived and/or developed prior to the date of this
Agreement, (ii) was first conceived or developed after termination of the Period
of Employment, (iii) was conceived or developed entirely on Executive's own time
without using the Company's equipment, supplies, facilities, or Proprietary
Information, and (iv) did not result from any work performed by Executive for
the Company.  Nothing in this Agreement is intended to expand the scope of
protection provided Executive by Sections 2870 through 2872 of the California
Labor Code.

     7.   Assignment: Successors and Assigns.
          ----------------------------------

          Executive agrees that he will not assign, sell, transfer, delegate or
otherwise dispose of, whether voluntarily or involuntarily, or by operation of
law, any rights or obligations under this Agreement, nor shall Executive's
rights be subject to encumbrance or the claims of

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creditors. Any purported assignment, transfer or delegation shall be null and
void. Nothing in this Agreement shall prevent the consolidation of the Company
with, or its merger into, any other corporation, or the sale by the Company of
all or substantially all of its properties or assets, or the assignment by the
Company of this Agreement and the performance of its obligations hereunder to
any successor in interest or any subsidiaries of the Company. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective heirs, legal representatives, successors and
permitted assigns, and shall not benefit any person or entity other than those
enumerated above.

          In the event of a consolidation or merger of the Company with or into
another corporation, or the sale of all, or substantially all, of the Company's
assets to another corporation, such corporation as may survive said transaction
shall assume this Agreement and become obligated to perform all the terms and
conditions hereof, and Executive's obligations hereunder shall continue in favor
of such surviving corporation.

          8.   Notices.  All notices or other communications required or
               -------
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand or mailed, postage prepaid, by certified or
registered mail, return receipt requested, and addressed to the Company at:

               Gemstar-TV Guide International, Inc.
               135 North Los Robles Avenue, Suite 800
               Pasadena, California  91101
               Attention:  Elsie Leung

or to Executive at:

               Robert M. Worsley
               601 East Houston
               Gilbert, Arizona  85234

Notice of change of address shall be effective only if done in accordance with
this section.

          9.   Entire Agreement. (a) The terms of this Agreement are intended by
               ----------------
the parties to be the final and exclusive expression of their agreement with
respect to the employment of Executive by the Company and may not be
contradicted by evidence of any prior or contemporaneous agreement or
arrangement, written or oral, any and all of which are superceded as of the
Effective Time.  The parties further intend that this Agreement shall constitute
the complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.

          (b)  Executive hereby waives any right he may have, under any
agreement or arrangement with the Company or any of its subsidiaries (other than
this Agreement), to receive (1) any increase in the amount of, or acceleration
of the vesting or timing of, any compensation or benefits or (2) any severance
pay, additional employment compensation or any other payment,

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benefit or award as a result of the execution and delivery of the Merger
Agreement or the consummation of the transactions contemplated thereby.

          10.  Amendments; Waivers.  This Agreement may not be modified, amended
               -------------------
or terminated except by an instrument in writing, signed by Executive and by a
duly authorized representative of the Company other than Executive.  By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure.  No failure to exercise and no delay in exercising any
right, remedy or power hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy or power hereunder preclude
any other or further exercise thereof or the exercise of any other right, remedy
or power provided herein or by law or in equity.

          11.  Severability; Enforcement.  If any provision of this Agreement,
               -------------------------
or the application thereof to any person, place or circumstance, shall be held
by a court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.

          12.  Governing Law.  The validity, interpretation, enforceability and
               -------------
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of California.

          13.  Injunctive Relief.  The parties agree that in the event of any
               -----------------
breach or threatened breach of any of the covenants in Section 6, the damage or
imminent damage to the value and the goodwill of the Company's business will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate.  Accordingly, the parties agree that the Company shall be
entitled to injunctive relief against Executive in the event of any breach or
threatened breach of any such provisions by Executive, in addition to any other
relief (including damages) available to the Company under this Agreement or
under law.

                           [Signature Page Follows]

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     The parties have duly executed this Agreement as of the date first written
     above.

     ________________________________________
     Executive - Robert M. Worsley

     SKYMALL, INC.

     By: ____________________________________
         Name:
         Title:

                                       10<PAGE>

                                                                    Exhibit 10.1

                 THIRD AMENDMENT TO FIFTH AMENDED AND RESTATED
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------

     THIS THIRD AMENDMENT TO FIFTH AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Third Amendment") is made as of June 12, 2001, by and among
FLEET CAPITAL CORPORATION, a Rhode Island corporation (the "Lender"), and D&K
HEALTHCARE RESOURCES, INC. ("D & K"), JARON, INC. ("Jaron") and JEWETT DRUG CO.,
a South Dakota corporation ("Jewett") (D & K, Jaron and Jewett are sometimes
hereinafter referred to individually as "Borrower" and collectively as
"Borrowers").

                             Preliminary Statements
                             ----------------------

     A.  Lender, and Borrowers are parties to that certain Fifth Amended and
Restated Loan and Security Agreement dated as of September 30, 2000, as amended
by that certain First Amendment to Fifth Amended and Restated Loan and Security
Agreement, dated as of March 7, 2001, and as amended by that certain Second
Amendment to Fifth Amended and Restated Loan and Security Agreement, dated as of
May 12, 2001 (as amended, and as hereafter amended, restated or renewed from
time to time, the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meanings given them in the Loan Agreement.

     B.  Borrowers and Lender have agreed to restructure and amend the Loans and
the Loan Agreement as set forth herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1.  Amendment to Loan Agreement.  The Loan Agreement and the Appendix to
the Loan Agreement are hereby amended as follows:

          (a)  Total Credit Facility. The reference to $130,000,000 on the cover
     page of the Loan Agreement and in the unnumbered paragraph following
     Section 1 are each hereby deleted and "$150,000,000 is inserted therefor.

          (b)  Term of Agreement.  Section 4.1 [relating to Term of Agreement]
     is deleted in its entirety and replace with the following:

               "4.1  Term of Agreement.  Subject to Lender's right to cease
     making Loans to Borrowers upon or after the occurrence of any Default or
     Event of Default, this Agreement shall be in effect for a period from
     September 30, 2000, through and including August 7, 2005 (as extended, the
     "Original Term")."

          (c)  Returns of Inventory.  Section 6.2.2 [relating to Returns of
     Inventory] is deleted in its entirety and replaced with the following:

               "6.2.2.  Returns of Inventory.  If at any time or times hereafter
     any Account Debtor returns to Borrowers any Inventory the shipment of which
     generated an Account on which such Account Debtor is obligated in excess of

<PAGE>

     $500,000, Borrowers shall immediately notify Lender of the same, specifying
     the reason for such return and the location, condition and intended
     disposition of the returned Inventory."

          (d)  Mergers; Consolidations; Acquisitions.  Section 8.2.1 [relating
     to Mergers; Consolidations; Acquisitions] is deleted in its entirety and
     replaced with the following:

               "8.2.1  Mergers; Consolidations; Acquisitions.  Except as
     otherwise provided in this Section 8.2.1, merge or consolidate, or permit
     any Subsidiary of any Borrower to merge or consolidate, with any Person;
     nor acquire, nor permit any of its Subsidiaries to acquire, all or any
     substantial part of the Properties of any Person; provided that the
     consolidation of PBI with D&K shall not constitute a violation of this
     covenant so long as such consolidation does not involve a merger and so
     long as D&K does not become directly or indirectly liable for any
     Indebtedness of PBI.  Notwithstanding the foregoing, D & K, may acquire all
     or substantially all of the assets or capital stock or ownership interest
     of any Person (the "Target") (in each case, a "Permitted Acquisition")
     subject to the satisfaction of each of the following conditions:

                    (i)  Lender shall receive at least thirty (30) Business
          Days' prior written notice of such proposed Permitted Acquisition,
          which notice shall include a reasonably detailed description of such
          proposed Permitted Acquisition;

                    (ii)  such Permitted Acquisition shall only involve assets
          located in the United States and comprising a business, or those
          assets of a business, of a wholesale drug or related service industry;

                    (iii)  such Permitted Acquisition shall be consensual and
          shall have been approved by the Target's board of directors;

                    (iv)  no additional Indebtedness, contingent obligations or
          other liabilities shall be incurred, assumed or otherwise be reflected
          on a consolidated balance sheet of Borrowers and Target after giving
          effect to such Permitted Acquisition, except (A) Loans made hereunder
          and (B) ordinary course trade payables and accrued expenses;

                    (v)  the sum of all amounts payable in connection with all
          Permitted Acquisitions (including all transaction costs and all
          Indebtedness and liabilities incurred or assumed in connection
          therewith or otherwise reflected in a consolidated balance sheet of
          Borrowers and Target) shall not exceed $15,000,000 in the aggregate in
          any fiscal year of Borrowers;

                    (vi)  the Target shall, for the trailing twelve-month period
          preceding the date of the Permitted Acquisition have net earnings

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          before interest expense, taxes, and allowances for depreciation and
          amortization, all as determined in accordance with GAAP, of greater
          than zero;

                    (vii)  the business and assets acquired in such Permitted
          Acquisition shall be free and clear of all Liens (other than Permitted
          Liens);

                    (viii)  at or prior to the closing of any Permitted
          Acquisition, Lender will be granted a first priority perfected Lien
          (subject to Permitted Liens) in all assets acquired pursuant thereto
          or in the assets and capital stock of the Target, and Borrowers and
          the Target shall have executed such documents and taken such actions
          as may be required by Lender in connection therewith, and if the
          Permitted Acquisition involves the acquisition of stock or other
          ownership interest of the Target, all documents, instruments and
          agreements necessary or desirable to cause Target to be a Borrower
          hereunder, including without limitation, amendments to this Agreement,
          stock pledge agreements, and stock powers;

                    (ix)  not less than ten (10) Business Days prior to any such
          Permitted Acquisition, Borrowers shall have delivered to Lender, in
          form and substance satisfactory to Lender:

                    (A)  a pro forma consolidated balance sheet of Borrowers and
               their Subsidiaries (including the Target) (the "Acquisition Pro
               Forma"), based on the most recently delivered monthly financial
               statements (pursuant to Section 8.1.3(ii)) and taking into
               account such Permitted Acquisition and the funding of all Loans
               in connection therewith;

                    (B)  updated versions of the most recently delivered
               Projections covering the current fiscal year and the subsequent
               fiscal year of Borrowers, commencing on the date of such
               Permitted Acquisition and otherwise prepared in accordance with
               the requirements of Section 8.1.3(iii) (the "Acquisition
               Projections") and based upon historical financial data of
               Borrowers and Target for the current fiscal year, taking into
               account such Permitted Acquisition; and

                    (C)  a certificate from the chief financial officer of each
               Borrower to the effect that: (v) all of the requirements set
               forth herein with respect to such Permitted Acquisition have been
               satisfied; (w) each Borrower (after taking into consideration all
               rights of contribution and indemnity such Borrower has against
               other Borrowers and each other Subsidiary of each Borrower) will
               be Solvent upon the consummation of the Permitted Acquisition;
               (x) the Acquisition Pro Forma fairly presents the financial
               condition of Borrowers (on a consolidated basis) as of the date
               thereof after giving effect to the Permitted Acquisition; (y) the
               Acquisition

                                       3
<PAGE>

               Projections are reasonable estimates of the future financial
               performance of Borrowers subsequent to the date thereof based
               upon the historical performance of Borrowers and the Target and
               show that Borrowers shall continue to be in compliance with the
               financial covenants set forth in Section 8.3 thereafter; and (z)
               Borrowers have completed their due diligence investigation with
               respect to the Target and such Permitted Acquisition, which
               investigation was conducted in a manner similar to that which
               would have been conducted by a prudent purchaser of a comparable
               business and the results of which investigation were delivered to
               Lender;

                    (x)  on or prior to the date of such Permitted Acquisition,
          Lender shall have received, in form and substance satisfactory to
          Lender, copies of the acquisition agreement and related agreements and
          instruments, and all opinions, certificates, lien search results and
          other documents reasonably requested by Lender;

                    (xi)  at the time of such Permitted Acquisition and after
          giving effect thereto, no Default or Event of Default shall have
          occurred and be continuing; and

                    (xii)  immediately following such Permitted Acquisition,
          Borrowers shall have Availability of not less than $20,000,000.

     Notwithstanding the foregoing, the Inventory of the Target shall not be
     included in Eligible Inventory without (i) the completion of an audit of
     such Inventory by Lender (Lender agrees to use its reasonable best efforts
     to complete its audit of such Inventory prior to the date of closing with
     respect to any such Permitted Acquisition), and (ii) the prior written
     consent of Lender."

          (e)  Loans.  Section 8.2.2 [relating to Loans] is deleted in its
     entirety and replaced with the following:

               "8.2.2  Loans.  Make, or permit any Subsidiary of any Borrower to
     make, any loans or other advances of money (other than pursuant to the
     Securitization Documents, and other than for salary, travel advances,
     advances against commissions and other similar advances in the ordinary
     course of business) to any Person in excess of $500,000, and with an
     aggregate of not more than $1,500,000 outstanding at any time."

          (f)  Distribution.  Section 8.2.7 [relating to Distributions] is
     deleted in its entirety and replaced with the following:

               "8.2.7  Distributions.  Declare or make, or permit any Subsidiary
     of Borrower to declare of make, and Distributions, except for (a) dividends
     of Jaron to D&K, provided that not less than 5 business days prior to the
     payment of such dividend, D&K shall give Lender written notice describing
     the amount of such dividend, and (b)

                                       4
<PAGE>

     dividends of D&K, subject to the further compliance with the financial
     covenants set forth in this Loan Agreement after giving effect to such
     dividend."

          (g)  Capital Expenditures.  Section 8.2.8 [relating to Capital
     Expenditures] is deleted in its entirety.

          (h)  Restricted Investment.  Section 8.2.12 [relating to Restricted
     Investment] is deleted in its entirety and replaced with the following:

               "8.2.12 Restricted Investment.  Make or have, or permit any
     Subsidiary of any Borrower to make or have, any Restricted Investments in
     excess of $5,000,000 in the aggregate."

          (i)  Leases. Section 8.2.13 [relating to Leases] is deleted in its
     entirety and replaced with the following:

               "8.2.13 Leases.  Become, or permit any of its Subsidiaries to
     become, a lessee under any operating lease (other than a lease under which
     a Borrower or any of its Subsidiaries is lessor) of Property if the
     aggregate Rentals payable during any current or future period of 12
     consecutive months under the lease in question and all other leases under
     which Borrowers or any of their Subsidiaries is then lessee would exceed
     $5,000,000.  The term "Rentals" means, as of the date of determination, all
     payments, which the lessee is required to make by the terms of any lease."

          (j)  Current Ratio.  Section 8.3(A) [relating to Current Ratio] is
     deleted in its entirety.

          (k)  Interest Coverage Ratio. Section 8.3(B) [relating to Interest
     Coverage Ratio] is deleted in its entirety and replaced with the following:

               "(B)  Interest Coverage Ratio.  Maintain at all times [at the end
     of each month during each respective period specified below on a trailing
     twelve (12) month basis,] a ratio of Net Cash Flow to Interest Expense of
     not less than 1.75 to 1.00."

          (l)  Book Net Worth.  Section 8.3(C) [relating to Book Net Worth] is
     deleted in its entirety.

          (m)  Cash Flow to Fixed Charges.  Section 8.3(D) [relating to Cash
     Flow to Fixed Charges] is deleted in its entirety and replaced with the
     following:

               "(D)  Cash Flow to Fixed Charges.  Commencing with the fiscal
     quarter ending June 30, 2001, maintain for each fiscal quarter of Borrowers
     a ratio of Cash Flow to Fixed Charges of not less than 1.15 to 1.00,
     measured as of the end of each fiscal quarter for the immediately preceding
     twelve month period."

          (n)  Inventory Turnover Test.  Section 8.3(E) [relating to Inventory
     Turnover] is deleted in its entirety.

                                       5
<PAGE>

          (o)  Applicable Margin.  The definition of "Applicable Margin" in
     Annex A is deleted and replaced with the following:

          "Applicable Margin -- For the period before delivery of Borrowers'
     financial statements for the twelve-month period ending June 30, 2001, the
     Applicable Margin with respect to the Base Rate shall be 0.75%, and the
     Applicable Margin with respect to the LIBO Rate shall be 2.00%.  For any
     period or date beginning with the delivery of the Borrowers' financial
     statements for the twelve-month period ending June 30, 2001 and thereafter,
     the Applicable Margin with respect to the Base Rate and the LIBO Rate, as
     applicable, shall be as set forth in the chart below corresponding to the
     Interest Coverage Ratio for the immediately preceding 12 month period as of
     the last day of each calendar quarter, as reflected by the most recently
     delivered financial statements for the period ending on such date, of
     Borrowers and their Subsidiaries pursuant to Section 8.1.3(i) (for the
     twelve month periods ending on June 30 of each year) and pursuant to
     Section 8.1.3(ii) (for the twelve month periods ending on each of September
     30, December 31 and March 31 of each year). The Applicable Margin shall be
     effective from and after the date of delivery of such financial statements:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
  Interest Coverage Ratio
    for preceding twelve       Applicable Margin      Applicable Margin
       month period                Base Rate              LIBO Rate
================================================================================
<S>                                  <C>                    <C>
     From 1.75 to 1.0                1.00%                  2.25%
      To 2.00 to 1.0
--------------------------------------------------------------------------------
     From 2.01 to 1.0                0.75%                  2.00%
      To 2.50 to 1.0
--------------------------------------------------------------------------------
     From 2.51 to 1.0                0.50%                  1.75%
      To 3.00 to 1.0
--------------------------------------------------------------------------------
(Greater than) 3.01 to 1.0           0.25%                  1.50%
--------------------------------------------------------------------------------
</TABLE>

          In calculating the Interest Coverage Ratio, Lender will calculate
     numbers to thousandths, and amounts of .005 or greater will be rounded up
     to the next hundredth. For example (and not by way of limitation) 2.445
     shall be rounded to 2.45.

          Notwithstanding anything herein to the contrary, if D & K issues any
     stock or otherwise raises new equity in any single transaction or series of
     transactions from and after the date of the Third Amendment, in an
     aggregate amount of $30,000,000 or more, the Applicable Margin which would
     otherwise be in effect from time to time, shall be reduced by 0.25% for the
     period beginning on the date D & K submits evidence of the infusion of such
     new equity capital, and ending six months after such date."

          (p)  Fee Letter.  The definition of "Fee Letter" in Annex A is deleted
     and replaced with the following:

                                       6
<PAGE>

               "Fee Letter -- that certain fee letter from Borrowers to Lender
     dated on or about the date of the Third Amendment."

          (q)  Net Cash Flow.  The definition of "Net Cash Flow" in Annex A is
     deleted and replaced with the following:

          "Net Cash Flow -- For any period means Consolidated Adjusted Net
     Earnings from Operations during such period, plus amounts deducted in the
     computation thereof for depreciation, amortization and taxes, plus Interest
     Expense for such period."

          (r)  Permitted Purchase Money Indebtedness.  The definition of
     "Permitted Purchase Money Indebtedness" in Annex A is deleted and replaced
     with the following:

          "Permitted Purchase Money Indebtedness -- Purchase Money Indebtedness
     of a Borrower incurred after the date hereof which is secured by a Purchase
     Money Lien and which, when aggregated with the principal amount of all
     other such Indebtedness and Capitalized Lease Obligations of all Borrowers
     at the time outstanding, does not exceed $5,000,000.  For the purposes of
     this definition, the principal amount of any Purchase Money Indebtedness
     consisting of capitalized leases shall be computed as a Capitalized Lease
     Obligation."

          (s)  Total Credit Facility.  The definition of "Total Credit Facility"
     in Annex A is deleted and replaced with the following:

          "Total Credit Facility -- $150,000,000."

     2.  Conditions Precedent to Effectiveness of Agreement.  This Third
Amendment shall not be effective unless and until each of the following
conditions shall have been satisfied in Lender's sole discretion:

          (a)  Sale of Participations.  Lender shall have sold, pursuant to a
     participation agreement in form and content satisfactory to Lender, an
     additional participation interest in the Loans equal to, or in excess of,
     $22,500,000.

          (b)  Opinion of Counsel.  Lender shall have received an opinion of
     counsel to Borrowers, in form and substance satisfactory to Lender,
     pursuant to which Borrowers' counsel shall opine as to, among other things,
     (i) the good standing of Borrowers, (ii) Borrowers' authorizations of this
     Third Amendment, (iii) the execution and delivery of this Third Amendment,
     and (iv) the enforceability of the Loan Agreement as amended by this Third
     Amendment against the Borrower.

          (c)  Resolutions of the Board.  Lender shall have received a
     resolution from each of the board of directors of each Borrower authorizing
     the execution and delivery of this Third Amendment.

          (d)  Officer's Certificate.  Borrowers shall have delivered to Lender
     an Officer's Certificate in form and content acceptable to Lender, pursuant
     to which the chief executive

                                       7
<PAGE>

     officer of each Borrower shall have certified certain documents,
     instruments, agreements and resolutions to Lender.

          (e)  Fee Letter.  Lender shall have received the Fee Letter executed
     by Borrowers and all fees and expenses which are payable thereunder and
     under the Loan Agreement.

          (f)  Amended and Restated Participation Agreement.  Lender shall have
     received a Second Amended and Restated Participation Agreement, fully
     executed and delivered, in form and content acceptable to Lender, between
     and among, Lender, National Bank of Canada, Firstar Bank, N.A., Bank One,
     Kentucky, N.A., LaSalle Business Credit, Inc., and PNC Business Credit,
     Inc.

          (g)  Amended and Restated Receivables Purchase Agreement.  Lender
     shall have received an Amended and Restated Receivables Purchase Agreement,
     fully executed and delivered, between and among D&K, D&K Receivables
     Corporation, Blue Keel Funding, LLC, Market Street Funding Corporation, PNC
     and Fleet National Bank, along with evidence that each of the conditions
     precedent to the initial Purchase (as defined therein) has been satisfied
     or waived in accordance with the terms thereof.

     3.  Representations and Warranties.  Borrowers hereby represent and warrant
to Lender as follows:

          (a)  Recitals.  The Recitals in this Third Amendment are true and
     correct in all respects.

          (b)  Incorporation of Representations.  All representations and
     warranties of Borrowers in the Loan Agreement are incorporated herein in
     full by this reference and are true and correct as of the date hereof.

          (c)  Corporate Power; Authorization.  Borrowers have the corporate
     power, and have been duly authorized by all requisite corporate action, to
     execute and deliver this Third Amendment and to perform the obligations
     hereunder and thereunder. This Third Amendment has been duly executed and
     delivered by Borrowers.

          (d)  Enforceability.  This Third Amendment is the legal, valid and
     binding obligation of Borrowers, enforceable against Borrowers in
     accordance with its terms.

          (e)  No Violation.  Borrowers' execution, delivery and performance of
     this Third Amendment does not and will not (i) violate any law, rule,
     regulation or court order to which Borrowers are subject; (ii) conflict
     with or result in a breach of any Borrower's Articles of Incorporation or
     Bylaws or any agreement or instrument to which either Borrower is party or
     by which it or its properties are bound, or (iii) result in the creation or
     imposition of any lien, security interest or encumbrance on any property of
     Borrowers, whether now owned or hereafter acquired, other than liens in
     favor of Lender.

                                       8
<PAGE>

          (f)  Obligations Absolute.  The obligation of Borrowers to repay the
     Loans, together with all interest accrued thereon, is absolute and
     unconditional, and there exists no right of setoff or recoupment,
     counterclaim or defense of any nature whatsoever.

     4.  No Claims.  Borrowers acknowledge that there are no existing claims,
defenses (personal or otherwise) or rights of set-off or recoupment whatsoever
with respect to any of the Loan Documents.  Borrowers agree that this Third
Amendment in no way acts as a release or relinquishment of any Liens in favor of
the Lender securing payment of the Obligations.

     5.  Miscellaneous.  Except as expressly set forth herein, there are no
agreements or understandings, written or oral, between any Borrower and Lender
relating to the Loan Agreement and the other Loan Documents that are not fully
and completely set forth herein or therein. Except to the extent specifically
waived or amended herein or in any of the documents, instruments, or agreements
delivered in connection herewith, all terms and provisions of the Loan Agreement
and the other Loan Documents are hereby ratified and reaffirmed and shall remain
in full force and effect in accordance with the respective terms thereof. This
Agreement may be executed in one or more counterparts, and by different parties
on different counterparts. All such counterparts shall be deemed to be original
documents and together shall constitute one and the same agreement. A signature
of a party delivered by facsimile or other electronic transmission shall be
deemed to be an original signature of such party.

     IN WITNESS WHEREOF, this Third Amendment has been executed and delivered by
the duly authorized representatives of the parties as of the date first above
written.

                              FLEET CAPITAL CORPORATION

                              By: /s/ Edward M. Bartkowski
                                  -------------------------------------------
                                  Edward M. Bartkowski, Senior Vice President

                              D & K HEALTHCARE RESOURCES, INC.

                              By: /s/ Thomas S. Hilton
                                  -------------------------------------------
                                  Name & Title: Thomas S. Hilton, Senior VP

                              JARON, INC.

                              By: /s/ Thomas S. Hilton
                                  -------------------------------------------
                                  Name & Title: Thomas S. Hilton, VP

                              JEWETT DRUG CO.

                              By: /s/ Thomas S. Hilton
                                  -------------------------------------------
                                  Name & Title: Thomas S. Hilton, VP

                                       9

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