Document:

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                                                                    Exhibit 10.6

                                     FORM OF

                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

                                 BY AND BETWEEN

                               MERCK & CO., INC.,

                                       AND

                          MEDCO HEALTH SOLUTIONS, INC.

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                                Table of Contents

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ARTICLE I          INDEMNIFICATION...................................................................      1
    Section 1.1    Indemnification by Medco..........................................................      1
    Section 1.2    Indemnification by Merck..........................................................      2
    Section 1.3    Procedures for Defense, Settlement and Indemnification of Third Party Claims......      3
    Section 1.4    Additional Matters................................................................      5
    Section 1.5    Survival of Indemnities...........................................................      6

ARTICLE II         INSURANCE MATTERS.................................................................      6
    Section 2.1    Medco Insurance Coverage..........................................................      6
    Section 2.2    Cooperation and Agreement Not to Release Carriers.................................      6
    Section 2.3    No Liability......................................................................      6
    Section 2.4    No Restrictions...................................................................      7
    Section 2.5    Further Agreements................................................................      7

ARTICLE III        DISPUTE RESOLUTION................................................................      7
    Section 3.1    Negotiation.......................................................................      7
    Section 3.2    Binding Arbitration...............................................................      7
    Section 3.3    Specific Performance..............................................................      9

ARTICLE IV         PRIVILEGED INFORMATION............................................................      9
    Section 4.1    Privileged Information............................................................      9

ARTICLE V          MISCELLANEOUS.....................................................................     10
    Section 5.1    Entire Agreement..................................................................     10
    Section 5.2    Governing Law; Forum..............................................................     11
    Section 5.3    Notices...........................................................................     11
    Section 5.4    Binding Effect; Assignment; Third-Party Beneficiaries.............................     11
    Section 5.5    Offset............................................................................     12
    Section 5.6    Other Agreements Evidencing Indemnification Obligations...........................     12
    Section 5.7    Counterparts......................................................................     12
    Section 5.8    Severability......................................................................     12
    Section 5.9    Failure or Indulgence Not Waiver..................................................     12
    Section 5.10   Amendment.........................................................................     13
    Section 5.11   Interpretation....................................................................     13

ARTICLE VI         DEFINITIONS.......................................................................     13
    Section 6.1    Action............................................................................     13
    Section 6.2    Dispute...........................................................................     13
    Section 6.3    Indemnitee........................................................................     13
    Section 6.4    Indemnifying Party................................................................     13
    Section 6.5    Insurance Policies................................................................     13
    Section 6.6    Intercompany Agreements...........................................................     13
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                                Table of Contents

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    Section 6.7    Liabilities..................................................................          13
    Section 6.8    Material Adverse Effect......................................................          14
    Section 6.9    Medco Assets.................................................................          14
    Section 6.10   Medco Balance Sheets.........................................................          14
    Section 6.11   Medco Business...............................................................          14
    Section 6.12   Medco Indemnitees............................................................          14
    Section 6.13   Medco Liabilities............................................................          14
    Section 6.14   Merck Indemnitees............................................................          17
    Section 6.15   Merck Insurance Policy.......................................................          17
    Section 6.16   Merck Liabilities............................................................          17
    Section 6.17   Merck Share of the Shared Liability Actions..................................          17
    Section 6.18   Privileged Information.......................................................          17
    Section 6.19   Securities Liabilities.......................................................          17
    Section 6.20   Distribution Agreement.......................................................          18
    Section 6.21   Shared Liability Actions.....................................................          18
    Section 6.22   Subsidiary...................................................................          18
    Section 6.23   Taxes........................................................................          18
    Section 6.24   Third Party Claim............................................................          18
    Section 6.25   Other Definitions............................................................          18
</TABLE>

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             FORM OF INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

     THIS INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT (this "Agreement") is
entered into as of __________, 2003, by and between Merck & Co., Inc., a New
Jersey corporation ("Merck"), and Medco Health Solutions, Inc., a Delaware
corporation ("Medco"). Certain capitalized terms used herein are defined in
Article VI. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Distribution Agreement (defined
below).

                                    RECITALS

     WHEREAS, the Merck Board has determined that it is appropriate and
desirable for Merck to separate the Medco Group from the Merck Group; and

     WHEREAS, as part of the foregoing, Merck and Medco have entered into the
Master Separation and Distribution Agreement, dated as of __________, 2003 (the
"Distribution Agreement"), which provides, among other things, for the
declaration of the Merck Dividend prior to the Distribution Date, the pro-rata
distribution by Merck of all of its shares of Medco Common Stock to the holders
of Merck Common Stock, and the execution and delivery of certain other
agreements in order to facilitate and provide for the foregoing; and

     WHEREAS, in connection therewith, the parties desire to set forth certain
agreements regarding indemnification and insurance.

     NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:

                                   ARTICLE I

                                 INDEMNIFICATION

     Section 1.1 Indemnification by Medco.

     (a) Indemnification. Except as otherwise provided in this Agreement, Medco
shall, for itself and as agent for each member of the Medco Group, indemnify,
defend and hold harmless the Merck Indemnitees from and against any and all
Liabilities that any third party seeks to impose upon any of the Merck
Indemnitees, or which are imposed upon any of the Merck Indemnitees, if and to
the extent such Liabilities relate to, arise out of or result from any of the
following items (without duplication):

               (i) any breach by Medco or any member of the Medco Group of the
          Distribution Agreement or any of the Ancillary Agreements (including
          this Agreement), other than breaches of the Amended and Restated
          Managed Care Agreement between Merck and Medco, dated as of May 28,
          2003 (the "Restated Agreement"), as further amended from time to time,
          or the original Managed Care Agreement between Merck and Medco, dated
          as of June 28, 2002 (the "Original Agreement" together with the
          Restated Agreement, the "Managed Care Agreement"), which shall be
          covered by the provisions thereof; or

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               (ii) any Medco Liability.

     (b) Reduction of Liability. In the event that any member of the Medco Group
makes a payment to any Merck Indemnitee hereunder, and the Liabilities on
account of which such payment was made are subsequently diminished or reduced,
either directly or through a third-party recovery (other than as a result of a
recovery under a Merck Insurance Policy, unless such recovery is pursuant to the
Credit Support Insurance Coverage, if any), Merck will promptly repay (or will
procure the relevant Merck Indemnitee promptly to repay) such member of the
Medco Group the amount by which the payment made by such member of the Medco
Group exceeds the actual cost of the associated indemnified Liabilities.

     (c) Joint and Several Liability; No Modification to Other Agreements. The
liability of the members of the Medco Group under this Section 1.1 shall be
joint and several. Nothing in this Section 1.1 shall modify or limit the rights
and remedies of Merck under the Distribution Agreement or any of the Ancillary
Agreements (other than this Agreement) relating to, arising out of or resulting
from any breach by Medco or any member of the Medco Group of the Distribution
Agreement or any of the Ancillary Agreements (other than this Agreement),
including without limitation, any provisions relating to the measure of damages,
consequential damages, liquidated damages, limitation of damages and/or specific
performance.

     Section 1.2 Indemnification by Merck.

     (a) Indemnification. Except as otherwise provided in this Agreement, Merck
shall, for itself and as agent for each member of the Merck Group, indemnify,
defend and hold harmless the Medco Indemnitees from and against any and all
Liabilities that any third party seeks to impose upon any of the Medco
Indemnitees, or which are imposed upon any of the Medco Indemnitees, if and to
the extent such Liabilities relate to, arise out of or result from (without
duplication):

               (i)  any breach by Merck or any member of the Merck Group of the
          Distribution Agreement or any of the Ancillary Agreements (including
          this Agreement), other than breaches of the Managed Care Agreement,
          which shall be covered by the provisions thereof; or

               (ii) any Merck Liability;

provided, however, that notwithstanding anything to the contrary herein, in no
event shall Merck or any member of the Merck Group be obligated to indemnify,
defend or hold harmless the Medco Indemnitees from, against or in respect of any
Medco Liability.

     (b) Reduction of Liability. In the event that any member of the Merck Group
makes a payment to any Medco Indemnitee hereunder, and the Liabilities on
account of which such payment was made are subsequently diminished or reduced,
either directly or through a third-party recovery, Medco will promptly repay (or
will procure a Medco Indemnitee to promptly repay) such member of the Merck
Group the amount by which the payment made by such member of the Merck Group
exceeds the actual cost of the associated indemnified Liabilities.

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            (c)  Joint and Several Liability; No Modification to Other
Agreements. The liability of the members of the Merck Group under this Section
1.2 shall be joint and several. Nothing in this Section 1.2 shall modify or
limit the rights and remedies of Medco under the Distribution Agreement or any
of the Ancillary Agreements (other than this Agreement) relating to, arising out
of or resulting from any breach by Merck or any member of the Merck Group of the
Distribution Agreement or any of the Ancillary Agreements (other than this
Agreement), including without limitation, any provisions relating to the measure
of damages, consequential damages, liquidated damages, limitation of damages
and/or specific performance.

     Section 1.3 Procedures for Defense, Settlement and Indemnification of Third
Party Claims.

            (a)  Notice of Claims. If an Indemnitee shall receive notice or
otherwise learn of the assertion of any Third Party Claim with respect to which
a party may be obligated to provide indemnification to such Indemnitee pursuant
to Section 1.1 or 1.2, Merck or Medco (as applicable) shall ensure that such
Indemnitee shall give the potential Indemnifying Party written notice thereof
(including any pleadings relating thereto) within twenty (20) days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, any delay
or failure of any Indemnitee to give notice as provided in this Section 1.3(a)
shall not relieve the Indemnifying Party of its obligations under this Article
I, except to the extent that the Indemnifying Party is actually and
substantially prejudiced by such delay or failure to give notice.

            (b)  Defense by Indemnifying Party. For any Third Party Claim
concerning which notice is required to be given under Section 1.3(a), the
Indemnifying Party may elect to defend and, subject to Section 1.3(f), may
settle or compromise the Third Party Claim using counsel appointed by the
Indemnifying Party, which counsel shall be reasonably satisfactory to the
Indemnitee. An Indemnifying Party electing to defend a Third Party Claim must
(i) notify the Indemnitee of its election to defend within twenty (20) days of
receipt of notice of such claim pursuant to Section 1.3(a) or sooner if the
nature of the Third Party Claim so requires and (ii) subject to Section 1.3(c),
acknowledge and agree in writing that if such Third Party Claim is adversely
determined, such Indemnifying Party will have an obligation to indemnify the
Indemnitee in respect of all Liabilities relating to, arising out of or
resulting from such Third Party Claim and that such Indemnifying Party
irrevocably waives in full all defenses it may have to contest such obligation.

            (c)  Defense by Merck. Notwithstanding Section 1.3(b), Merck, in its
sole discretion, upon written notice to Medco, may elect to defend (or may at
any time assume the defense of) and, subject to Section 1.3(f), may settle or
compromise, any Third Party Claim or series of related Third Party Claims,
regardless of whether Merck is obligated to indemnify any member of the Medco
Group in respect of such Third Party Claim or series of related Third Party
Claims or whether Merck acknowledges any obligation to indemnify any Medco
Indemnitee if:

                 (i) any member of the Merck Group is named as a party to any of
            such Third Party Claims; or

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                 (ii) both Merck and Medco may be Indemnifying Parties with
            respect to such Third Party Claim(s).

     Except as otherwise provided in the definition of "Merck Share of the
Shared Liability Actions," if Merck elects to defend against a Third Party Claim
pursuant to this Section 1.3(c) all costs and expenses incurred by members of
the Merck Group in connection with such defense shall be paid by Merck and Medco
pro rata based on their respective proportionate liability for any Liabilities
relating to, arising out of or resulting from such Third Party Claim (after
taking into account the parties' respective indemnification obligations under
this Agreement, other than with respect to payment of defense costs).

            (d)  Defense By Non-Electing Party. If the party having the right to
elect to defend a Third Party Claim pursuant to Section 1.3(b) or 1.3(c) elects
not to defend, or does not within any time frame required thereunder elect to
defend, a particular claim, the other party shall defend such Third Party Claim.
In such case, (i) the other party shall have the right, subject to Sections
1.3(c) and 1.3(f) and the provisions contained in the definition of "Merck Share
of the Shared Liability Actions," to compromise, settle or consent to the entry
of any judgment with respect to such Third Party Claim (but such compromise,
settlement or judgment shall not necessarily be determinative of which party
hereunder is entitled to indemnification) and (ii) the Indemnifying Party shall
bear all costs and expenses of defending such Third Party Claim; provided,
however, that if both parties may be Indemnifying Parties with respect to such
Third Party Claim, except as otherwise provided in the definition of "Merck
Share of the Shared Liability Actions," the Non-Defending Party (defined below)
shall reimburse the Defending Party for the Non-Defending Party's pro rata share
of all costs and expenses incurred by the Defending Party in connection with its
defense of such Third Party Claim, based on the Non-Defending Party's
proportionate liability for any Liabilities relating to, arising out of or
resulting from such Third Party Claim (after taking into account the parties'
indemnification obligations under this Agreement, other than with respect to
payment of defense costs).

            (e)  Participation by Non-Defending Party. In the event that a party
(a "Defending Party") elects or is required to defend a particular Third Party
Claim pursuant to Section 1.3(b), 1.3(c) or 1.3(d), the other party (the
"Non-Defending Party") shall have the right to participate in the defense of
such Third Party Claim; provided, however, that (i) the Defending Party shall
control, manage and direct the defense of such Third Party Claim; and (ii) the
costs and expenses of participating in such defense by the Non-Defending Party
shall be the sole responsibility of the Non-Defending Party. Nothing in this
Section 1.3(e) shall affect the rights of Merck under Section 1.3(c) at any time
to assume the defense of any Third Party Claim and to be indemnified for costs
and expenses of such defense in accordance with Section 1.3(c).

            (f)  No Settlement, Compromise or Consent to Judgments.

                 (i)  No Non-Defending Party may compromise or settle or consent
            to the entry of judgment or determination of liability with respect
            to any Third Party Claim without the consent of the Defending Party.

                 (ii) Notwithstanding anything to the contrary herein (but
            subject to the provisions contained in the definition of "Merck
            Share of the Shared Liability

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            Actions"), no Defending Party shall compromise, settle or consent to
            the entry of judgment or determination of liability concerning any
            Third Party Claim without providing at least 10 days' prior written
            notice of such compromise, settlement or consent to the Indemnitor
            (if the Indemnitor is other than the Defending Party) and without
            the consent of the Non-Defending Party (such approval not to be
            unreasonably withheld) if the terms or conditions of such
            compromise, settlement or consent would have a Material Adverse
            Effect on the Non-Defending Party's Group.

     Section 1.4 Additional Matters.

            (a)  Other Claims for Indemnification. Any claim in respect of a
Liability which does not relate to, arise out of or result from a Third Party
Claim shall be asserted by written notice from the Indemnitee to the
Indemnifying Party stating the specific provisions of this Agreement or any
Ancillary Agreement upon which such claim is based. Such Indemnifying Party
shall have a period of twenty (20) days from actual receipt of the notice within
which to respond thereto. If such Indemnifying Party does not respond within
such 20-day period, then such Indemnifying Party shall be deemed to have denied
responsibility for such claim.

            (b)  Contribution. If with respect to any Securities Liabilities an
Indemnitee's right to indemnification therefor contained in this Article I is
for any reason held by a court or other tribunal to be unavailable on policy
grounds or otherwise, the Indemnifying Party shall contribute to any amount
payable by the Indemnitee as a result of such Securities Liabilities in such
proportion as to reflect the relative benefit received by the members of the
Indemnifying Party's Group and such Indemnitee from the transaction or
disclosure giving rise to such Securities Liability. If the contribution
provided above is not permitted by applicable law, the Indemnifying Party shall
contribute to any amount payable by the Indemnitee as a result of such
Securities Liabilities in such proportion as to reflect the relative benefit
received by the members of the Indemnifying Party's Group and such Indemnitee
from the transaction and the statements and omissions giving rise to such
Securities Liability, and the relative fault of such members and the Indemnitee
in connection with such statements or omissions. The relative fault of the
members of the Indemnifying Party's Group and such Indemnitee shall be
determined by reference to, among other things, their relative intent,
knowledge, access to information and opportunity to prevent or correct the
statements or omissions giving rise to such Securities Liability.

            (c)  Subrogation. In the event of payment by or on behalf of any
Indemnifying Party to or on behalf of any Indemnitee in connection with any
Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon whether
the Indemnifying Party has paid all or only part of the Indemnitee's Liability,
as to any events or circumstances in respect of which such Indemnitee may have
any right, defense or claim relating to such Third Party Claim against any
claimant or plaintiff asserting such Third Party Claim or against any other
Person. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim.

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            (d)  Effect of Insurance on Indemnification/Contribution
Obligations. No Indemnitee shall be required to pursue any claim under any
Insurance Policies of which it is a beneficiary in connection with any Liability
for which such Indemnitee is entitled to indemnification hereunder. The amount
of indemnification or contribution to which such Indemnitee may be entitled
hereunder shall not be reduced as a result of any claim such Indemnitee may
pursue, or have the right to pursue, under any Insurance Policy in respect of
the Liability to which such right to indemnification or contribution relates,
unless the Indemnitee shall have actually recovered any portion of such
Liability from its insurance carrier(s), in which case, whether or not the
amount of indemnification or contribution to such Indemnitee shall be reduced
shall be determined in accordance with Sections 1.1(b) and 1.2(b), as
applicable.

            (e)  Not Applicable to Taxes. Notwithstanding anything to the
contrary contained herein, this Agreement shall not apply to Taxes (which are
covered by the Tax Agreement).

     Section 1.5 Survival of Indemnities. Subject to Section 5.4, the rights and
obligations of the members of the Merck Group and the Medco Group under this
Article I shall survive the sale or other transfer by any party of any assets or
businesses or the assignment by it of any Liabilities or the sale by any member
of the Merck Group or the Medco Group of the capital stock or other equity
interests of any Subsidiary to any Person.

                                   ARTICLE II

                                INSURANCE MATTERS

     Section 2.1 Medco Insurance Coverage. Medco, and Medco alone, shall be
responsible for obtaining and maintaining insurance programs for its risk of
loss and such insurance arrangements shall be separate and apart from Merck's
insurance programs. Merck shall not be required to maintain any insurance
coverage for the benefit of the members of the Medco Group or the directors,
officers or employees of any member of the Medco Group for any period prior to
or after the Distribution.

     Section 2.2 Cooperation and Agreement Not to Release Carriers. Each of
Merck and Medco will share such information as is reasonably necessary in order
to permit the other to manage and conduct its insurance matters in an orderly
fashion. Medco, at the request of Merck, shall cooperate with and use
commercially reasonable efforts to assist Merck in recoveries for claims made
under any Merck Insurance Policy for the benefit of members of the Merck Group.
Neither Medco nor any of its Subsidiaries shall take any action which would
intentionally jeopardize or otherwise interfere with the ability of any member
of the Merck Group to collect any proceeds payable pursuant to any insurance
policy. Nothing in this Agreement shall be interpreted to require Merck to
maintain any insurance coverage for any Member of the Medco Group or any of
their officers, directors or employees.

     Section 2.3 No Liability. Medco does hereby, for itself and as agent for
each other member of the Medco Group, agree that no member of the Merck Group or
any Merck Indemnitee shall have any Liability whatsoever as a result of the
insurance policies and practices

                                       6

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of Merck and its Subsidiaries as in effect at any time prior to the Distribution
Date, including as a result of the level or scope of any such insurance, the
creditworthiness of any insurance carrier, the terms and conditions of any
policy, the adequacy or timeliness of any notice to any insurance carrier with
respect to any claim or potential claim or otherwise.

     Section 2.4 No Restrictions. Nothing in this Agreement shall be deemed to
restrict any member of the Medco Group from acquiring at its own expense any
other insurance policy in respect of any Liabilities or covering any period.

     Section 2.5 Further Agreements. Medco, the members of the Medco Group, and
the directors, officers and employees of any member of the Medco Group, shall
not make any claims under Merck Insurance Policies, including in respect of
events that occurred when Medco and the members of the Medco Group were
subsidiaries of Merck.

                                   ARTICLE III

                               DISPUTE RESOLUTION

     EXCEPT AS OTHERWISE SET FORTH IN THE DISTRIBUTION AGREEMENT OR ANY
ANCILLARY AGREEMENT, ANY DISPUTES ARISING OUT OF OR RELATING TO THE DISTRIBUTION
AGREEMENT OR ANY ANCILLARY AGREEMENT (INCLUDING THIS AGREEMENT BUT EXPRESSLY
EXCLUDING THE MANAGED CARE AGREEMENT), INCLUDING, WITHOUT LIMITATION, DISPUTES
CONCERNING THE VALIDITY, INTERPRETATION AND PERFORMANCE OF OR UNDER ANY SUCH
AGREEMENT, SHALL BE EXCLUSIVELY GOVERNED BY AND SETTLED IN ACCORDANCE WITH THE
PROVISIONS OF THIS ARTICLE III.

     Section 3.1 Negotiation. The parties shall make a good faith attempt to
resolve any Dispute through negotiation. Within fifteen (15) days after notice
of a Dispute is given by either party to the other party, each party shall
select one or more representatives who are vice presidents, senior vice
presidents or executive vice presidents of such party and shall notify the other
party in writing of the names and contact details of its representatives, which
representatives shall meet and make a good faith attempt to resolve such Dispute
and shall continue to negotiate in good faith in an effort to resolve the
Dispute without the necessity of any formal proceedings. The specific format for
such negotiations will be left to the discretion of the designated
representatives but may include the preparation of agreed upon statements of
fact or written statements of position furnished to the other party.

     Section 3.2 Binding Arbitration.

            (a)  If such representatives fail to resolve a Dispute within ten
(10) days after the date of delivery of the later of the notices of selection of
the representatives, unless otherwise mutually agreed, either party shall have
the right to submit such Dispute to final and binding arbitration. It is the
intent of the parties that any such arbitration be structured in such a way as
to result in a resolution of such Dispute as promptly as practicable in
accordance herewith.

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Except as otherwise provided in this Article III, any arbitration shall be
conducted pursuant to the then current Rules for Non-Administered Arbitration of
the Center for Public Resources ("CPR Rules") and the site of the arbitration
shall be in New York County, New York.

         (b) A party (a "Disputing Party") shall institute any arbitration
proceeding hereunder by providing written notice thereof to the other party (the
"Arbitration Demand") which shall describe in reasonable detail the nature of
the Dispute, the claims of the Disputing Party and the requested relief and, if
the Disputing Party is Merck, setting forth a list of at least five potential
independent and impartial arbitrators selected by Merck, each of whom shall not
have a personal or financial interest in the result of the arbitration or the
parties to the arbitration (provided that the ownership of shares in a mutual
fund that owns securities of either of the parties shall not be considered a
personal or financial interest for this purpose) and shall be experienced in
representing clients in commercial arbitration. Within thirty (30) days after
the other party's receipt of the Arbitration Demand, such other party shall
furnish the Disputing Party with a written statement (a "Response Statement")
(1) answering the claims set forth in the Arbitration Demand, (2) asserting any
counterclaim, describing in reasonable detail the nature of the Dispute relating
to such counterclaim and the requested relief for such counterclaims, and (3) if
such other party is Medco, selecting as the sole arbitrator for the proceeding
one of the potential arbitrators listed in the Arbitration Demand or if such
other party is Merck setting forth a list of at least five potential impartial
arbitrators selected by Merck, each of whom shall not have a personal or
financial interest in the result of the arbitration or the parties to the
arbitration (provided that the ownership of shares in a mutual fund that owns
securities of either of the parties shall not be considered a personal or
financial interest for this purpose) and shall be experienced in representing
clients in commercial arbitration. If the Disputing Party is Medco, Medco shall
notify Merck within ten (10) days of Medco's receipt of the Response Statement
of Medco's selection as the sole arbitrator for the proceeding from the
potential arbitrators listed in the Arbitration Demand. If Medco fails within
the applicable time period to select an arbitrator from the list of potential
arbitrators included in Merck's Arbitration Demand or Response Statement, as
applicable, an arbitrator shall be selected in accordance with the CPR Rules
from such list of potential arbitrators.

         (c) The arbitrator shall be instructed to use best efforts to complete
all arbitration hearings no later than three (3) months from the date of the
arbitrator's appointment and use best efforts to render a decision within four
(4) months from such date.

         (d) With respect to discovery in an arbitration proceeding, the
arbitrator must allow either party to make discovery requests for documents of
the other party where the information sought is reasonably calculated to lead to
the discovery of admissible evidence, and each party agrees to respond to such
discovery request within a reasonable time. The arbitrator is obligated to
construe the term "document" literally to encompass data compilations in any
form.

         (e) The prevailing party in any arbitration as determined by the
arbitrator shall be entitled to expenses, including costs and reasonable
attorneys' and other professional fees, incurred in connection with the
arbitration.

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            (f)  In connection with any Dispute, the arbitrator shall be
obligated to apply solely principles of law.

            (g)  The decision of the arbitrator shall be final and
non-appealable and may be enforced in any court of competent jurisdiction.

            (h)  The use of any alternative dispute resolution procedures will
not be construed under the doctrine of laches, waiver or estoppel to adversely
affect the rights of either party.

     Section 3.3 Specific Performance. The parties agree and acknowledge that
each would suffer irreparable harm in the event that the other fails to perform
any of its obligations under Article IV hereunder in accordance with its
specific terms or otherwise breaches any of such obligations. Each of the
parties further agrees and acknowledges that money damages may be an inadequate
remedy for such failure to perform or breach of Article IV by it. Accordingly,
notwithstanding anything herein to the contrary, and without waiving any remedy
hereunder, each of the parties shall be entitled to seek specific performance by
the other of its obligations under Article IV hereunder and/or injunctive or
other equitable relief to prevent or cure breaches of Article IV hereunder in an
arbitration proceeding (without first complying with the negotiation provision
of Section 3.1) or in court (subject to Section 5.2).

                                   ARTICLE IV

                             PRIVILEGED INFORMATION

     Section 4.1 Privileged Information. In furtherance of the rights and
obligations of the parties set forth in the Distribution Agreement and the
Ancillary Agreements:

            (a)  Each party hereto acknowledges that (i) each of the Merck Group
on the one hand, and the Medco Group on the other hand, has or may obtain
Information regarding a member of the other Group, or any of its operations,
employees, assets or liabilities (whether in documents or stored in any other
form or known to its employees or agents), as applicable, that is or may be
protected from disclosure pursuant to the attorney-client privilege, the work
product doctrine or other applicable privileges ("Privileged Information"); (ii)
there are a number of actual, threatened or future litigations, investigations,
proceedings (including arbitration proceedings), claims or other legal matters
that have been or may be asserted by or against, or otherwise affect, each or
both of Merck and Medco (or members of either Group) ("Litigation Matters");
(iii) Merck and Medco have a common legal interest in Litigation Matters, in the
Privileged Information, and in the preservation of the confidential status of
the Privileged Information, in each case relating to the Merck Business or the
Medco Business or any former businesses or the assets or liabilities of each
party as it or they existed prior to the Distribution Date or relating to or
arising in connection with the relationship between the constituent elements of
the Groups on or prior to the Distribution Date; and (iv) Merck and Medco intend
that the transactions contemplated by the Related Agreements and any transfer of
Privileged Information in connection herewith or therewith shall not operate as
a waiver of any potentially applicable privilege.

                                       9

<PAGE>

            (b)  Each of Merck and Medco agrees, on behalf of itself and each
member of the Group of which it is a member, not to disclose or otherwise waive
any privilege attaching to any Privileged Information relating to the Merck
Business or the Medco Business or any former businesses or the assets or
liabilities of either party as it or they existed prior to the Distribution Date
or relating to or arising in connection with the relationship between the Groups
on or prior to the Distribution Date, without providing prompt written notice to
and obtaining the prior written consent of the other, which consent shall not be
unreasonably withheld and shall not be withheld if the other party certifies
that such disclosure is to be made in response to a likely threat of suspension,
debarment, criminal indictment or similar action; provided, however, that Merck
may make such disclosure or waiver with respect to Privileged Information if
such Privileged Information relates solely to the Merck Business, its former
businesses (other than the Medco Business), its assets or liabilities (other
than assets or liabilities of the Medco Business), and Medco may make such
disclosure or waiver with respect to Privileged Information if such Privileged
Information relates solely to the Medco Business, or assets or liabilities
exclusively of the Medco Business. The parties will use commercially reasonable
efforts to limit any such disclosure or waiver to the maximum extent possible
and shall seek the execution of a confidentiality agreement by the party or
parties to which such disclosure or waiver is made.

            (c)  Upon any member of the Merck Group or any member of the Medco
Group receiving any subpoena or other compulsory disclosure notice from any
Governmental Authority or otherwise which requests disclosure of Privileged
Information, in the case of the Medco Group, relating to the Merck Business, its
former businesses (other than the Medco Business), its assets or liabilities
(other than assets or liabilities of the Medco Business), or, in the case of the
Merck Group, relating to the Medco Business, or assets or liabilities
exclusively of the Medco Business, as it or they existed prior to the
Distribution Date or, in either case, relating to or arising in connection with
the relationship between the constituent elements of the Groups on or prior to
the Distribution Date, the recipient of the notice shall promptly provide to
Merck, in the case of receipt by a member of the Medco Group, or to Medco, in
the case of receipt by a member of the Merck Group, a copy of such notice, the
intended response, and all materials or information relating to the other Group
that might be disclosed. In the event of a disagreement as to the intended
response or disclosure, unless and until the disagreement is resolved as
provided in Article III, Merck and Medco shall cooperate to assert all defenses
to disclosure claimed by either Group, at the cost and expense of the Group
claiming such defense to disclosure, and shall not disclose any disputed
documents or information until all legal defenses and claims of privilege have
been finally determined.

                                    ARTICLE V

                                  MISCELLANEOUS

     Section 5.1 Entire Agreement. This Agreement, the Distribution Agreement,
the other Ancillary Agreements and any Annexes, Exhibits and Schedules attached
hereto and thereto, constitutes the entire agreement among the parties with
respect to the subject matter hereof and thereof and shall supersede all prior
written and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof and thereof.

                                       10

<PAGE>

     Section 5.2 Governing Law; Forum. This Agreement, the Distribution
Agreement and all other Ancillary Agreements shall be construed in accordance
with, and all Disputes hereunder shall be governed by, the procedural (except to
the extent inconsistent with the procedures set forth in Article III of this
Agreement) and substantive laws of the State of New York as to all matters
regardless of the laws that might otherwise govern under principles of conflicts
of laws applicable thereto. Under no circumstances may any party seek or be
awarded punitive damages under this Agreement, the Distribution Agreement or any
other Ancillary Agreement. Any state court sitting in New York county, New York
and/or the United States District Court for the Southern District of New York
shall have exclusive jurisdiction and venue, and each party hereto hereby
submits to such jurisdiction and venue and irrevocably waives, to the fullest
extent permitted by applicable law, any objection it may now or hereafter have
to such jurisdiction or the laying of such venue over any Disputes between the
parties that are permitted to be brought in a court, or the enforcement of any
decision of arbitrators, pursuant to Article III above. Each of the parties
hereby irrevocably waives any right to a jury trial with respect to a Dispute.

     Section 5.3 Notices. All notices and other communications required or
permitted to be given by any party pursuant to the terms of this Agreement shall
be in writing to and shall be deemed to have been duly given when delivered in
person, by express or overnight mail delivery by a nationally recognized courier
(delivery charges prepaid), or by registered or certified mail (postage prepaid,
return receipt requested), as follows:

         if to Merck:

                 Merck & Co., Inc.
                 One Merck Drive
                 P.O. Box 100
                 Whitehouse Station, New Jersey 08889
                 Attention: General Counsel

         if to Medco:

                 Medco Health Solutions, Inc.
                 100 Parsons Pond Drive
                 Franklin Lakes, New Jersey 07417
                 Attention: General Counsel

or to such other address as the party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. All
notices and other communication shall be deemed to have been given and received
on the date of actual delivery.

     Section 5.4 Binding Effect; Assignment; Third-Party Beneficiaries. Medco
may not, directly or indirectly, in whole or in part, whether by operation of
law or otherwise, assign or transfer this Agreement or its rights or obligations
hereunder, without Merck's prior written consent and, except as otherwise
permitted hereby, any attempted assignment, transfer or delegation without such
prior written consent shall be voidable at the sole option of Merck. Nothing in
this Agreement shall restrict any transfer of this Agreement by Merck, whether
by

                                       11

<PAGE>

operation of law or otherwise. Without limiting the foregoing, this Agreement
shall be binding upon Merck and the other members of the Merck Group and Medco
and the other members of the Medco Group and inure solely to the benefit of the
Medco Indemnitees and the Merck Indemnitees and their respective legal
representatives, successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.

     Section 5.5 Offset. In addition to, and not in limitation of, any other
remedies any member of the Merck Group or any Merck Indemnitee may be entitled
to under the Distribution Agreement, any Ancillary Agreement (including this
Agreement) or any Intercompany Agreement, any member of the Merck Group or any
Merck Indemnitee may satisfy any amounts owed to such member of the Merck Group
or Merck Indemnitee by any member of the Medco Group by means of an offset
against any amounts any member of the Merck Group may from time to time owe to
any member of the Medco Group or an Medco Indemnitee, whether under the
Distribution Agreement, any Ancillary Agreement (including this Agreement), any
Intercompany Agreement, any other agreement or arrangement existing between any
member of the Merck Group and any member of the Medco Group, or otherwise.

     Section 5.6 Other Agreements Evidencing Indemnification Obligations. Merck
hereby agrees to execute, for the benefit of any Medco Indemnitee, such
documents as may be reasonably requested by such Medco Indemnitee, evidencing
Merck's agreement that the indemnification obligations of Merck set forth in
this Agreement inure to the benefit of and are enforceable by such Medco
Indemnitee. Medco hereby agrees to execute, for the benefit of any Merck
Indemnitee, such documents as may be reasonably requested by such Merck
Indemnitee, evidencing Medco's agreement that the indemnification obligations of
Medco set forth in this Agreement inure to the benefit of and are enforceable by
such Merck Indemnitee.

     Section 5.7 Counterparts. This Agreement, including any Annexes, Schedules
and Exhibits hereto, and the other documents referred to herein, may be executed
in counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.

     Section 5.8 Severability. If any term or other provision of this Agreement
or any Annexes, Schedules or Exhibits attached hereto is determined by a court,
administrative agency or arbitrator to be invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party hereto.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties hereto
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible. If the parties
are unable to reach an agreement on any such modification, the arbitrator
selected in accordance with Article III of this Agreement shall have the
authority to determine such modification.

     Section 5.9 Failure or Indulgence Not Waiver. No failure or delay on the
part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a

                                       12

<PAGE>

waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right.

     Section 5.10 Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to this Agreement.

     Section 5.11 Interpretation. The headings contained in this Agreement, in
any Annex, Exhibit or Schedule hereto and in the table or contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Any capitalized term used in any
Annex, Schedule or Exhibit but not otherwise defined therein, shall have the
meaning assigned to such term in this Agreement. When a reference is made in
this Agreement to an Article or Section, or an Annex, Exhibit or Schedule, such
reference shall be to an Article or Section of, or an Annex, Exhibit or Schedule
to, this Agreement unless otherwise indicated.

                                   ARTICLE VI

                                   DEFINITIONS

     Section 6.1  Action. "Action" means any claim, demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international governmental authority or any
arbitration or mediation tribunal.

     Section 6.2  Dispute. "Dispute" means a dispute arising from or in
connection with the Distribution Agreement, this Agreement or any other
Ancillary Agreement, whether based on contract, tort, or otherwise.

     Section 6.3  Indemnitee. "Indemnitee" means a Merck Indemnitee or a Medco
Indemnitee.

     Section 6.4  Indemnifying Party. "Indemnifying Party" means any party who
is required to indemnify any other Person pursuant to this Agreement.

     Section 6.5  Insurance Policies. "Insurance Policies" means insurance
policies pursuant to which a Person makes a true risk transfer to an insurer.

     Section 6.6  Intercompany Agreements. "Intercompany Agreements" means any
written agreement, arrangement or understanding between any member of the Merck
Group and any member of the Medco Group which is in effect prior to, as of or
after the Distribution Date.

     Section 6.7  Liabilities. "Liabilities" means all debts, liabilities,
guarantees, assurances, commitments and obligations, whether fixed, contingent
or absolute, asserted or unasserted, matured or unmatured, liquidated or
unliquidated, accrued or not accrued, known or unknown, due or to become due,
whenever or however arising (including, without limitation, whether arising out
of any contract or tort based on negligence or strict liability) and whether or
not the same would be required by generally accepted principles and accounting
policies to be

                                       13

<PAGE>

reflected in financial statements or disclosed in the notes thereto. For
purposes of any indemnification hereunder, "Liabilities" shall be deemed also to
include any and all damages, claims, suits, judgments, fines, penalties, costs
and expenses of any kind or character, including attorney's fees and expenses,
costs of investigation and preparation, expert witness costs and any other fees
and expenses associated with the defense of any Action whether relating to Third
Party Claims or Actions against the other party hereto.

     Section 6.8  Material Adverse Effect. "Material Adverse Effect" means, with
respect to either Group, a material adverse effect on the business, results of
operations or financial conditions of the members of such Group, taken as a
whole, provided that, without limiting the events, circumstances or conditions
which may constitute or result in a Material Adverse Effect on the Merck Group,
any compromise, settlement or consent affecting the Merck Group that, if applied
to Medco or any member of the Medco Group, would result in a Material Adverse
Effect on the Medco Group, shall be deemed to result in a Material Adverse
Effect on the Merck Group.

     Section 6.9  Medco Assets. "Medco Assets" means all assets of the Medco
Group following the consummation of the Distribution.

     Section 6.10 Medco Balance Sheets. "Medco Balance Sheets" means the
consolidated balance sheets of Medco and its Subsidiaries included in the Form
10.

     Section 6.11 Medco Business. "Medco Business" means (a) the business and
operations of Medco, Merck-Medco LLC and its Subsidiaries and Affiliates (other
than members of the Merck Group), and (b) except as otherwise expressly provided
herein, any terminated, divested or discontinued businesses or operations that
at the time of termination, divestiture or discontinuation primarily related to
the Medco Business as then conducted; provided, that the Medco Business shall
not include the business or operations of Merck Capital Ventures LLC, Merck
Liability Management Company or Merck Medco Holdings II Corp.

     Section 6.12 Medco Indemnitees. "Medco Indemnitees" means Medco, each
member of the Medco Group and each of their respective directors, officers,
employees, agents or representatives.

     Section 6.13 Medco Liabilities. "Medco Liabilities" means, collectively,
all of the Liabilities of Medco and each of the other members of the Medco
Group, including without limitation:

                  (i)   all of the Liabilities reflected on the Medco Balance

               Sheet;

                  (ii)  all Liabilities relating to, arising out of or resulting
               from any of the Credit Support Arrangements, including, without
               limitation, any payment required to be made by a member of the
               Merck Group under any of the Credit Support Arrangements;

                  (iii) all Liabilities which are incurred or arise, or which
               accrue or exist or are accrued at any time on, prior to or after
               the date of the Medco Balance

                                       14

<PAGE>

         Sheets and which arise or arose out of, or in connection with, or
         otherwise relate to or result from, the Medco Assets or the Medco
         Business;

             (iv)    all Liabilities of each member of the Medco Group under,
         allocated to or to be retained or assumed by Medco or any of the other
         members of the Medco Group pursuant to the Distribution Agreement, this
         Agreement or any Ancillary Agreements, or Intercompany Agreements;
         provided that nothing in this Agreement shall adversely affect the
         rights and remedies of Merck or Medco under the Managed Care Agreement
         relating to, arising out of or resulting from a breach of the Managed
         Care Agreement, or any Liability of either party to the other relating
         to, arising out of or resulting from such breach;

             (v)     all of the Liabilities of any member of the Merck Group or
         Medco Group (whenever arising whether prior to, on or following the
         Distribution Date) arising out of or in connection with or otherwise
         relating to the management or conduct prior to, on or following the
         Distribution Date of the Medco Business or the Medco Assets; provided
         that nothing in this Agreement shall adversely affect the rights and
         remedies of Merck or Medco under the Managed Care Agreement relating
         to, arising out of or resulting from a breach of the Managed Care
         Agreement, or any Liability of either party to the other relating to,
         arising out of or resulting from such breach;

             (vi)    Subject to the proviso set forth after clause (x) of this
         Section 6.13, all Liabilities relating to, arising out of or resulting
         from (a) the Shared Liability Actions, any Actions in respect of which
         as of the date of this Agreement any member of the Medco Group has been
         named as a defendant (including, without limitation, the Actions
         captioned U.S.A. ex rel. Hunt and Gauger v. Medco and U.S.A. ex rel. v.
         Piacentile v. Medco) or any amendments to such Actions (the "Existing
         Actions"), (b) any of the facts, circumstances and events giving rise
         to Shared Liability Actions or any of the Existing Actions, and (c) any
         Actions involving similar claims or which are based upon similar facts,
         circumstances or events, whether involving the same parties or other
         parties, in each case whether relating to, arising out of or resulting
         from facts, circumstances or events prior to, on or after the
         Distribution Date;

             (vii)   all Liabilities relating to, arising out of or resulting
         from, any Third Party Claim relating to, arising out of or resulting
         from (1) the Managed Care Agreement or (2) any infringement or alleged
         infringement by the Patents or the Patent License (or the use thereof)
         on any intellectual property or other rights of any Person;

             (viii)  all Liabilities relating to, arising out of or resulting
         from the Actions, Third Party Claims, the examinations, notices,
         letters, reviews and investigations by Governmental Authorities,
         referred to in the Form 10 under "Business - Legal Proceedings and
         Government Investigations", and "Management - Retirement Benefits -
         Cash Balance Plan" and Liabilities relating to, arising out of, or
         resulting from the facts, circumstances or events giving rise

                                       15

<PAGE>

         to any of such Actions, Third Party Claims, examinations, notices,
         letters, reviews or investigations (subject to the proviso set forth
         after clause (x) of this Section 6.13);

             (ix)    all Securities Liabilities relating to, arising out of or
         resulting from (A) the Notes Offering, the Distribution and any
         documents, information or data (financial or otherwise) furnished or
         provided, orally or in writing, to purchasers or transferees or
         potential purchasers and transferees (or any of their respective
         representatives), in connection therewith or filed or furnished in
         connection therewith with or to any Governmental Authority or any
         securities exchange or securities market, including, without
         limitation, the Registration Statements, (B) any other offer, issuance,
         sale, exchange or other transfer of securities of or by Medco or any
         member of the Medco Group prior to, on or after the Distribution Date,
         or any documents, information or data (financial or otherwise)
         furnished or provided, orally or in writing, to transferees or
         purchasers or potential transferees or purchasers (or any of their
         respective representatives) of such securities or filed or furnished in
         connection therewith with or to any Governmental Authority or
         securities exchange or securities market, including, without
         limitation, any registration statement, (C) any oral or written
         disclosure made, whether or not included in documents filed with or
         furnished to any Governmental Authority or securities exchange or
         securities market, by Medco or any member of the Medco Group, or on
         behalf of Medco or any Member of the Medco Group, prior to, on or after
         the Distribution Date or any disclosure made (other than by a member of
         the Merck Group), orally or in writing, of information or data
         (financial or otherwise) relating to or concerning Medco or any other
         member of the Medco Group, the business, operations and management of
         the Medco Business and/or Medco or any other member of the Medco Group,
         and (D) any oral or written disclosure made, whether or not included in
         documents filed with or furnished to any Governmental Authority or
         securities exchange or securities market, by Merck or any member of the
         Merck Group prior to, on or after the Distribution Date based on any
         information or data (financial or otherwise) provided by or on behalf
         of Medco or any member of the Medco Group; and

             (x)     all other Liabilities arising out of, relating to or
         resulting from any Action or Third Party Claim by any Governmental
         Authority or any other Person that is based on (A) any violations or
         alleged violations by Medco, its Subsidiaries and/or any of their
         respective directors, officers, employees, agents or representatives of
         any of the provisions of the Securities Act, Exchange Act, or the rules
         and regulations of the Commission promulgated thereunder, any other
         securities or similar law or any other law, rule or regulation,
         including, without limitation, the federal False Claims Act and state
         False Claims Acts, or (B) any breach or alleged breach of fiduciary
         duty by the Medco Board or any Committee of the Medco Board (or any
         member of the Medco Board or any Committee thereof) or the board of
         directors or similar body or any Committee of the board of directors or
         similar body (or any member of any such board or similar body or

                                       16

<PAGE>

            any Committee thereof) of any other member of the Medco Group, or by
            any officer or employee of any member of the Medco Group.

provided, however, that (i) Medco Liabilities shall not include the Merck
Defendant Robinson-Patman Act Liabilities (as defined in Section 6.16), and (ii)
Merck shall be responsible for the Merck Share of the Shared Liability Actions.

     Section 6.14 Merck Indemnitees. "Merck Indemnitees" means Merck, each
member of the Merck Group and each of their respective directors, officers,
employees, agents and representatives.

     Section 6.15 Merck Insurance Policy. "Merck Insurance Policy" shall mean
each Insurance Policy owned or maintained by a member of the Merck Group.

     Section 6.16 Merck Liabilities. "Merck Liabilities" means

                  (i)   all Liabilities of any member of the Merck Group under,
            allocated to or to be retained or assumed by Merck or any of the
            other members of the Merck Group pursuant to the Distribution
            Agreement, this Agreement or any other Ancillary Agreement (other
            than Liabilities resulting from a breach of the Managed Care
            Agreement, which shall be subject to the terms thereof);

                  (ii)  all Liabilities incurred by members of the Merck Group
            in connection with the management or conduct prior to, on or
            following the Distribution Date of the Merck Business (other than
            Liabilities resulting from a breach of the Managed Care Agreement,
            which shall be subject to the terms thereof); and

                  (iii) all monetary Liabilities arising out of those Actions
            set forth on Schedule 6.16 (but not including any lost sales or
            profits resulting from any of such Actions) (the "Merck Defendant
            Robinson-Patman Act Liabilities");

provided, however, that Merck Liabilities shall not include any Liability that
constitutes a Medco Liability.

     Section 6.17 Merck Share of the Shared Liability Actions. "Merck Share of
the Shared Liability Actions" shall have the meaning set forth on Schedule 6.17.

     Section 6.18 Privileged Information. "Privileged Information" has the
meaning set forth in Section 4.1(a).

     Section 6.19 Securities Liabilities. "Securities Liabilities" means any and
all losses, liabilities, penalties, claims, damages, demands, costs or expenses
or other Liabilities whatsoever that are assessed, imposed, awarded against,
incurred or accrued by a Person arising out of or relating in whole or in part
to any Action, any potential or threatened Action, any Third Party Claim or any
potential or threatened Third Party Claim by any Governmental Authority or any
other Person that is based on any violations or alleged violations of the
Securities Act, the

                                       17

<PAGE>

Exchange Act, and any of the rules or regulations of the Commission promulgated
under the Securities Act or Exchange Act, or any other securities or other
similar laws, rules or regulations, including, without limitation, state
securities or "blue sky" laws, rules or regulations, foreign securities laws,
rules or regulations and rules or regulations of any securities exchange or
market.

     Section 6.20 Distribution Agreement. "Distribution Agreement" has the
meaning set forth in the Recitals hereof.

     Section 6.21 Shared Liability Actions. "Shared Liability Actions" has the
meaning set forth on Schedule 6.21.

     Section 6.22 Subsidiary. "Subsidiary" has the meaning set forth in the
Distribution Agreement.

     Section 6.23 Taxes. "Taxes" has the meaning set forth in the Tax Agreement.

     Section 6.24 Third Party Claim. "Third Party Claim" means an Action
brought, asserted, commenced or pursued by a Person (including any Governmental
Authority) other than a member of the Merck Group or the Medco Group.

     Section 6.25 Other Definitions. Any capitalized terms used but not defined
herein shall have the meanings assigned to them in the Distribution Agreement.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       18

<PAGE>

     IN WITNESS WHEREOF, each of the parties has caused this Indemnification and
Insurance Matters Agreement to be executed on its behalf by its officers
thereunto duly authorized on the day and year first above written.

                                    MERCK & CO., INC.

                                    By:_________________________________
                                    Name:
                                    Title:

                                    MEDCO HEALTH SOLUTIONS, INC.

                                    By:_________________________________
                                    Name:
                                    Title:

                                       19<PAGE>

                                                                   Exhibit 10.21

                                     FORM OF

                 RECEIVABLES PURCHASE AND CONTRIBUTION AGREEMENT

                                 by and between

                          MEDCO HEALTH SOLUTIONS, INC.

                           as Originator and Servicer

                                       and

                          MEDCO HEALTH RECEIVABLES, LLC

                                    as Buyer

                          Dated as of August [__], 2003

<PAGE>

                                TABLE OF CONTENT

                                                                           Page

ARTICLE I.  DEFINITIONS..............................................  1

    SECTION 1.01. Certain Defined Terms....................................  1
    SECTION 1.02. Other Terms..............................................  4
    SECTION 1.03. Incorporation of Defined Terms...........................  5

ARTICLE II. AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS...............  5

    SECTION 2.01. Facility.................................................  5
    SECTION 2.02. Making Purchases.........................................  5
    SECTION 2.03. Collections..............................................  6
    SECTION 2.04. Settlement Procedures....................................  7
    SECTION 2.05. Payments and Computations, Etc...........................  7
    SECTION 2.06. Contributions............................................  8
    SECTION 2.07. Intent of the Originator and the Buyer...................  8
    SECTION 2.08. Grant of Security Interest...............................  8

ARTICLE III. CONDITIONS OF PURCHASES.......................................  9

    SECTION 3.01. Conditions Precedent to Initial Purchase from the
                    Originator.............................................  9
    SECTION 3.02. Conditions Precedent to All Purchases....................  9

ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................. 10

    SECTION 4.01. Representations and Warranties of the Originator......... 10

ARTICLE V. COVENANTS....................................................... 13

    SECTION 5.01. Covenants of the Originator.............................. 13

ARTICLE VI. ADMINISTRATION AND COLLECTION.................................. 19

    SECTION 6.01. Designation of Servicer.................................. 19
    SECTION 6.02. Certain Rights of the Buyer.............................. 19
    SECTION 6.03. Rights and Remedies...................................... 20
    SECTION 6.04. Transfer of Records to Buyer............................. 20

ARTICLE VII. TERMINATION EVENTS............................................ 21

    SECTION 7.01. Termination Events....................................... 21

ARTICLE VIII. INDEMNIFICATION.............................................. 23

    SECTION 8.01. Indemnities by the Originator............................ 23

                                       i

<PAGE>

ARTICLE IX. MISCELLANEOUS.................................................. 25

    SECTION 9.01. Amendments, Etc.......................................... 25
    SECTION 9.02. Notices, Etc............................................. 25
    SECTION 9.03. Binding Effect; Assignability............................ 25
    SECTION 9.04. Costs, Expenses and Taxes................................ 26
    SECTION 9.05. No Proceedings........................................... 26
    SECTION 9.06. GOVERNING LAW............................................ 26
    SECTION 9.07. Third Party Beneficiary.................................. 27
    SECTION 9.08. Restriction on Payments.................................. 27
    SECTION 9.09. Execution in Counterparts................................ 28
    SECTION 9.10. Integration; Survival of Termination..................... 28
    SECTION 9.11. Consent to Jurisdiction.................................. 28
    SECTION 9.12. WAIVER OF JURY TRIAL..................................... 29

EXHIBITS

EXHIBIT A    Deposit Accounts and Deposit Account Banks
EXHIBIT B    Form of Subordinated Note
EXHIBIT C    Trade Names and Former Names

                                       ii

<PAGE>

                 RECEIVABLES PURCHASE AND CONTRIBUTION AGREEMENT

                          Dated as of August [__], 2003

                  MEDCO HEALTH SOLUTIONS, INC., a Delaware corporation, in its
capacity as originator of the Receivables (the "Originator") and as servicer of
the Receivables (the "Servicer"), and MEDCO HEALTH RECEIVABLES, LLC, a Delaware
limited liability company (the "Buyer"), agree as follows:

                  PRELIMINARY STATEMENTS. (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to those defined
above) are defined in Article I of this Agreement or, if not defined therein, in
the Receivables Purchase Agreement referred to below.

                  (2) The Originator has Receivables that it wishes to sell to
the Buyer from time to time, and the Buyer has agreed to purchase such
Receivables on the terms set forth herein.

                  (3) The Originator may also wish to contribute Receivables to
the capital of the Buyer from time to time on the terms set forth herein.

                  NOW, THEREFORE, the parties agree as follows:

                             ARTICLE I. DEFINITIONS

                  SECTION 1.01. Certain Defined Terms. The following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

                  "Agreement" means this Receivables Purchase and Contribution
         Agreement, as the same may be amended, restated, supplemented or
         otherwise modified from time to time.

                  "Closing Date" means August [__], 2003 or, if later, the first
         date on which the conditions precedent set forth in Section 3.01 are
         satisfied.

                  "Contract" means an agreement pursuant to or under which a
         pharmaceutical manufacturer shall be obligated to pay rebates,
         administrative fees, data fees or other fees to the Originator, in each
         case as such agreement may be amended, restated, supplemented, renewed
         or otherwise modified from time to time and any replacement or
         substitute agreement; provided that the term "Contract" shall not
         include any agreement with Merck or any of its Affiliates so long as no
         payments under such agreement are remitted to a Deposit Account.

                  "Contributed Receivable" has the meaning specified in
         Section 2.06.

                  "Deemed Collection" has the meaning specified in
         Section 2.04(a).

                                      B-3

<PAGE>

                  "Deposit Date" means each day on which any Collections are
         deposited in a Deposit Account or on which any Transaction Party shall
         receive Collections.

                  "Discount" means, in respect of each Purchase, the Discount
         Percentage multiplied by the Outstanding Balance of the Receivables
         that are the subject of such Purchase.

                  "Discount Percentage" means, on any date, the percentage
obtained from the following formula:

                                (LR + ACRP + ERP)

all determined by the Originator as of the most recent Monthly Reporting Date,

         Where
         -----

         LR         =     the average Loss-to-Liquidation Ratio for the three
                          Calculation Periods immediately prior to such Monthly
                          Reporting Date.

         ACRP       =     the "Adjusted Carrying Cost Reserve Percentage,"
                          defined as the sum of the Yield and Fee Reserve Ratio
                          plus the Servicing Fee Reserve Ratio plus 1.00%.

         ERP        =     the "Expense Reserve Percentage" defined as 1.0%
                          (which reflects the cost of the Buyer's overhead,
                          including costs of processing the purchase of
                          Receivables and other normal operation costs, and a
                          reasonable profit margin).

         None of the elements of the above-referenced formula, in respect of any
         purchase of Receivables, will be adjusted following the related
         Purchase Date.

                  With respect to each calculation set forth above with respect
         to a Monthly Reporting Date, such calculation as calculated on such
         Monthly Reporting Date and included in the applicable Monthly Report
         shall remain in effect from and including the related Monthly Reporting
         Date to but excluding the following Monthly Reporting Date.

                  For the initial period from and including the Closing Date to
         but excluding the first Monthly Reporting Date, the Discount Percentage
         will be [ ]%.

                  "Incipient Termination Event" means an event that but for
         notice or lapse of time or both would constitute a Termination Event.

                  "Indemnified Amounts" has the meaning specified in Section
         8.01.

                  "Indemnified Parties" has the meaning specified in Section
         8.01.

                  "Initial Subordinated Note Amount" has the meaning specified
         in Section 2.02(d).

<PAGE>

                  "Material Adverse Effect" means a material adverse effect on
         (i) the ability of any Transaction Party to perform its obligations
         under any Transaction Document, subject to applicable cure and grace
         periods, (ii) the legality, validity or enforceability of this
         Agreement or any other Transaction Document, (iii) the Buyer's interest
         in the Receivables generally or in any material portion of the
         Receivables, the Related Security or the Collections with respect
         thereto, (iv) the collectibility of the Receivables generally or of any
         material portion of the Receivables or the legality, validity or
         enforceability of the Contracts generally or of any material portion of
         the Contracts or (v) the business, operations, properties, assets,
         liabilities or condition (financial or otherwise) of the Originator and
         its Subsidiaries, taken as a whole.

                  "Purchase" means a purchase by, or contribution to, the Buyer
         of Receivables from the Originator pursuant to Article II.

                  "Purchase Date" means each day on which a Purchase is made
         pursuant to Article II.

                  "Purchased Receivable" means any Receivable which is purchased
         by the Buyer pursuant to Section 2.02.

                  "Purchase Price" for any Purchase means an amount equal (a) to
         the Outstanding Balance of the Receivables that are the subject of such
         Purchase as set forth in the Receivables Trial Balance, minus (b) the
         Discount for such Purchase minus (c) the amount of any Purchase Price
         Credits to be credited against the Purchase Price pursuant to Section
         2.04.

                  "Purchase Price Credit" has the meaning specified in Section
         2.04(c).

                  "Receivables" means all indebtedness and other obligations (in
         each case whether present or future, due or to become due, billed or
         unbilled) of any Obligor arising under or pursuant to a Contract,
         including, without limitation, the right to payment of any rebates,
         administrative fees, data fees, interest or finance charges, late
         payment charges, delinquency charges, extension or collection fees and
         all other obligations of such Obligor with respect thereto.

                  "Receivables Purchase Agreement" means that certain
         Receivables Purchase Agreement, dated as of the date hereof, among the
         Buyer; the Originator, as Servicer; the Conduit Purchasers from time to
         time parties thereto; the Committed Purchasers from time to time
         parties thereto; the Managing Agents from time to time parties thereto;
         and Citicorp North America, Inc., as Administrative Agent, as amended,
         restated, supplemented or otherwise modified from time to time.

                  "Receivables Trial Balance" of the Originator on any date
         means the Originator's accounts receivable trial balance (whether in
         the form of a computer printout, magnetic tape or diskette or other
         electronic or paper record) on such date, listing Obligors and the
         Receivables respectively owed by such Obligors on such date together
         with the aged Outstanding Balances of such Receivables, in form and
         substance satisfactory to the Buyer.

<PAGE>

                  "Related Security" means with respect to any Receivable:

                           (i) all security interests or liens and property
                  subject thereto from time to time purporting to secure payment
                  of such Receivable, whether pursuant to the Contract related
                  to such Receivable or otherwise, together with all financing
                  statements and financing statement amendments authorized by an
                  Obligor describing any collateral securing such Receivable;

                           (ii) all guaranties, insurance and other agreements
                  or arrangements of whatever character from time to time
                  supporting or securing payment of such Receivable whether
                  pursuant to the Contract related to such Receivable or
                  otherwise;

                           (iii) all other books, records and other information
                  (including, without limitation, computer programs, tapes,
                  discs, punch cards, data processing software and related
                  property and rights) relating to such Receivable and the
                  related Obligor;

                           (iv) all of the Originator's right, title and
                  interest in and to all Contracts or other agreements or
                  documents that evidence, secure or otherwise relate to such
                  Receivable; and

                           (v) all Proceeds of the foregoing.

                  "Repurchase Price" has the meaning specified in Section
         2.04(b).

                  "Settlement Date" means (i) the 15th day of each calendar
         month (or, if such day is not a Business Day, the next succeeding
         Business Day) and (ii) following the Termination Date, each other
         "Settlement Date" under and as defined in the Receivables Purchase
         Agreement.

                  "Subordinated Note" has the meaning specified in Section
         2.02(d).

                  "Termination Event" has the meaning specified in Section 7.01.

                  "Transaction Party" means either of the Originator or (so long
         as it is the Originator or an Affiliate thereof other than the Buyer)
         the Servicer.

                  "Transferred Receivable" means a Purchased Receivable or a
         Contributed Receivable.

                  SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York, as in effect on the
date hereof and not specifically defined herein, are used herein as defined in
such Article 9. Unless otherwise expressly indicated, all references herein to
"Article," "Section," "Schedule" or "Exhibit" means articles and sections of,
and schedules and exhibits to, this Agreement. Headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof. Any reference to any

<PAGE>

Law shall be deemed to be a reference to such Law as the same may be amended or
re-enacted from time to time. Any reference to any Person appearing in any of
the Transaction Documents shall include its successors and permitted assigns.

                  SECTION 1.03. Incorporation of Defined Terms. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Receivables Purchase Agreement.

          ARTICLE II. AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS

                  SECTION 2.01. Facility. On the terms and conditions
hereinafter set forth and without recourse to the Originator (except to the
extent specifically provided herein), the Originator hereby agrees to sell to
the Buyer all Receivables originated by it from time to time and the Buyer
hereby agrees to purchase from the Originator all such Receivables from time to
time, in each case during the period from the date hereof to the Termination
Date; provided, however, that the Originator may, at its option, elect to
contribute Receivables to the Buyer pursuant to Section 2.06 in lieu of a sale
of such Receivables.

                  SECTION 2.02. Making Purchases.

                  (a) Initial Purchase. On the Closing Date, the Originator
shall (i) contribute to the capital of the Buyer Receivables having an aggregate
Outstanding Balance of $[ ] and (ii) sell to the Buyer all other Receivables
outstanding as of the Closing Date. On the date of such Purchase, the Buyer
shall, upon satisfaction of the applicable conditions set forth in Article III,
pay the Purchase Price for the Receivables sold to it in the manner provided in
Section 2.02(c).

                  (b) Subsequent Purchases. On each Business Day following the
Closing Date until the Termination Date, the Originator shall sell to the Buyer
and the Buyer shall purchase from the Originator all Receivables originated by
the Originator which have not previously been sold or contributed to the Buyer
hereunder; provided, however, that the Originator may, at its option on any
Purchase Date, contribute all or any of such Receivables to the Buyer pursuant
to Section 2.06, instead of selling such Receivables to the Buyer pursuant to
this Section 2.02(b). On or before the date of each such Purchase, the Buyer
shall, upon the Satisfaction of the applicable conditions set forth in Article
III, pay the Purchase Price for such Purchase in the manner provided in Section
2.02(c).

                  (c) Payment of Purchase Price. The Purchase Price for each
Purchase shall be paid on each Purchase Date therefor as follows: (i) first, to
the extent the Buyer has available funds therefor, a deposit in same day funds
to the Originator's account designated by the Originator and (ii) second, by
means of an addition to the principal amount of the Subordinated Note in an
aggregate amount equal to the remaining portion of the Purchase Price; provided
that the Buyer may not pay all or any portion of the Purchase Price for any
Purchase by means of an increase in the principal amount of the Subordinated
Note if, after giving effect thereto, the Tangible Net Worth of the Buyer would
be less than 3% of the aggregate Outstanding Balance of the Pool Receivables.

<PAGE>

                  (d) Subordinated Note. On the Closing Date, the Buyer shall
issue to the Originator a note substantially in the form of Exhibit B hereto (as
amended, supplemented or otherwise modified from time to time, the "Subordinated
Note"). The initial aggregate principal amount of the Subordinated Note (the
"Initial Subordinated Note Amount") shall be equal to $[____] (which represents
the portion of the Purchase Price to be paid by the Buyer on the Closing Date
pursuant to Section 2.02(c) through an addition to the principal amount of the
Subordinated Note). Following the Closing Date, the outstanding principal amount
of the Subordinated Note at any time shall be equal to the difference between
(i) the sum of the Initial Subordinated Note Amount and each addition to the
principal amount of the Subordinated Note pursuant to Section 2.02(c) as of such
time and (ii) the aggregate amount of all payments made in respect of the
principal of the Subordinated Note as of such time. All payments made in respect
of the Subordinated Note shall be allocated, first, to pay accrued and unpaid
interest thereon and, second, to pay the outstanding principal amount thereof.

                  (e) Ownership of Receivables and Related Security. On each
Purchase Date, after giving effect to the Purchase (including any contribution
of Receivables pursuant to Section 2.06) on such date, the Buyer shall own all
Receivables originated by the Originator on or prior to such date (including
Receivables which have been previously sold or contributed to the Buyer
hereunder), together with all Related Security with respect thereto.

                  SECTION 2.03. Collections. (a) On each Business Day, the
Servicer shall apply all Collections released to the Buyer pursuant to the
Receivables Purchase Agreement (i) first, to pay the Purchase Price then owing
by the Buyer hereunder on such date, (ii) second, to pay the reasonable
operating expenses of the Buyer then due and payable, (iii) third, if such date
is a Settlement Date, to pay the accrued and unpaid interest on the outstanding
principal amount of the Subordinated Note for the most recently ended calendar
month and (iv) fourth, to prepay in whole or in part the principal amount of the
Subordinated Note. The Servicer shall, on or before each Settlement Date,
deposit into an account of the Buyer or the Buyer's assignee all remaining
Collections of Transferred Receivables (if any) then held by the Servicer (but
only to the extent such Collections have not been previously applied to purchase
new Receivables hereunder or to make payments under the Subordinated Note).

                  (b) In the event that the Originator believes that collections
which are not Collections of Transferred Receivables have been deposited into an
account of the Buyer or the Buyer's assignee, the Originator shall so advise the
Buyer and, on the Business Day following such identification to the Buyer's
reasonable satisfaction, the Buyer shall instruct the Servicer to remit such
collections to the Originator.

                  (c) On each Settlement Date, the Buyer shall, to the extent
Collections are available for such purpose under the Receivables Purchase
Agreement and are not required to pay the Purchase Price for any Receivables
purchased hereunder, pay to the Originator accrued interest on the Subordinated
Note; provided, however, that each such payment shall be made solely from
Collections of Transferred Receivables after all other amounts then due from the
Buyer under the Receivables Purchase Agreement have been paid in full and all
amounts then required to be set aside by the Buyer or the Servicer under the
Receivables Purchase Agreement have been so set aside; provided, further that no
such payment shall be made at any time (i) when a Termination Event or Incipient
Termination Event shall have occurred and be continuing or (ii)

<PAGE>

during the period between the Termination Date and the Final Payout Date. On
each Business Day from and after the Final Payout Date, the Buyer shall apply
all Collections of Transferred Receivables received by it (and not previously
distributed) first to the payment of accrued interest on the Subordinated Note,
and then to the reduction of the principal amount of the Subordinated Note until
paid in full.

                  SECTION 2.04. Settlement Procedures. (a) If on any day any
Transferred Receivable becomes (in whole or in part) a Diluted Receivable, the
Originator shall be deemed to have received on such day a Collection of such
Receivable in the amount of such Diluted Receivable (each, a "Deemed
Collection").

                  (b) If on any day it is determined that any of the
representations and warranties set forth in Section 4.01 with respect to any
Transferred Receivable shall not have been true when made with respect to such
Transferred Receivable, the Originator shall repurchase such Receivable on such
day by paying to the Buyer an amount equal to the Outstanding Balance of such
Transferred Receivable (the "Repurchase Price").

                  (c) The Originator shall pay to the Servicer the amount of all
Deemed Collections and the amount of any Repurchase Price on or before the next
Settlement Date after the date of such deemed receipt or the date of repurchase,
as applicable; provided, however, that, prior to the Termination Date, such
Deemed Collections and Repurchase Price may be paid by way of a credit (each a
"Purchase Price Credit") against the Purchase Price otherwise payable by the
Buyer hereunder in respect of Receivables arising on or after such date;
provided, further that if any Purchase Price Credits remain unused upon the
earlier to occur of (i) the Termination Date and (ii) the first Settlement Date
to occur after the Calculation Period in which such Purchase Price Credits
arose, then the Originator shall pay to the Buyer on such date in cash the
amount of such unused Purchase Price Credits.

                  (d) Except as otherwise required by law or the relevant
Contract, all Collections from an Obligor of any Transferred Receivable shall be
applied to the Receivables of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable.

                  SECTION 2.05. Payments and Computations, Etc. (a) All amounts
to be paid or deposited by the Originator or the Servicer hereunder shall be
paid or deposited no later than 12:00 Noon (New York City time) on the day when
due in same day funds to an account or accounts designated by the Buyer from
time to time.

                  (b) The Originator shall, to the extent permitted by law, pay
to the Buyer interest on any amount not paid or deposited by the Originator
(whether as Servicer or otherwise) when due hereunder at an interest rate per
annum equal to 2.00% per annum above the Alternate Base Rate, payable on demand.

                  (c) All computations of interest hereunder shall be made on
the basis of a year of 365 (or 366, as applicable) days for the actual number of
days (including the first but excluding the last day) elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next

<PAGE>

succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.

                  SECTION 2.06. Contributions. The Originator shall on the
Closing Date, and may from time to time thereafter at its option, by notice to
the Buyer on or prior to the date of the proposed contribution, identify
Receivables which it proposes to transfer to the Buyer as a capital contribution
to the Buyer. On the date of each such contribution and after giving effect
thereto, the Buyer shall own all right, title and interest in and to the
Receivables so identified and contributed (collectively, the "Contributed
Receivables") and all Related Security relating to such Receivables and all
Collections with respect thereto and other proceeds of such Receivables and
Related Security.

                  SECTION 2.07. Intent of the Originator and the Buyer. The
Originator and the Buyer have structured this Agreement with the intention that
each sale of Receivables hereunder be treated as a sale of such Receivables by
the Originator to the Buyer for all purposes and each contribution of
Receivables hereunder shall be treated as an absolute transfer of such
Receivables by the Originator to the Buyer for all purposes. The Originator and
the Buyer shall record each sale and contribution as a sale or capital
contribution, as the case may be, on its books and records, and reflect each
sale and contribution in its financial statements as a sale or capital
contribution, as the case may be.

                  SECTION 2.08. Grant of Security Interest. As collateral
security for the performance by the Originator of all the terms, covenants and
agreements on the part of the Originator (whether as Originator, Servicer or
otherwise) to be performed under this Agreement or any other Transaction
Document, including the punctual payment when due of all amounts payable by it
hereunder and thereunder, the Originator hereby grants to the Buyer a security
interest in all of the Originator's right, title and interest (if any) in and to
the following, in each case whether now owned and existing or hereafter acquired
or arising:

                  (a) all Contracts, including, without limitation, with respect
         to each Contract (i) all rights of the Originator to receive moneys due
         or to become due under or pursuant to such Contract (whether or no
         earned by performance), (ii) all security interests and property
         subject thereto from time to time purporting to secure payment of
         monies due or to become due under or pursuant to such Contract, (iii)
         all rights of the Originator to receive proceeds of any insurance,
         indemnity, warranty or guaranty with respect to such Contract, (iv)
         claims of the Originator for damages arising out of or for breach of or
         default under such Contract, and (v) the right of the Originator to
         compel performance and otherwise exercise all remedies thereunder;

                  (b) all Receivables, (whether arising before, on or after the
         Termination Date), together with all Related Security and Collections
         with respect thereto;

                  (c) all Deposit Accounts; and

                  (d) to the extent not included in the foregoing, all products,
         profits, collections and Proceeds of any and all of the foregoing.

<PAGE>

                      ARTICLE III. CONDITIONS OF PURCHASES

                  SECTION 3.01. Conditions Precedent to Initial Purchase from
the Originator. The initial Purchase of Receivables from the Originator pursuant
to Section 2.02(a) hereunder is subject to the conditions precedent that the
Buyer shall have received on or before the date of such Purchase all of the
instruments, documents, agreements and opinions specified in Section 3.01 of the
Receivables Purchase Agreement, each (unless otherwise indicated therein) dated
such date, in form and substance satisfactory to the Buyer.

                  SECTION 3.02. Conditions Precedent to All Purchases. The
Buyer's obligation to make any Purchase (including the initial Purchase pursuant
to Section 2.02(a)) hereunder shall be subject to the further conditions
precedent that:

                  (a) on or prior to the date of such Purchase, the Servicer
         shall have delivered to the Buyer all Servicer Reports required under
         the Receivables Purchase Agreement, each duly completed and containing
         information covering the most recently ended reporting period for which
         information is required pursuant to Section 6.03 of the Receivables
         Purchase Agreement and containing such additional information as may
         reasonably be requested by the Buyer;

                  (b) on the date of such Purchase the following statements
         shall be true (and the Originator, by accepting the Purchase Price for
         such Purchase, shall be deemed to have represented and warranted that):

                           (i) The representations and warranties contained in
                  Section 4.01 are true and correct in all material respects
                  (except that, to the extent any such representation or
                  warranty is qualified by materiality or Material Adverse
                  Effect, such representation or warranty must be true and
                  correct in all respects subject only to the materiality or
                  Material Adverse Effect qualification set forth therein) on
                  and as of the date of such Purchase as though made on and as
                  of such date;

                           (ii) No event has occurred and is continuing, or
                  would result from such Purchase, that constitutes a
                  Termination Event or an Incipient Termination Event; and

                           (iii) The "Termination Date" shall not have occurred
                  under (and as defined in) the Receivables Purchase Agreement;
                  and

                  (c) the Buyer shall have received such other approvals,
         opinions or documents as the Buyer may reasonably request.

         Notwithstanding the foregoing, unless otherwise specified by the Buyer
(with the written consent of the Administrative Agent) in a written notice to
the Originator, each Purchase shall occur automatically on each day prior to the
Termination Date, with the result that the title to all Receivables and the
Related Security with respect thereto shall vest in the Buyer automatically on
the date each such Receivable arises and without any further action of any kind
by the Buyer or the Originator, whether or not the conditions precedent to such
Purchase were in fact satisfied on such date and notwithstanding any delay in
making payment of the Purchase Price for such

<PAGE>

Receivables (but without impairing the Buyer's obligation to pay such Purchase
Price in accordance with the terms hereof).

                   ARTICLE IV. REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01. Representations and Warranties of the
Originator. The Originator represents and warrants as follows as of the date
hereof and as of the date of each Purchase hereunder:

                  (a) The Originator is a corporation duly incorporated, validly
         existing and in good standing under the laws of Delaware, and is duly
         qualified to do business, and is in good standing, in every
         jurisdiction where the nature of its business requires it to be so
         qualified, unless the failure to so qualify would not reasonably be
         expected to have a Material Adverse Effect.

                  (b) The execution, delivery and performance by the Originator
         of the Transaction Documents to which it is a party, including the
         Originator's sale and contribution of Receivables hereunder and the
         Originator's use of the proceeds of Purchases, (i) are within the
         Originator's corporate powers, (ii) have been duly authorized by all
         necessary corporate action, (iii) do not contravene (1) the
         Originator's certificate of incorporation or by-laws, (2) any Law
         applicable to the Originator, (3) any material contractual restriction
         binding on or affecting the Originator or its property or (4) any
         order, writ, judgment, award, injunction or decree binding on or
         affecting the Originator or its property, except, in the case of each
         of sub-clauses (2) through (4) of this clause (iii), to the extent that
         such contravention would not be reasonably expected to have a Material
         Adverse Effect, and (iv) do not result in or require the creation of
         any Adverse Claim upon or with respect to any of its properties (except
         for the transfer of the Originator's interest in the Transferred
         Receivables pursuant to this Agreement). Each of the Transaction
         Documents to which the Originator is named as a party has been duly
         executed and delivered by the Originator.

                  (c) No authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         is required for the due execution, delivery and performance by the
         Originator of this Agreement or any other Transaction Documents to
         which it is a party, except for the filing of the financing statements
         referred to in Section 3.01 of the Receivables Purchase Agreement.

                  (d) Each of the Transaction Documents to which the Originator
         is a party constitutes the legal, valid and binding obligation of the
         Originator enforceable against the Originator in accordance with its
         terms, except as such enforceability may be limited by bankruptcy,
         insolvency, reorganization or similar laws affecting the enforcement of
         creditors' rights generally and by principles of equity, regardless of
         whether such enforceability is considered in a proceeding in equity or
         at law.

                  (e) Each sale and contribution of Receivables made pursuant to
         this Agreement will constitute a valid sale, transfer, and assignment
         of such Receivables to

<PAGE>

         the Buyer, enforceable against creditors of, and purchasers from, the
         Originator. The Originator shall have no remaining property interest in
         any Transferred Receivable.

                  (f) (i) The Originator has heretofore furnished to the Buyer
         and the Purchasers its consolidated balance sheet and statements of
         income, stockholders' equity and cash flows (x) for the fiscal years
         ending, and at, December 29, 2001 and December 28, 2002, and (y) as of
         and for the fiscal quarter and the portion of the fiscal year ended
         March 29, 2003. The financial statements described in clause (x) of
         this Section 4.01(f) were reported on by PricewaterhouseCoopers LLP for
         such fiscal years ending, and at, December 29, 2001 and December 28
         2002, and in clause (y) of this Section 4.01(f) were certified by the
         Originator's chief financial officer. Such financial statements present
         fairly, in all material respects, the financial position and results of
         operations and cash flows of the Originator and its consolidated
         Subsidiaries as of such dates and for such periods in conformity with
         GAAP, subject to year-end audit adjustments and the absence of
         footnotes in the case of the statements referred to in clause (y) above
         of this Section 4.01(f). The Originator has heretofore also furnished
         to the Purchasers its unaudited pro forma condensed consolidated
         statement of income, for its fiscal year ended December 28, 2002, and
         for its fiscal quarter ended March 29, 2003 and its unaudited pro forma
         condensed consolidated balance sheet at March 29, 2003. Such pro forma
         financial statements comply, in all material respects, with the
         requirements of Article XI of Regulation S-X of the SEC.

                       (ii) Since December 28, 2002, there has been no change,
         occurrence or development that has had or could reasonably be expected
         to have a Material Adverse Effect.

                  (g) There are no actions, suits or proceedings by or before
         any Official Body pending against or, to the knowledge of the Executive
         Officers, threatened against or affecting the Originator or any of its
         Subsidiaries that (i) would reasonably be expected to be adversely
         determined, and (ii) if so determined either (x) would reasonably be
         expected, individually or in the aggregate, to result in a Material
         Adverse Effect or (y) seek to enjoin, unwind or otherwise materially
         and adversely affect the transactions contemplated by the Transaction
         Documents.

                  (h) No proceeds of any Purchase will be used for a purpose
         that violates or would be inconsistent with, Regulation T, U or X
         promulgated by the Board of Governors of the Federal Reserve System
         from time to time.

                  (i) No transaction contemplated hereby requires compliance
         with any bulk sales act or similar law.

                  (j) Immediately prior to each Purchase of Receivables
         hereunder, the Originator will be the owner of such Receivables and all
         Related Security with respect thereto, free and clear of any Adverse
         Claim (other than Adverse Claims created hereunder and under the
         Receivables Purchase Agreement). The Buyer has acquired a valid and
         perfected first priority ownership interest in each Transferred
         Receivable now existing or hereafter arising and in the Related
         Security and Collections with respect

<PAGE>

         thereto, in each case free and clear of any Adverse Claim (other than
         Adverse Claims created hereunder and under the Receivables Purchase
         Agreement). No effective financing statement or other instrument
         similar in effect, is filed in any recording office listing the
         Originator as debtor, covering any Receivable, any interest therein,
         the Related Security or Collections except such as may be filed in
         favor of the Buyer in accordance with this Agreement. Prior to giving
         effect to any transfer hereunder, all Receivables were payable to the
         Originator as principal for its own account. The Originator has no
         obligation (whether pursuant to any contract, any requirement of Law or
         otherwise) to remit any Collections on the Receivables to any
         Pharmaceutical Plan or to any other Person, other than to the Buyer
         hereunder and to the Purchasers as provided in the Receivables Purchase
         Agreement.

                  (k) Each Servicer Report (if prepared by any Transaction Party
         or any of their respective Affiliates, or to the extent that
         information contained therein is supplied by any Transaction Party or
         an Affiliate), information, exhibit, financial statement, document,
         book, record or report furnished or to be furnished in writing at any
         time by or on behalf of any Transaction Party in connection with the
         Transaction Documents is or will be accurate in all material respects
         as of its date or (except as otherwise disclosed to the Buyer at such
         time) as of the date so furnished, and no such Servicer Report,
         information, exhibit, financial statement, document, book, record or
         report contains or will contain any untrue statement of a material fact
         or omits or will omit to state a material fact necessary in order to
         make the statements contained therein, in the light of the
         circumstances under which they were made, not misleading.

                  (l) The principal place of business and chief executive office
         of the Originator and the office where the Originator keeps its records
         concerning the Transferred Receivables are, and at all times during the
         past five (5) years have been located at the address or addresses
         referred to in Section 5.01(b).

                  (m) The name and address of each Deposit Account Bank,
         together with the account number of each Deposit Account, are as
         specified in Exhibit A (as the same may be updated from time to time
         pursuant to Section 5.01(g)).

                  (n) In the past five (5) years, the Originator has not used
         any corporate name, tradename or doing-business-as name other than the
         name in which it has executed this Agreement and the other names listed
         on Exhibit C. The Originator's Federal Employer Identification Number
         is 22-3461740.

                  (o) The Originator is not, and is not controlled by, an
         "investment company" within the meaning of the Investment Company Act
         of 1940, as amended.

                  (p) (i) The fair value of the property of the Originator is
         greater than the total amount of liabilities, including contingent
         liabilities, of the Originator, (ii) the present fair salable value of
         the assets of the Originator is not less than the amount that will be
         required to pay all probable liabilities of the Originator on its debts
         as they become absolute and matured, (iii) the Originator does not
         intend to, and does not believe that it will, incur debts or
         liabilities beyond the Originator's abilities to pay such debts and

<PAGE>

         liabilities as they mature and (iv) the Originator is not engaged in a
         business or a transaction, and is not about to engage in a business or
         a transaction, for which the Originator's property would constitute
         unreasonably small capital.

                  (q) Each Receivable treated as or represented to be an
         Eligible Receivable on any date (including without limitation, for
         purposes of calculating the Net Receivables Balance under the
         Receivables Purchase Agreement) shall be an Eligible Receivable on such
         date.

                  (r) All Obligors have been instructed to remit all their
         payments in respect of Receivables directly to a Deposit Account with
         respect to which a duly executed Control Agreement is in full force and
         effect or will be in full force and effect within 30 days of the
         Closing Date.

                  (s) The transfers of Transferred Receivables by the Originator
         to the Buyer pursuant to this Agreement, and all other transactions
         between the Originator and the Buyer, have been and will be made in
         good faith and without intent to hinder, delay or defraud creditors of
         the Originator.

                  (t) No ERISA Event has occurred or is reasonably expected to
         occur that, when taken together with all other such ERISA Events for
         which liability is reasonably expected to occur, has resulted, or could
         reasonably be expected to result, in a Material Adverse Effect. The
         Originator and its ERISA Affiliates have fulfilled their respective
         obligations under the minimum funding standards of ERISA and the IRC
         with respect to each Plan and are in compliance in all material
         respects with the presently applicable provisions of ERISA and the IRC
         and have not incurred any liability to the PBGC (other than to make
         contributions, pay annual PBGC premiums or pay out benefits in the
         ordinary course of business) and none of the foregoing have resulted,
         or would reasonably be expected to result, in a Material Adverse
         Effect.

                  (u) No event has occurred and is continuing and no condition
         exists which constitutes a Termination Event or Incipient Termination
         Event.

                  ARTICLE V. COVENANTS

                  SECTION 5.01. Covenants of the Originator. From the date
hereof until the first day following the Termination Date on which all of the
Transferred Receivables are either collected in full or are written off in
accordance with the Credit and Collection Policy, the Originator covenants and
agrees as follows:

                  (a) Compliance with Laws, Etc. The Originator will comply in
         all respects with all applicable Laws and preserve and maintain its
         corporate existence, rights, franchises, qualifications and privileges
         except to the extent that the failure so to comply with such Laws or
         the failure so to preserve and maintain such rights, franchises,
         qualifications, and privileges would not reasonably be expected to have
         a Material Adverse Effect.

<PAGE>

                  (b) Offices, Records and Books of Account. The Originator will
         keep its principal place of business and chief executive office and the
         office where it keeps its records concerning the Receivables at (i) the
         address of the Originator specified in Section 9.02 as of the date of
         this Agreement or (ii) upon 30 days' prior written notice to the Buyer,
         at any other locations in jurisdictions where all actions reasonably
         requested by the Buyer to protect and perfect the Buyer's interest in
         the Receivables have been taken and completed. The Originator also will
         maintain and implement administrative and operating procedures
         (including without limitation, an ability to recreate records
         evidencing Receivables and related Contracts in the event of the
         destruction of the originals thereof), and keep and maintain all
         documents, books, records and other information reasonably necessary or
         advisable for the collection of all Receivables (including, without
         limitation, records adequate to permit the daily identification of each
         Receivable and all Collections of and adjustments to each existing
         Receivable). The Originator shall make a notation in its books and
         records, including its computer files, to indicate which Receivables
         have been sold or contributed to the Purchaser hereunder.

                  (c) Performance and Compliance with Contracts and Credit and
         Collection Policy. The Originator will, at its expense, (i) timely and
         fully perform and comply in all material respects with all provisions,
         covenants and other promises required to be observed by it under the
         Contracts related to the Receivables, and (ii) timely and fully comply
         in all material respects with the Credit and Collection Policy in
         regard to each Receivable and the related Contracts.

                  (d) Sales, Liens, Etc. Except for the sales and contributions
         of Receivables contemplated herein, the Originator will not sell,
         assign (by operation of law or otherwise) or otherwise dispose of, or
         create or suffer to exist any Adverse Claim (other than Adverse Claims
         created hereunder and under the Receivables Purchase Agreement) upon or
         with respect to, any Receivable, Related Security, related Contract or
         Collections, or upon or with respect to any Deposit Account, or assign
         any right to receive income in respect thereof.

                  (e) Extension or Amendment of Receivables and Contracts. The
         Originator will not extend, amend or otherwise modify the terms of any
         Receivable except, in its capacity as Servicer, to the extent permitted
         under Section 6.02(c) of the Receivables Purchase Agreement. The
         Originator shall not amend, modify or waive any term or condition of
         any Contract, unless such amendment, modification or waiver (i) is made
         in accordance with the Credit and Collection Policy and (ii) could not
         reasonably be expected to cause any existing Receivable to cease to be
         an Eligible Receivable or otherwise have a Material Adverse Effect.

                  (f) Change in Business or Credit and Collection Policy. The
         Originator will not make any change in the character of its business or
         in the Credit and Collection Policy, except for any such change that
         would not (i) impair the collectibility of any Receivables in any
         material respect or (ii) otherwise be reasonably likely to have a
         Material Adverse Effect.

<PAGE>

                  (g) Change in Payment Instructions to Obligors. The Originator
         will not add or terminate any Deposit Account from those listed on
         Exhibit A to this Agreement, or make any change in its instructions to
         Obligors regarding payments to be made in respect of the Receivables or
         payments to be made to the Deposit Accounts, unless the Buyer shall
         have received notice of such addition, termination or change (including
         an updated Exhibit A) and a fully executed Control Agreement with
         respect to each new Deposit Account. Each Deposit Account shall be
         maintained in the name of the Buyer.

                  (h) Deposits to the Deposit Accounts. The Originator will
         instruct all Obligors to remit all their payments in respect of the
         Receivables into the Deposit Accounts directly by wire transfer or
         electronic funds transfer to the relevant Deposit Account Bank. If the
         Originator shall receive any Collections directly, the Originator or
         the Servicer, as the case may be, shall promptly (and in any event
         within one Business Day) cause such Collections to be either (i)
         deposited into a Deposit Account or (ii) in the case of checks received
         by the Originator or the Servicer, mail to a Deposit Account Bank for
         deposit into a Deposit Account. The Originator and the Servicer will
         not permit funds which do not constitute Collections of Receivables
         from being deposited into any Deposit Account.

                  (i) Marking of Records. At its expense, the Originator will
         mark its master data processing records evidencing Receivables with a
         legend evidencing that Transferred Receivables and the related
         Contracts have been sold in accordance with this Agreement.

                  (j) Audits. The Originator will, from time to time during
         regular business hours as requested by the Buyer or its assigns upon
         reasonable prior notice and at the Originator's expense, permit the
         Buyer, or its agents, representatives or assigns (including independent
         public accountants), (i) to conduct periodic audits of the Receivables,
         the Related Security and the related Contracts, books and records and
         collections systems of the Originator, (ii) to examine and make copies
         of and abstracts from all books, records and documents (including,
         without limitation, computer tapes and disks) in the possession or
         under the control of the Originator relating to Receivables and the
         Related Security, including, without limitation, the Contracts, and
         (iii) to visit the offices and properties of the Originator for the
         purpose of examining such materials described in clause (ii) above, and
         to discuss matters relating to Receivables and the Related Security or
         the Originator's performance under the Transaction Documents or under
         the Contracts with any of the officers or employees of the Originator
         having knowledge of such matters. The Buyer shall use commercially
         reasonably efforts to minimize the disruption to the Originator's
         business in connection with any such audit, examination or visit.

                  (k) Further Assurances; Change in Name or Jurisdiction of
         Origination, etc. (i) The Originator agrees from time to time, at its
         expense, promptly to execute and deliver all further instruments and
         documents, and to take all further actions, that may be necessary or
         desirable, or that the Buyer or its assignee may reasonably request, to
         perfect, protect or more fully evidence the Buyer's ownership of the
         Transferred Receivables and/or the Buyer's security interest in the
         property described in Section 2.08,

<PAGE>

         or to enable the Buyer or its assignee to exercise and enforce its
         respective rights and remedies under this Agreement. Without limiting
         the foregoing, the Originator will, upon the request of the Buyer or
         its assignee, (A) execute and file such financing or continuation
         statements, or amendments thereto, and such other instruments and
         documents, that may be necessary or desirable or that the Buyer or its
         assignee may reasonably request to perfect, protect or evidence the
         Buyer's ownership of such Receivables and/or such security interest;
         and (B) following the occurrence and during the continuation of a
         Termination Event or an Incipient Termination Event, deliver to the
         Buyer copies of the invoices evidencing the Transferred Receivables
         (which delivery may be made in electronic form).

                      (ii) The Originator authorizes the Buyer or its
         assignee to file financing or continuation statements, and amendments
         thereto and assignments thereof, relating to the Receivables and the
         Related Security, the related Contracts and the Collections with
         respect thereto without the signature of the Originator. A photocopy or
         other reproduction of this Agreement shall be sufficient as a financing
         statement where permitted by law.

                      (iii) The Originator shall perform its obligations
         under the Contracts related to the Transferred Receivables to the same
         extent as if the Transferred Receivables had not been sold or
         transferred.

                      (iv) The Originator shall not change its jurisdiction
         of organization unless (i) the Buyer shall have received at least
         thirty (30) days advance written notice of such change and all action
         by Originator necessary or appropriate to perfect or maintain the
         perfection of the Buyer's interest in the Receivables (including,
         without limitation, the filing of all financing statements and the
         taking of such other action as the Buyer may request in connection with
         such change) shall have been duly taken and (ii) the new jurisdiction
         of organization is a State within the United States of America.

                      (v) The Originator will not change its name, identity
         or corporate structure or tax identification number or relocate its
         chief executive office or the office at which any records relating to
         the Receivables are maintained unless the Buyer shall have received at
         least thirty (30) days advance written notice of such change or
         relocation and all action by Originator necessary or appropriate to
         perfect or maintain the perfection of the Buyer's interest in the
         Receivables (including, without limitation, the filing of all financing
         statement amendments and the taking of such other action as the Buyer
         may request in connection with such change or relocation) shall have
         been duly taken.

                  (l) Reporting Requirements. The Originator will provide or
         cause to be provided to the Buyer and the Administrative Agent the
         following:

                      (i) not later than the earlier of (i) 100 days after the
         end of each fiscal year of the Originator and (ii) 5 Business Days
         after the filing thereof with the SEC, (A) the audited consolidated
         balance sheet of the Originator and related consolidated statements of
         operations, stockholders' equity and cash flows as of the end of and
         for such year, setting forth in each case in comparative form the
         figures for the previous

<PAGE>

         fiscal year, all reported on by PricewaterhouseCoopers LLP or other
         independent public accountants of recognized national standing (without
         a "going concern" or like qualification or exception and without any
         qualification or exception as to the scope of such audit) to the effect
         that such consolidated financial statements present fairly in all
         material respects the financial condition and results of operations of
         the Originator and its consolidated Subsidiaries on a consolidated
         basis, as of such dates and for such periods, in conformity with GAAP;
         provided, however, that delivery within the time frame specified above
         of copies of the Originator's Annual Report on Form 10-K filed with the
         SEC shall satisfy the requirement for the delivery of the Originator's
         financial statements set forth in this clause (i);

                       (ii) not later than the earlier of (i) 55 days after the
         end of each of the first three fiscal quarters of each fiscal year of
         the Originator and (ii) 5 Business Days after the filing thereof with
         the SEC, the unaudited consolidated balance sheet of the Originator and
         related statements of operations, stockholders' equity and cash flows
         as of the end of and for such fiscal quarter and the then elapsed
         portion of the fiscal year, setting forth in each case in comparative
         form the figures for the corresponding period or periods of (or, in the
         case of the balance sheet, as of the end of) the previous fiscal year,
         all certified by one of its Financial Officers as presenting fairly in
         all material respects the financial condition and results of operations
         of the Originator and its consolidated Subsidiaries, on a consolidated
         basis, as of such dates and for such periods, in conformity with GAAP,
         subject to normal year-end audit adjustments and the absence of
         footnotes; provided, however, that delivery within the time
         frame specified above of copies of Originator's Quarterly Report on
         Form 10-Q filed with the SEC shall satisfy the requirements for
         the delivery of the Originator's financial statements set forth in this
         clause (ii);

                       (iii) at the time of the delivery of the financial
         statements provided for in clause (i) or clause (ii) of this Section
         5.01(l), a certificate of a Financial Officer of the Originator to the
         effect that, to the best of such officer's knowledge, no Termination
         Event or Incipient Termination Event has occurred and is continuing or,
         if any Termination Event or Incipient Termination Event has occurred
         and is continuing, specifying the nature and extent thereof;

                       (iv) as soon as possible and in any event within one
         Business Day after obtaining knowledge of the occurrence of each
         Termination Event or Incipient Termination Event, a statement of a
         Financial Officer of the Originator setting forth details of such
         Termination Event or Incipient Termination Event and the action that
         the Originator has taken and proposes to take with respect thereto;

                       (v) promptly upon a Financial Officer becoming aware
         thereof, notice of the occurrence of any ERISA Event that, alone or
         together with any other ERISA Events that have occurred and are then
         outstanding, would reasonably be expected to result in liability of the
         Originator and its Subsidiaries in an aggregate amount exceeding
         $5,000,000;

<PAGE>

                       (vi) at least thirty (30) days prior to any change in the
         name, jurisdiction of organization, corporate structure or tax
         identification number of any Transaction Party, a notice setting forth
         the new name, jurisdiction of organization, corporate structure or tax
         identification number, as applicable, and the effective date thereof;

                       (vii) promptly upon learning thereof, notice of any
         downgrade in the Debt Rating (or the withdrawal by either S&P or
         Moody's of a Debt Rating) of any Transaction Party, setting forth the
         Indebtedness affected and the nature of such change (or withdrawal);

                       (viii) promptly after the occurrence thereof any pending
         or threatened litigation or other event or condition that has had, or
         could reasonably be expected to have, a Material Adverse Effect;

                       (ix) promptly upon learning thereof, and in any event no
         later than the effective date thereof, notice of any amendment, waiver,
         termination or other modification to, or replacement or substitution
         for, the Revolving Credit Agreement;

                       (x) as soon as possible and in any event within one
         Business Day after obtaining knowledge of any event or circumstance
         described in any of clauses (ii), (iii) or (iv) of the definition of
         "Formulary Rebate Conditions," a statement of an Executive Officer of
         the Originator setting forth in reasonable detail the nature of such
         event or circumstance;

                       (xi) promptly upon the occurrence thereof, notice of any
         amendment to the Credit and Collection Policy; and

                       (xii) such other information respecting the Transferred
         Receivables or the condition or operations, financial or otherwise, of
         the Originator (including, without limitation, information regarding
         any pending or threatened litigation) as the Buyer may from time to
         time reasonably request.

                   (m) Separate Conduct of Business. The Originator will, and
         will cause each of its Affiliates (other than the Buyer) to: (i)
         maintain separate corporate records and books of account from those of
         the Buyer; (ii) conduct its business from an office separate from that
         of the Buyer; (iii) ensure that all oral and written communications,
         including without limitation, letters, invoices, purchase orders,
         contracts, statements and applications, will not be made in the name of
         the Buyer; (iv) have stationery and other business forms separate from
         those of the Buyer; (v) not hold itself out as having agreed to pay, or
         as being liable for, the obligations of the Buyer; (vi) not engage in
         any transaction with the Buyer except as contemplated by this Agreement
         or the Receivables Purchase Agreement; (vii) continuously maintain as
         official records the resolutions, agreements and other instruments
         underlying the transactions contemplated by this Agreement and (viii)
         insure that any consolidated financial statements of the Originator
         that are filed with the Securities and Exchange Commission or any other
         Official Body or are furnished to any creditors of the Originator have
         notes clearly stating that (A) the Buyer is the owner

<PAGE>

         of the Transferred Receivables and is a separate entity and (B) the
         Buyer's assets will be available first and foremost to satisfy the
         claims of the creditors of the Buyer. In addition, the Originator shall
         take, or refrain from taking, as the case may be, all other actions
         that are necessary to be taken or not to be taken in order to (x)
         ensure that the assumptions and factual recitations set forth in the
         Specified Bankruptcy Opinion Provisions remain true and correct in all
         material respects with respect to the Originator and (y) comply in all
         material respects with those procedures described in such provisions
         which are applicable to the Originator.

                   (n) Taxes. The Originator will file all material tax returns
         and reports required by law to be filed by it and will promptly pay all
         taxes and governmental charges at any time owing, except such as are
         being contested in good faith by appropriate proceedings and for which
         appropriate reserves have been established in conformity with GAAP. The
         Originator will pay when due any taxes payable in connection with the
         Receivables excluding taxes on or measured by income or gross receipts
         of the Administrative Agent, the Managing Agents, the Purchasers and
         the Buyer.

                   (o) Treatment as Sales. The Originator shall not account for
         or treat (whether in financial statements or otherwise) the
         transactions contemplated by this Agreement in any manner other than as
         a sale and/or absolute conveyance of Receivables by the Originator to
         the Buyer.

                   ARTICLE VI. ADMINISTRATION AND COLLECTION

                   SECTION 6.01. Designation of Servicer. Consistent with the
Buyer's ownership interest in the Transferred Receivables, the Originator
acknowledges and agrees that the servicing, administration and collection of the
Transferred Receivables shall be the responsibility and right of the Buyer. The
Buyer has advised the Originator that the servicing, administration and
collection of the Transferred Receivables shall be conducted by the Person
designated as the Servicer pursuant to the Receivables Purchase Agreement from
time to time. The Buyer has requested the Originator to, and the Originator has
agreed that it will, act as the initial Servicer. All references to the
Originator hereunder shall include the Originator in its capacity as Servicer
under the Receivables Purchase Agreement until a successor Servicer is appointed
thereunder.

                   SECTION 6.02. Certain Rights of the Buyer. (a) The Originator
hereby transfers to the Buyer (and its assigns and designees) the exclusive
ownership and control of the Deposit Accounts and the Originator shall take any
further action that the Buyer may reasonably request to effect or further
evidence such transfer.

                   (b) At any time following the occurrence and during the
continuation of a Termination Event or a Rating Level 4 Period:

                       (i) The Originator shall, upon the Buyer's request and at
         the Originator's expense, give notice of the Buyer's interest to each
         Obligor of Receivables

<PAGE>

         and direct that payments of all amounts payable under the Receivables
         be made directly to the Buyer or its designee.

                       (ii) At the Buyer's request and at the Originator's
         expense, the Originator shall (A) assemble all of the documents,
         instruments and other records (including, without limitation, computer
         tapes and disks) that evidence or relate to the Receivables, and the
         related Contracts and Related Security, or that are otherwise necessary
         or desirable to collect the Receivables, and shall make the same
         available to the Buyer at a place selected by the Buyer or its
         designee, and (B) segregate all cash, checks and other instruments
         received by it from time to time constituting Collections of
         Receivables in a manner acceptable to the Buyer and, promptly upon
         receipt, remit all such cash, checks and instruments, duly indorsed or
         with duly executed instruments of transfer, to the Buyer or its
         designee. The Buyer shall also have the right to make copies of all
         such documents, instruments and other records at any time.

                   (c) The Originator authorizes each of the Buyer and the
Administrative Agent, and hereby irrevocably appoints each of the Buyer and the
Administrative Agent as its attorney-in-fact coupled with an interest, with full
power of substitution and with full authority in place of the Originator,
following the occurrence and during the continuation of a Termination Event or a
Rating Level 4 Period, to take any and all steps in the Originator's name and on
behalf of the Originator, that are necessary or desirable, in the determination
of the Buyer or the Administrative Agent, to collect amounts due under the
Receivables, including, without limitation, endorsing the Originator's name on
checks and other instruments representing Collections of Receivables and
enforcing the Receivables and the Related Security and related Contracts.

                   SECTION 6.03. Rights and Remedies. (a) If the Originator (as
Servicer or otherwise) fails to perform any of its obligations under this
Agreement, the Buyer may (but shall not be required to) cause performance of,
such obligation, and the costs and expenses of the Buyer reasonably incurred in
connection therewith shall be payable by the Originator.

                  (b) The Originator (as Servicer or otherwise) shall perform
all of its obligations under the Contracts related to the Receivables to the
same extent as if the Originator had not sold or contributed Receivables
hereunder, and the exercise by the Buyer of its rights hereunder shall not
release the Originator (as Servicer or otherwise) from any of its duties or
obligations with respect to any Receivables or the related Contracts. The Buyer
shall not have any obligation or liability with respect to any Receivables or
related Contracts, nor shall the Buyer be obligated to perform any of the
obligations of the Originator (as Servicer or otherwise) thereunder.

                  (c) The Originator shall cooperate with the Servicer in
collecting amounts due from Obligors in respect of the Receivables.

                   SECTION 6.04. Transfer of Records to Buyer. Each Purchase
hereunder shall include the transfer to the Buyer of all of the Originator's
right and title to and interest in the records relating to such Receivables and
shall include an irrevocable non-exclusive license to the use of the
Originator's computer software system (other than third party proprietary
software

<PAGE>

which is not included in the Related Security or which is subject to license
agreements that require additional payments by the Originator or its Affiliates
for access thereto by Persons other than the Originator) to access and create
such records. Such license shall be without royalty or payment of any kind, is
coupled with an interest, and shall be irrevocable until all of the Transferred
Receivables are either collected in full or are written off as uncollectible.

                  To the extent that (i) direct on-line access by the Buyer to
the computer files and third-party proprietary software subject to license
agreements would require additional payments for access thereto by the Buyer or
is prohibited by such license agreements and (ii) the Originator is no longer
the Servicer, the Originator hereby agrees to download, prepare and distribute,
promptly and effectively, all data relating to the Receivables in usable form as
reasonably requested by the Buyer and its assigns from time to time. If the
Originator fails to produce such data in a prompt and effective manner, the
Buyer and its assigns may have access to such third-party software to create
such records, and the Originator shall incur and pay such additional license
costs and expenses with respect to the granting of such access.

                  The Originator shall take such action requested by the Buyer,
from time to time hereafter, that may be necessary or appropriate to ensure that
the Buyer has an enforceable ownership interest in the records relating to the
Transferred Receivables and rights (whether by ownership, license or
sublicense), to the extent provided in the first and second paragraphs of this
Section 6.04, to the use of the Originator's computer software system to access
and create such records.

                  In recognition of the Originator's need to have access to the
records transferred to the Buyer hereunder, the Buyer hereby grants to the
Originator an irrevocable license to access such records in connection with any
activity arising in the ordinary course of the Originator's business or in
performance of its duties as Servicer; provided, however, that (i) the
Originator shall not disrupt or otherwise interfere with the Buyer's use of and
access to such records during such license period, (ii) the Originator consents
to the assignment and delivery of the records (including any information
contained therein relating to the Originator or its operations) to any assignees
or transferees of the Buyer and (iii) access to proprietary third-party software
shall be subject to the first and second paragraphs of this Section 6.04.

                        ARTICLE VII. TERMINATION EVENTS

                   SECTION 7.01. Termination Events. If any of the following
events (each a "Termination Event") shall occur and be continuing:

                   (a) any Transaction Party shall fail to make any payment or
deposit required to be made by it hereunder or under any of the Transaction
Documents when due hereunder or thereunder and such failure shall remain
unremedied for one Business Day; or

                   (b) any representation, warranty, certification or statement
made by any Transaction Party in this Agreement, any other Transaction Document
to which it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect (or, to the
extent any such representation or warranty is qualified by materiality or
Material Adverse Effect, such representation or warranty shall prove to have
been incorrect in

<PAGE>

any respect, subject only to the materiality or Material Adverse Effect
qualification set forth therein) when made or deemed made; or

                   (c) any Transaction Party shall fail to perform or observe
(i) any term, covenant or agreement contained in Section 5.01(a) (as to
maintenance of existence only), 5.01(d) or 5.01(l)(iv) of this Agreement or (ii)
any other term, covenant or agreement contained in this Agreement or any other
Transaction Document on its part to be performed or observed and, solely in the
case of this clause (ii), such failure shall remain unremedied for ten (10) days
after such Transaction Party has knowledge or receives notice thereof; or

                   (d) (i) the Originator or any of its Subsidiaries shall fail
to make any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall become due
and payable; or (ii) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity, other than at the
election of the Originator or any Subsidiary, or that, subject to any applicable
grace period, enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided, however, that this clause
(d)(ii) shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness; or

                   (e) any Event of Bankruptcy shall occur with respect to any
Transaction Party; or

                   (f) the Buyer shall, for any reason, fail or cease to have
good marketable title to the Receivables and Related Security and Collections
with respect thereto, free and clear of any Adverse Claims (other than Adverse
Claims created hereunder and under the Receivables Purchase Agreement); or

                   (g) any Change of Control shall occur; or

                   (h) there shall have occurred since the Closing Date any
event or condition which has had or could reasonably be expected to have a
material adverse effect on (A) the ability of the Buyer or the Originator to
perform its obligations under the Transaction Documents or (B) the
collectibility of the Receivables; or

                   (i) any Transaction Party receives notice or becomes aware
that (i) a notice of federal tax lien has been filed against any Transaction
Party or (ii) a notice of lien has been filed against any Transaction Party
under Section 412(n) of the IRC or Section 302(f) of ERISA for a failure to make
a required installment or other payment to a plan to which Section 412(n) of the
IRC or Section 302(f) of ERISA applies; or

                   (j) one or more judgments for the payment of money in an
aggregate amount in excess of $25,000,000 (except in each case to the extent
covered by insurance or other right of reimbursement or indemnification), or
which have or would reasonably be expected to have a Material Adverse Effect,
shall be rendered against the Originator, any Subsidiary or any

<PAGE>

combination thereof and the same shall remain undischarged for a period of 60
consecutive days during which execution shall not be effectively stayed or
bonded pending appeal;

then, and in any such event, the Buyer may, in its discretion, declare the
Termination Date to have occurred upon notice to the Originator (in which case
the Termination Date shall be deemed to have occurred); provided, however, that,
automatically upon the occurrence of any Event of Bankruptcy with respect to any
Transaction Party (without any requirement for the giving of notice), the
Termination Date shall occur. Upon any such declaration or upon such automatic
termination, the Buyer and its assigns shall have, in addition to the rights and
remedies which it may have under this Agreement, all other rights and remedies
provided after default under the UCC and under other applicable law, which
rights and remedies shall be cumulative.

                         ARTICLE VIII. INDEMNIFICATION

                   SECTION 8.01. Indemnities by the Originator. Without limiting
any other rights that the Buyer and its assigns (each, an "Indemnified Party")
may have hereunder or under applicable law, the Originator hereby agrees to
indemnify each Indemnified Party from and against any and all damages, losses,
claims, liabilities, deficiencies, costs, disbursements and expenses, including,
without limitation, interest, penalties, amounts paid in settlement and
reasonable attorneys' fees (all of the foregoing being collectively referred to
as "Indemnified Amounts") arising out of or resulting from any of the following
(excluding, however, (a) Indemnified Amounts to the extent a final
non-appealable judgment of a court of competent jurisdiction finds that such
Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of such Indemnified Party and (b) any income, franchise, profits, branch
profits or similar taxes incurred by such Indemnified Party arising out of or as
a result of this Agreement or the ownership of Transferred Receivables):

                       (i) any Receivable which any Transaction Party represents
         to be or treats as an Eligible Receivable but which is not an Eligible
         Receivable as of the date of such representation or treatment;

                       (ii) any representation or warranty certification, report
         or other statement made or deemed made by any Transaction Party (or any
         of their respective officers) under or in connection with this
         Agreement or any of the other Transaction Documents which shall have
         been incorrect in any respect when made;

                       (iii) the failure by any Transaction Party to comply with
         any applicable Law with respect to any Receivable or the related
         Contract; or the failure of any Receivable or the related Contract to
         conform to any such applicable Law;

                       (iv) the failure to vest in the Buyer absolute ownership
         of each Transferred Receivable and the Related Security and Collections
         in respect thereof, free and clear of any Adverse Claim;

                       (v) the failure to have filed, or any delay in filing,
         financing statements or other similar instruments or documents under
         the UCC of any applicable jurisdiction or other applicable laws with
         respect to any Receivables and the Related Security and

<PAGE>

         Collections in respect thereof, whether at the time of any Purchase or
         at any subsequent time;

                       (vi) any dispute, claim or defense (other than discharge
         in bankruptcy) of an Obligor to the payment of any Receivable
         (including, without limitation, a defense based on such Receivable or
         the related Contract not being a legal, valid and binding obligation of
         such Obligor enforceable against it in accordance with its terms), or
         any other claim relating to any Contract or relating to billing or
         collection activities with respect to any such Contract or any
         Receivable (if such billing or collection activities were performed by
         the Originator or any of its Affiliates acting as Servicer) or relating
         to any Contract related thereto;

                       (vii) any failure of any Transaction Party to perform its
         duties or obligations in accordance with the provisions hereof and each
         other Transaction Document or to perform its duties or obligations
         under the Contracts or to timely and fully comply in all respects with
         the Credit and Collection Policy in regard to each Receivable and the
         related Contract;

                       (viii) any products liability, environmental or other
         claim arising out of or in connection with merchandise, goods or
         services which are the subject of any Contract or the sale of which
         gave rise to any Receivable;

                       (ix) the commingling of Collections of Transferred
         Receivables at any time with other funds;

                       (x) any investigation, litigation or proceeding (actual
         or threatened) related to this Agreement or any other Transaction
         Document or the use of proceeds of Purchases or the ownership of
         Transferred Receivables or in respect of any Receivable or Related
         Security or Contract;

                       (xi) any Receivable becoming a Diluted Receivable or any
         other setoff with respect to any Receivable;

                       (xii) any claim brought by any Person other than an
         Indemnified Party arising from any activity by the Originator or any
         Affiliate of the Originator in servicing, administering or collecting
         any Receivable; or

                       (xiii) the failure by any Transaction Party to pay when
         due any taxes, including, without limitation, sales, excise or personal
         property taxes.

                  Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the Originator's indemnification obligations pursuant to
clauses (ii) and (vii) of this Article VIII, any representation, warranty or
covenant qualified by the occurrence or non-occurrence of a Material Adverse
Effect or similar concepts of materiality shall be deemed to be not so
qualified. It is expressly agreed and understood by the parties hereto (x) that
the foregoing indemnification is not intended to, and shall not, constitute a
guarantee of collectibility or payment of the Receivables and (y) that nothing
in this Section 8.01 shall require the Originator to indemnify any Person for
Receivables that are not collected, not paid or uncollectible solely

<PAGE>

on account of the insolvency, bankruptcy, or financial inability to pay of the
applicable Obligor except to the extent of any Indemnified Amounts arising from
the improper characterization of any such Receivables as Eligible Receivables.

                       ARTICLE IX. MISCELLANEOUS

                  SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Originator
therefrom shall be effective unless in a writing signed by the Buyer and the
Administrative Agent and, in the case of any amendment, also signed by the
Originator, and then such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No
failure on the part of the Buyer to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.

                  SECTION 9.02. Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and be faxed or delivered, to each
party hereto, at its address set forth below or at such other address as shall
be designated by such party in a written notice to the other parties hereto:

                  If to the Originator:

                  Medco Health Solutions, Inc.
                  100 Parsons Pond Drive
                  Franklin Lakes, New Jersey  07417
                  Attention:  General Counsel
                  Telephone:  [         ]
                  Telecopy:  (201) 269-1225

                  If to the Buyer

                  Medco Health Receivables, LLC
                  [                 ]
                  [                 ]
                  Attention:  [          ]
                  Telephone:  [         ]
                  Telecopy:  [        ]

                  Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by regular mail), and notices
and communications sent by other means shall be effective when received.

                  SECTION 9.03. Assignability; Binding Effect. (a) This
Agreement shall be binding upon and inure to the benefit of the Originator, the
Buyer and their respective successors and assigns; provided, however, that the
Originator may not assign its rights or obligations hereunder or any interest
herein without the prior written consent of the Buyer. The Buyer may

<PAGE>

assign all or any part of its rights and obligations hereunder without the
consent of the Originator. In connection with any sale or assignment by the
Buyer of all or a portion of the Transferred Receivables, the purchaser or
assignee, as the case may be, shall, to the extent of its purchase or
assignment, have all rights of the Buyer under this Agreement (as if such
purchaser or assignee, as the case may be, were the Buyer hereunder) subject to
the terms of the agreement between the Buyer and such purchaser or assignee, as
the case may be.

                  (b) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the Termination Date, when all
of the Transferred Receivables are either collected in full or are written off
as uncollectible in accordance with the Credit and Collection Policy; provided,
however, that rights and remedies with respect to any breach of any
representation and warranty made by the Originator pursuant to Article IV and
the provisions of Article VIII and Sections 9.04, 9.05 and 9.06 shall be
continuing and shall survive any termination of this Agreement.

                  SECTION 9.04. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to the Buyer pursuant to Article VIII
hereof, the Originator agrees to pay on demand all reasonable costs and expenses
in connection with the preparation, execution, delivery and administration of
this Agreement and the other documents and agreements to be delivered hereunder,
including, without limitation, (i) the reasonable fees and out-of-pocket
expenses of counsel for the Buyer with respect thereto and with respect to
advising the Buyer as to its rights and remedies under this Agreement; (ii) all
reasonable fees and expenses associated with any audits and other due diligence
conducted prior to or after the Closing Date and (iii) any amendments, waivers
or consents under the Transaction Documents. In addition, the Originator agrees
to pay all costs and expenses, if any (including reasonable counsel fees and
expenses), in connection with the enforcement of this Agreement and the other
documents to be delivered hereunder.

                  (b) In addition, the Originator agrees to pay any and all
stamp and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder, and the Originator agrees to save each
Indemnified Party harmless from and against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.

                  SECTION 9.05. No Proceedings. The Originator hereby agrees
that it will not institute against, or join any other Person in instituting
against, the Buyer any proceeding of the type referred to in the definition of
"Event of Bankruptcy" in the Receivables Purchase Agreement so long as there
shall not have elapsed one year plus one day since the later of (i) the Final
Payout Date and (ii) the date on which all of the Transferred Receivables are
either collected in full or are written off in accordance with the Credit and
Collection Policy.

                  SECTION 9.06. GOVERNING LAW. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT
WOULD

<PAGE>

CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE
EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE BUYER'S OWNERSHIP OF OR
SECURITY INTEREST IN THE RECEIVABLES OR OTHER ASSETS ARE GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

                  SECTION 9.07. Third Party Beneficiary. Each of the parties
hereto hereby acknowledges that the Buyer may assign all or any portion of its
rights under this Agreement and that such assignees may (except as otherwise
agreed to by such assignees) further assign their rights under this Agreement,
and the Originator hereby consents to any such assignments. All such assignees,
including parties to the Receivables Purchase Agreement in the case of
assignment to such parties, shall be third party beneficiaries of, and shall be
entitled to enforce the Buyer's rights and remedies under, this Agreement to the
same extent as if they were parties hereto, subject to the terms of their
agreement with the Buyer. Without limiting the generality of the foregoing, the
Originator hereby acknowledges that the Buyer has granted a security interest in
all its rights, remedies and powers under this Agreement to the Administrative
Agent pursuant to the Receivables Purchase Agreement. The Originator agrees that
the Administrative Agent (for the benefit of the Purchasers under the
Receivables Purchase Agreement) shall, subject to the terms of the Receivables
Purchase Agreement, have the right to enforce this Agreement and to exercise
directly all of the Buyer's rights and remedies under this Agreement (including,
without limitation, the right to give or withhold any consents or approvals of
the Buyer to be given or withheld hereunder), and the Originator agrees to
cooperate fully with the Administrative Agent in the exercise of such rights,
remedies and powers. The Originator further agrees to give to the Administrative
Agent copies of all notices and reports it is required to give to the Buyer
hereunder. Notwithstanding anything herein to the contrary, no declaration of
the Termination Date, and no other amendment, waiver, consent or other
modification made or granted hereunder, shall in any case be effective unless
the same shall have been made or granted by, or approved in writing by, the
Administrative Agent acting with the consent, or at the direction, of each
Managing Agent and the Majority Committed Purchasers.

                  SECTION 9.08. Restriction on Payments. (a) Notwithstanding
anything in this Agreement or elsewhere to the contrary, the Originator agrees
that any indebtedness, obligation or claim it may from time to time hold or
otherwise have (including, without limitation, any obligation or claim in
respect of the Subordinated Note) against the Buyer or any assets or properties
of the Buyer, whether arising hereunder or otherwise existing (each a "Buyer
Obligation"), shall be paid solely out of funds available to the Buyer pursuant
to the Receivables Purchase Agreement and then only to the extent such payment
is permitted by the terms of the Receivables Purchase Agreement. Without
limiting the generality of the foregoing, the Originator acknowledges and agrees
that pursuant to Section 5.01(o) of the Receivables Purchase Agreement no
Restricted Payments may be made to the Originator at any time (i) that a
Termination Event or Incipient Termination Event has occurred and is continuing
or (ii) during the period between the Termination Date and the Final Payout
Date.

                  (b) Except as otherwise provided herein, the obligations and
liabilities of the Originator under this Agreement and the other Transaction
Documents (collectively, the "Originator Obligations") shall not be subject to
deduction of any kind or type, except by

<PAGE>

payment in full of the amount thereof in accordance with the terms thereof. The
Originator hereby waives any right it may now or at any time hereafter have to
set-off any Originator Obligation against any Buyer Obligation except as
expressly set forth herein.

                  (c) Notwithstanding any provision to the contrary in the
Subordinated Note or elsewhere in this Agreement, other than with respect to
payments of a Buyer Obligation specifically permitted by Section 9.08(a) above,
no demand for any payment may be made by the Originator in respect of such Buyer
Obligation, no payment shall be due from the Buyer to the Originator with
respect thereto and the Originator shall have no claim for payment of such Buyer
Obligation. In the event that, notwithstanding the foregoing provision limiting
such payment, the Originator shall receive any payment or distribution of any
kind or character which is not permitted to be made by Section 9.08(a) above,
such payment or distribution shall be received and held in trust by the
Originator for the benefit of, and shall be promptly paid over to, the
Administrative Agent under the Receivables Purchase Agreement.

                  (d) The Originator hereby acknowledges the subordination
provisions of the Subordinated Note and agrees to be bound thereby.

                  SECTION 9.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.

                  SECTION 9.10. Integration; Survival of Termination. This
Agreement and the other Transaction Documents executed by the parties hereto on
the date hereof contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superceding all prior oral or written understandings.
Any provisions of this Agreement which are prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                  SECTION 9.11. Consent to Jurisdiction. (a) Each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of any New York
State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Agreement, and each party hereto hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State court or, to the extent permitted
by law, in such Federal court. The parties hereto hereby irrevocably waive, to
the fullest extent they may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

                  (b) Each of the Originator and the Buyer consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to it at its

<PAGE>

address specified herein. Nothing in this Section 9.11 shall affect the right of
any party to serve legal process in any manner permitted by law.

                  SECTION 9.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO ,
OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

ORIGINATOR                          MEDCO HEALTH SOLUTIONS, INC.
AND SERVICER:

                                    By:
                                         ---------------------------------------
                                          Name:
                                          Title:

BUYER:                              MEDCO HEALTH RECEIVABLES, LLC

                                    By:
                                         ---------------------------------------
                                          Name:
                                          Title:

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