SECOND AMENDMENT TO SUPPLY AGREEMENT

Exhibit 10.1

Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. The omissions have been indicated by “[***Redacted***]” , and the omitted text has been filed separately with the Securities and Exchange Commission.

SECOND AMENDMENT TO SUPPLY AGREEMENT

This Second Amendment to the Supply Agreement (the “Second Amendment”) is entered into the 7th day of November, 2008, by and between Rite Aid Corporation (“Rite Aid”) and McKesson Corporation (“McKesson”).

INTRODUCTION

Pursuant to the terms of the Supply Agreement dated December 22, 2003 (the “Rite Aid Agreement”) as amended by the First Amendment to the Supply Agreement dated December 8, 2007 (the “First Amendment”) (collectively referred to herein as the “Agreement”), McKesson and Rite Aid entered into an agreement to establish a program for McKesson’s supply of pharmaceutical and OTC products to Rite Aid.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, McKesson and Rite Aid hereby agree as follows:

1.                                        Effective as of the first day of the first full month following the Second Amendment Effective Date (as hereinafter defined), Section 3.1 of the Agreement is hereby deleted and replaced with the following:

3.1                                Warehouse.  The Cost of Goods for Warehouse purchases of Products, other than Branded Rx Warehouse Repackaged Products and OneStop Generics, shall be the [***Redacted***] .

2.                                        Effective as of the first day of the first full month following the Second Amendment Effective Date (as hereinafter defined), the following is hereby added as Section 3.9(a) of the Agreement:

3.9                                Additional Rebates.

(a)                                   Buy Profit Rebate.   McKesson will issue to Rite Aid a rebate, in the form of a credit, in an amount equal to [***Redacted***] of the Cost of Goods for Branded Rx Warehouse purchases (net of Branded Rx Warehouse returns as provided in Section 8.1 and excluding Branded Rx Warehouse Repackaged Merchandise) (the “Buy Profit Rebate”). The Buy Profit Rebate shall be paid each week on Tuesday for purchases made from Saturday to Friday of the previous week, unless Tuesday is a McKesson recognized holiday, in which case the rebate shall be paid on the next business day.  An illustration of the Buy Profit Rebate calculation is set forth below:

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