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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1996

REGISTRATION NO. 333-05327
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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MIM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 8099 05-0489664
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

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ONE BLUE HILL PLAZA RICHARD H. FRIEDMAN
PEARL RIVER, NEW YORK 10965 ONE BLUE HILL PLAZA
(914) 735-3555 PEARL RIVER, NEW YORK 10965
(ADDRESS, INCLUDING ZIP CODE, AND (914) 735-3555
TELEPHONE NUMBER, INCLUDING AREA (NAME, ADDRESS, INCLUDING ZIP CODE,
CODE, OF REGISTRANT'S PRINCIPAL AND TELEPHONE NUMBER, INCLUDING AREA
EXECUTIVE OFFICES) CODE, OF AGENT FOR SERVICE)

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COPIES TO:
JOHN E. STODDARD III, ESQ. JOHN J. SCHUSTER, ESQ.
DRINKER BIDDLE & REATH CAHILL GORDON & REINDEL
47 HULFISH STREET 80 PINE STREET
PRINCETON, NEW JERSEY 08542 NEW YORK, NEW YORK 10005
(609) 497-7004 (212) 701-3000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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MIM CORPORATION

CROSS REFERENCE SHEET

ITEM NUMBER AND CAPTION IN FORM S-1 LOCATION IN PROSPECTUS
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1.Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus...... Outside Front Cover Page
2.Inside Front and Outside Back
Cover Pages of Prospectus..... Inside Front and Outside Back Cover Pages
3.Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges.............. Outside Front Cover Page; Prospectus
Summary; Risk Factors
4.Use of Proceeds................. Prospectus Summary; Use of Proceeds
5.Determination of Offering
Price......................... Outside Front Cover Page; Underwriting
6.Dilution........................ Dilution
7.Selling Security Holders........ Not Applicable
8.Plan of Distribution............ Underwriting
9.Description of Securities to be
Registered.................... Description of Capital Stock
10.Interests of Named Experts and
Counsel....................... Not Applicable
11.Information with Respect to the
Registrant.................... Additional Information; Prospectus Summary;
Risk Factors; Use of Proceeds; Dividend
Policy; Capitalization; Dilution; Selected
Consolidated Financial Data; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Management; Certain Transactions;
Principal Stockholders; Description
of Capital Stock; Shares Eligible for
Future Sale; Consolidated Financial
Statements
12.Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................... Not Applicable

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JULY 30, 1996

4,000,000 SHARES

MIM CORPORATION
[LOGO]
COMMON STOCK

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All of the shares of Common Stock offered hereby are being sold by MIM
Corporation. Prior to this Offering, there has been no public market for the
Common Stock of the Company. It is currently estimated that the initial public
offering price will be between $14.00 and $16.00 per share. See "Underwriting"
for a discussion of the factors to be considered in determining the initial
public offering price.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol MIMS, subject to official notice of issuance.

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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 6.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

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Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
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Per Share.................................. $ $ $
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Total...................................... $ $ $
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Total Assuming Full Exercise of
Over-Allotment Option(3).................. $ $ $

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(1) See "Underwriting."
(2) Before deducting expenses estimated at $1,000,000, which are payable by the
Company.
(3) Assuming exercise in full of the 45-day option granted by the Company to
the Underwriters to purchase up to 600,000 additional shares, on the same
terms, solely to cover over-allotments. See "Underwriting."

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The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, and
subject to their right to reject orders in whole or in part. It is expected
that delivery of the Common Stock will be made in New York City on or about
, 1996.

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PAINEWEBBER INCORPORATED DILLON, READ & CO. INC.

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THE DATE OF THIS PROSPECTUS IS , 1996.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments thereto, the "Registration Statement") under the Securities Act
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information contained in the Registration Statement,
certain portions of which have been omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement, including the exhibits and schedule thereto.
Statements contained in this Prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and are qualified
in all respects by such reference. A copy of the Registration Statement,
including the exhibits and schedule thereto, may be inspected without charge
at the principal office of the Commission, 450 Fifth Street, N.W., Washington,
DC 20549 and at the Commission's regional offices located at 500 West Madison
Street, Suite 1400, Chicago, IL 60661 and Seven World Trade Center, 13th
Floor, New York, NY 10048. Copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, upon payment of the fees prescribed by the Commission.
The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission, and the address of such site is
(http://www.sec.gov).

The Company intends to furnish to its stockholders annual reports containing
financial statements audited by independent certified public accountants and
quarterly reports containing unaudited financial information for the first
three quarters of each fiscal year of the Company.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. All references to the Company refer to
MIM Corporation and its subsidiaries and predecessors (the "Company"). Unless
otherwise indicated, the information in this Prospectus (i) assumes that the
Underwriters' over-allotment option will not be exercised, (ii) assumes an
initial public offering price per share of $15.00 and (iii) gives effect to the
reorganization of the Company and its affiliates in May 1996. See "Certain
Transactions--The Formation." All references herein to industry financial and
statistical information are based on trade articles and industry reports that
the Company believes to be reliable, although there can be no assurance to that
effect. Investors should consider carefully the information set forth under the
heading "Risk Factors."

THE COMPANY

MIM Corporation is a pharmacy management organization that provides a broad
range of services designed to promote the cost-effective delivery of pharmacy
benefits. The Company targets organizations involved in three key segments of
the pharmaceutical health care industry--sponsors of public and private health
plans (such as HMOs and other managed care organizations), retail pharmacies
and pharmaceutical manufacturers--and offers services that provide financial
benefits to each of them. The Company works with plan sponsors and local health
care professionals to design, implement and manage innovative programs to
control pharmacy benefit costs, primarily through financial risk sharing
arrangements and increased substitution of lower-cost generic drugs for brand
name drugs. Participating retail pharmacies receive management and support
services, as well as financial incentives to purchase and dispense preferred
generic drugs. Finally, the Company offers manufacturers of generic drugs the
potential to increase their market share in regions covered by participating
pharmacies as a result of the increase in generic drug utilization encouraged
by the Company's programs.

The Company has derived virtually all of its revenues to date from operations
in the State of Tennessee under the TennCare Medicaid waiver program for
formerly Medicaid-eligible, and certain uninsured and uninsurable, Tennessee
residents. These revenues have been derived pursuant to a contract with RxCare
of Tennessee, Inc. ("RxCare"), a professional services administrative
organization owned by the Tennessee Pharmacists Association and representing
approximately 1,200 retail pharmacies in Tennessee. At June 30, 1996, the
Company provided pharmacy benefit management services, such as formulary design
and compliance, drug usage evaluation, claims processing and disease
management, to 19 health plan sponsors with an aggregate of approximately 1.1
million plan members. Substantially all of such members participate in six of
such health plans, representing approximately 88% of the eligible participants
in the TennCare program. During 1995, approximately 90% of the Company's $214
million in revenues was derived from contracts under which the Company was paid
on a capitated basis (that is, on the basis of a fixed monthly fee per plan
member). Since program inception in January 1994, the generic utilization rate
as a percentage of all covered prescriptions under the Company's pharmacy
benefit management programs has averaged 67%, compared to an estimated industry
average of approximately 40% during 1994.

The retail pharmaceutical market has grown in recent years, with over two
billion prescriptions filled and estimated sales of approximately $77 billion
in 1995. Approximately 42% of retail prescriptions during 1994 were paid by
plan sponsors, with over 50 million people in the United States belonging to
managed care organizations at the end of 1994. Industry sources estimate that
by the year 2000 approximately 80 million people in the United States are
expected to belong to managed care organizations and that such organizations
are expected to be responsible for approximately 77% of all retail
prescriptions. Managed care organizations and other plan sponsors have
increasingly turned to pharmacy benefit managers to help administer and control
the cost of the pharmacy benefit component of their overall benefit programs.
The Company believes that a key

element in successfully controlling pharmacy benefit costs is generic
substitution. Sales of generic drugs at retail, which typically sell at a 30%
to 70% discount to brand name drug equivalents, were approximately $6.3 billion
in 1994. However, there were approximately $28 billion of off-patent brand name
drug sales at retail during 1994 for which a generic equivalent was available.
In addition, brand name drugs with estimated sales at retail of approximately
$23 billion are scheduled to go off-patent from 1996 through 2006.

The Company has developed the following strategy that it believes will allow
it to capitalize upon these industry trends:

Establish MIM as a National Pharmacy Benefit Manager. The Company has begun
to market its pharmacy benefit management services to sponsors of public and
private health plans outside of Tennessee on a capitated or cost savings
sharing basis, thereby transferring from the plan sponsor to the Company all or
some of the risk of controlling overall pharmacy benefit costs. Building upon
the experience it has gained from managing capitated TennCare pharmacy benefit
programs, the Company has begun to offer its innovative financial risk sharing
programs to plan sponsors in similar highly price-competitive and emerging
capitated markets, while also continuing to offer traditional fee-for-service
programs. In addition, the Company will further develop its information systems
to provide plan sponsors with real-time access to pharmacy and financial data.

Strengthen Pharmacy Relationships. The Company believes that local
pharmacists play a critical role in providing high quality cost-effective care,
including the point-of-sale substitution of generic drugs when appropriate. The
Company intends to increase pharmacy participation in its programs by
continuing to offer financial incentives and discount drug purchasing services,
as well as a broad range of pharmacy support programs for local retail
pharmacists.

Market Preferred Generics. The Company is currently marketing and promoting
certain generic drugs of Zenith Goldline Pharmaceuticals, Inc. ("Zenith
Goldline") in the State of Tennessee under the Company's preferred generics
program. In general, the Company's preferred generics program encourages
pharmacies to stock a particular manufacturer's generic drugs ("preferred
generics") in lieu of brand name or other generic drugs in the same therapeutic
class by arranging for discounts on the purchase of preferred generics by
pharmacies. Under Company-managed pharmacy benefit programs, the Company also
provides financial incentives to pharmacies to sell preferred generics. These
arrangements and incentives are designed to encourage participating pharmacies
to dispense and sell preferred generics to all of their customers, including
those not covered by Company-managed pharmacy benefit plans. The Company
intends to expand its preferred generics program with Zenith Goldline to other
geographic areas and is negotiating similar arrangements with other generic
drug manufacturers. The Company also plans, subject to economic and other
conditions, to distribute generic and over-the-counter drugs under its own
private label. Certain agreements may restrict the Company's ability to compete
in certain areas of the Company's preferred generics business, its planned drug
distribution business and certain other business areas. See "Business--
Preferred Generics" and "Certain Transactions--Relationship of Certain
Executive Officers with Zenith and Zenith Goldline."

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MIM Corporation was incorporated in Delaware in March 1996 for the purpose of
combining the businesses and operations of Pro-Mark Holdings, Inc. and MIM
Strategic Marketing, LLC. For a description of the transactions involved in
connection therewith (the "Formation"), see "Certain Transactions--The
Formation" and Note 1 to the consolidated financial statements included herein.

The Company's principal executive offices are located at One Blue Hill Plaza,
Pearl River, New York 10965, and its telephone number is (914) 735-3555.

THE OFFERING

Common Stock Offered by the
Company........................ 4,000,000 shares(1)

Common Stock to be Outstanding
after the Offering............. 12,023,800 shares(1)(2)

Use of Proceeds................. The Company intends to use the net proceeds
from the Offering to expand the Company's
preferred generics business, to fund addi-
tional pharmacy benefit management programs,
to enhance its management information system
capabilities and for general corporate pur-
poses, including working capital. See "Use of
Proceeds."

Proposed Nasdaq National Market
Symbol......................... MIMS
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(1) Assumes no exercise of the Underwriters' over-allotment option.
(2) Excludes 3,937,639 shares of Common Stock issuable upon exercise of
outstanding options under the Company's stock option plans at July 15, 1996
at a weighted average exercise price of approximately $3.49 per share.

SUMMARY CONSOLIDATED FINANCIAL DATA
(In thousands, except for per share amounts)

SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
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1994 1995 1995 1996
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(unaudited)

STATEMENT OF OPERATIONS DATA
Revenue.......................... $ 109,326 $ 213,929 $71,330 $135,320
Cost of revenue.................. 106,717 213,398 70,684 130,218
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Gross profit................... 2,609 531 646 5,102
General and administrative
expenses........................ 5,256 8,048 3,450 4,627
Executive stock option
compensation expense(1)......... -- -- -- 26,640
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Loss from operations........... (2,647) (7,517) (2,804) (26,165)
Interest income, net............. 191 745 229 275
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Loss before minority interest.. (2,456) (6,772) (2,575) (25,890)
Less: minority interest ......... -- -- -- 6
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Net loss......................... $ (2,456) $ (6,772) $(2,575) $(25,896)
=========== =========== ======= ========
Net loss per common and common
equivalent share................ $ (0.55) $ (1.43) $ (0.57) $ (3.23)
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Weighted average shares
outstanding..................... 4,500 4,732 4,500 8,024
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JUNE 30, 1996
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DECEMBER 31, 1995 ACTUAL AS ADJUSTED (2)
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(unaudited)

BALANCE SHEET DATA
Cash and cash equivalents.......... $ 1,804 $ 2,964 $ 57,764
Working capital (deficit).......... (12,080) (12,340) 42,460
Total assets....................... 18,924 21,702 76,502
Accumulated deficit(1)............. (9,188) (35,706) (35,706)
Stockholders' equity (deficit)..... (11,524) (10,768) 44,032

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(1) The Company's net loss for the six months ended June 30, 1996 included a
nonrecurring, noncash charge for compensation expense and a credit to
additional paid-in capital of $26,640, representing the difference between
the exercise price and the deemed fair market value of the Common Stock at
the date of grant of options to purchase an aggregate of 3,600,000 shares
of Common Stock granted by the Company's principal stockholder to certain
executive officers and directors of the Company. See "Certain
Transactions--Other Transactions" and Note 7 to the consolidated financial
statements included herein.

(2) Adjusted to give effect to the receipt of the estimated net proceeds of the
Offering, based on an assumed initial public offering price of $15.00 per
share. See "Use of Proceeds."

RISK FACTORS

An investment in the Common Stock offered hereby involves a high degree of
risk. Prospective investors should consider carefully the following risk
factors, in addition to the other information contained in this Prospectus,
before purchasing the securities offered hereby.

GOING CONCERN QUALIFICATION IN REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS;
HISTORY OF LOSSES

The report of independent public accountants on the Company's consolidated
financial statements included herein is qualified because of substantial doubt
about the ability of the Company to continue as a going concern. Among the
factors cited by such independent public accountants are that the Company has
suffered recurring losses from operations and has a net capital deficiency.
For the year ended December 31, 1995 and the six months ended June 30, 1996,
the Company incurred net losses of $6.8 million and $25.9 million,
respectively (including a nonrecurring, noncash charge for executive stock
option compensation expense during the six months ended June 30, 1996 of $26.6
million). At June 30, 1996, the Company had an accumulated deficit of $35.7
million, a working capital deficit of $12.3 million and a stockholders'
deficit of $10.8 million. The Company needs the net proceeds of the Offering
to continue and expand its operations, although there can be no assurance that
even with such proceeds the Company's operations will be profitable in the
future. In management's opinion, the net proceeds from the Offering are
expected to provide the capital necessary to enable the Company to continue as
a going concern. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and notes thereto included elsewhere herein.

LIMITED OPERATING HISTORY; RISK OF MANAGING GROWTH

The Company commenced its operations in June 1993 and has had a limited
operating history. The Company has recently experienced a period of rapid
growth that has strained the Company's financial resources and management
information and other systems. The Company's ability to manage its growth
effectively will require that it continue to improve its systems and hire,
train and manage additional employees. There can be no assurance that the
Company will be able to continue to expand its market presence in current
locations or successfully enter other markets. If the Company is unable to
manage its growth effectively, the Company's business and results of
operations could be adversely affected. See "Business."

DEPENDENCE ON RXCARE RELATIONSHIP

The Company has derived virtually all of its revenue to date pursuant to an
agreement with RxCare of Tennessee, Inc. ("RxCare"), a professional services
administrative organization owned by the Tennessee Pharmacists Association
representing approximately 1,200 retail pharmacies in Tennessee. Under the
RxCare agreement, the Company is obligated to operate and manage pharmacy
benefit programs for plan sponsors that have entered into contracts with
RxCare for such services. Although the Company has been performing
substantially all of RxCare's obligations under RxCare's contracts with plan
sponsors since January 1994, no plan sponsor has been asked to formally
consent to such arrangements, including certain sponsors whose contracts with
RxCare require prior written consent thereto. RxCare reasonably may decline to
execute any contract with plan sponsors or pharmacies, or any amendment or
renewal thereof, negotiated by the Company on behalf of RxCare.

A number of RxCare's contracts with plan sponsors are for providing state-
mandated pharmacy benefits to formerly Medicaid-eligible (as well as certain
uninsured and uninsurable) Tennessee residents under the TennCare program, a
so-called "Medicaid waiver" state health program. Revenues from two of such
TennCare contracts accounted for approximately 75% of the Company's revenues
during 1995. The Company believes that the loss of its arrangement with
RxCare, the loss of one or more of such contracts, the termination or
expiration of the TennCare program (which is currently scheduled to expire on
December 31, 1998) or the loss of funding thereunder would have a material
adverse effect on the Company's business and results of operations. See
"Business--Relationship with RxCare and TennCare."

There can be no assurance that RxCare or the Company will be able to enter
into additional contracts in the State of Tennessee or that the Company's
experience in Tennessee will enable it to obtain additional contracts in other
states. The failure to enter into additional contracts could limit the
Company's ability to increase its revenues on a profitable basis. See
"Business."

LIMITED TERM OF MATERIAL AGREEMENTS

The Company's contract with RxCare is scheduled to expire in December 1998
unless renewed in accordance with its terms. RxCare's contracts with plan
sponsors typically have a one-year term and are subject to automatic renewal
unless notice of termination is given. Those contracts are subject to earlier
termination upon the occurrence of certain events, including a breach of the
agreement which is not cured within 30 days of notice, insolvency or
termination of the TennCare program or of the plan sponsor's contract with the
State of Tennessee. Two of such contracts accounted for 75% of the Company's
revenues during 1995 and are scheduled to expire in December 1997 unless
extended. There can be no assurance that either of the foregoing contracts or
the Company's contract with RxCare will be continued or renewed in accordance
with their terms. The loss of any of such contracts would have a material
adverse effect on the Company's business and results of operations. See
"Business--Relationship with RxCare and TennCare."

RISK OF CAPITATED AGREEMENTS

Approximately 90% of the Company's revenue during 1995 was derived from
"capitated" agreements, through which the Company receives a pre-determined
fee each month for each member enrolled in a particular health plan in return
for providing certain covered pharmacy services to plan members. The Company
generally negotiates the capitation fee for a particular plan (or subset of
individuals within a plan) based upon a number of factors, including
competitive conditions within a particular market and the expected costs of
providing the covered pharmacy services. Expected costs are generally based on
prior experience with similar groups and demographic data based on the
population at large. Data with respect to prior experience may not be
available and, if available, may not be a reliable indicator of the actual
results for a particular plan. The cost of providing pharmacy services varies
among plan participants and groups and is affected by many factors, including
formulary design and compliance, generic substitution rate and payment
structure. During the early stages of a contract, the cost of providing
pharmacy services typically exceeds the capitation fee, primarily due to the
lag between the commencement of the contract and the full implementation of
the formulary and the Company's other cost containment measures. There can be
no assurance that the cost of providing pharmacy services will not exceed the
capitation fee, either per member or per plan, throughout the entire contract
term. Under an April 1995 contract with one plan sponsor that was renegotiated
and extended in June 1996, the Company underestimated the utilization of
prescription drugs by the plan's members and recognized losses under that
contract of approximately $10 million for the year ended December 31, 1995.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

The Company intends to expand its scope of activities to include groups with
which the Company has not had any meaningful experience and with respect to
which no prior experience data is available, such as Medicare. Accordingly,
the Company may miscalculate certain costs and utilization levels associated
with these groups and may incur losses as a result. In addition, the Company
may be required, due to contractual obligations or other business reasons, to
bear all or a portion of the costs of certain newly-developed drugs, such as
medications for the treatment of AIDS, the existence or cost of which may not
have been known at the time the capitation fee for a particular plan was
established. See "Business."

EXPANSION OF PREFERRED GENERICS BUSINESS

The Company intends to utilize a portion of the proceeds of the Offering to
fund the expansion of its preferred generics business. The expansion of the
Company's preferred generics business is expected to place a significant
strain on the Company's management, operational and financial resources and
systems, and there can be no assurance that the Company's planned operations
in this area will be profitable. See "Business--Preferred Generics."

The Company also plans, subject to economic and other conditions, to
distribute generic and over-the-counter drugs. The Company has had limited
experience regarding the distribution of drugs and may, among other things,
miscalculate the demand for particular types of drugs, carry excess inventory,
incorrectly estimate certain matters involving the pricing and shipment of
products to customers and fail to develop adequate distribution capabilities.
In addition, the generic drug industry is extremely competitive, with
generally declining prices and margins as generic versions of the same product
enter the marketplace. See "Business--Business Strategy" and "--Competition."

Certain agreements may restrict the Company's ability to compete in certain
areas of the Company's preferred generics business, its planned drug
distribution business and certain other business areas. John H. Klein, the
Company's Chairman and Chief Executive Officer, and Richard H. Friedman, the
Company's Chief Financial Officer, Chief Operating Officer and Treasurer, have
agreed that they will not, prior to January 1999 and January 1997,
respectively, own, manage or be employed by any business or enterprise that is
substantially competitive with any material portion of the business of
manufacturing or distributing prescription generic drugs as conducted in early
1996 by Zenith Laboratories, Inc. ("Zenith"), an affiliate of Zenith Goldline,
or Zenith's subsidiaries. See "Certain Transactions--Relationship of Certain
Executive Officers with Zenith and Zenith Goldline." Furthermore, pursuant to
agreements with Zenith Goldline, the Company has agreed that it will not offer
certain kinds of programs to market or promote generic drugs anywhere in the
United States for any other manufacturer or seller without first offering such
programs to Zenith Goldline. See "Business--Preferred Generics."

GOVERNMENT REGULATION

The Company's current and planned businesses are subject to extensive
Federal and state laws and regulations. Subject to certain exceptions, Federal
law (the "Federal Anti-Kickback Statute") prohibits the payment or receipt of
any remuneration, directly or indirectly, to induce, arrange for or recommend
the purchase of health care items or services paid for in whole or in part by
the Medicare or state health care programs (including Medicaid and TennCare),
and certain state laws (including professional licensing laws prohibiting fee-
splitting) contain similar provisions that may extend the prohibition to cover
items or services that are paid for by private insurance and self-pay
patients. There can be no assurance that some of the Company's practices will
be found to be protected by certain so-called "safe harbor" regulations, which
provide insulation from prosecution under the Federal Anti-Kickback Statute,
and in some instances it is clear that they are not so protected. Federal
authorities enforcing the Federal Anti-Kickback Statute have issued Fraud
Alerts describing suspect activity and have initiated enforcement proceedings
involving practices that have similar features to some of the practices of the
Company. The Company is also subject to various false claim, drug
distribution, antitrust and consumer protection laws and may be subject to
certain other laws, including various state insurance laws.

any such challenge would not be successful. Any such challenge, whether or not
successful, could have a material adverse effect upon the Company's business
and results of operations. Violation of the Federal Anti-Kickback Statute, for
example, may result in substantial criminal penalties, as well as exclusion
from the Medicare and Medicaid (including TennCare) programs. Further, there
can be no assurance that the Company will be able to obtain or maintain any of
the regulatory approvals that may be required to operate its business, and the
failure to do so could have a material adverse effect on the Company's
business and results of operations. See "Business--Government Regulation" and
"Certain Transactions."

FTC CONSENT DECREE WITH RXCARE

In June 1996, the proposed consent decree between the Federal Trade
Commission (the "FTC") and RxCare and its parent, the Tennessee Pharmacists
Association ("TPA"), became final. Under the terms of the consent decree,
RxCare and TPA are prohibited from entering into a "most favored nations"
clause (under which a participating pharmacy that accepts a lower
reimbursement rate than that offered by RxCare must reduce its charges to
RxCare) with any pharmacy or from suggesting or assisting any other person to
do so. The FTC contends that such clause had the effect of increasing prices
charged by pharmacies to purchasers of prescription drugs in Tennessee because
the preponderance of pharmacies in Tennessee are members of RxCare and because
RxCare accounted for a substantial portion of drug purchases from each
pharmacy. Because the FTC justified its challenge and the decree, in part, on
RxCare's potential market power in Tennessee, business arrangements and
practices involving RxCare, either directly or indirectly, or involving sales
to or purchases by RxCare-affiliated pharmacies may face heightened scrutiny
or continued review from an anti-competitive perspective by state or Federal
regulators and possible challenge by private parties. The existence of this
consent order may hamper the Company's efforts to develop or pursue
competitive opportunities, in Tennessee or elsewhere, in areas such as group
purchasing or market advocacy on behalf of drug manufacturers. Prolonged
proceedings involving regulatory or private party challenges to the Company's
activities would be costly to the Company and divert its resources, including
key personnel. An adverse determination in such a proceeding could have a
material adverse effect on the Company's business and results of operations.
See "Business--Government Regulation."

DEPENDENCE ON SENIOR MANAGEMENT

The Company's operations have been substantially dependent on the services
of E. David Corvese, the Vice Chairman and principal stockholder of the
Company. In April 1996, Messrs. Klein and Friedman joined the Company and will
be responsible for implementing the Company's strategic plan, including the
development of the Company's preferred generics business. The loss of the
services of one or more of these individuals would have a material adverse
effect upon the Company's business. Messrs. Klein, Corvese and Friedman each
have employment agreements with the Company which restrict the ability of such
officers to compete with the Company and its affiliates for a period of one
year following termination. See "Management--Employment Agreements."

RELATIONSHIP OF CERTAIN EXECUTIVE OFFICERS WITH ZENITH AND ZENITH GOLDLINE

Prior to their employment with the Company, Messrs. Klein and Friedman were
employed by Zenith, and also were executive officers of Zenith Goldline, a
major generic drug manufacturer and marketer. Zenith Goldline also has a 10%
ownership interest in MIM Strategic Marketing, LLC, a 90%-owned subsidiary of
the Company formed for the purpose of enhancing the distribution of Zenith
Goldline's pharmaceutical products in the State of Tennessee. Pursuant to
termination agreements with Zenith, Mr. Klein has agreed to continue as an
untitled employee of Zenith through December 1996 and to act as a consultant
to Zenith and its affiliates from January 1997 through December 1998, and Mr.
Friedman has agreed to continue as an untitled employee of Zenith through
December 1996. Messrs. Klein and Friedman also continue to hold options to
purchase shares of common stock of Zenith Goldline's and Zenith's parent.
Although Messrs. Klein and Friedman intend to devote substantially all of
their time to the business and operations of the Company, no assurance can be
given that their rights and obligations under their respective termination
agreements or that their interests in Zenith's parent will not result in or
create a conflict of interest with their obligations to the Company. See
"Certain Transactions--Relationship of Certain Executive Officers with Zenith
and Zenith Goldline."

CONTROL BY MANAGEMENT

Upon consummation of the Offering, the Company's directors and executive
officers will beneficially own in the aggregate approximately 72% of the
Company's Common Stock (69% if the Underwriters' over-allotment option is
exercised in full). Accordingly, they collectively will be able to determine
the outcome of virtually all corporate actions requiring approval by the
stockholders of the Company, including the election of directors. See
"Principal Stockholders."

BROAD DISCRETION IN APPLICATION OF PROCEEDS

Approximately $26.6 million, or 49%, of the estimated net proceeds of the
Offering (assuming an initial public offering price of $15.00 per share) have
not been specifically allocated and will be utilized by the Company for
working capital and general corporate purposes. Accordingly, management of the
Company will have broad discretion in the application of the unallocated
proceeds. See "Use of Proceeds."

COMPETITION

Generic drugs are distributed by numerous generic drug distributors, drug
wholesalers and mail order suppliers. Generic drug distributors and
wholesalers generally offer a broad line of generic drugs from a variety of
sources to a diverse customer base, typically including independent retail and
chain pharmacies, government agencies and managed care organizations. In the
generic products business (unlike patent-protected brand name drugs), similar
versions of existing generic drugs frequently enter the market, resulting in
significantly lower prices and margins. In addition, certain agreements
between Zenith and Messrs. Klein and Friedman may restrict the Company's
ability to compete in certain areas of the preferred generics business, its
planned drug distribution business and certain other business areas. See
"Business--Competition" and "Certain Transactions--Relationship of Certain
Executive Officers with Zenith and Zenith Goldline."

PROFESSIONAL LIABILITY RISK

The services provided by the Company in connection with its business may
subject the Company to litigation and liability for damages. The Company
believes that its insurance protection is adequate for its present business
operations, but there can be no assurance that the Company will be able to
obtain and maintain insurance coverage in the future or that such insurance
coverage will be available on acceptable terms or adequate to cover any or all
potential professional liability, product liability or other claims. A
successful claim in excess of the Company's insurance coverage could have a
material adverse effect on the Company's business and results of operations.

DEPENDENCE ON INFORMATION SYSTEMS

The Company believes that its point-of-sale technology is an integral part
of its business. Any continuing disruption in its computer or telephone
systems could adversely affect its ability to operate its business on a timely
basis, and could adversely affect the Company's relations with pharmacies and
health plan sponsors. The Company is also dependent on certain licensed
software for the operation of its on-line transaction processing system
pursuant to a non-exclusive license for a one-year term with automatic
renewals. There can be no assurance that the licensor of such software will
continue this license beyond the period presently agreed, and the loss of such
rights could have a material adverse effect on the Company's business and
results of operations.

EFFECT OF CERTAIN LEGAL PROCEEDINGS

On March 5, 1996, the Company was added as a third-party defendant in a
proceeding in the Superior Court of the State of Rhode Island. The third-party
plaintiffs, Medical Marketing Group, Inc. ("MMG"), PPI Holding, Inc. ("PPI
Holding") and Payer Prescribing Information, Inc. ("PPI"), allege that the
Company employed E. David Corvese, the Company's Vice Chairman, with knowledge
of covenants not to compete in effect between Mr. Corvese and PPI, PPI Holding
and MMG that prevent Mr. Corvese from competing in the area of the collection,
analysis or marketing of data for the pharmaceutical or health care industries
relating to physician practice demographics and the influence of managed care
plans. The complaint alleges that the Company interfered with the contractual
relationship between the parties and that it misappropriated MMG's and PPI's
confidential information through its employment of Mr. Corvese. The complaint
seeks to enjoin the Company from using confidential information allegedly
misappropriated from MMG and PPI and seeks an unspecified amount of
compensatory and consequential damages, interest and attorneys' fees. The
Company believes that the third-party plaintiffs' allegations are without
merit; however, the loss of this litigation could have a material adverse
effect on the Company's business and results of operations. See "Business--
Legal Proceedings."

Certain of the Company's programs may be objectionable to certain special
interest groups, such as competitors, manufacturers of drugs excluded from the
Company's formularies, pharmacists, health care providers and public advocacy
groups, who may seek to hinder or delay, through legal, regulatory or other
means, the Company's ability to conduct its business. For example, a Federal
court case brought by the National Association of Community Health Centers in
June 1994 against the Secretary of the U.S. Department of Health and Human
Services is pending in the United States District Court for the District of
Columbia which seeks to have certain experimental and demonstration Medicaid
programs, including TennCare, declared unlawful and enjoined. A decision which
revokes or otherwise restricts the TennCare program would have a material
adverse effect on the Company's business and results of operations. See
"Business--Relationship with RxCare and TennCare."

POSSIBLE NEGATIVE EFFECTS OF PREFERRED STOCK

The Company is authorized to issue 5,000,000 shares of Preferred Stock, the
designation, rights and preferences of which (including voting, dividend,
redemption and liquidation rights) may be fixed by the Company's Board of
Directors from time to time without further stockholder action. Shares of
Preferred Stock could be issued in the future with rights and preferences that
could make the possible takeover of the Company or the removal of management
of the Company more difficult or could otherwise adversely impact the rights
of holders of Common Stock. See "Description of Capital Stock--Preferred
Stock."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of shares of Common Stock in the public market
after the Offering, or the perception that such sales could occur, could
adversely affect the prevailing market price of the Common Stock. Upon
completion of the Offering, the Company will have a total of 12,023,800 shares
of Common Stock outstanding, assuming no exercise of outstanding stock options
and no exercise of the Underwriters' over-allotment option. Of these shares,
the 4,000,000 shares of Common Stock offered hereby will be freely tradeable
without restriction under the Securities Act of 1933, as amended (the
"Securities Act"), by persons other than "affiliates" of the Company, as
defined under the Securities Act. The remaining 8,023,800 shares of Common
Stock outstanding are "restricted shares" as that term is defined by Rule 144
as promulgated under the Securities Act. Of these restricted shares, 45,000
will be saleable in the public market 90 days following the date of this
Prospectus, subject to compliance with Rule 144. Beginning one year after the
date of this Prospectus (or earlier for certain limited transactions or with
the written consent of PaineWebber Incorporated on behalf of the
Underwriters), 4,455,000 additional restricted shares will become eligible for
sale in the public market upon the expiration of lock-up agreements between
the Underwriters and the holders of such shares, subject to compliance with
Rule 144 of the Securities Act. See "Shares Eligible for Future Sale."

A reserve of 4,100,000 shares of Common Stock has been established for
issuance under the Company's stock option plans. At July 15, 1996, options to
purchase a total of 3,937,639 shares of Common Stock were outstanding under
such plans, of which options to purchase 2,686,400 shares were exercisable.
See "Management--Stock Incentive Plans."

IMMEDIATE AND SUBSTANTIAL DILUTION

Investors purchasing shares of Common Stock in the Offering will experience
immediate and substantial dilution in the net tangible book value of their
shares of approximately $11.34 per share from the assumed initial public
offering price of $15.00 per share (the mid-point of the range set forth on
the cover page of this Prospectus). In the event the Company issues additional
Common Stock in the future, purchasers of Common Stock in the Offering may
experience further dilution in the net tangible book value per share of the
Common Stock. See "Dilution."

ABSENCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active or liquid trading market will
develop or be sustained. The initial public offering price for the Common
Stock offered hereby will be determined by negotiations between the Company
and the Underwriters and may bear no relationship to the price at which the
Common Stock will trade after completion of the Offering. See "Underwriting"
for factors to be considered in determining the offering price.

In addition, the stock market has, from time to time, experienced extreme
price and volume volatility. These fluctuations may be unrelated to the
operating performance of particular companies whose shares are publicly
traded. Market fluctuations may adversely affect the market price of the
Common Stock. The market price of the Common Stock could also be subject to
significant fluctuations in response to the Company's operating results,
government regulation and other factors, and there can be no assurance that
the market price of the Common Stock will not decline below the initial public
offering price.

NO INTENTION TO PAY DIVIDENDS

The Company presently intends to retain all earnings, if any, to support the
operation and expansion of its business and does not anticipate paying cash
dividends in the foreseeable future. See "Dividend Policy."

USE OF PROCEEDS

The net proceeds to the Company from the sale of shares of Common Stock
offered hereby (assuming an initial public offering price of $15.00 per share)
are estimated to be $54.8 million ($63.2 million if the over-allotment option
granted to the Underwriters is exercised in full), after deducting
underwriting discounts and commissions and estimated expenses of the Offering
payable by the Company. The Company intends to use approximately $18.6 million
to fund the expansion of the Company's preferred generics business (including
the purchase of inventory), approximately $7.0 million to fund additional
pharmacy benefit management programs, approximately $2.6 million to enhance
its management information system capabilities and the balance for working
capital and general corporate purposes. The Company may also use a portion of
the net proceeds of the Offering for the acquisition of technology, assets or
businesses complementary to the Company's business, although no such
acquisitions are currently being negotiated. The uses of proceeds described
above are estimates and are subject to change. Pending use for the purposes
described above, the Company will invest such net proceeds in short-term,
interest-bearing, investment grade securities. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business."

DIVIDEND POLICY

The Company has not declared or paid any dividends on its Common Stock and
does not anticipate paying any cash dividends in the foreseeable future. The
Company intends to retain all working capital and earnings, if any, for use in
the Company's operations and in the expansion of its business. Any future
determination with respect to the payment of dividends will be at the
discretion of the Board of Directors and will depend upon, among other things,
the Company's results of operations, financial condition and capital
requirements, the terms of any then existing indebtedness, general business
conditions and such other factors as the Board of Directors deems relevant.

CAPITALIZATION

The following table sets forth the capitalization of the Company at June 30,
1996 and as adjusted to reflect the sale of the shares of Common Stock offered
by the Company hereby (assuming an initial public offering price of $15.00 per
share), after deducting underwriting discounts and commissions and estimated
offering expenses payable by the Company. This table should be read in
conjunction with the consolidated financial statements and related notes
thereto appearing elsewhere in this Prospectus.

JUNE 30, 1996
--------------------------
ACTUAL AS ADJUSTED
----------- -------------
(In thousands,
except for share data)

Cash and cash equivalents.......................... $ 2,964 $ 57,764
=========== ===========
Long-term debt, including capital lease
obligations, net of current portion .............. $ 486 $ 486
Stockholders' equity (deficit):
Preferred Stock, $.0001 par value; 5,000,000
shares authorized,
no shares issued or outstanding................. -- --
Common Stock, $.0001 par value; 40,000,000 shares
authorized,
8,023,800 shares issued and outstanding,
12,023,800 shares
issued and outstanding as adjusted(1)........... 1 1
Additional paid-in capital(2).................... 26,640 81,440
Accumulated deficit(2)........................... (35,706) (35,706)
Stockholder notes receivable..................... (1,703) (1,703)
----------- -----------
Total stockholders' equity (deficit)........... (10,768) 44,032
----------- -----------
Total capitalization........................... $ (10,282) $ 44,518
=========== ===========

- --------
(1) Excludes 3,833,710 shares of Common Stock issuable upon exercise of
outstanding options at June 30, 1996. Also excludes 103,929 shares of
Common Stock issuable upon exercise of additional options that were
granted in July 1996.

(2) The Company's net loss for the six months ended June 30, 1996 included a
nonrecurring, noncash charge for compensation expense and a credit to
additional paid-in capital of $26,640, representing the difference between
the exercise price and the deemed fair market value of the Common Stock at
the date of grant of options to purchase an aggregate of 3,600,000 shares
of Common Stock granted by the Company's principal stockholder to certain
executive officers and directors of the Company. See "Certain
Transactions--Other Transactions" and Note 7 to the consolidated financial
statements included herein.

DILUTION

The net tangible book value of the Company at June 30, 1996 was
approximately ($10.8 million), or ($1.34) per share of Common Stock. Net
tangible book value per share represents the amount of the Company's total
tangible assets less total liabilities, divided by the number of shares of
Common Stock outstanding. After giving effect to the sale by the Company of
4,000,000 shares of Common Stock offered hereby at an assumed initial public
offering price of $15.00 per share (after deducting Underwriters' discounts
and commissions and estimated offering expenses), the net tangible book value
of the Company at June 30, 1996 would have been approximately $3.66 per share.
This represents an immediate increase of $5.00 per share to existing
stockholders and an immediate dilution of $11.34 per share to new investors.
The following table illustrates this per share dilution:

Assumed initial public offering price per share............ $15.00
Net tangible book value per share before Offering........ $(1.34)
Increase in net tangible book value per share
attributable to new public investors.................... 5.00
------
Net tangible book value per share after the Offering....... 3.66
------
Dilution per share to new investors........................ $11.34
======

The following table summarizes at June 30, 1996 the differences between the
number of shares of Common Stock purchased from the Company, the total cash
consideration paid (before deducting Underwriters' discounts and commissions
and estimated offering expenses), and the average price per share paid by the
existing stockholders and by the investors purchasing shares of Common Stock
in the Offering (based upon an assumed initial public offering price of $15.00
per share):

SHARES PURCHASED TOTAL CONSIDERATION
------------------ ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------

Existing stockholders...... 8,023,800 66.7% $ 802 --% $.0001
New investors.............. 4,000,000 33.3% 60,000,000 100 $15.00
---------- ----- ----------- ---
Total.................... 12,023,800 100.0% $60,000,802 100% $ 4.99
========== ===== =========== ===

The foregoing tables assume no exercise of any outstanding options to
purchase Common Stock after June 30, 1996. At June 30, 1996, 3,833,710 shares
of Common Stock were reserved for issuance pursuant to outstanding options
under the Company's 1996 Stock Incentive Plan at a weighted average exercise
price of approximately $3.18 per share. To the extent that these outstanding
options are exercised, the dilution per share to new investors would be
$11.45. See "Management--Stock Incentive Plans."

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data as of December 31, 1994
and 1995, for the period from inception (June 22, 1993) through December 31,
1993 and for the years ended December 31, 1994 and 1995 are derived from the
audited consolidated financial statements included elsewhere in this
Prospectus. The selected consolidated financial data as of June 30, 1996 and
for the six months ended June 30, 1995 and 1996 are derived from the Company's
unaudited consolidated financial statements included elsewhere in this
Prospectus. In the opinion of management, such unaudited financial statements
reflect all adjustments (consisting only of normal recurring accruals) which
the Company considers necessary for a fair presentation of the financial
position and results of operations of the Company for these periods. Operating
results for the six months ended June 30, 1996 are not necessarily indicative
of the results to be expected for the entire year. The selected consolidated
financial data set forth below should be read in conjunction with the
consolidated financial statements and related notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere herein.

PERIOD FROM
INCEPTION SIX MONTHS ENDED
(JUNE 22,1993) YEAR ENDED DECEMBER 31, JUNE 30,
THROUGH ------------------------ -----------------
DECEMBER 31, 1993 1994 1995 1995 1996
----------------- ----------- ----------- ------- --------
(In thousands, except for per share amounts)

STATEMENT OF OPERATIONS
DATA
Revenue................. $ 122 $ 109,326 $ 213,929 $71,330 $135,320
Cost of revenue......... -- 106,717 213,398 70,684 130,218
------ ----------- ----------- ------- --------
Gross profit.......... 122 2,609 531 646 5,102
General and administra-
tive expenses.......... 82 5,256 8,048 3,450 4,627
Executive stock option
compensation
expense(1)............. -- -- -- -- 26,640
------ ----------- ----------- ------- --------
Income (loss) from
operations........... 40 (2,647) (7,517) (2,804) (26,165)
Interest income, net.... -- 191 745 229 275
------ ----------- ----------- ------- --------
Income (loss) before
minority interest.... 40 (2,456) (6,772) (2,575) (25,890)
Less: minority
interest............... -- -- -- -- 6
------ ----------- ----------- ------- --------
Net income (loss)....... $ 40 $ (2,456) $ (6,772) $(2,575) $(25,896)
====== =========== =========== ======= ========
Net income (loss) per
common and common
equivalent share....... $ 0.01 $ (0.55) $ (1.43) $ (0.57) $ (3.23)
====== =========== =========== ======= ========
Weighted average shares
outstanding............ 4,500 4,500 4,732 4,500 8,024
====== =========== =========== ======= ========

DECEMBER 31,
-----------------------
1993 1994 1995 JUNE 30, 1996
---- ------- -------- -------------
(In thousands)

BALANCE SHEET DATA
Cash and cash equivalents................ $-- $ 2,933 $ 1,804 $ 2,964
Working capital (deficit)................ (3) (5,087) (12,080) (12,340)
Total assets............................. 93 15,260 18,924 21,702
Accumulated earnings (deficit)........... 40 (2,416) (9,188) (35,706)
Stockholders' equity (deficit)........... 41 (3,693) (11,524) (10,768)

- --------

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements and the notes thereto included elsewhere in the
Prospectus.

OVERVIEW

Virtually all of the Company's revenues to date have been derived from
operations in the State of Tennessee under the Company's contract with RxCare
of Tennessee, Inc. ("RxCare"), a professional services administrative
organization owned by the Tennessee Pharmacists Association and representing
approximately 1,200 retail pharmacies in Tennessee. See "Risk Factors--
Dependence on RxCare Relationship." RxCare initially contracted with the
Company in 1993 to help secure health plan pharmaceutical business for the
RxCare network and to provide related services, including pharmacy benefit
design and pricing. In December 1993, the State of Tennessee announced the
formation of its TennCare program, a state health program for formerly
Medicaid-eligible, and certain uninsured and uninsurable, Tennessee residents.
Under this program, selected plan sponsors (such as HMOs and other managed
care organizations) contracted with the State of Tennessee to provide mandated
medical services to designated portions of TennCare beneficiaries on a
capitated basis--that is, for a fixed monthly fee per plan member. In turn,
certain of these plan sponsors contracted with RxCare to provide TennCare-
mandated pharmaceutical benefits to the plan sponsor's TennCare beneficiaries
through RxCare's network of retail pharmacies, in most cases on a
corresponding capitated basis.

In March 1994, the Company agreed with RxCare to provide a broad range of
pharmacy benefit management services with respect to RxCare's TennCare and
private pharmaceutical benefit businesses. The Company performs essentially
all of RxCare's obligations under its pharmacy benefit contracts with plan
sponsors, including the receipt of fees due from the plan sponsors and the
reimbursement to pharmacies for delivered pharmacy benefits. The Company pays
certain amounts to RxCare and is compensated by sharing with RxCare the
profit, if any, from activities under RxCare's contracts with plan sponsors.
The Company initially began providing pharmacy benefits for five plan sponsors
representing 335,000 members of Tennessee's Medicaid population. In April
1995, a contract was added with the single largest TennCare provider, Blue
Cross and Blue Shield of Tennessee ("Blue Cross"), for approximately 623,000
members. At June 30, 1996, the Company provided pharmacy benefit management
services to 19 health plan sponsors with an aggregate of approximately 1.1
million plan members in Tennessee, primarily on a capitated basis. See
"Business--Relationship with RxCare and TennCare."

Although the Company commenced limited operations in June 1993, the Company
did not begin to receive significant revenue until 1994 pursuant to its
agreement with RxCare. Accordingly, the results of operations for 1994
compared to 1993 are not meaningful and have not been included herein. See
"Risk Factors--Limited Operating History; Risk of Managing Growth."

RESULTS OF OPERATIONS

Six months ended June 30, 1996 compared to six months ended June 30, 1995

For the six months ended June 30, 1996, the Company recorded a net loss of
$25.9 million on revenue of $135.3 million, including a nonrecurring, noncash
charge for compensation expense and a credit to additional paid-in capital of
$26.6 million, representing the difference between the exercise price and the
deemed fair market value of the Common Stock at the date of grant of options
to purchase an aggregate of 3,600,000 shares of Common Stock granted by the
Company's principal stockholder to certain executive officers and directors of
the Company. This compares with a net loss of $2.6 million on revenue of $71.3
million for the same period in 1995. The increase of $64.0 million in revenue
was primarily due to the addition of the Blue Cross contract in April 1995.
For the first six months of 1996, approximately 92% of the Company's revenue
was generated through capitated contracts, compared with 86% during the first
six months of 1995.

At December 31, 1995, the Company had accrued $4.5 million to cover the
losses expected to be incurred under the initial term of the Blue Cross
contract (which was originally scheduled to expire in June 1996 but was

renegotiated on more favorable terms to the Company and extended through
December 1997). Approximately $2.1 million of such accrual remained at June
30, 1996.

Cost of revenue as a percentage of revenue decreased from 99.1% in the first
six months of 1995 to 96.2% in the first six months of 1996. Such decrease
reflects the application of $2.4 million of Blue Cross claims during the first
six months of 1996 against the $4.5 million reserve established at December
31, 1995, the renegotiation of a higher capitation rate on one of the
Company's contracts effective March 1, 1996 and the Company's decision not to
renew a capitation contract that expired on December 31, 1995 and that had
adversely affected gross profit during 1995.

General and administrative expenses were $4.6 million for the six months
ended June 30, 1996 and $3.5 million for the six months ended June 30, 1995,
an increase of 31.4%. The $1.1 million increase was largely attributable to
the costs of additional personnel to support expanded marketing efforts. As a
percentage of revenue, general and administrative expenses declined from 4.8%
in the first six months of 1995 to 3.4% in the first six months of 1996.

Year ended December 31, 1995 compared to the year ended December 31, 1994

For the year ended December 31, 1995 the Company recorded a net loss of $6.8
million on revenue of $213.9 million. This compares with a net loss of $2.5
million on revenue of $109.3 million for 1994. The increase in revenue was
primarily due to the addition of the Blue Cross contract in April 1995. In
1995, approximately 90% of the Company's revenue was generated through
capitated contracts, compared with 85% during 1994.

Cost of revenue as a percentage of revenue increased from 97.6% in 1994 to
99.8% in 1995, primarily due to the increase in claims paid as a result of the
addition of the Blue Cross contract. The drug utilization rate of Blue Cross
participants was significantly higher than rates previously experienced under
other contracts, resulting in losses under that contract of $10 million during
1995, including the accrual of approximately $4.5 million to cover the
expected losses to be incurred under the remainder of the contract. Claims
expense (after giving effect to such accrual) was 107% of capitation revenues
under the contract.

General and administrative expenses were $8.0 million in 1995 and $5.3
million in 1994, an increase of 50.9%. Of the $2.7 million increase, $2.0
million was the result of a charge relating to an advance to RxCare in 1995
which the Company has fully reserved for. The remainder of the increase is
largely attributable to the costs of additional personnel to support expanded
marketing efforts. As a percentage of revenue, general and administrative
expenses declined from 4.8% in 1994 to 3.8% in 1995.

LIQUIDITY AND CAPITAL RESOURCES

As a result of the Company's historical losses, the Company had a working
capital deficit of $12.3 million at June 30, 1996. The Company's primary
source of liquidity to date has been the receipt of revenue from plan sponsors
under capitated programs. From time to time, the Company has also delayed
payments due plan sponsors and others in order to meet its working capital
requirements. In June 1996, John H. Klein, the Chairman of the Board and Chief
Executive Officer of the Company, loaned $500,000 to the Company for working
capital purposes pursuant to an unsecured, 10% demand note that was repaid
that month.

Cash and cash equivalents were $3.0 million at June 30, 1996, compared with
$1.8 million at December 31, 1995. Operating activities of the Company
generated $3.1 million in cash for the six months ended June 30, 1996
primarily due to the generation of net income of $0.7 million (prior to a
nonrecurring, noncash charge of $26.6 million relating to executive stock
option compensation expense) and an increase in payables to plan sponsors and
others of $4.3 million and was partially offset by a decrease in claims
payable of $3.5 million.

The Company believes that the funds expected to be generated from operations
and the anticipated net proceeds of the Offering will provide adequate cash to
fund the Company's anticipated working capital and other cash needs for the
foreseeable future. Although the Company does not currently have any
significant capital commitments, the Company intends to use approximately $2.6
million of the net proceeds of the Offering to enhance its management
information systems capabilities. In addition, the Company intends to offset,
against profit sharing amounts, if any, due RxCare in the future under the
RxCare contract, approximately $2.4 million previously advanced or paid to
RxCare. See "Certain Transactions--Relationship with RxCare."

The Company believes that its improved financial condition and capital
structure following the Offering will enhance its ability to negotiate and
obtain additional contracts with plan sponsors and other potential customers.

OTHER MATTERS

The Company's pharmaceutical reimbursement claims have historically been
subject to a significant increase over annual averages from October through
February, which the Company believes is due to increased medical problems
during the colder months.

Changes in prices charged by manufacturers and wholesalers for
pharmaceuticals affect the Company's cost of revenue. The Company does not
believe that inflation has had a material impact on the results of its
operations.

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"). SFAS 123 requires that an entity account for employee stock
compensation under a fair value-based method. However, SFAS 123 also allows an
entity to continue to measure compensation cost for employee stock-based
compensation plans using the intrinsic value-based method of accounting
prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). Effective for fiscal years beginning after December 15, 1995,
entities electing to remain with accounting under APB 25 are required to make
pro forma disclosures of net income and earnings per share as if the fair
value-based method of accounting under SFAS 123 had been applied. The Company
will continue to account for employee stock-based compensation under APB 25
and will make the pro forma disclosures required under SFAS 123.

BUSINESS

SUMMARY

The Company is a pharmacy management organization that provides a broad
range of services designed to promote the cost-effective delivery of pharmacy
benefits. The Company targets organizations involved in three key segments of
the pharmaceutical health care industry--sponsors of public and private health
plans (such as HMOs and other managed care organizations), retail pharmacies
and pharmaceutical manufacturers--and offers services that provide financial
benefits to each of them. The Company works with plan sponsors and local
health care professionals to design, implement and manage innovative programs
to control pharmacy benefit costs, primarily through financial risk sharing
arrangements and increased substitution of lower-cost generic drugs for brand
name drugs. Participating retail pharmacies receive management and support
services, as well as financial incentives to purchase and dispense preferred
generic drugs. Finally, the Company offers manufacturers of generic drugs the
potential to increase their market share in regions covered by participating
pharmacies as a result of the increase in generic drug utilization encouraged
by the Company's programs.

The Company has derived virtually all of its revenues to date from
operations in the State of Tennessee under the TennCare Medicaid waiver
program for formerly Medicaid-eligible, and certain uninsured and uninsurable,
Tennessee residents. These revenues have been derived pursuant to a contract
with RxCare, a professional services administrative organization owned by the
Tennessee Pharmacists Association and representing approximately 1,200 retail
pharmacies in Tennessee. At June 30, 1996, the Company provided pharmacy
benefit management services, such as formulary design and compliance, drug
usage evaluation, claims processing and disease management, to 19 health plan
sponsors with an aggregate of approximately 1.1 million plan members.
Substantially all of such members participate in six of such health plans,
representing approximately 88% of the eligible participants in the TennCare
program. During 1995, approximately 90% of the Company's $214 million in
revenues was derived from contracts under which the Company was paid on a
capitated basis (that is, on the basis of a fixed monthly fee per plan
member). Since program inception in January 1994, the generic utilization rate
as a percentage of all covered prescriptions under the Company's pharmacy
benefit management programs has averaged 67%, compared to an estimated
industry average of approximately 40% during 1994.

BUSINESS STRATEGY

The Company intends to continue to work closely with plan sponsors,
pharmacists and generic drug manufacturers to encourage the delivery of
clinically acceptable pharmaceutical care on a cost-effective basis, primarily
through restricted formularies and continued generic substitution. The Company
has developed the following strategy:

Establish MIM as a National Pharmacy Benefit Manager. The Company has begun
to market its pharmacy benefit management services to sponsors of public and
private health plans outside of Tennessee on a capitated or cost savings
sharing basis, thereby transferring from the plan sponsor to the Company all
or some of the risk of controlling overall pharmacy benefit costs. Building
upon the experience it has gained from managing capitated TennCare pharmacy
benefit programs, the Company has begun to offer its innovative financial risk
sharing programs to plan sponsors in similar highly price-competitive and
emerging capitated markets, while also continuing to offer traditional fee-
for-service programs. In addition, the Company will further develop its
information systems to provide plan sponsors with real-time access to pharmacy
and financial data.

Strengthen Pharmacy Relationships. The Company believes that local
pharmacists play a critical role in providing high quality cost-effective
care, including the point-of-sale substitution of generic drugs when
appropriate. The Company intends to increase pharmacy participation in its
programs by continuing to offer financial incentives and discount drug
purchasing services, as well as a broad range of pharmacy support programs for
local retail pharmacists.

Market Preferred Generics. The Company is currently marketing and promoting
certain generic drugs of Zenith Goldline in the State of Tennessee under the
Company's preferred generics program. In general, the Company's preferred
generics program encourages pharmacies to stock a particular manufacturer's
generic drugs ("preferred generics") in lieu of brand name or other generic
drugs in the same therapeutic class by arranging for discounts on the purchase
of preferred generics by pharmacies. Under Company-managed pharmacy benefit
programs, the Company also provides financial incentives to pharmacies to sell
preferred generics. These arrangements and incentives are designed to
encourage participating pharmacies to dispense and sell preferred generics to
all of their customers, including those not covered by Company-managed
pharmacy benefit plans. The Company intends to expand its preferred generics
program with Zenith Goldline to other geographic areas and is negotiating
similar arrangements with other generic drug manufacturers. The Company also
plans, subject to economic and other conditions, to distribute generic and
over-the-counter drugs under its own private label. Certain agreements may
restrict the Company's ability to compete in certain areas of the Company's
preferred generics business, its planned drug distribution business and
certain other business areas. See "--Preferred Generics" and "Certain
Transactions--Relationship of Certain Executive Officers with Zenith and
Zenith Goldline."

INDUSTRY OVERVIEW

Pharmacy Benefit Management. The retail pharmaceutical market has grown in
recent years, with over two billion prescriptions filled and estimated sales
of approximately $77 billion in 1995. Pharmaceutical costs, as well as other
medical costs, are increasingly being covered by sponsors of public and
private health plans, including plans administered by managed care
organizations. Approximately 42% of retail prescriptions during 1994 were paid
by plan sponsors, with over 50 million people in the United States belonging
to managed care organizations at the end of 1994. Industry sources estimate
that by the year 2000 approximately 80 million people in the United States are
expected to belong to managed care organizations, and that such organizations
are expected to be responsible for approximately 77% of all retail
prescriptions.

Industry-wide financial pressures have created incentives for managed care
organizations and other plan sponsors to limit their exposure to rising
medical costs. In order to focus on their core business, plan sponsors have
increasingly turned to pharmacy benefit managers to help administer and
control the cost of the pharmacy benefit component of their overall benefit
programs. Pharmacy benefit managers have typically operated on a fee-for-
service basis in which the profitability of the pharmacy benefit manager is
based more upon the volume of claims processed than upon the reduction of the
cost of the pharmacy benefit. The Company believes that in order for plan
sponsors and pharmacy benefit managers to maintain profitability, they have
increasingly relied on rebates from drug manufacturers and have reduced
reimbursement rates to retail pharmacies. This trend has contributed to a
general decrease in retail pharmacy profitability and consolidation in the
retail pharmacy industry.

Generic Drugs. The Company believes that generic drug sales will continue to
increase, primarily because of the expiration of patents on brand name drugs
and their relatively high cost compared to generic drugs, which typically sell
at a 30% to 70% discount to brand name drug equivalents. There were an
estimated $28 billion of off-patent brand name drug sales at retail during
1994 for which a generic equivalent was available. In addition, patents on
brand name drugs with estimated sales at retail of approximately $23 billion
are scheduled to expire from 1996 through 2006. Generic drug sales at retail
have increased steadily in recent years, reaching an estimated $6.3 billion in
1994.

Certain other factors that have contributed, and that are expected to
continue to contribute, to the increase in the sales of generic drugs include
the following: (a) the continuing transition of health plans from cost
reimbursement to managed care has encouraged the use of lower-cost generic
drugs when available; (b) changes in distribution patterns have resulted in
more prescription drugs being sold through sources that are financially
motivated to use lower-cost generic drugs, such as managed care organizations,
preferred provider pharmacy networks and mail order drug distributors; (c)
various state laws have been enacted that enable, and in some instances
mandate, the use of generic drugs; (d) greater awareness and acceptance of the
safety and efficacy of generic drugs among consumers, prescribers and
pharmacists; and (e) streamlined procedures for approval of certain generic
drugs have provided an incentive for manufacturers to develop generic
equivalents for brand name drugs with smaller markets.

RELATIONSHIP WITH RXCARE AND TENNCARE

In December 1993, the State of Tennessee announced the institution effective
January 1, 1994 of its TennCare program, a so-called "Medicaid waiver" state
health program for formerly Medicaid-eligible, and certain uninsured and
uninsurable, Tennessee residents. Under this program, selected plan sponsors
contracted with the State of Tennessee to provide mandated medical services to
designated portions of the TennCare beneficiaries on a capitated basis. In
turn, certain of these plan sponsors contracted with RxCare to provide
TennCare-mandated pharmaceutical benefits to the plan sponsor's TennCare
beneficiaries through RxCare's network of retail pharmacies, in most cases on
a corresponding capitated basis. In addition, RxCare is typically required to
share with plan sponsors its manufacturers' rebates and profits.

In March 1994, the Company agreed with RxCare to provide a broad range of
pharmacy benefit management services with respect to RxCare's TennCare and
private pharmaceutical benefit businesses. The Company pays certain amounts to
RxCare and is compensated by sharing with RxCare the profit, if any, from
activities under RxCare's contracts with TennCare plan sponsors and other plan
sponsors in Tennessee. Under the RxCare contract, the Company performs
essentially all of RxCare's obligations under its pharmacy benefit contracts
with sponsors of public and private health plans in Tennessee. The Company (a)
markets and negotiates new pharmacy benefit management contracts, (b) designs
and prices the pharmacy benefit programs (including restricted formularies and
related procedures) with local health care professionals, (c) manages the
delivery of the pharmacy benefits through RxCare's pharmacy network (including
recommending the prices that RxCare pays pharmacists for each drug), (d)
provides or arranges for the provision by third parties of claims processing
and other pharmacy benefit management functions, (e) receives fees due from
the plan sponsors, (f) designs and administers incentive programs with
suppliers of pharmaceutical products covered by the plans (including the
collection of rebates from manufacturers on drugs dispensed under the plans)
and (g) makes payments to pharmacies for delivered pharmacy benefits. The
Company also negotiates agreements with pharmacies on behalf of RxCare which
establish the terms of their participation in the network. Although the
Company has been performing substantially all of RxCare's obligations under
RxCare's contracts with plan sponsors since January 1994, no plan sponsor has
been asked to formally consent to such arrangements, including certain
sponsors whose contracts with RxCare require prior written consent thereto.
RxCare may reasonably decline to execute any contract with plan sponsors or
pharmacies, or any amendment or renewal thereof, negotiated by the Company on
behalf of RxCare. While most of RxCare's private pharmacy benefit management
contracts provide for payment of per-transaction network fees or traditional
fee-for-service compensation, over 90% of RxCare's TennCare business under
contracts with plan sponsors was serviced by the Company on a capitated basis
during 1995. The Company's contract with RxCare is scheduled to expire in
December 1998 unless renewed in accordance with its terms. In December 1995,
the Company also agreed with RxCare to assist network pharmacies in obtaining
generic drugs in return for a fee payable to the Company by vendors of generic
drugs.

At June 30, 1996, the Company provided pharmacy benefit management services
to 19 plan sponsors with an aggregate of approximately 1.1 million plan
members in Tennessee, primarily on a capitated basis. Substantially all of
such members participate in health plans of six of such plan sponsors,
representing approximately 88% of the eligible participants in the TennCare
program. Since program inception in January 1994, the generic utilization rate
as a percentage of all covered prescriptions under the Company's pharmacy
benefit management programs has averaged 67%, compared to an industry average
of 40% during 1994.

RxCare's contracts with TennCare plan sponsors typically are for a term of
one year and are subject to automatic renewal unless notice of termination is
given by either party. Those contracts are subject to early termination upon
the occurrence of certain events, including a breach of the agreement which is
not cured within 30 days of notice, insolvency, termination of the TennCare
program (which is currently scheduled to terminate on December 31, 1998) or
termination of the plan sponsor's contract with the State of Tennessee.
RxCare's contracts with Tennessee Primary Care Network, Inc., Preferred Health
Partnership and Health Net accounted for approximately 60%, 15% and 13%,
respectively, of the Company's revenues in 1994, and RxCare's contracts with
Blue Cross and Blue Shield of Tennessee and Tennessee Primary Care Network,
Inc. accounted for approximately 45% and 30%, respectively, of the Company's
revenues in 1995. Although the Company continues to add new Tennessee private
plan sponsors as customers under the RxCare contract, the loss of the Blue
Cross and Blue Shield or Tennessee Primary Care Network contracts, or the
RxCare contract, would have a material adverse effect on the Company's
business and results of operations. See "Risk Factors--Dependence on RxCare
Relationship."

There is a Federal court case pending against the Secretary of the U.S.
Department of Health and Human Services which seeks to have certain
experimental and demonstration Medicaid programs, including TennCare, declared
unlawful. The case was brought in June 1994 by the National Association of
Community Health Centers in the U.S. District Court for the District of
Columbia, and has resulted in the intervention by eight states (including the
States of Tennessee and Rhode Island) as named defendants. Among other grounds
cited, the plaintiffs allege that such programs fail to comply with the
Federal statutory criteria authorizing such programs. The suit also seeks an
injunction revoking the Secretary's approval of such programs and requiring
their phase-out over a six-month period. A decision which revokes or otherwise
restricts the TennCare program would have a material adverse effect on the
Company's business and results of operations.

BENEFIT MANAGEMENT SERVICES

The Company offers plan sponsors a broad range of services that are designed
to ensure the cost-effective delivery of clinically acceptable pharmacy
benefits. The Company's benefit management programs include a number of design
features and fee structures that are tailored to suit a customer's particular
service and cost requirements. In addition to traditional fee-for-service
arrangements, the Company offers alternative methodologies for pricing its
various benefit management packages, including charging a fixed fee per
capita, as well as sharing costs exceeding established per capita amounts or
sharing savings where costs are less than established per capita amounts.
During 1995, approximately 90% of the Company's revenues was derived from
capitated contracts. Benefit parameters are managed through a point-of-sale
("POS") claims processing system through which real-time electronic messages
are transmitted to pharmacists to ensure compliance with specified parameters
before services are rendered. The Company's organization and programs are
clinically oriented, with a high proportion of staff having pharmacological
certification, training and experience. The Company uses commissioned
independent agents and brokers, as well as its own employees, to solicit
business from plan sponsors.

Benefit management services available to customers of the Company include
the following:

Formulary Design and Compliance. The Company offers flexible formulary
designs to meet the plan sponsor's requirements. Many plan sponsors do not
restrict coverage to a specific list of pharmaceuticals and are said to have
no formulary or an open formulary that generally covers all FDA-approved drugs
except certain classes of excluded pharmaceuticals (such as certain vitamins
and cosmetic, experimental, investigative or over-the-counter drugs). As a
result of rising program costs, the Company believes that both public and
private health plans have become increasingly receptive to restricting the
drugs covered in any given therapeutic class. Once a determination has been
made by a plan sponsor to utilize a restricted or closed formulary, the
Company actively involves local Pharmacy and Therapeutics Committees
(consisting of local plan sponsors, prescribers, pharmacists and other health
care professionals) to design clinically acceptable formularies in order to
control costs. The composition of the formulary is subject to the final
approval of the plan sponsor.

An essential component of formulary design is the promotion of the
substitution of therapeutically equivalent generic drugs, in lieu of brand
name drugs, to the extent permitted by law and standards of medical and
pharmacy practice. Increased usage of generic drugs by Company-managed
pharmacy benefit programs also enables the Company to obtain purchasing
concessions and other financial incentives on generic drugs, which may be
shared with plan sponsors. While brand name drug rebates are also negotiated
under certain circumstances, the Company believes that it is less dependent on
such rebates than certain larger pharmacy benefit managers, particularly those
that are owned by drug manufacturers.

The primary method for assuring formulary compliance is that pharmacists
will not be reimbursed for dispensing non-formulary drugs, subject to certain
limited exceptions. The Company also provides financial incentives to
pharmacists to utilize preferred status products. Formulary compliance is
managed with the active assistance of participating network pharmacists,
primarily through prior authorization procedures, on-line POS edits as to
particular subscribers and other network communications. Overutilization of
medication is monitored and managed through quantity limitations, based upon
nationally recognized standards and guidelines regarding maintenance vs. non-
maintenance therapy and the use of certain therapeutic classes of drugs and
specific medications. Step protocols, which are procedures requiring that
preferred therapies be tried and shown ineffective before less favored
therapies are covered, also are established by the Company in conjunction with
local Pharmacy and Therapeutics Committees to control improper utilization of
certain high-risk or high-cost medications.

Overrides and Prior Authorizations. The Company's formularies typically
provide an appropriate selection of covered drugs within all major therapeutic
classes to treat the vast majority of medical conditions. However, provision
is made for covering non-formulary drugs (other than excluded products) when
shown to be clinically appropriate. Since non-formulary drugs ordinarily are
automatically rejected for coverage by the real-time POS system, procedures
may be employed to override restrictions on non-formulary medications for a
particular patient and period of treatment. Restrictions on the use of certain
high-risk or high-cost formulary drugs may be similarly overridden through
prior authorization procedures. Non-formulary overrides and prior
authorizations are processed on the basis of documented, clinically-supported
medical necessity and typically are granted or denied within 24 hours after
request. Requests for, and appeals of denials of, coverage in these cases are
handled by the Company through its staff of trained pharmacists, nationally
certified pharmacy technicians and board certified pharmacotherapy
specialists. Further, in case of a medical emergency as determined by the
dispensing pharmacist, the Company authorizes, without prior approval, short-
term supplies of antibiotics and certain other medications.

Drug Usage Evaluation. Drug usage is evaluated on a concurrent, prospective
and retrospective basis, utilizing the real-time POS system and proprietary
information systems, for multiple drug interactions, drug-health condition
interactions, duplication of therapy, step therapy protocol enforcement,
minimum/maximum dose range edits, compliance with prescribed utilization
levels and early refill notification. The Company also maintains an on-going
drug utilization review program in which select medication therapies are
reviewed and data collected, analyzed and reported for management and
educational applications.

Pharmacy Data Services. The Company is currently developing systems to
provide plan sponsors with real-time access to pharmacy, financial, claims,
prescriber, subscriber and dispensing data.

Claims Processing. The Company utilizes claims processing data to generate
reports for management and plan sponsor use, including drug utilization
review, quality assurance, claims analysis and rebate contract administration.
The Company also intends to market its existing claims processing capability
to plan sponsors.

Disease Management. The Company designs and administers programs geared
toward specific diseases to maximize the benefit of pharmaceutical use as a
tool in achieving therapy goals. Programs focus on preventing high risk
events, such as asthma exacerbations or stroke, through appropriate use of
pharmaceuticals, while eliminating unnecessary or duplicate therapies. Key
components of these programs include health care provider training,
integration of care between health disciplines, monitoring of patient
compliance, measurement of care process and quality, and providing feedback
for continuous improvement in achieving therapy goals. Diseases

that can be favorably affected through customized pharmaceutical management
include asthma, hypertension, hypercholesterolemia, tuberculosis and diabetes.
Other patients who can benefit from these services include those who receive
long-term institutional care and individuals who are at high risk for adverse
drug reaction due to complex, multiple drug maintenance regimens.

PREFERRED GENERICS

The Company believes it is able to increase a generic drug manufacturer's
market share in regions where the Company has established relationships with
pharmacy networks. The Company encourages pharmacies to stock a particular
manufacturer's generic drugs ("preferred generics") in lieu of brand and other
generic drugs in the same therapeutic class by generally arranging for
discounts on the purchase of preferred generics by pharmacies. Under Company-
managed pharmacy benefit programs, the Company also provides financial
incentives to pharmacies to sell preferred generics. These incentives are
designed to encourage participating pharmacies to dispense and sell preferred
generics to all of their customers, including those not covered by Company-
managed pharmacy benefit plans. The Company also offers generic drug
manufacturers consulting services with respect to marketing and promoting
their generic drugs.

The Company is currently marketing and promoting certain preferred generic
drugs of Zenith Goldline pursuant to two three-year contracts entered into in
December 1995. Under one contract, the Company has agreed to use its best
efforts to cause Zenith Goldline to be designated as the preferred or
exclusive supplier of certain generic drugs carried by Zenith Goldline under
the Company's TennCare programs. The Company is also required to pay certain
incentive fees to pharmacists for dispensing Zenith Goldline products to
persons covered by the Company's TennCare programs. In return, the Company
receives a fee based on a percentage of the growth in Zenith Goldline's gross
margins from related sales. Under the other agreement, MIM Strategic
Marketing, LLC ("MIM Strategic"), a Rhode Island limited liability company and
a 90%-owned subsidiary of the Company, has agreed to provide marketing and
sales information relating to generic drugs. In return, the Company receives a
fee based on a percentage of the growth in Zenith Goldline's gross margins
from sales in Tennessee other than those related to TennCare members. Zenith
Goldline owns 10% of MIM Strategic. See "Certain Transactions--Relationship of
Certain Executive Officers with Zenith and Zenith Goldline." The agreements
prohibit the Company from accepting any proposal from any other manufacturer
or seller of generic drugs to participate in a program anywhere in the United
States similar to the Company's arrangement with Zenith Goldline without first
offering Zenith Goldline the right to participate on the same terms. The
Company is currently negotiating with Zenith Goldline to extend such services
to other states and the Company intends to offer such services to other
generic drug manufacturers.

The Company may, subject to economic conditions and other factors, expand
its business to become a private label distributor of generic and over-the-
counter drugs, by buying discounted drugs in bulk from manufacturers for
resale and further distribution, at least initially, through wholesalers and
other traditional industry distribution channels.

COMPETITION

The pharmacy benefit management and generic drug distribution businesses are
each highly competitive, and many of the Company's current and potential
competitors have considerably greater financial, technical, marketing and
other resources than the Company. The pharmacy benefit management business
includes a number of large, well capitalized companies with nationwide
operations and many smaller organizations typically operating on a local or
regional basis. Some of the larger organizations are owned by or otherwise
related to a brand name drug manufacturer and may have significant influence
on the distribution of pharmaceuticals. Among larger companies offering
pharmacy benefit management services are Medco Containment Services, Inc. (a
subsidiary of Merck & Co., Inc.), Caremark International Inc., PCS, Inc. (a
subsidiary of Eli Lilly & Company), Express Scripts, Inc., Value Health, Inc.,
Diversified Pharmaceutical Services, Inc. (a subsidiary of SmithKline Beecham)
and National Prescription Administrators, Inc. Numerous insurance and Blue
Cross and Blue Shield plans, managed care organizations and retail drug chains
also have their own pharmacy benefit management capabilities.

Generic drugs are distributed by numerous generic drug distributors, drug
wholesalers and mail order suppliers. Generic drug distributors and
wholesalers generally offer a broad line of generic drugs from a variety of
sources to a diverse customer base, typically including independent retail and
chain pharmacies, government agencies and managed care organizations. Chain
pharmacies use their size to procure pharmaceuticals on advantageous terms,
and independent pharmacies frequently are offered opportunities through trade
and wholesaler organizations to join group purchasing efforts. In addition,
certain agreements between Zenith and Messrs. Klein and Friedman may restrict
the Company's ability to compete in certain areas of its preferred generics
business, its planned drug distribution business and certain other business
areas. See "Certain Transactions--Relationship of Certain Executive Officers
with Zenith and Zenith Goldline."

GOVERNMENT REGULATION

The Company's current and planned businesses are subject to extensive
Federal and state laws and regulations. While management believes that the
Company is in material compliance with all existing laws and regulations
material to the operation of its business, many of the laws and regulations
affecting it are uncertain in their application and are subject to
interpretation and change. Laws regulating healthcare businesses, and
interpretations thereof, are undergoing rapid change. As controversies
continue to arise in this area, for example, regarding the efforts of plan
sponsors and pharmacy benefit managers to limit formularies, alter drug choice
and establish limited networks of participating pharmacies, Federal and state
regulation and enforcement priorities in this area can be expected to
increase, the impact of which on the Company cannot be predicted. There can be
no assurance that the Company will not be subject to scrutiny or challenge
under one or more of these laws or that any such challenge would not be
successful. Any such challenge, whether or not successful, could have a
material adverse effect upon the Company's business and results of operations.
Further, there can be no assurance that the Company will be able to obtain or
maintain any of the regulatory approvals that may be required to operate its
business, and the failure to do so could have a material adverse effect on the
Company's business and results of operations.

Anti-Kickback Laws. Subject to certain exceptions, a Federal law (the
"Federal Anti-Kickback Statute") prohibits the payment or receipt of any
remuneration, directly or indirectly, to induce, arrange for or recommend the
purchase of health care items or services paid for in whole or in part by the
Medicare or state health care programs (including Medicaid and TennCare), and
certain state laws (including professional licensing laws prohibiting fee-
splitting) contain similar provisions that may extend the prohibition to cover
items or services that are paid for by private insurance and self-pay patients
(together with the Federal Anti-Kickback Statute, the "Anti-Kickback Laws").
The Company's arrangements with RxCare, RxCare's Chairman, Zenith Goldline,
other drug manufacturers, marketing agents, brokers, health plan sponsors and
pharmacies involve payments to or from persons providing or purchasing, or
recommending or arranging for the purchase of, items or services paid in part
by the TennCare program or by other programs covered by the Anti-Kickback
Laws. See "Certain Transactions." Management believes the Company is in
compliance with the Anti-Kickback Laws; however, the laws in this area are
uncertain in their application, and there can be no assurance that in the
future the foregoing arrangements will not be challenged or found to violate
such laws if, among other things, a party thereto is found to have the
requisite intent. As a felony provision, a violation of the Federal Anti-
Kickback Statute requires proof of criminal intent, with those found in
violation subject to substantial criminal penalties, as well as exclusion from
the Medicare and Medicaid (including TennCare) programs. Courts differ,
however, regarding the requisite level of criminal intent necessary to find a
violation of the Federal Anti-Kickback Statute. Although a Federal appellate
court has ruled that a violation requires proof that the parties specifically
intended to violate the law, this decision was not followed in subsequent
cases. State Anti-Kickback Laws may impose different standards of intent than
the Federal Anti-Kickback Statute.

In July 1991 and January 1996, the Department of Health and Human Services
Office of Inspector General ("OIG") issued so-called "safe harbor" regulations
specifying certain managed care, discount, management and personal services,
group purchasing, investment interests and other arrangements involving
payments which, although potentially capable of constituting unlawful
remuneration, will be protected from prosecution or civil sanctions under the
Federal Anti-Kickback Statute. There can be no assurance that any of the
Company's

arrangements mentioned above will be found to be protected by these safe
harbors, and in some instances it is clear that they are not so protected. The
OIG has indicated, however, that failure of an arrangement to comply with a
specific safe harbor provision does not necessarily indicate that it will
challenge the arrangement or that it violates the Federal Anti-Kickback
Statute.

In August 1994, the OIG issued a Fraud Alert describing prescription drug
marketing practices that the OIG might investigate under the Federal Anti-
Kickback Statute, including among other things product conversion programs
that offer cash rewards to pharmacies for switching prescriptions from one
drug to another. The Fraud Alert also indicates that a payment may be
considered improper if it is made to a person in a position to generate
business for the paying party, is related to the volume of business generated
and exceeds the fair market value of services rendered to the payor, or is
unrelated to any service other than referrals. The Fraud Alert uses broad
language to describe some of the practices that it indicates the OIG might
investigate, and it could be interpreted as including among them some of the
Company's practices, including Zenith Goldline and other drug manufacturer
rebate payments to the Company and the Company's incentive payments to
pharmacists under its preferred generics program. Although a Fraud Alert
represents a statement of the OIG's views, it is not binding on a court.
Management believes that the kinds of financial incentives paid to or by the
Company in connection with the TennCare program, where it has been acting as a
purchaser of pharmacy benefits on behalf of plan sponsors, are not prohibited
by the Federal Anti-Kickback Statute.

Payments by a health care provider to an entity that refers or influences
the referral of Medicare or Medicaid business and subcontracts a substantial
portion of the required services and financial risk to the health care
provider have been the subject of an OIG Fraud Alert on Joint Venture
Arrangements issued in April 1989 and a formal proceeding brought by the OIG
under the Federal Anti-Kickback Statute seeking to exclude the parties from
the Medicare and Medicaid programs. Payments by a health care provider to a
consultant who has influence over Medicare or Medicaid referrals because of
his position of authority with a referral source have been the subject of
successful prosecutions by the Department of Justice under the Federal Anti-
Kickback Statute. In such cases, a court's inquiry is directed towards whether
the payments were intended in whole or in part to induce referrals or whether
they were for other legitimate purposes. Some Federal appeals courts have held
that if one among a number of purposes for a payment is improper, then the
payment is unlawful. Although not protected by safe harbor regulations, the
Company believes that its payments to RxCare and RxCare's Chairman, a
consultant to the Company, and Zenith Goldline's investment in a subsidiary of
the Company comply with the Federal Anti-Kickback Statute. However, no
assurances can be given that a successful challenge might not be brought
involving one or more such transactions. Whether or not successful, such a
challenge could have a material adverse effect on the Company's business and
results of operations.

In recent years, Federal health care prosecutions have been initiated by so-
called qui tam litigants who file suits as private parties on behalf of the
government seeking a portion of the fines eventually assessed by prosecutors
against health care providers alleged to have filed false claims with the
Medicare or Medicaid programs. Some courts have permitted qui tam actions to
proceed where the wrongful activity alleged is a violation of the Federal
Anti-Kickback Statute. In general, if one or more of the Company's
transactions were found to constitute false claims or deemed to be fraudulent
under state or Federal laws, the Company and responsible individuals could be
subject to substantial civil and criminal penalties and restitution.
Specifically, if one or more of the Company's transactions described under
"Certain Transactions" were determined to be inappropriately classified or
described, the Company could be required to make restitution or pay other sums
as compensation or penalties.

In addition to the Anti-Kickback Laws, certain state laws designed to
protect consumers have been the basis for investigations and multi-state
settlements requiring the discontinuance of certain financial incentives
provided by manufacturers to retail pharmacies to promote the sale of the
manufacturers' drugs. One recent settlement required, among other things, that
a pharmacy benefit manager owned by a drug manufacturer inform physicians of
the identity of its owner and the manufacturer of the drugs being recommended
when attempting to persuade physicians to switch prescription drugs.

Antitrust Laws. Numerous lawsuits have been filed throughout the United
States by retail pharmacies against drug manufacturers challenging certain
brand drug pricing practices under various state and Federal antitrust laws.
Although the Company is not a party to any of these proceedings, its
operations are subject to review and scrutiny under those laws. The suits
allege, among other things, that the manufacturers have offered, and certain
pharmacy benefit managers have knowingly accepted, discounts or rebates on
drug purchases that allegedly violate the Federal Robinson-Patman Act in that
similar discounts were not available to retail pharmacies. A Federal district
court judge in one such suit recently rejected a proposed monetary settlement
that required no change in the challenged pricing practices. The parties to
that civil suit have agreed to settle the disputes by agreeing to an
injunction that meets the court's objections to the previously proposed
settlement by prohibiting the defendant drug manufacturers from refusing to
offer discounts based solely on the status of the buying entity, and by
providing that to the extent that retail pharmacies and retail buying groups
can demonstrate an ability to affect market share in the same or similar
manner as managed care entities, retailers will be entitled to the same types
of discounts given to managed care entities. Although the Company is not a
party to that civil suit, under the terms of the revised settlement approved
in June 1996 the availability to the Company of certain discounts, rebates and
fees that the Company presently receives in connection with its drug
purchasing and formulary administration programs could be adversely affected
and the Company could encounter increased competition from pharmacies and
pharmacy chains. In addition, the FTC has reportedly recently begun an
investigation of the defendants' pricing practices complained of in these
cases.

In June 1996, the FTC's proposed consent decree with RxCare and its parent,
the Tennessee Pharmacists Association ("TPA"), became final. Under the terms
of the consent decree, RxCare and TPA are prohibited from entering into a
"most favored nations" clause (under which a participating pharmacy that
accepts a lower reimbursement rate than that offered by RxCare must reduce its
charges to RxCare) with any pharmacy or from suggesting or assisting any other
person to do so. The FTC contends that such clause had the effect of
increasing prices charged by pharmacies to purchasers of prescription drugs in
Tennessee because the preponderance of pharmacies in Tennessee are members of
RxCare and because RxCare accounted for a substantial portion of drug
purchases from each pharmacy. Because the FTC justified its challenge and the
decree, in part, on RxCare's potential market power in Tennessee, business
arrangements and practices involving RxCare, either directly or indirectly, or
involving sales to or purchases by RxCare-affiliated pharmacies may face
heightened scrutiny or continued review from an anti-competitive perspective
by state or Federal regulators and possible challenge by private parties. The
existence of this consent order therefore may hamper the Company's effort to
develop or pursue competitive opportunities, in Tennessee or elsewhere, in
areas such as group purchasing or market advocacy on behalf of drug
manufacturers. Prolonged proceedings involving regulatory or private party
challenges to the Company's activities would be costly to the Company and
divert its resources, including key personnel. An adverse determination in
such a proceeding could have a material adverse effect on the Company.

Drug Distribution Laws. The Federal Food, Drug and Cosmetic Act generally
regulates the introduction, manufacture, advertising, labeling, packaging,
storage, handling, marketing and distribution of, and recordkeeping for,
pharmaceuticals shipped in interstate commerce. The Prescription Drug
Marketing Act of 1987 amended the Federal Food, Drug and Cosmetic Act and
established certain requirements applicable to the wholesale distribution of
prescription drugs, including the requirement that wholesale drug distributors
be registered with the Secretary of Health and Human Services or licensed by
each state in which they conduct business in accordance with federally
established guidelines on storage, handling and records maintenance. If the
Company distributes pharmaceutical products, it will be subject to inspection
by the Food and Drug Administration ("FDA") and will be required to maintain
licenses and permits under the laws of the states in which it operates.
Failure by the Company of an FDA inspection or to comply with any of the
foregoing laws, licenses, permits or other requirements could result in a
suspension of one or more of its operations and in penalties, which could have
a material adverse affect on the Company.

State Regulation. Many states have statutes and regulations that do or may
impact the provision of pharmacy benefits. In some states, pharmacy benefit
managers may be subject to regulation under insurance laws or laws licensing
HMOs and other managed care organizations, in which event requirements could
include the maintenance of reserves, required filings with regulatory
agencies, and compliance with disclosure requirements and other regulation of
the Company's operations. A number of states have laws designed to restrict
limitations on the consumer's choice of pharmacies. Some states require that
the benefits of discounts negotiated by managed care organizations be passed
along to consumers in proportionate reductions of co-payments. Some states
require that pharmacies be permitted to participate in provider networks if
they are willing to comply with network requirements. Other states require
pharmacy benefit managers to follow certain prescribed procedures in
establishing a network and admitting and terminating its members. Many states
require that Medicaid obtain the lowest prices from a pharmacy, which may
limit the Company's ability to reduce the prices it pays for drugs below
Medicaid prices. States have a variety of laws regulating pharmacists' ability
to switch prescribed drugs or to split fees, which could impede the Company's
business strategy.

ERISA. If the Company were determined to be a fiduciary under ERISA because
it was found to have discretionary responsibility for part or all of a group
health plan's administration, or because it was found to exercise authority or
control over the management or disposition of the plan's assets, the Company
could be restricted from commercial activities and relationships with
pharmacies, drug manufacturers and others deemed to conflict with its
fiduciary duties to plan members under ERISA statutes and regulations.
Violation of ERISA may result in substantial civil penalties and damage awards
to affected plan beneficiaries.

LEGAL PROCEEDINGS

On March 5, 1996, the Company was added as a third-party defendant in a
proceeding in the Superior Court of the State of Rhode Island. The third-party
plaintiffs, Medical Marketing Group, Inc. ("MMG"), PPI Holding, Inc. ("PPI
Holding") and Payer Prescribing Information, Inc. ("PPI"), allege that the
Company employed E. David Corvese, the Company's Vice Chairman, with knowledge
of covenants not to compete in effect between Mr. Corvese and PPI, PPI Holding
and MMG that prevent Mr. Corvese from competing in the area of the collection,
analysis or marketing of data for the pharmaceutical or health care industries
relating to physician practice demographics and the influence of managed care
plans. The complaint alleges that the Company interfered with the contractual
relationship between the parties and that it misappropriated MMG's and PPI's
confidential information through its employment of Mr. Corvese. The complaint
seeks to enjoin the Company from using confidential information allegedly
misappropriated from MMG and PPI and seeks an unspecified amount of
compensatory and consequential damages, interest and attorneys' fees. The
Company and Mr. Corvese believe the claim is without merit and intend to
vigorously defend against it; however, the loss of this litigation could have
a material adverse effect on the Company's business and results of operations.

FACILITIES AND EMPLOYEES

The Company's corporate headquarters are located in approximately 9,500
square feet of leased office space in Pearl River, New York. For its
operational needs, the Company leases approximately 24,000 square feet of
office space in South Kingstown, Rhode Island, approximately 5,000 square feet
in Nashville, Tennessee and approximately 1,850 square feet in Memphis,
Tennessee. The Company believes that its facilities, while currently adequate,
will need to be augmented as additional headquarters staff are added. The
addition of new pharmacy benefit management business, if obtained, may require
the Company to lease additional local facilities to support effective delivery
by the Company of its programs and services.

At June 30, 1996, the Company employed a total of 80 people, 17 of whom are
licensed pharmacists. The Company's employees are not represented by any
union, and, in the opinion of management, the Company enjoys good relations
with its employees.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors currently consists of seven members. The Company's
directors and executive officers are as follows:

NAME AGE POSITION
- ---- --- --------

John H. Klein............ 50 Chairman of the Board, Chief Executive Officer
and Director
E. David Corvese......... 40 Vice Chairman of the Board and Director
Richard H. Friedman...... 45 Chief Financial Officer, Chief Operating Officer,
Treasurer and Director
Todd R. Palmieri......... 31 Executive Vice President--Business Development
and Director
Leslie B. Daniels........ 49 Director
Louis A. Luzzi, Ph.D. ... 64 Director
Scott R. Yablon.......... 45 Director

JOHN H. KLEIN joined the Company in April 1996 and was elected Chief
Executive Officer, Chairman of the Board and a director of the Company in May
1996. From May 1989 to December 1994, Mr. Klein served as President, Chief
Executive Officer, a director and a member of the Executive Committee of the
Board of Directors of Zenith Laboratories, Inc. ("Zenith"), a manufacturer of
multi-source generic pharmaceutical drugs. In December 1994, Zenith was
acquired by IVAX Corporation ("IVAX"), an international healthcare company and
the world's largest multi-source generic pharmaceutical manufacturer and
marketer. From January 1995 to January 1996, Mr. Klein was President of IVAX'
North American Multi-Source Pharmaceutical Group and each of its operating
companies, including Zenith and Zenith Goldline (collectively, "NAMPG"). From
January 1995 to January 1996, he was also an executive officer and a member of
the Executive Committee of IVAX. Pursuant to a termination and consulting
agreement between Zenith and Mr. Klein executed in January 1996, Mr. Klein has
agreed to work as an untitled employee of Zenith for up to three days per
month through December 1996 and to act as a consultant to Zenith and its
affiliates for up to three days per month from January 1997 through December
1998. See "Certain Transactions." Mr. Klein has served as Chairman of the
Generic Pharmaceutical Industry Association since March 1995.

E. DAVID CORVESE has served as a director of the Company since March 1996
and as Vice Chairman since May 1996. Mr. Corvese has served as Chairman of
Pro-Mark Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary
of the Company ("Pro-Mark"), since June 1995 and also served as President and
Chief Executive Officer of Pro-Mark from March 1994 to June 1995. From June
1991 to November 1993, Mr. Corvese served as President of Payer Prescribing
Information, Inc. ("PPI"), a company engaged in the business of providing
informational products, market analysis and consulting services to the
pharmaceutical industry. From March 1990 to March 1992, he served as President
of Kay-Rem Associates, Inc., a company engaged in the business of
pharmaceutical consulting. Mr. Corvese is also a past President of the Rhode
Island Pharmaceutical Association and a member of the American Pharmaceutical
Association, the American Society of Hospital Pharmacists and the Rhode Island
Society of Hospital Pharmacists.

RICHARD H. FRIEDMAN joined the Company in April 1996 and was elected Chief
Financial Officer, Chief Operating Officer, Treasurer and a director of the
Company in May 1996. From May 1991 to January 1992, Mr. Friedman served as
Vice President--Finance of Genpharm, Inc., a manufacturer and distributor of
generic pharmaceuticals. From February 1992 to December 1994, he served as
Chief Financial Officer and Vice President of Finance of Zenith. From January
1995 to January 1996, Mr. Friedman was Vice President of Administration of
NAMPG. Pursuant to a termination agreement between Zenith and Mr. Friedman
executed in February 1996, Mr. Friedman has agreed to work as an untitled
employee of Zenith for up to three days per month through December 1996. See
"Certain Transactions."

TODD R. PALMIERI has served as Executive Vice President--Business
Development and a director of the Company since May 1996 and as President of
MIM Strategic Marketing, LLC, a Rhode Island limited liability company and
majority-owned subsidiary of the Company, since December 1995. From December
1993 to August 1995, Mr. Palmieri served as Chief Financial Officer and a
director of Pro-Mark. From January 1992 to September 1993, he served as Vice
President--Operations and Product Development of PPI. From March 1991 to May
1992, Mr. Palmieri served as Vice President--Marketing and Business
Development for Cole Associates Inc., a company engaged in pharmaceutical
managed care marketing and consulting.

LESLIE B. DANIELS has served as a director of the Company since May 1996.
Mr. Daniels has been a principal of CAI Advisors & Co., an investment firm,
since 1988. He was Chairman of the Board of Directors of Zenith from April
1990 to December 1994 and a director from December 1989 to December 1994. From
December 1994 to December 1995, he was a director of IVAX. Mr. Daniels has
served as a director of several public and private companies.

LOUIS A. LUZZI, PH.D. has served as a director of the Company since July
1996. Dr. Luzzi is Dean of Pharmacy and Provost for Health Science Affairs of
the University of Rhode Island College of Pharmacy. He has been a Professor of
Pharmacy at the University of Rhode Island since 1981. Dr. Luzzi participates
in several university, industry and government committees and has published
numerous research articles.

SCOTT R. YABLON has served as a director of the Company since July 1996.
Since 1981, he has held the position of Vice President--Administration for
Forbes, Inc. and currently is Vice President--Finance and Administration. He
is also a member of the Investment Committee of Forbes, Inc., Vice President,
Treasurer and Secretary of Forbes Investors Advisory Institute and Vice
President and Treasurer of Forbes Trinchera, Sangre de Cristo Ranches, Fiji
Forbes and Forbes Europe.

The members of the Board of Directors will serve until the next annual
meeting of stockholders and thereafter until their successors are elected and
qualified.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has an Executive Committee, an Audit Committee and a
Compensation Committee of the Board of Directors. The Executive Committee,
currently comprised of Messrs. Klein, Corvese, Friedman and Palmieri, reviews
the operating and strategic plans of the Company and, to the extent permitted
by Delaware law, has all the powers of the Board of Directors to direct and
manage the business and affairs of the Company. The Audit Committee, currently
comprised of Messrs. Daniels, Friedman and Yablon, makes recommendations to
the Board of Directors regarding the selection of independent auditors,
reviews the results and scope of the audit and other services provided by the
Company's independent auditors, reviews and evaluates the Company's internal
accounting controls and performs such other functions as directed by the Board
of Directors. The Compensation Committee, currently comprised of Messrs.
Daniels, Luzzi and Yablon, administers the Company's stock incentive plans.
See "--Stock Incentive Plans."

COMPENSATION OF DIRECTORS

Directors who are not officers of the Company ("Outside Directors") receive
fees of $1,500 per month and $500 per meeting of the Board of Directors and
any committee thereof and are reimbursed for expenses incurred in connection
with attending such meetings. In addition, each Outside Director joining the
Company since the adoption of the Company's 1996 Non-Employee Directors Stock
Incentive Plan receives an option to purchase 20,000 shares of Common Stock
under that plan. See "--Stock Incentive Plans." Directors who are also
officers of the Company will not be paid any director fees.

EXECUTIVE COMPENSATION

MIM Corporation was incorporated in March 1996 for the purpose of combining
the businesses and operations of Pro-Mark and MIM Strategic Marketing, LLC.
See "Certain Transactions--The Formation." Prior to the Formation in May 1996,
substantially all of the operations of MIM Corporation were conducted by Pro-
Mark. Accordingly, the following table sets forth certain information of Pro-
Mark concerning the annual, long-term and other compensation of the chief
executive officer of Pro-Mark and the four executive officers of Pro-Mark
whose total annual salary and bonus exceeded $100,000 during 1995 (the "Named
Executive Officers"):

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------
NAME AND PRINCIPAL SECURITIES
POSITION WITH PRO- OTHER ANNUAL UNDERLYING ALL OTHER
MARK(1) YEAR SALARY BONUS COMPENSATION(2) OPTIONS(3) COMPENSATION
- ------------------ ---- -------- -------- --------------- ------------ ------------

E. David Corvese ....... 1995 $221,539(4) $100,000 $10,599 1,336,950 $33,000(5)
Chairman of the Board
Todd R. Palmieri ....... 1995 139,809(6) 182,308 2,400 955,500 --
Chief Financial Officer
Richard H. Krupski...... 1995 127,885 5,400 3,710 48,750 --
Chief Executive Officer
and President
Steven M. Dias ......... 1995 102,513 19,000 3,600 -- --
Vice President
Michael R. Ryan ........ 1995 96,000 41,398 3,600 48,750 --
Vice President

- --------
(1) The current executive officers of the Company are Messrs. Klein, Corvese,
Friedman and Palmieri, and their respective annual base salary rates for
1996 are as follows: Mr. Klein ($325,000), Mr. Corvese ($325,000), Mr.
Friedman ($275,000) and Mr. Palmieri ($210,000). Messrs. Krupski, Dias and
Ryan are currently non-executive officer employees of the Company. See "--
Employment Agreements."
(2) Consists of car allowances.
(3) Represents options to purchase shares of Common Stock of the Company
issued in connection with the Formation of the Company in exchange for
options that were granted by Pro-Mark during 1995. See "Certain
Transactions--The Formation."
(4) Includes $69,231 of compensation paid to Mr. Corvese by MIM Holdings, LLC.
Mr. Corvese served Pro-Mark as Chairman of the Board, Chief Executive
Officer and President prior to June 1995 and since June 1995 as Chairman
of the Board.
(5) Represents certain legal costs and expenses paid by Pro-Mark and MIM
Holdings, LLC on behalf of Mr. Corvese during 1995. See "Business--Legal
Proceedings."
(6) Includes $53,846 of compensation paid to Mr. Palmieri by MIM Holdings,
LLC.

The following table sets forth information concerning stock option grants
made during 1995 to the Named Executive Officers. These grants are also
reflected in the Summary Compensation Table. In accordance with the rules and
regulations of the Commission, the hypothetical gains or "option spreads" for
each option grant are shown based on compound annual rates of stock price
appreciation of 5% and 10% from the grant date to the expiration date. The
assumed rates of growth are prescribed by the Commission and are for
illustrative purposes only; they are not intended to predict the future stock
prices, which will depend upon market conditions and the Company's future
performance, among other things.

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS(1)
-----------------------------------------------
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OPTION TERM
OPTIONS FISCAL YEAR PRICE EXPIRATION ----------------------
NAME GRANTED(#) 1995 ($/SHARE) DATE 5% 10%
- ---- ---------- ------------ --------- ---------- ---------- -----------

E. David Corvese........ 1,336,950(2) 53.6% $.0067 3/30/10 $ 9,665 $ 28,460
Todd R. Palmieri........ 906,750(2) 36.4 .0067 3/30/10 6,555 19,302
48,750(3) 2.0 .0067 3/23/10 352 1,038
Richard H. Krupski...... 48,750(3) 2.0 .0067 3/23/10 352 1,038
Michael R. Ryan......... 48,750(3) 2.0 .0067 3/23/10 352 1,038

- --------
(1) Represents options to purchase shares of Common Stock of the Company
issued in connection with the Formation of the Company in exchange for
options granted by Pro-Mark during 1995. See "Certain Transactions--The
Formation."
(2) Such options became immediately exercisable on the date of grant.
(3) Such options become exercisable in equal installments on the first three
anniversaries of the date of grant.

None of the Named Executive Officers exercised options during 1995. The
following table sets forth for each Named Executive Officer the number of
shares covered by both exercisable and unexercisable stock options held as of
December 31, 1995. Also reported are the values for "in-the-money" options,
which represent the difference between the respective exercise prices of such
stock options and the assumed initial public offering price of $15.00 per
share.

AGGREGATED FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END(1) FISCAL YEAR-END(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------

E. David Corvese............ 1,336,950 -- $20,045,292 $ --
Todd R. Palmieri............ 923,000 81,250 13,838,816 1,218,206
Richard H. Krupski.......... -- 48,750 -- 730,923
Steven M. Dias.............. 12,650 25,300 189,665 379,330
Michael R. Ryan............. 16,250 81,250 243,641 1,218,206

EMPLOYMENT AGREEMENTS

In May 1996, Messrs. Klein, Corvese, Friedman and Palmieri entered into
executive employment agreements with the Company which provide for initial
base salaries at annualized rates of $325,000, $325,000, $275,000 and
$210,000, respectively, and certain fringe benefits including automobile and
life insurance allowances. Such executives are also eligible to participate in
an executive bonus program for senior executive officers. The term of
employment is four years, subject to earlier termination by either party. If
employment is terminated early due to disability, or by the Company without
cause, or by the executive with cause, the Company is obligated to continue to
pay his salary and provide fringe benefits for twelve months following
termination. During the term of employment and for one year after the later of
termination of severance payments (unless the Company terminates the executive
without cause) or employment, the executive may not, directly or indirectly,
participate in the United States (other than with the Company) in the pharmacy
benefit management business, any business then being engaged in by the Company
or any component of any such business, nor may the executive induce any
customers to take actions disadvantageous to the Company.

Mr. Krupski entered into a three-year employment agreement with Pro-Mark in
April 1995 which provides for an initial annual base salary of $175,000 and
certain fringe benefits. In addition, Mr. Krupski will be eligible for
incentive compensation or performance bonuses, not exceeding the sum of
$25,000 in any calendar year, as determined by Pro-Mark's Board of Directors.
During the term of his employment by Pro-Mark and for one year thereafter, Mr.
Krupski may not, directly or indirectly, interfere with any business
relationship between Pro-Mark and its employees, customers, suppliers or other
business associates, or own, operate, or participate in the ownership or
operation of, or in any manner be connected with, any business the principal
activity of which is in competition with the pharmacy benefit management and
consulting business or any other present or planned business of Pro-Mark or
any of its subsidiaries. If Pro-Mark terminates Mr. Krupski's employment as a
result of his disability or his unsatisfactory performance of his duties, Pro-
Mark is obligated to pay him an amount equal to his base salary for a period
of six months, with fringe benefits.

Dr. Ryan entered into a three-year employment agreement with Pro-Mark
effective April 1994 which provides for an initial annual base salary of
$96,000 and certain fringe benefits. In March 1996, Dr. Ryan's annual base
salary was increased to $125,000. In addition, Dr. Ryan will be eligible for
incentive compensation or performance bonuses as determined by Pro-Mark's
Board of Directors. During the term of his employment by Pro-Mark and for up
to one year thereafter, Dr. Ryan may not, directly or indirectly, interfere
with any business relationship between Pro-Mark and its employees, customers
or suppliers or own, operate, or participate in the ownership or operation of,
or in any manner be connected with, any business which is in competition with
the drug benefit plan marketing and consulting business or any other present
or planned business of Pro-Mark or any of its subsidiaries. If Pro-Mark
terminates Dr. Ryan's employment as a result of (a) his unsatisfactory
performance of his duties or (b) the termination, expiration or modification
of government funding for TennCare or of the Federal waiver for TennCare, Pro-
Mark is obligated to pay him an amount equal to his base salary for a period
of up to three months.

STOCK INCENTIVE PLANS

Employee Plan

The Company's 1996 Stock Incentive Plan (the "Employee Plan") was adopted in
May 1996 and provides for the grant of either statutory or non-qualified stock
options to employees and key contractors of the Company to purchase up to an
aggregate of 4,000,000 shares of Common Stock. In connection with the
Formation of the Company in May 1996, the Company issued options to purchase
an aggregate of 3,021,900 shares of Common Stock under the Employee Plan (of
which options to purchase 2,686,400 shares were fully vested at July 15, 1996)
at an exercise price of $.0067 per share in exchange for options to purchase
shares of Pro-Mark common stock. In May and July 1996, the Company also
granted options to purchase an aggregate of 875,739 shares of Common Stock
under the Employee Plan (none of which were vested at July 15, 1996) at an
exercise price equal to the initial public offering price of the shares
offered in the Offering. Options granted under the Employee Plan

vest in full upon a change in control of the Company, and have a term of up to
15 years. All options at the time of original grant were deemed to be at fair
market value.

Directors Plan

The Company's 1996 Non-Employee Directors Stock Incentive Plan (the
"Directors Plan" and, together with the Employee Plan, the "Plans") was
adopted in July 1996. The purpose of the Directors' Plan is to attract and
retain qualified individuals to serve as non-employee directors of the Company
("Outside Directors"), to provide incentives and rewards to such directors and
to associate more closely the interests of such directors with those of the
Company's stockholders. The Directors Plan provides for the automatic granting
of non-qualified stock options to Outside Directors joining the Company since
the adoption of the Directors Plan. Each such Outside Director receives an
option to purchase 20,000 shares of Common Stock upon his or her initial
appointment or election to the Board of Directors. The exercise price of such
options is equal to the fair market value of the Common Stock on the date of
grant. Options granted under the Directors Plan generally vest over three
years. A reserve of 100,000 shares of Common Stock has been established for
issuance under the Directors Plan. Options to purchase 40,000 shares of Common
Stock are currently outstanding under the Directors Plan at an exercise price
equal to the initial public offering price of the shares offered in the
Offering.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breach of directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the
corporation, directors must exercise an informed business judgment based on
all material information reasonably available to them. Absent the limitations
authorized by the Delaware statute, directors could be accountable to
corporations and their stockholders for monetary damages for conduct that does
not satisfy their duty of care. Although the statute does not change
directors' duty of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission. The Company's Amended and
Restated Certificate of Incorporation ("Certificate of Incorporation") limits
the liability of the Company's directors to the Company or its stockholders to
the fullest extent permitted by the Delaware statute. Specifically, directors
of the Company will not be personally liable for monetary damages for breach
of a director's fiduciary duty as a director, except for liability (a) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(b) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (c) for unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, or (d) for any transaction from
which the director derived an improper personal benefit. The inclusion of this
provision in the Certificate of Incorporation may have the effect of reducing
the likelihood of derivative litigation against directors and may discourage
or deter stockholders or management from bringing a lawsuit against directors
for breach of their duty of care, even though such an action, if successful,
might otherwise have benefited the Company and its stockholders. At present,
there is no litigation or proceeding pending involving a director of the
Company as to which indemnification is being sought, nor is the Company aware
of any threatened litigation that may result in claims for indemnification by
any director.

The By-laws of the Company also provide for indemnification of the officers
and directors of the Company to the fullest extent permitted under Delaware
law.

The Company believes the foregoing are necessary to attract and retain
qualified persons as directors and officers.

CERTAIN TRANSACTIONS

THE FORMATION

MIM Corporation was incorporated in Delaware in March 1996 for the purpose
of combining the businesses and operations of Pro-Mark Holdings, Inc. ("Pro-
Mark"), a Delaware corporation, and MIM Strategic Marketing, LLC ("MIM
Strategic"), a Rhode Island limited liability company (the "Formation").
Immediately prior to the Formation, Pro-Mark was controlled by E. David
Corvese, the Vice Chairman and a director of MIM Corporation, and MIM
Strategic was controlled by MIM Holdings, LLC ("MIM Holdings"), a Rhode Island
limited liability company. The owners of MIM Holdings prior to the Formation
were Mr. Corvese and his wife, various trusts for the benefit of their family,
and Todd R. Palmieri, currently Executive Vice President--Business Development
and a director of MIM Corporation. Prior to the Formation, substantially all
of the operations of MIM Corporation were conducted by Pro-Mark.

The transactions that occurred in the Formation took place in May 1996 and
were as follows:

. The stockholders of Pro-Mark transferred their Pro-Mark shares to MIM
Corporation in exchange for an aggregate of 4,500,000 shares of Common
Stock of MIM Corporation (including an aggregate of 4,455,000 shares to
Mr. Corvese), and the holders of options to purchase shares of common
stock of Pro-Mark exchanged such options for options to purchase an
aggregate of 3,021,900 shares of Common Stock of MIM Corporation
(including options to purchase 1,336,950 shares to Mr. Corvese and
options for 1,004,250 shares to Mr. Palmieri).

. MIM Holdings redeemed a portion of Mr. Corvese's ownership interest in
MIM Holdings in exchange for an ownership interest in MIM Strategic, and
Mr. Corvese then transferred such ownership interest in MIM Strategic to
MIM Corporation in exchange for 905,000 shares of Common Stock of MIM
Corporation.

. MIM Holdings redeemed all of Mr. Palmieri's ownership interests in MIM
Holdings in exchange for an ownership interest in MIM Strategic, and Mr.
Palmieri then transferred such ownership interest in MIM Strategic to
MIM Corporation in exchange for 195,747 shares of Common Stock of MIM
Corporation.

. MIM Holdings assigned certain contract rights and transferred all of its
remaining ownership interests in MIM Strategic to MIM Corporation in
exchange for an aggregate of 2,423,053 shares of Common Stock of MIM
Corporation.

As a result of the foregoing transactions, Pro-Mark became a wholly-owned
subsidiary of MIM Corporation and MIM Strategic became a 90%-owned subsidiary
of MIM Corporation, with Zenith Goldline owning the remaining 10% ownership
interest in MIM Strategic. Mr. Corvese and his wife and various trusts for the
benefit of their family are the current owners of MIM Holdings. Messrs.
Corvese and Palmieri and MIM Holdings are each principal stockholders of MIM
Corporation. See "Principal Stockholders."

RELATIONSHIP OF CERTAIN EXECUTIVE OFFICERS WITH ZENITH AND ZENITH GOLDLINE

In December 1995, the Company and Zenith Goldline, a major generic drug
manufacturer and marketer and a subsidiary of IVAX, formed MIM Strategic for
the purpose of enhancing the distribution of Zenith Goldline's pharmaceutical
products in the State of Tennessee. Zenith Goldline contributed $1,150,000 to
MIM Strategic in exchange for its 10% ownership interest in MIM Strategic.

In December 1995, the Company entered into agreements to advise and assist
Zenith Goldline in the distribution of Zenith Goldline's line of generic and
non-prescription pharmaceutical products in the State of Tennessee in return
for a fee based on a percentage of the growth in Zenith Goldline's gross
margins from the distribution of such products. See "Business--Preferred
Generics." John H. Klein, the Company's Chairman and Chief Executive Officer
and a director, and Richard H. Friedman, the Company's Chief Financial
Officer, Chief Operating Officer and Treasurer and a director, both of whom
joined the Company in April 1996, were executive officers of Zenith Goldline
at the time the Company entered into the agreements with Zenith Goldline.

In January 1996, Mr. Klein and Zenith entered into a termination and
consulting agreement, whereby Mr. Klein agreed to continue as an untitled
employee of Zenith through December 1996 and to act as a consultant to Zenith
and its affiliates from January 1997 through December 1998. Mr. Klein has
agreed to devote up to three days per month to Zenith under such agreement,
and Zenith has agreed to pay Mr. Klein $400,000 per year through December
1998. Under the agreement, Mr. Klein has agreed that he will not, prior to
January 1999, own, manage, or be employed by, consult to or otherwise assist
any business or enterprise that is substantially competitive with any material
portion of the business of manufacturing prescription generic drugs as
conducted by Zenith or its subsidiaries as of the date of the agreement. Such
covenant may restrict the Company's ability to compete in certain areas of the
preferred generics business, its planned drug distribution business and
certain other business areas.

In February 1996, Mr. Friedman and Zenith entered into a termination
agreement, whereby Mr. Friedman agreed to continue as an untitled employee of
Zenith through December 1996. Mr. Friedman has agreed to work up to three days
per month under the agreement, and Zenith has agreed to pay Mr. Friedman an
annual salary of $184,000 through December 1996. Mr. Friedman has agreed to a
noncompetition covenant similar to that of Mr. Klein's that will be in effect
through December 1996.

As of June 30, 1996, Messrs. Klein and Friedman held options to purchase an
aggregate of 288,150 and 84,955 shares, respectively, of common stock of
Zenith's parent, IVAX. Although Messrs. Klein and Friedman intend to devote
substantially all of their time to the business and operations of the Company,
no assurance can be given that their rights and obligations under the above
agreements or their interests in Zenith's parent will not result in or create
a conflict of interest with their obligations to the Company.

RELATIONSHIP WITH RXCARE

In March 1994, the Company entered into an agreement with RxCare agreeing to
provide RxCare with a broad range of pharmacy benefit management services with
respect to RxCare's TennCare and private pharmaceutical benefit businesses.
Under the agreement, the Company shares with RxCare the Company's profit, if
any, from such pharmaceutical benefit business. Based on the Company's
estimated results of operations for 1994, the Company paid RxCare a profit
sharing fee of $473,000 pursuant to the agreement in early 1995. The Company's
actual operations for 1994 were subsequently determined not to be profitable.
Although the Company does not intend to request repayment of the fee, the
Company intends to offset such amount against future profit sharing amounts,
if any, due to RxCare under the agreement. Under the agreement, the Company
also agreed to pay RxCare $10,000 per month through October 1995 for the use
of certain office space and equipment and $20,000 per month thereafter through
December 1998. Expenses under this agreement were $100,000, $140,000 and
$120,000 during 1994, 1995 and the first six months of 1996, respectively. The
Company believes that the loss of the agreement with RxCare would have a
material adverse effect on the Company's results of operations.

Since January 1994, the Chairman of the Board and Chief Executive Officer of
RxCare has been a consultant to the Company. Pursuant to the agreement between
the Company and the consultant, the Company has agreed to pay the consultant
$5,500 each month, and additional compensation as agreed by the parties for
special projects, through December 1996. During 1994, 1995 and the first six
months of 1996, the Company paid the consultant and a related party assignee a
total of $516,000 (including $150,000 upon execution of the RxCare agreement
and $300,000 for special projects related to the establishment of the
Company's TennCare business), $66,000 and $33,000, respectively, under the
agreement.

In July 1995, the Company advanced RxCare approximately $1,957,000 to fund
the losses RxCare had incurred in connection with one of its pharmacy benefit
management contracts that is currently being managed by the Company under the
above agreement with RxCare. Although the Company does not intend to seek
repayment of the advance, the Company intends to offset such amount against
future profit sharing amounts, if any, due to RxCare under the agreement.

OTHER TRANSACTIONS

In March 1994, a brother of E. David Corvese received a loan of $150,000
from the Company bearing interest at the prime rate, with principal and
interest payable upon demand. The loan was secured by his brother's present
and future interests in the capital and profits of a subsidiary of the
Company. The loan was repaid in 1995.

In June 1994, Mr. and Mrs. Corvese received loans from the Company in the
aggregate amount of $978,750 bearing interest at 5.42% per annum, with
interest payable monthly and principal payable in full on or before June 15,
1997. The loans are secured by a first mortgage on their principal residence
located in Peace Dale, Rhode Island. Indebtedness of $956,000 under the loans
(including accrued interest) was outstanding at June 30, 1996.

In August 1994, the Company provided Alchemie Properties, LLC ("Alchemie")
with a $299,000 loan bearing interest at 10% per annum, with interest payable
monthly and principal payable in full on or before December 1, 2004. Alchemie
is a Rhode Island limited liability company of which Mr. Corvese is the
manager and the principal owner. The loan is secured by a lien on Alchemie's
rental income. Indebtedness of $280,000 under the loan was outstanding at June
30, 1996.

In December 1994, the Company entered into a ten-year lease with Alchemie
for approximately 7,200 square feet of office space in Peace Dale, Rhode
Island. The Company paid $5,000, $60,000 and $30,000 in rent for this space
during 1994, 1995 and the first six months of 1996, respectively. The Company
has also expended an aggregate of approximately $480,000 for alterations and
leasehold improvements to this space, which upon termination of the lease will
accrue to the benefit of Alchemie.

In September 1995, the Company entered into a two-year agreement with MIM
Holdings, whereby MIM Holdings agreed to provide management and consulting
services to the Company for a fee of $75,000 per month. During 1995 and the
first quarter of 1996, the Company paid MIM Holdings $300,000 and $225,000,
respectively, pursuant to the agreement. The agreement was terminated in March
1996.

In December 1995, MIM Strategic advanced to MIM Holdings $800,000 for
certain consulting services to be performed for MIM Strategic in 1996. During
1995, the Company also paid $278,000 for certain expenses on behalf of MIM
Holdings. These amounts, totaling $1,078,000, were recorded as a stockholder
note receivable at December 31, 1995. The Company has received a note from MIM
Holdings guaranteed by Mr. Corvese for $456,000. The note bears interest at
10% per annum, payable quarterly, with principal due on March 31, 2001. The
note is further secured by the assignment of two notes due to MIM Holdings
from Messrs. Palmieri and Ryan in the aggregate amount of $456,000. The
outstanding principal balance of the note plus accrued interest at June 30,
1996 was $467,000. The remaining $622,000 will not be repaid and was treated
as a stockholder distribution during the first quarter of 1996.

In January 1996, MIM Strategic entered into another agreement with MIM
Holdings, whereby MIM Holdings agreed to provide to MIM Strategic operational
and professional services for a fee of $50,000 per month. MIM Strategic paid
MIM Holdings $150,000 under this Agreement during the first quarter of 1996.
In connection with the Formation, MIM Holdings assigned such agreement to the
Company. The agreement was terminated in May 1996.

During the first quarter of 1996, the Company advanced $99,000 and $25,000
to MIM Holdings and Alchemie, respectively. During the second quarter of 1996,
the advance to Alchemie was repaid in full and $13,000 of the advance to MIM
Holdings was repaid. The $86,000 balance of the advance to MIM Holdings at
June 30, 1996 is to be repaid by September 30, 1996 without interest.

Prior to the affiliation of Messrs. Klein, Friedman and Daniels with the
Company, the Company primarily was a pharmacy benefit manager providing
capitated services to the TennCare Medicaid population of Tennessee. Drawing
upon their experience, know-how, contacts and relationships, managerial
expertise, contracts under negotiation and strategic understandings and plans
relating to the generic drug and health care industries, the Company has
determined to pursue a business strategy that emphasizes the promotion and
distribution of generic drugs through exclusive contracts with preferred
generic drug manufacturers and the marketing of risk sharing pharmacy benefit
programs to sponsors of public and private health plans outside of Tennessee.
Negotiations are currently proceeding with a number of generic drug
manufacturers and plan sponsors. Management believes that combining the
interests of Messrs. Klein, Friedman and Daniels with the interests of the
Company has resulted in a business strategy uniquely suited to capitalize on
the present and expected conditions in the pharmaceutical and health care
industries. Based upon the foregoing, in May 1996 Mr. Corvese granted to
Messrs. Klein, Friedman and Daniels options to purchase 1,800,000, 1,500,000
and 300,000 shares of his Common Stock, respectively, at an exercise price of
$.10 per share. These options are immediately exercisable and have a term of
ten years, subject to earlier termination upon certain mergers or
consolidations of the Company or the sale or other disposition of all or
substantially all of the assets of the Company ("Change in Control"). Mr.
Corvese also granted to Mr. Klein an additional option to purchase 1,860,000
shares of his Common Stock at a price of $7.50 per share (the "Option"). The
Option has a term of six years, subject to earlier termination (a) upon a
Change in Control of the Company, (b) if Mr. Klein's four-year employment
agreement with the Company is not renewed by the Company or, if renewed, his
employment with the Company does not continue for any reason for an additional
12 months thereafter, or (c) Mr. Klein voluntarily terminates his employment
with the Company prior to May 2001. Although the Option is immediately
exercisable, Mr. Corvese will have the right to repurchase from Mr. Klein, at
a purchase price of $7.50 per share, the shares of Common Stock issued upon
exercise of the Option commencing seven months after the occurrence of an
event described in (b) or (c) above, provided that Mr. Corvese's repurchase
option will terminate upon a Change in Control of the Company or to the extent
the Company achieves certain levels of consolidated net income in any one
fiscal year. Mr. Klein has agreed that he will not dispose of any shares of
Common Stock issued upon exercise of the Option to the extent such shares are
or may be subject to Mr. Corvese's repurchase option. In connection with the
grant of the foregoing options, the Company granted certain registration
rights to Messrs. Corvese, Klein, Friedman and Daniels. See "Shares Eligible
for Future Sale."

In June 1996, Mr. Klein loaned $500,000 to the Company for working capital
purposes pursuant to an unsecured, 10% demand note that was repaid that month.
The Company paid $2,500 to Mr. Klein in interest and associated fees in
connection with the loan.

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

ALL FUTURE TRANSACTIONS BETWEEN THE COMPANY AND ITS OFFICERS, DIRECTORS,
PRINCIPAL STOCKHOLDERS AND AFFILIATES WILL BE ON TERMS NO LESS FAVORABLE TO
THE COMPANY THAN COULD BE OBTAINED FROM UNAFFILIATED PARTIES AND, TO THE
EXTENT THAT SUCH TRANSACTIONS ARE NOT IN THE ORDINARY COURSE OF BUSINESS, WILL
BE SUBJECT TO THE APPROVAL OF A MAJORITY OF THE COMPANY'S INDEPENDENT,
DISINTERESTED DIRECTORS.

PRINCIPAL STOCKHOLDERS

The following table sets forth as of June 30, 1996 the beneficial ownership
of the Common Stock by: (i) each person or entity known to the Company to own
beneficially five percent or more of the Company's Common Stock; (ii) each of
the Company's directors; (iii) the Company's Chief Executive Officer and each
other Named Executive Officer; and (iv) all directors and current executive
officers of the Company as a group.

PERCENTAGE OF SHARES
NUMBER OF SHARES --------------------------------
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1)(2) PRIOR TO OFFERING AFTER OFFERING
------------------------ ------------------------ ----------------- --------------

E. David Corvese........ 9,120,003(3)(4) 97.4% 68.3%
25 North Road (5)(6)
Peace Dale, RI 02883
John H. Klein........... 3,660,000(4) 45.6 30.3
One Blue Hill Plaza
Pearl River, NY 10965
MIM Holdings, LLC....... 2,323,053(7) 29.0 19.3
25 North Road
Peace Dale, RI 02883
Richard H. Friedman..... 1,500,000(5) 18.7 12.5
One Blue Hill Plaza
Pearl River, NY 10965
Todd R. Palmieri........ 1,151,247(8) 12.8 8.9
One Blue Hill Plaza
Pearl River, NY 10965
Leslie B. Daniels....... 300,000(6) 3.7 2.5
Michael R. Ryan......... 48,750(9) * *
Steven M. Dias.......... 25,300(9) * *
Richard H. Krupski...... 16,250(9) * *
Louis A. Luzzi, Ph.D.... -- (10) * *
Scott R. Yablon......... -- (10) * *
All directors and
current executive
officers as a group
(seven persons)........ 10,271,250(11) 99.6 71.7

- --------
* Less than 1%.
(1) The inclusion herein of any shares as beneficially owned does not
constitute an admission of beneficial ownership of those shares. Except as
otherwise indicated, each person has sole voting power and sole investment
power with respect to all shares beneficially owned by such person.
(2) Shares not outstanding but deemed financially owned by virtue of the right
of an individual to acquire them within 60 days upon the exercise of an
option are treated as outstanding for purposes of determining beneficial
ownership and the percentage beneficially owned by such individual.
(3) Includes 1,336,950 shares issuable upon exercise of options. Also includes
2,323,053 shares held by MIM Holdings, LLC, a Rhode Island limited
liability company, the owners of which are Mr. Corvese, his wife and
various trusts for the benefit of their family.
(4) Mr. Klein has the right to acquire 3,660,000 shares from Mr. Corvese
pursuant to stock option agreements. See "Certain Transactions."
(5) Mr. Friedman has the right to acquire 1,500,000 shares from Mr. Corvese
pursuant to a stock option agreement. See "Certain Transactions."
(6) Mr. Daniels has the right to acquire 300,000 shares from Mr. Corvese
pursuant to a stock option agreement. See "Certain Transactions."
(7) For purposes of beneficial ownership, the shares held by MIM Holdings, LLC
are also deemed to be held by Mr. Corvese (see footnote 3).
(8) Includes 955,500 shares issuable upon exercise of the vested portion of
options. Excludes 48,750 shares subject to the unvested portion of options
held by Mr. Palmieri.
(9) Consists of shares issuable upon exercise of the vested portion of
options. Excludes 53,133, 123,750 and 90,600 shares subject to the
unvested portion of options held by Messrs. Dias, Ryan and Krupski,
respectively.
(10) Excludes 20,000 and 20,000 shares subject to unvested options held by
Messrs. Luzzi and Yablon, respectively.
(11) See footnotes 3 through 8 and 10 above.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company as stated in the Company's
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") consists of 40,000,000 shares of Common Stock, $.0001 par
value per share, and 5,000,000 shares of preferred stock, $.0001 par value per
share (the "Preferred Stock"). At June 30, 1996, 8,023,800 shares of Common
Stock were issued and outstanding and held of record by six stockholders and
no shares of Preferred Stock were issued or outstanding.

COMMON STOCK

Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the outstanding shares of Common
Stock entitled to vote in any election of directors may elect all the
directors standing for election. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Company's
Board of Directors out of funds legally available therefor. Upon the
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to receive ratably the net assets of the Company available for
distribution after the payment of, or adequate provision for, all debts and
other liabilities of the Company. Holders of Common Stock have no preemptive,
subscription, redemption, sinking fund or conversion rights. Immediately upon
consummation of the Offering, all of the then outstanding shares of Common
Stock will be validly issued, fully paid and nonassessable by the Company.

PREFERRED STOCK

Under the terms of the Company's Certificate of Incorporation, the Company's
Board of Directors is authorized, subject to any limitations prescribed by
law, to issue without stockholder approval up to 5,000,000 shares of Preferred
Stock in one or more series. Each such series of Preferred Stock shall have
preferences, privileges, restrictions and rights, including voting, dividend,
conversion and redemption and liquidation preferences, as shall be determined
by the Company's Board of Directors.

The purpose of authorizing the Company's Board of Directors to issue
Preferred Stock and determine its rights and preferences is to eliminate
delays associated with a stockholder vote on specific issuances. The issuance
of Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue any shares of Preferred
Stock.

DELAWARE ANTI-TAKEOVER STATUTE

Upon consummation of the Offering, the Company will be subject to Section
203 of the Delaware General Corporation Law ("Section 203"). Subject to
certain exceptions and limitations, Section 203 prohibits a Delaware
corporation from engaging in any business combination with any "interested
stockholder," defined as any entity or person beneficially owning 15% or more
of the outstanding voting stock of a corporation and any entity or person
affiliated with or controlling or controlled by such entity or person, for a
period of three years following the time that such stockholder became an
interested stockholder, unless: (i) prior to such time, the board of directors
of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder; (ii)
upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (for the purposes of determining the number of shares
outstanding under Delaware law, those shares owned (x) by persons who are
directors and also officers and (y) by employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer are
excluded from the calculation); or (iii) at or subsequent to such time, the
business combination is approved by the board of directors and authorized at
an annual or special meeting of stockholders, and not by written

consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.

Section 203 defines a business combination to include: (i) any merger or
consolidation of the corporation with the interested stockholder; (ii) any
sale, transfer, pledge or other disposition of 10% or more of the assets of
the corporation involving the interested stockholder; (iii) subject to certain
exceptions, any transaction which results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder;
(iv) any transaction involving the corporation which has the effect of
increasing the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or (v) the
receipt by the interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or through the
corporation.

STOCK TRANSFER AGENT AND REGISTRAR

The stock transfer agent and registrar for the Common Stock is American
Stock Transfer and Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
12,023,800 shares of Common Stock (assuming no exercise of outstanding stock
options under the Plan or the Underwriters' over-allotment option). The
4,000,000 shares of Common Stock sold in the Offering (plus any additional
shares of Common Stock sold upon exercise of the Underwriters' over-allotment
option) will be freely tradeable without restriction, except for any shares
purchased by affiliates of the Company which will be subject to the resale
limitations under Rule 144 of the Securities Act and which may also be subject
to the agreement with the Underwriters described below. None of the remaining
8,023,800 outstanding shares of Common Stock (collectively, the "restricted
shares") have been issued in transactions registered under the Securities Act,
which means that they may be resold publicly only in future transactions
registered under the Securities Act or in compliance with an exemption from
the registration requirements of the Securities Act, including the exemption
provided by Rule 144 thereunder. Of these restricted shares, 45,000 will be
saleable in the public market 90 days following the date of this Prospectus,
subject to compliance with Rule 144. Beginning one year after the date of this
Prospectus (or earlier for certain limited transactions or with the written
consent of PaineWebber Incorporated on behalf of the Underwriters), 4,455,000
additional restricted shares will become eligible for sale in the public
market upon the expiration of lock-up agreements between the Underwriters and
the holders of such shares, subject to compliance with Rule 144. The remaining
3,523,800 restricted shares will become eligible for sale in the public market
in December 1997, subject to compliance with Rule 144.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) whose restricted shares have been fully paid for
and held for at least two years from the later of the date of issuance by the
Company or acquisition from an affiliate, including an "affiliate" as that
term is defined under the Securities Act, is entitled to sell, within any
three-month period commencing 90 days after the date of this Prospectus, a
number of shares that does not exceed the greater of 1% of the then
outstanding shares of Common Stock (approximately 120,000 shares immediately
after the Offering, assuming no exercise of outstanding stock options under
the Plan or the Underwriters' over-allotment option) or the average weekly
trading volume of the Common Stock on all exchanges and/or reported through
the automated quotation system of a registered securities association during
the four calendar weeks preceding the date on which notice of the sale is
filed with the Commission. Sales under Rule 144 are also subject to certain
manner of sale provisions, notice requirements and the availability of current
public information about the Company. A person (or persons whose shares are
aggregated) who is not deemed to have been an "affiliate" of the Company at
any time during the 90 days preceding the sale, and whose restricted shares
have been fully paid for and held for at least three years from the later of
the date of issuance by the Company or acquisition from an affiliate, would be
entitled to sell such shares under Rule 144(k) without regard to the
limitations described above. Rule 144A under the Securities Act permits

the immediate sale by the current holders of restricted shares of all or a
portion of their shares to certain qualified institutional buyers as defined
in Rule 144A, subject to certain conditions.

The Commission has proposed to amend the holding periods required by Rule
144 to permit sales of restricted securities after one year rather than two
years (and two years rather than three years for non-affiliates who desire to
sell such shares under Rule 144(k)). If such proposed amendment were enacted,
the restricted securities would become freely tradeable (subject to any
applicable contractual restrictions) at correspondingly earlier dates.

Upon consummation of the Offering, the Company will have outstanding under
the Plans options to purchase an aggregate of 3,937,639 shares of Common
Stock, 2,689,400 of which will then be exercisable. Restricted securities,
including shares issuable upon exercise of options under the Plans, sold by
the Company in reliance on Rule 701 under the Securities Act may be resold 90
days after the date hereof in reliance on Rule 144 by persons who are not
affiliates of the Company subject only to the provision of Rule 144 regarding
manner of sale, and by persons who are affiliates of the Company without
complying with the Rule's holding period requirements. The Company intends to
file a registration statement on Form S-8 under the Securities Act to register
all shares of Common Stock issuable under the Plans. The registration
statement is expected to be filed approximately 180 days after the date of
this Prospectus and is expected to become effective immediately upon filing.
Shares covered by that registration statement will be eligible for resale in
the public market after the effective date of that registration statement
subject to Rule 144 limitations applicable to affiliates, the vesting
provisions of each option grant (generally three years) and the lock-up
agreements described below, if applicable.

Pursuant to various registration rights agreements, certain of the Company's
securityholders have certain demand and piggyback registration rights with
respect to an aggregate of up to 7,783,053 outstanding shares of Common Stock
and an additional 1,336,950 shares of Common Stock issuable upon exercise of
outstanding options. The demand registration rights are exercisable after the
first anniversary of the closing of this Offering, and the piggyback
registration rights are exercisable after the closing of this Offering, in
each case subject to certain limitations. The Company has agreed to pay
substantially all expenses incident to the registration of such shares, other
than underwriting discounts and commissions.

Each of the Company's executive officers and directors and MIM Holdings, who
upon the closing of the Offering will own an aggregate of 7,978,800 shares of
Common Stock and options to purchase 2,381,200 shares of Common Stock, have
agreed, except for certain limited exceptions or without the prior written
consent of PaineWebber Incorporated, that they will not, directly or
indirectly, sell, offer to sell, grant an option for the sale of, grant a
security interest in, or otherwise dispose of any shares of Common Stock or
other equity securities of the Company beneficially owned by them for a period
of one year from the date of this Prospectus. See "Underwriting."

Prior to the Offering, there has been no market for the Common Stock, and no
prediction can be made as to the effect, if any, that the sale of shares or
the availability of shares for sale will have on the market price prevailing
from time to time. Nevertheless, sales of substantial amounts of the Common
Stock in the public market could adversely affect prevailing market prices of
the Common Stock and may make it more difficult for the Company to sell its
equity securities in the future at times and prices which it deems
appropriate.

UNDERWRITING

The Underwriters named below, acting through PaineWebber Incorporated and
Dillon, Read & Co. Inc. (the "Representatives"), have severally agreed,
subject to the terms and conditions set forth in the Underwriting Agreement by
and among the Company and the Representatives (the "Underwriting Agreement"),
to purchase from the Company, and the Company has agreed to sell to the
Underwriters, the number of shares of Common Stock set forth opposite the name
of such Underwriter below:

UNDERWRITER NUMBER OF SHARES
----------- ----------------

PaineWebber Incorporated.................................
Dillon, Read & Co. Inc...................................
---------
Total................................................ 4,000,000
=========

The Underwriting Agreement provides that the obligations of the Underwriters
to purchase the shares listed above are subject to certain conditions. The
Underwriting Agreement also provides that the Underwriters are committed to
purchase, and the Company is obligated to sell, all of the shares offered by
this Prospectus, if any of the shares being sold pursuant to the Underwriting
Agreement are purchased (without consideration of any shares that may be
purchased through the exercise of the Underwriters' over-allotment option).

The Representatives have advised the Company that the Underwriters propose
to offer the shares to the public initially at the public offering price set
forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $ per share. The Underwriters may
allow, and such dealers may reallow, a concession to other dealers not in
excess of $ per share. After the initial public offering of the shares, the
public offering price, the concessions to selected dealers and the reallowance
to other dealers may be changed by the Representatives.

The Company has granted to the Underwriters an option, exercisable during
the 45-day period after the date of this Prospectus, to purchase up to an
additional 600,000 shares of Common Stock at the initial public offering price
set forth on the cover page of this Prospectus, less underwriting discounts
and commissions. The Underwriters may exercise such option only to cover over-
allotments, if any. To the extent the Underwriters exercise such option, each
of the Underwriters will become obligated, subject to certain conditions, to
purchase such percentage of such additional shares of Common Stock as is
approximately equal to the percentage of shares that it is obligated to
purchase as shown in the table set forth above.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that the Underwriters may be required to make in respect thereof.

The Representatives have informed the Company that they do not expect the
Underwriters to confirm sales to any account over which they exercise
discretionary authority.

The Company, the directors and executive officers of the Company and MIM
Holdings have agreed not to offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of, directly or indirectly, any shares of
capital stock or warrants or other rights to purchase shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for any capital stock or warrants or other rights to purchase
shares of capital stock of the Company owned by any of them prior to the
expiration of one year from the date of this Prospectus without the prior
written consent of PaineWebber Incorporated, except for (a) in the case of the

Company, the issuance of shares of Common Stock upon the exercise of options,
or the grant of options to purchase shares of Common Stock, under the Plans or
in connection with other employee or director incentive compensation
arrangements, (b) in the case of the Company's directors and executive
officers and MIM Holdings, shares of Common Stock disposed of (i) as bona fide
gifts to donees who agree not to sell or otherwise dispose of such Common
Stock during the one-year period following the date of this Prospectus without
the prior consent of PaineWebber Incorporated, (ii) pursuant to the laws of
testamentary or intestate descent, (iii) pursuant to a final and nonappealable
order of a court or other body of competent jurisdiction, or (iv) in
consideration of the cashless exercise of options under the Plans or to
fulfill tax withholding obligations and (c) in the case of MIM Holdings,
shares of Common Stock distributed or otherwise transferred to its members who
agree not to sell or otherwise dispose of such Common Stock during the one-
year period following the date of this Prospectus without the prior written
consent of PaineWebber Incorporated.

Prior to the Offering, there has been no public market for the Common Stock
of the Company. The initial public offering price will be determined pursuant
to negotiations between the Company and the Representatives. Among the factors
to be considered in determining the initial public offering price, in addition
to prevailing market conditions, will be certain financial information of the
Company, the history of, and the prospects for, the Company and the industry
in which it competes, an assessment of the Company's management, its past and
present operations, the prospects for, and timing of, future revenues of the
Company, the present state of the Company's development, and the above factors
in relation to market values and various valuation measures of other companies
engaged in activities similar to the Company. The initial public offering
price set forth on the cover page of this Prospectus should not, however, be
considered an indication of the actual value of the Common Stock. Such price
is subject to change as a result of market conditions and other factors. There
can be no assurance that an active trading market will develop for the Common
Stock or that the Common Stock will trade in the public market subsequent to
the Offering at or above the initial public offering price.

The Representatives have provided and may continue to provide investment
banking services to certain affiliates of the Company. The registration rights
agreements with certain executive officers of the Company provide the
Representatives a right of first offer with respect to any requested demand
registrations.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol MIMS, subject to official notice of issuance.

LEGAL MATTERS

Certain legal matters with respect to the shares of Common Stock offered
hereby will be passed upon for the Company by Drinker Biddle & Reath,
Princeton, New Jersey. John E. Stoddard III, a partner in Drinker Biddle &
Reath, was appointed the Secretary of the Company in July 1996, but is not an
employee of the Company. Certain legal matters relating to the Offering will
be passed upon for the Underwriters by Cahill Gordon & Reindel (a partnership
including a professional corporation), New York, New York.

EXPERTS

The audited consolidated financial statements and schedule included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said reports which include an explanatory paragraph that describes the ability
of the Company to continue as a going concern discussed in Note 1 to the
consolidated financial statements.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

MIM CORPORATION AND SUBSIDIARIES

PAGE
----

Report of Independent Public Accountants.................................. F-2
Consolidated Balance Sheets as of December 31, 1994 and 1995 and June 30,
1996 (Unaudited)......................................................... F-3
Consolidated Statements of Operations for the period from inception (June
22, 1993) through December 31, 1993, the years ended December 31, 1994
and 1995 and the six months ended June 30, 1995 and 1996 (Unaudited)..... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the period
from inception (June 22, 1993) through December 31, 1993, the years ended
December 31, 1994 and 1995 and the six months ended June 30, 1996
(Unaudited).............................................................. F-5
Consolidated Statements of Cash Flows for the period from inception (June
22, 1993) through December 31, 1993, the years ended December 31, 1994
and 1995 and the six months ended June 30, 1995 and 1996 (Unaudited)..... F-6
Notes to Consolidated Financial Statements................................ F-7

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To MIM Corporation and Subsidiaries:

We have audited the accompanying consolidated balance sheets of MIM
Corporation and Subsidiaries as of December 31, 1994 and 1995 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the period from inception (June 22, 1993) through December 31, 1993
and for the years ended December 31, 1994 and 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of MIM
Corporation and Subsidiaries as of December 31, 1994 and 1995 and the results
of their operations and their cash flows for the period from inception (June
22, 1993) through December 31, 1993 and for the years ended December 31, 1994
and 1995, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has suffered
recurring losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Arthur Andersen LLP

Roseland, New Jersey
April 10, 1996 (Except with respect to the matter discussed in Note 1,
as to which the date is May 24, 1996)

F-2

MIM CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)

DECEMBER 31,
----------------- JUNE 30,
1994 1995 1996
------- -------- -----------
(UNAUDITED)

ASSETS
Current assets
Cash and cash equivalents..................... $ 2,933 $ 1,804 $ 2,964
Receivables, less allowance for doubtful
accounts of $340, $360 and $426 at December
31, 1994 and 1995 and June 30, 1996,
respectively................................. 10,115 14,823 14,908
Prepaid expenses and other current assets..... 579 481 616
------- -------- --------
Total current assets........................ 13,627 17,108 18,488
Property and equipment, net..................... 1,262 1,807 2,170
Due from affiliates, less allowance for doubtful
accounts of $1,957 and $2,547 at December 31,
1995 and June 30, 1996......................... 198 -- 676
Other assets, net............................... 173 9 368
------- -------- --------
Total assets................................ $15,260 $ 18,924 $ 21,702
======= ======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of capital lease obligations.. $ 198 $ 216 $ 213
Accounts payable.............................. 1,447 1,071 1,137
Claims payable................................ 10,263 19,294 15,828
Payables to plan sponsors and others.......... 6,433 8,436 12,700
Accrued expenses.............................. 373 171 950
------- -------- --------
Total current liabilities................... 18,714 29,188 30,828
Capital lease obligations, net of current
portion........................................ 239 110 486
Commitments and contingencies (Note 5)
Minority interest............................... -- 1,150 1,156
Stockholders' deficit
Preferred stock, $.0001 par value; 5,000,000
shares authorized, no shares issued or
outstanding.................................. -- -- --
Common stock, $.0001 par value; 40,000,000
shares authorized, 4,500,000, 8,023,800 and
8,023,800 shares issued and outstanding at
December 31, 1994 and 1995 and June 30, 1996,
respectively................................. 1 1 1
Additional paid-in capital.................... -- -- 26,640
Accumulated deficit........................... (2,416) (9,188) (35,706)
Stockholder notes receivable.................. (1,278) (2,337) (1,703)
------- -------- --------
Total stockholders' deficit................. (3,693) (11,524) (10,768)
------- -------- --------
Total liabilities and stockholders'
deficit.................................... $15,260 $ 18,924 $ 21,702
======= ======== ========

The accompanying notes are an integral part of these consolidated financial
statements.

F-3

MIM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

PERIOD FROM
INCEPTION SIX MONTHS ENDED
(JUNE 22, 1993) YEAR ENDED DECEMBER 31, JUNE 30,
THROUGH ------------------------ -------------------
DECEMBER 31, 1993 1994 1995 1995 1996
----------------- ----------- ----------- -------- ---------
(UNAUDITED)

Revenue................. $ 122 $ 109,326 $ 213,929 $ 71,330 $ 135,320
Cost of revenue......... -- 106,717 213,398 70,684 130,218
------ ----------- ----------- -------- ---------
Gross profit.......... 122 2,609 531 646 5,102
General and
administrative
expenses............... 82 5,256 8,048 3,450 4,627
Executive stock option
compensation expense... -- -- -- -- 26,640
------ ----------- ----------- -------- ---------
Income (loss) from
operations........... 40 (2,647) (7,517) (2,804) (26,165)
Interest income, net.... -- 191 745 229 275
------ ----------- ----------- -------- ---------
Income (loss) before
minority interest.... 40 (2,456) (6,772) (2,575) (25,890)
Less: minority
interest............... -- -- -- -- 6
------ ----------- ----------- -------- ---------
Net income (loss)....... $ 40 $ (2,456) $ (6,772) $ (2,575) $ (25,896)
====== =========== =========== ======== =========
Net income (loss) per
common
and common equivalent
share.................. $ 0.01 $ (0.55) $ (1.43) $ (0.57) $ (3.23)
====== =========== =========== ======== =========
Weighted average shares
outstanding............ 4,500 4,500 4,732 4,500 8,024
====== =========== =========== ======== =========

The accompanying notes are an integral part of these consolidated financial
statements.

F-4

MIM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)

RETAINED
ADDITIONAL EARNINGS STOCKHOLDER TOTAL
COMMON PAID-IN (ACCUMULATED NOTES STOCKHOLDERS'
STOCK CAPITAL DEFICIT) RECEIVABLE EQUITY (DEFICIT)
------ ---------- ------------ ----------- ----------------

Balance, June 22, 1993.. $ 1 $ -- $ -- $ -- $ 1
Net income............ -- -- 40 -- 40
--- ------- -------- ------- ---------
Balance, December 31,
1993................... 1 -- 40 -- 41
Stockholder loans..... -- -- -- (1,278) (1,278)
Net loss.............. -- -- (2,456) -- (2,456)
--- ------- -------- ------- ---------
Balance, December 31,
1994................... 1 -- (2,416) (1,278) (3,693)
Stockholder loans,
net.................. -- -- -- (1,059) (1,059)
Net loss.............. -- -- (6,772) -- (6,772)
--- ------- -------- ------- ---------
Balance, December 31,
1995................... 1 -- (9,188) (2,337) (11,524)
Repayment of
stockholder loans,
net (unaudited)...... -- -- -- 12 12
Stockholder
distribution
(unaudited).......... -- -- (622) 622 --
Executive stock option
compensation expense
(unaudited).......... -- 26,640 -- -- 26,640
Net loss (unaudited).. -- -- (25,896) -- (25,896)
--- ------- -------- ------- ---------
Balance, June 30, 1996
(unaudited)............ $ 1 $26,640 $(35,706) $(1,703) $ (10,768)
=== ======= ======== ======= =========

The accompanying notes are an integral part of these consolidated financial
statements.

F-5

MIM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

PERIOD FROM
INCEPTION YEAR ENDED SIX MONTHS ENDED
(JUNE 22,1993) DECEMBER 31, JUNE 30,
THROUGH ------------------ -------------------
DECEMBER 31, 1993 1994 1995 1995 1996
----------------- -------- -------- -------- ---------
(UNAUDITED)

Cash flows from
operating activities:
Net income (loss)...... $ 40 $ (2,456) $ (6,772) $ (2,575) $ (25,896)
Adjustments to
reconcile net income
(loss) to net cash
provided by
operating
activities:
Net income allocated
to minority
interest............ -- -- -- -- 6
Depreciation and
amortization........ 2 92 366 184 328
Executive stock
option compensation
expense............. -- -- -- -- 26,640
Provision for losses
on receivables and
due from affiliates
.................... -- 340 1,977 -- 656
Changes in assets and
liabilities:
Receivables........... (49) (10,455) (4,728) 4,390 (151)
Prepaid expenses and
other current
assets............... -- (530) 98 (821) (135)
Accounts payable...... -- 1,447 (376) 201 66
Claims payable........ -- 10,263 9,031 6,847 (3,466)
Payables to plan
sponsors and
others............... -- 6,433 2,003 (2,102) 4,264
Accrued expenses...... 14 359 (202) 315 779
---- -------- -------- -------- ---------
Net cash provided by
operating
activities.......... 7 5,493 1,397 6,439 3,091
---- -------- -------- -------- ---------
Cash flows from
investing activities:
Purchase of property
and equipment......... (41) (810) (802) ( 628) (164)
Stockholder notes
receivable, net....... -- (1,278) (1,059) -- 12
Due from affiliates,
net................... 38 (236) (1,759) 180 (1,266)
(Increase) decrease in
other assets.......... (5) (168) 164 160 (359)
---- -------- -------- -------- ---------
Net cash used in
investing
activities.......... (8) (2,492) (3,456) (288) (1,777)
---- -------- -------- -------- ---------
Cash flows from
financing activities:
Principal payments on
capital lease
obligations........... -- (68) (220) (98) (154)
Minority interest
investment............ -- -- 1,150 -- --
Issuance of common
stock................. 1 -- -- -- --
---- -------- -------- -------- ---------
Net cash provided by
(used in) financing
activities.......... 1 (68) 930 (98) (154)
---- -------- -------- -------- ---------
Net increase (decrease)
in cash and cash
equivalents............ -- 2,933 (1,129) 6,053 1,160
Cash and cash
equivalents--beginning
of period.............. -- -- 2,933 2,933 1,804
---- -------- -------- -------- ---------
Cash and cash
equivalents--end of
period................. $ -- $ 2,933 $ 1,804 $ 8,986 $ 2,964
==== ======== ======== ======== =========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW
INFORMATION:
Cash paid during the
period for:
Income taxes........... $ -- $ 72 $ 286 $ 286 $ --
==== ======== ======== ======== =========
Interest............... $ -- $ 6 $ 31 $ 15 $ 21
==== ======== ======== ======== =========
SUPPLEMENTAL DISCLOSURE
OF NONCASH
TRANSACTIONS:
Equipment acquired
under capital lease
obligations........... $ -- $ 505 $ 109 $ -- $ 527
==== ======== ======== ======== =========
Distribution to
stockholder through
cancellation of
stockholder notes
receivable............ $ -- $ -- $ -- $ -- $ 622
==== ======== ======== ======== =========

The accompanying notes are an integral part of these consolidated financial
statements.

F-6

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

NOTE 1--NATURE OF BUSINESS

Corporate Organization

MIM Corporation was incorporated in Delaware in March 1996 for the purpose
of combining the businesses and operations of Pro-Mark Holdings, Inc. ("Pro-
Mark"), a Delaware corporation, and MIM Strategic Marketing, LLC ("MIM
Strategic"), a Rhode Island limited liability company (the "Formation"). The
Formation was effected in May 1996. Previously, Pro-Mark Drug Benefit
Management Services, LLC, a Rhode Island limited liability company ("Pro-Mark
DBMS"), formed in June 1993 had merged into Pro-Mark in April 1994. Pro-Mark
is a wholly-owned subsidiary of MIM Corporation, and MIM Strategic is 90%-
owned by MIM Corporation. As used in these notes, the "Company" refers to MIM
Corporation and its subsidiaries and predecessors.

Prior to the Formation, Pro-Mark DBMS, Pro-Mark and Strategic were
controlled by an officer of the Company and his family who collectively hold a
direct or indirect controlling interest in MIM Corporation. All of these
companies are under common control. The Formation has been accounted for using
the carryover basis of accounting, and MIM Corporation's consolidated
financial statements include the accounts and operations of Pro-Mark DBMS,
Pro-Mark and MIM Strategic for all periods presented from the date each entity
was formed.

At incorporation, the authorized capital stock of MIM Corporation consisted
of 1,500,000 shares of common stock, $0.001 par value. In May 1996, the
certificate of incorporation of MIM Corporation was amended and restated to
provide for authorized capital stock consisting of 40,000,000 shares of common
stock, $0.0001 par value ("Common Stock"), and 5,000,000 shares of Preferred
Stock, $0.0001 par value. In May 1996, 8,023,800 shares of Common Stock were
issued in connection with the Formation.

In the Formation, MIM Corporation acquired all of the outstanding stock of
Pro-Mark and 90% of the ownership and membership interest in MIM Strategic. In
exchange, Pro-Mark's stockholders received 150 shares of Common Stock of MIM
Corporation for each Pro-Mark share (or an aggregate of 4,500,000 shares of
Common Stock), and certain members of MIM Strategic received an aggregate of
3,523,800 shares of Common Stock for their 90% interest in MIM Strategic.
Zenith Goldline Pharmaceuticals, Inc., a Florida corporation ("Zenith
Goldline"), has held a 10% interest in MIM Strategic since its inception and
did not participate in the Formation.

In the Formation, outstanding stock options granted by Pro-Mark to employees
and key contractors were exchanged for options from MIM Corporation on
substantially similar terms (see Note 7). Except as otherwise indicated, all
stock and stock option amounts (including share, per share par value and
exercise price) pertaining to Pro-Mark DBMS, Pro-Mark and MIM Strategic prior
to the Formation have been restated to reflect the equivalent amounts
pertaining to Common Stock as if the Formation had already occurred.

MIM Strategic was formed in 1995 by MIM Holdings, LLC ("MIM Holdings"),
which is controlled by an officer of the Company and his family. MIM Holdings
and Zenith Goldline contributed various intangibles and $1,150 in cash,
respectively, to the capital of MIM Strategic in exchange for their 90% and
10% interests, respectively, in MIM Strategic. No accounting recognition has
been given to the intangibles for financial reporting purposes since their
value is not objectively determinable, and the entire $1,150 of capital
contributed by Zenith Goldline has been presented as minority interest in the
accompanying consolidated balance sheets. Profits and losses of MIM Strategic
are allocated 90% to the Company and 10% to Zenith Goldline.

F-7

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
Business

The Company's revenues have been derived primarily from agreements to
provide pharmacy benefit management services to sponsors of public and private
health plans. To date, these services have been provided to sponsors of
Tennessee-based plans who have entered into pharmacy benefit management
contracts with RxCare of Tennessee, Inc. ("RxCare"), a subsidiary of the
Tennessee Pharmacists Association, including contracts ("TennCare contracts")
to provide mandated pharmaceutical services to formerly Medicaid-eligible and
uninsured and uninsurable Tennessee residents under the State's TennCare
Medicaid waiver program ("TennCare").

Under a March 1994 agreement with RxCare, as amended, the Company is
responsible for operating and managing RxCare's pharmacy benefit management
contracts. In return for receipt of all sponsor payments due RxCare under its
pharmacy benefit management contracts and all rebates negotiated with
pharmaceutical manufacturers in connection with RxCare programs, the Company
implements and enforces the drug benefit programs, bears all program costs
including payments to dispensing pharmacies and certain payments to RxCare and
sponsors, and shares with RxCare the remaining profit, if any, under the
pharmacy benefit management contracts (see Note 2). The Company's contract
with RxCare is scheduled to expire in December 1998 unless renewed in
accordance with its terms. Although the Company has been performing
substantially all of RxCare's obligations under RxCare's contracts with plan
sponsors since January 1994, no plan sponsor has been asked to formally
consent to such arrangements, including certain sponsors whose contracts with
RxCare require prior written consent thereto.

The Company markets prescription as well as over-the-counter pharmaceutical
products to pharmacies and pharmacy-buying networks. In December 1995, the
Company entered into two agreements with Zenith Goldline, a company that
manufactures and distributes generic and non-prescription pharmaceutical
products, to provide consulting and marketing services to assist Zenith
Goldline in marketing and promoting sales of its products and distributing its
products in the State of Tennessee.

Management Plan and Going Concern Uncertainty

The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company is
subject to risks and difficulties encountered by new businesses, including
competition from existing companies offering the same or similar services,
lack of financial resources and minimal previous record of operations,
earnings or revenues. The Company has incurred net losses from inception and
has a stockholders' deficit. In general, the likelihood of the success of the
Company must be considered in light of the expenses, difficulties and delays
that could reasonably be expected in connection with the early phases of
operation of a new business. As a result, there can be no assurance that the
Company will not continue to incur losses, and the continuation of the Company
as a going concern is dependent on obtaining additional financing, through the
Company's proposed initial public offering or other sources, in amounts
sufficient to satisfy its liabilities as they become due. In management's
opinion, the net proceeds from the Company's proposed initial public offering
are expected to provide the capital necessary to enable the Company to
continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might result should the Company
be unable to continue as a going concern.

The Company is proposing an initial public offering of up to 4,000,000
shares of its Common Stock. Prospective investors should consider, among other
things, the Company's history of losses, its limited operating

F-8

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
history, its ability to manage growth, its dependence on the RxCare
relationship, risks inherent in its capitated agreements and risks associated
with Federal and state government regulations. For additional information on
these and other factors, see "Risk Factors."

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition

Capitated Agreements. Certain pharmacy benefit management contracts are
capitated agreements pursuant to which the Company receives a fixed monthly
fee for each member enrolled in a particular health plan. In exchange for this
fee the Company is obligated to provide certain covered pharmacy services to
plan members. Typically, capitated agreements have a one-year term and are
subject to automatic renewal unless notice of termination is given. These
contracts are subject to earlier termination upon the occurrence of certain
events.

Capitation payments under TennCare contracts are based upon the latest
eligible member data provided by the State of Tennessee. On a monthly basis,
the Company receives payments (and recognizes revenue) for those members
eligible for the current month, plus or minus capitation amounts for those
persons determined to be retroactively eligible or ineligible for prior months
under the contract. The amounts for retroactive capitation payments are based
upon management's estimates and are included in receivables in the
accompanying consolidated balance sheets. The related receivables at December
31, 1994 and 1995 and June 30, 1996 were approximately $3,578, $1,740 and
$1,733, respectively. The related capitated revenue for the years ended
December 31, 1994 and 1995 was approximately $93,100 and $192,625,
respectively, and for the six months ended June 30, 1995 and 1996 was $61,667
and $124,867, respectively.

Fee-for-Service Agreements. Certain pharmacy benefit management contracts
are fee-for-service agreements pursuant to which the Company is paid by the
plan sponsor an amount reflecting the cost of a prescription plus a service
fee. Under these contracts, the Company is obligated to pay network pharmacies
for pharmacy service provided to plan members only to the extent that the plan
sponsor pays the Company for the cost of the service. Service fee revenue is
recognized at the time a pharmacy prescription claim is received. The related
fee-for-service revenue for the years ended December 31, 1994 and 1995 was
approximately $14,072 and $16,525, respectively, and for the six months ended
June 30, 1995 and 1996 was $8,377 and $7,607, respectively.

Receivables. Receivables include amounts due from plan sponsors under the
Company's pharmacy benefit management contracts and amounts due from
pharmaceutical manufacturers, which represent rebates resulting from the
distribution of certain drugs through retail pharmacies.

Cost of Revenue. Cost of revenue includes pharmacy claims, fees paid to
pharmacists and other direct costs associated with pharmacy management and
claims processing operations, offset by fees received from pharmaceutical
manufacturers in connection with the Company's drug purchasing and formulary
management programs.

F-9

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

Payables to Plan Sponsors and Others

Certain pharmacy benefit management contracts provide for an income or loss
share with the plan sponsor. The income or loss share is calculated by
deducting all related costs and expenses from revenues earned under the
contract. To the extent revenues exceed costs, the Company records a payable
representing the plan sponsor's share of the profit attributable to that
contract, and to the extent costs exceed revenues the Company records a
receivable. Agreements between RxCare and certain plan sponsors also provide
for the sharing of pharmaceutical manufacturers' rebates with the plan
sponsor. The Company is also obligated to share with RxCare the cumulative
profit, if any, under the Company's agreement with RxCare (see Note 3). The
Company estimates that any difference between the recorded liability on the
accompanying consolidated balance sheets and the ultimate exposure under those
contract provisions will not have a material adverse effect on the
consolidated financial statements.

Cash and Cash Equivalents

For the purpose of the accompanying consolidated statements of cash flows,
cash and cash equivalents are defined as demand deposits and overnight
investments at banks.

Property and Equipment

The Company provides for depreciation and amortization using the straight-
line method over the estimated useful lives of assets ranging from three to
five years or in the case of leases, over the life of the lease. Maintenance
and repairs are expensed as incurred.

Long-Lived Assets

During 1995, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets" ("SFAS 121"). SFAS 121 requires, among other things, that an entity
review its long-lived assets and certain related intangibles for impairment
whenever changes in circumstances indicate that the carrying amount of an
asset may not be fully recoverable. As a result of its review, the Company
does not believe that any impairment currently exists related to its long-
lived assets.

Claims Payable

The Company is responsible for all covered prescriptions provided to plan
members during the contract period. At December 31, 1994 and 1995 and at June
30, 1996, certain prescriptions were dispensed to members for which the
related claims had not yet been presented to the Company for payment.
Estimates of $2,925, $3,823 and $3,783 at December 31, 1994 and 1995 and at
June 30, 1996, respectively, have been accrued for these claims in the
accompanying consolidated balance sheets. Unpaid claims incurred and reported
amounted to $7,338, $10,971 and $9,947 at December 31, 1994 and 1995 and at
June 30, 1996, respectively.

The Company has experienced losses on one of its TennCare contracts since
the contract was entered into as of April 1, 1995. The Company recognized
losses under the contract during 1995 of $10,000, including the accrual of
approximately $4,500 to cover management's estimate of losses to be incurred
during the remainder of this contract; $2,098 of such accrual remained at June
30, 1996. These amounts are included in claims payable in the accompanying
consolidated balance sheets.

F-10

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

Minority Interest

The minority interest in MIM Strategic is reflected as a reduction of net
income in the accompanying consolidated statements of operations.

Income Taxes

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). SFAS 109 utilizes the liability method, and deferred taxes are
determined based on the estimated future tax effects of differences between
the financial statement and tax bases of assets and liabilities at currently
enacted tax laws and rates.

Disclosure of Fair Value of Financial Instruments

The Company's financial instruments consist mainly of cash and cash
equivalents, accounts receivable and accounts payable. The carrying amounts of
these financial instruments approximate fair value due to their short-term
nature.

Accounting for Stock-Based Compensation

Interim Financial Information

The financial statements at June 30, 1996 and for the six months ended June
30, 1995 and 1996 are unaudited. In the opinion of the Company's management,
the unaudited financial statements at June 30, 1996 and for the six months
ended June 30, 1995 and 1996 include all adjustments, consisting of only
normal recurring adjustments, necessary for a fair presentation. The results
of operations for the six months ended June 30, 1996 are not necessarily
indicative of the results to be expected for the full year.

Earnings Per Share

Net income (loss) per share is calculated based on the weighted average
number of common shares outstanding during the period plus, in periods in
which they have a dilutive effect, the effect of the common shares
contingently issuable from stock options. Common shares outstanding and per
share amounts reflect the Formation (see Note 1) and are considered
outstanding from the date each entity was formed.

F-11

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

NOTE 3--RELATED PARTY TRANSACTIONS

Due to/from Affiliates

During 1993 the Company borrowed $38 from a relative of an officer of the
Company. The amount was fully repaid in 1994.

During 1994 the Company loaned $150 to a relative of an officer of the
Company in return for a demand note bearing interest at the prime rate (8.5%
at December 31, 1994). At December 31, 1994, accrued interest amounted to
approximately $8. The full amount of principal and interest was repaid in
1995.

In 1994 the Company made approximately $40 of short-term advances to an
officer of the Company. These advances were repaid in full during 1995.

During 1995 the Company advanced RxCare approximately $1,957 to fund the
losses RxCare had incurred in connection with one of its pharmacy benefit
management contracts that is currently being managed by the Company under the
Company's agreement with RxCare. Although the Company does not intend to seek
repayment of the advance, the Company intends to offset such amount against
future profit sharing amounts, if any, due to RxCare under the Company's
agreement with RxCare. As RxCare's revenue is largely dependent upon the
Company's results of operations in Tennessee, the collectibility of this
amount is uncertain, and a full reserve has been recorded against the advance.

As part of its agreement with RxCare, the Company is obligated to share with
RxCare the Company's cumulative profit, if any, from the RxCare pharmacy
benefit management contracts. Based on estimated results of operations for
1994, the Company accrued $473 during 1994, which was included in Payables to
Plan Sponsors and Others on the accompanying consolidated balance sheet at
December 31, 1994 and was paid in 1995. Although actual operations for 1994
were subsequently determined not to be profitable, the Company does not intend
to request repayment of the fee but intends to offset such amount against
future profit sharing amounts, if any, due to RxCare under the agreement. No
amount was due RxCare for the year ended December 31, 1995 or for the six
months ended June 30,1996.

The Company is currently marketing and promoting certain preferred generic
drugs of Zenith Goldline pursuant to two three-year contracts entered into in
December 1995. In return, the Company receives a fee based on a percentage of
the growth in Zenith Goldline's gross margins from related sales. Included in
due from affiliates is management's estimate of revenues earned under these
agreements.

During 1996, the Company made short-term advances to MIM Holdings and
Alchemie Properties, LLC ("Alchemie") of $99 and $25, respectively. Repayments
by MIM Holdings and Alchemie through June 30, 1996 were $13 and $25,
respectively. The remaining balance of $86 from MIM Holding at June 30, 1996
is scheduled to be repaid by September 30, 1996 without interest. Both
companies are controlled by an officer and his family.

In June 1996, an executive officer of the Company loaned $500 to the Company
for working capital purposes pursuant an unsecured, 10% promissory note that
is payable upon demand. The loan amount plus $2.5 for interest and fees was
repaid by June 30, 1996.

Other Activities

In 1994, the Company entered into an agreement with RxCare for, among other
things, the use of certain office space and equipment provided by RxCare on
behalf of the Company. The agreement initially provided for payments of $10
per month and was amended to provide for $20 per month beginning November
1995. The

F-12

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
agreement expires in December 1998. Expenses under this agreement were $100
and $140 for the years ended December 31, 1994 and 1995, respectively, and $40
and $120 for the six months ended June 30, 1995 and 1996, respectively.

In December 1994, the Company entered into a ten-year agreement to lease a
facility from Alchemie. The lease provides for monthly payments of $3 plus
real estate taxes and condominium association fees. Rent expense was
approximately $5 and $60 for the years ended December 31, 1994 and 1995,
respectively, and $30 for the six months ended June 30, 1995 and 1996.

The future minimum rental payments under these agreements are included in
Note 5 with the Company's other operating leases.

Consulting and Service Agreements

In January 1994, the Company entered into consulting agreements with three
minority stockholders of the Company. These agreements expire in 1999 and
provide for payments to be made as services are rendered. In 1994, payments of
$75 were made to each consultant. No amounts were paid in 1995 or in the six
months ended June 30, 1996.

In January 1994, the Company entered into a consulting agreement for various
marketing, distribution and promotional services with an officer of RxCare
which provides for payments by the Company of $5.5 per month, and additional
compensation as agreed by the parties for special projects, through December
1996. The Company paid a total of $516 in 1994 (including $150 upon execution
of the RxCare agreement and $300 for special projects related to the
establishment of the Company's TennCare business), $66 in 1995 and $33 for the
six months ended June 30, 1995 and 1996, respectively, to the officer and a
related party assignee.

In September 1995, the Company entered into a contract with MIM Holdings to
receive management consulting services in return for monthly payments to MIM
Holdings of $75. Consulting expenses amounted to $300 for the year ended
December 31, 1995 and $225 for the six months ended June 30, 1996. The
contract was terminated on March 31, 1996.

A professional services agreement was entered into as of January 1, 1996
between MIM Holdings and the Company. Under this agreement, MIM Holdings
provides to the Company operational professional services required to perform
the Company's obligations under a Marketing Services Agreement with Zenith
Goldline (see Note 1), for which the Company paid MIM Holdings $150 for the
six months ended June 30, 1996. The agreement was terminated in May 1996.

Stockholder Notes Receivable

In June 1994, the Company advanced to an officer approximately $979 for
purposes of acquiring a principal residence, $975 of which is collateralized
by a first mortgage on the residence. In exchange for the funds, the Company
received two promissory notes, the aggregate outstanding principal balance of
which was $979 at December 31, 1994 and 1995 and $956 (including accrued
interest) at June 30, 1996. The notes are due on June 15, 1997 and bear
interest at 5.42% per annum payable monthly. Interest income on the notes for
the years ended December 31, 1994 and 1995 was $29 and $55, respectively, and
$26 for the six months ended June 30, 1995 and 1996.

In August 1994, the Company advanced to Alchemie $299 for the purposes of
acquiring the building leased by the Company, of which approximately $299,
$280 and $280 was outstanding at December 31, 1994 and 1995

F-13

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
and June 30, 1996, respectively. The note bears interest at a rate of 10% per
annum with principal due on December 1, 2004. Interest income was $12 and $29
for the years ended December 31, 1994 and 1995, respectively, and $14 for the
six months ended June 30, 1995 and 1996. The note is secured by a lien on
Alchemie's rental income.

In December 1995, the Company advanced to MIM Holdings $800 for certain
consulting services to be performed for the Company in 1996. During 1995, the
Company also paid $278 for certain expenses on behalf of MIM Holdings. These
amounts, totaling $1,078, were recorded as a stockholder note receivable at
December 31, 1995. The Company has received a note from MIM Holdings
guaranteed by an officer of the Company for $456. The note bears interest at
10% per annum, payable quarterly, with principal due on March 31, 2001. The
note is further secured by the assignment of two notes due to MIM Holdings
also in the amount of $456. The remaining balance of $622 will not be repaid
and was treated as a stockholder distribution during the first quarter of
1996. The outstanding principal balance plus accrued interest at June 30, 1996
was $467.

NOTE 4--PROPERTY AND EQUIPMENT

Property and equipment, at cost, consists of the following:

DECEMBER 31,
-------------- JUNE 30,
1994 1995 1996
------ ------ --------

Computer and office equipment, including
equipment under capital leases............... $ 787 $1,614 $2,185
Furniture and fixtures........................ 130 173 205
Leasehold improvements........................ 439 480 480
------ ------ ------
1,356 2,267 2,870
Less: Accumulated depreciation and amortiza-
tion......................................... (94) (460) (700)
------ ------ ------
$1,262 $1,807 $2,170
====== ====== ======

NOTE 5--COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company from time to time is involved in legal proceedings in the normal
course of business. The Company is currently a third-party defendant in a
proceeding in the Superior Court in the State of Rhode Island. The third-party
complaint alleges that the Company interfered with certain contractual
relationships and that it misappropriated certain confidential information.
The third-party complaint seeks to enjoin the Company from using the allegedly
misappropriated confidential information and seeks an unspecified amount of
compensatory and consequential damages, interest and attorneys' fees. Although
the Company believes that the third-party plaintiffs' allegations are without
merit, the loss of this litigation could have a material adverse effect on the
Company's financial position and results of operations.

Government Regulation

The Company's current and planned businesses are subject to extensive
Federal and state laws and regulations. Subject to certain exceptions, a
Federal law (the "Federal Anti-Kickback Statute") prohibits the payment or
receipt of any remuneration, directly or indirectly, to induce, arrange for or
recommend the purchase of health care items or services paid for in whole or
in part by the Medicare or state health care programs (including Medicaid and
TennCare), and certain state laws (including professional licensing laws
prohibiting fee-splitting) contain similar provisions that may extend the
prohibition to cover items or services that are paid for

F-14

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
by private insurance and self-pay patients. There can be no assurance that
some of the Company's practices will be found to be protected by certain so-
called "safe harbor" regulations, which provide insulation from prosecution
under the Federal Anti-Kickback Statute, and in some instances it is clear
that they are not so protected. Federal authorities enforcing the Federal
Anti-Kickback Statute have issued Fraud Alerts describing suspect activity and
have initiated enforcement proceedings involving practices that have similar
features to some of the practices of the Company.

In June 1996, the proposed consent decree between the Federal Trade
Commission (the "FTC") and RxCare and its parent, the Tennessee Pharmacists
Association, prohibiting certain allegedly anti-competitive practices, became
final. Because the FTC justified its challenge and the decree, in part, on
RxCare's potential market power in Tennessee, business arrangements and
practices involving RxCare, either directly or indirectly, or involving sales
to or purchases by RxCare-affiliated pharmacies may face heightened scrutiny
or continued review from an anti-competitive perspective by state or Federal
regulators and possible challenge by private parties. The existence of this
consent order may hamper the Company's efforts to develop or pursue
competitive opportunities, in Tennessee or elsewhere, in areas such as group
purchasing or market advocacy on behalf of drug manufacturers. Prolonged
proceedings involving regulatory or private party challenges to the Company's
activities would be costly to the Company and divert its resources, including
key personnel. An adverse determination in such a proceeding could have a
material adverse effect on the Company's financial position and results of
operations.
The Company is also subject to various false claim, drug distribution and
consumer protection laws and may be subject to certain other laws, including
various state insurance laws.

While management believes that the Company is in material compliance with
all existing laws and regulations material to the operation of its business,
many of the laws and regulations affecting it are uncertain in their
application and are subject to interpretation and change. Laws regulating
healthcare businesses, and interpretations thereof, are undergoing rapid
change. As controversies continue to arise in this area, for example,
regarding the efforts of plan sponsors and pharmacy benefit managers to limit
formularies, alter drug choice and establish limited networks of participating
pharmacies, Federal and state regulation and enforcement priorities in this
area can be expected to increase, the impact of which on the Company cannot be
predicted. There can be no assurance that the Company will not be subject to
scrutiny or challenge under one or more of these laws or that any such
challenge would not be successful. Any such challenge, whether or not
successful, could have a material adverse effect upon the Company's financial
position and results of operations. Violation of the Federal Anti-Kickback
Statute, for example, may result in substantial criminal penalties, as well as
exclusion from the Medicare and Medicaid (including TennCare) programs.
Further, there can be no assurance that the Company will be able to obtain or
maintain any of the regulatory approvals that may be required to operate its
business, and the failure to do so could have a material adverse effect on the
Company's financial position and results of operations.

Non-Compete Covenants

The Company's Chief Executive Officer and Chief Financial Officer, both
former executives of Zenith Laboratories, Inc. ("Zenith"), agreed to continue
in consultant and employment capacities with Zenith through December 1998 and
December 1996, respectively. In connection with these agreements, both
executives agreed not to own, manage or be employed by any business that is
substantially competitive with Zenith's business as conducted in early 1996.
Such covenants expire at the end of December 1998 and December 1996,
respectively. Such covenants may restrict the Company's ability to compete in
certain areas of the Company's preferred generics business, its planned drug
distribution business and certain other business areas.

F-15

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

Employment Agreements

The Company has entered into employment agreements with certain key
employees which expire at various dates through May 2000. Total minimum
commitments under these agreements are approximately as follows:

1996.................................. $1,100
1997.................................. 1,500
1998.................................. 1,300
1999.................................. 1,200
2000.................................. 500
------
$5,600
======

Other Agreements

The Company has various consulting agreements which will require payments of
$786 in the aggregate through 1998. As discussed in Note 3, the Company rents
its main facility from Alchemie. Rent expense for non-related party leased
facilities and equipment was approximately $95 and $116 for the years ended
December 31, 1994 and 1995, respectively, and $67 and $84 for the six months
ended June 30, 1995 and 1996, respectively.

Operating Leases

The Company leases its facilities and certain equipment under various
operating leases. The future minimum lease payments under these operating
leases at December 31, 1995 are as follows:

AMOUNT
------

1996............................................................... $ 95
1997............................................................... 64
1998............................................................... 51
1999............................................................... 48
2000............................................................... 45
Thereafter......................................................... 160
----
$463
====

Capital Leases

The Company leases certain equipment under various capital leases. Future
minimum lease payments under the capital lease agreements at December 31, 1995
are as follows:

AMOUNT
------

1996............................................................... $235
1997............................................................... 93
1998............................................................... 24
----
Total minimum lease payments....................................... 352
Less: Amount representing interest............................... 26
----
Obligations under leases........................................... 326
Less: current portion of lease obligation........................ 216
----
$110
====

F-16

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

NOTE 6--INCOME TAXES

The Company accounts for income taxes in accordance with SFAS 109. Under
SFAS 109, deferred tax assets or liabilities are computed based on the
differences between the financial statement and income tax bases of assets and
liabilities as measured by currently enacted tax laws and rates. Deferred
income tax expenses and credits are based on changes in the deferred assets
and liabilities from period to period.

The effect of temporary differences which give rise to a significant portion
of deferred taxes are as follows as of December 31, 1994 and 1995:

1994 1995
------ -------

Deferred tax assets:
Reserves and accruals not yet deductible for tax purpos-
es..................................................... $ 872 $ 2,952
Net operating loss carryforward......................... 432 783
------ -------
Subtotal.............................................. 1,304 3,735
Less: valuation allowance.............................. (922) (3,669)
------ -------
Total deferred tax assets................................. 382 66
------ -------
Deferred tax liabilities:
Revenue not yet recognized for tax purposes............. (378) 0
Property basis differences.............................. (4) (66)
------ -------
Total deferred tax liability.............................. (382) (66)
------ -------
Net deferred taxes........................................ $ -- $ --
====== =======

It is uncertain whether the Company will realize full benefit from its
deferred tax assets, and it has therefore recorded a valuation allowance. The
Company will assess the need for the valuation allowance at each balance sheet
date.

There is no provision (benefit) for income taxes for the period from
inception (June 22, 1993) through December 31, 1993 or for the years ended
December 31, 1994 and 1995. A reconciliation to the tax provision (benefit) at
the Federal statutory rate is presented below:

1993 1994 1995
---- ----- -------

Tax provision (benefit) at statutory rate................. $ 14 $(835) $(2,303)
State tax provision (benefit), net of federal taxes....... 3 (162) (447)
Provision for valuation allowance......................... -- 922 2,747
Other..................................................... (17) 75 3
---- ----- -------
Recorded income taxes.................................... $ -- $ -- $ --
==== ===== =======

At December 31, 1995, the Company had, for tax purposes, unused net
operating loss carryforwards of approximately $1,900 that are available to
offset future taxable income, if any, and which will begin expiring in 2008.
The Tax Reform Act of 1986 contains provisions that limit the net operating
loss carryforwards available to be used in any given year upon the occurrence
of certain events, including significant changes in ownership.

F-17

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

NOTE 7--STOCKHOLDERS' EQUITY

In 1994, Pro-Mark established the Pro-Mark Holdings 1994 Stock Plan (the
"Pro-Mark Plan"). The Pro-Mark Plan provided for, among other awards, options
to employees, contractors and consultants to purchase 60,000 shares of Pro-
Mark common stock at an option price not less than 100% of the fair market
value of the shares on the grant date. The period during which an option may
be exercised varied, but no option could be exercised after 15 years from the
date of grant. During 1994, options to purchase 3,738 shares of common stock
were granted at $1.00 per share (560,700 shares of the Company's Common Stock
at $0.0067 per share as a result of the Formation--see Note 1). On January 9,
January 16, March 24, March 31, August 8, and October 9, 1995, options to
purchase 50, 60, 1,300, 15,108, 60 and 50 shares of common stock,
respectively, were granted at $1.00 per share (a total of 2,494,200 shares of
the Company's Common Stock at $0.0067 per share as a result of the Formation--
see Note 1). All of such options were deemed to have been granted at fair
market value and were exchanged in the Formation for options under the
Company's Plan (as defined below).

In May 1996, the Company adopted the MIM Corporation 1996 Stock Incentive
Plan (the "Plan"). The Plan provides for the granting of incentive stock
options (ISOs) and non-qualified stock options to employees and key
contractors of the Company. Options granted under the Plan generally vest over
a three-year period, but vest in full upon a change in control of the Company
or at the discretion of the Company's compensation committee, and generally
are exercisable up to 15 years from the date of grant. The exercise price of
ISOs granted under the Plan will not be less than 100% of the fair market
value on the date of grant (110% for ISOs granted to more than a 10%
shareholder). If non-qualified stock options are granted at an exercise price
less than fair market value on the grant date, the amount by which fair market
value exceeds the exercise price will be charged to compensation expense over
the period the options vest. A reserve of 4,000,000 shares has been
established for issuances under the Plan. In May and July 1996, options to
purchase 811,810 and 63,929 shares of Common Stock, respectively, were granted
at a price that will equal the initial public offering price. In June 1996,
the Company agreed to grant an option to purchase 15,000 shares of Common
Stock, at a price equal to the initial public offering price, to a member of
the Company's Medical Advisory Board upon completion of the Company's initial
public offering. At July 15, 1996, 102,361 shares remained available for grant
under the Plan.

No options were exercisable at December 31, 1994. As of December 31, 1995
and June 30, 1996, the exercisable portion of outstanding options was
2,442,100 and 2,686,400, respectively. Stock option activity under the Plan
through December 31, 1995 is as follows:

OPTIONS PRICE
--------- -------

Balance, December 31, 1993................................... -- --
Granted.................................................... 560,700 $0.0067
Canceled................................................... (8,400)
---------
Balance, December 31, 1994................................... 552,300 $0.0067
Granted.................................................... 2,494,200 $0.0067
Canceled................................................... (24,600)
---------
Balance, December 31, 1995................................... 3,021,900 $0.0067
=========

F-18

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
In July 1996, the Company adopted the MIM Corporation 1996 Non-Employee
Directors Stock Incentive Plan (the "Directors Plan"). The purpose of the
Directors Plan is to attract and retain qualified individuals to serve as non-
employee directors of the Company ("Outside Directors"), to provide incentives
and rewards to such directors and to associate more closely the interests of
such directors with those of the Company's stockholders. The Directors Plan
provides for the automatic granting of non-qualified stock options to Outside
Directors joining the Company since the adoption of the Directors Plan. Each
such Outside Director receives an option to purchase 20,000 shares of Common
Stock upon his or her initial appointment or election to the Board of
Directors. The exercise price of such options is equal to the fair market
value of the Common Stock on the date of grant. Options granted under the
Directors Plan generally vest over three years. A reserve of 100,000 shares of
Common Stock has been established for issuance under the Directors Plan.
Options to purchase 40,000 shares of Common Stock are currently outstanding
under the Directors Plan at an exercise price equal to the initial public
offering price of the shares offered in the Offering.

Other Stockholder Activities

Prior to the affiliation of three unrelated individuals with the Company
(each of whom became a director of the Company and two of whom also became
officers of the Company), the Company primarily was a pharmacy benefit manager
providing capitated services to the TennCare Medicaid population of Tennessee.
Drawing upon their experience, know-how, contacts and relationships,
managerial expertise, contracts under negotiation and strategic understandings
and plans relating to the generic drug and health care industries, the Company
has determined to pursue a business strategy that emphasizes the promotion and
distribution of generic drugs through exclusive contracts with preferred
generic drug manufacturers and the marketing of risk sharing pharmacy benefit
programs to sponsors of public and private health plans outside of Tennessee.
Negotiations are currently proceeding with a number of generic drug
manufacturers and plan sponsors. Management believes that combining the
interests of these individuals with the interests of the Company has resulted
in a business strategy uniquely suited to capitalize on the present and
expected conditions in the pharmaceutical and health care industries. Based
upon the foregoing, in May 1996 the majority stockholder of the Company
granted to these individuals options to purchase an aggregate of 3,600,000
shares of Common Stock owned by him at $0.10 per share. These options are
immediately exercisable and have a term of ten years, subject to earlier
termination upon a change in control of the Company, as defined. In connection
with these options, for the six months ended June 30, 1996 the Company
recorded a nonrecurring, noncash charge for compensation expense and a credit
to additional paid-in capital of $26,640, representing the difference between
the exercise price and the deemed fair market value of the Common Stock at the
date of grant. In addition, the majority stockholder granted to one of these
individuals an additional option ("additional option") to purchase 1,860,000
shares of Common Stock owned by him at $7.50 per share. The additional option
has a term of six years, subject to earlier termination (a) upon a change in
control of the Company, as defined, (b) non-renewal of his employment
contract, as defined, or (c) voluntary termination of employment prior to May
2001. Although the additional option is immediately exercisable, the majority
stockholder will have the right to repurchase from this individual, at a price
of $7.50 per share, Common Stock issued upon exercise of the additional option
commencing seven months after the occurrence of an event described in (b) or
(c) above, provided that the repurchase option will terminate upon a change in
control of the Company, as defined, or to the extent the Company achieves
certain levels of consolidated net income in any one fiscal year.

F-19

MIM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
1996 IS UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

NOTE 8--CONCENTRATION OF CREDIT RISK

The majority of the Company's revenues have been derived from TennCare
contracts pursuant to its contract with RxCare. The following table outlines
contracts with plan sponsors having revenues which individually exceeded 10%
of total revenues during the applicable time period:

PLAN SPONSOR
---------------
A B C D
--- --- --- ---

Year ended December 31, 1994
% of total revenue............................................ 60% 13% 15% --
% of total accounts receivable at period end.................. 49% * * --
Year ended December 31, 1995
% of total revenue............................................ 30% * * 45%
% of total accounts receivable at period end.................. * * * 28%
Six months ended June 30, 1995
% of total revenue............................................ 45% 13% 12% 18%
% of total accounts receivable at period end.................. 16% * * *
Six months ended June 30, 1996
% of total revenue............................................ 20% -- * 56%
% of total accounts receivable at period end.................. * -- * 36%

- --------
* Less than 10%.

There were no other contracts representing 10% or more of the Company's
total revenue for the years ended December 31, 1994 and 1995 and the six
months ended June 30, 1995 and 1996. There were no TennCare contracts in place
in 1993. It is possible that the State of Tennessee or the Federal government
could require modifications to the TennCare program. The Company is unable to
predict the effect of any such future changes to the TennCare program.

NOTE 9--PROFIT SHARING PLAN

The Company maintains a deferred compensation plan under Section 401(k) of
the Internal Revenue Code. Under the plan, employees may elect to defer up to
15% of their salary, subject to Internal Revenue Service limits. The Company
may make a discretionary match. The Company made no matching contributions
during the period from inception (June 22, 1993) through December 31, 1993,
the years ended December 31, 1994 and 1995 or the six months ended June 30,
1996.

F-20

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.

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

TABLE OF CONTENTS

PAGE
----

Additional Information................................................... 2
Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 13
Dividend Policy.......................................................... 13
Capitalization........................................................... 14
Dilution................................................................. 15
Selected Consolidated Financial Data..................................... 16
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 17
Business................................................................. 20
Management............................................................... 30
Certain Transactions..................................................... 36
Principal Stockholders................................................... 40
Description of Capital Stock............................................. 41
Shares Eligible for Future Sale.......................................... 42
Underwriting............................................................. 44
Legal Matters............................................................ 45
Experts.................................................................. 45
Index to Consolidated Financial Statements............................... F-1

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

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

4,000,000 SHARES

[LOGO]

MIM CORPORATION

COMMON STOCK

---------------
PROSPECTUS

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

PAINEWEBBER INCORPORATED

DILLON, READ & CO. INC.

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

, 1996

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

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS.

EXHIBIT
NUMBER DESCRIPTION
-------- -----------

1 Form of Underwriting Agreement
10.23(a) Amendment No. 1 dated July 29, 1996 to Stock Option Agreement II
between E. David Corvese and John H. Klein dated as of May 30,
1996
10.24(a) Amendment No. 1 dated July 29, 1996 to Repurchase Agreement between
E. David Corvese and John H. Klein dated as of May 30, 1996
10.30 Registration Rights Agreement-I dated July 29, 1996 between MIM
Corporation and John H. Klein, Richard H. Friedman, Leslie B. Dan-
iels, E. David Corvese and MIM Holdings, LLC
10.31 Registration Rights Agreement-II dated July 29, 1996 between MIM
Corporation and John H. Klein, Richard H. Friedman and Leslie B.
Daniels
10.32 Registration Rights Agreement-III dated July 29, 1996 between MIM
Corporation and John H. Klein and E. David Corvese
23.1 Consent of Arthur Andersen LLP

(B) FINANCIAL STATEMENT SCHEDULES.

The following financial statement schedule of the Company is furnished at
the indicated page:

Report of Independent Public Accountants (Page S-1)
Schedule II--Valuation and Qualifying Accounts (Page S-2)

All other schedules not listed are omitted because of the absence of
conditions under which they are required.

II-1

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN PEARL RIVER, NEW
YORK ON JULY 30, 1996.

MIM CORPORATION

/s/ Richard H. Friedman
By: _________________________________
RICHARD H. FRIEDMAN CHIEF
OPERATING OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO REGISTRATION STATEMENT ON FORM S-1 HAS BEEN SIGNED BY THE FOLLOWING
PERSONS, IN THE CAPACITIES INDICATED, ON THE 30TH DAY OF JULY, 1996.

SIGNATURE TITLE

/s/ John H. Klein Chairman of the Board, Chief
- ------------------------------------- Executive Officer and Director
JOHN H. KLEIN (Principal Executive Officer)

/s/ Richard H. Friedman Chief Financial Officer, Chief
- ------------------------------------- Operating Officer, Treasurer and
RICHARD H. FRIEDMAN Director (Principal Financial
and Accounting Officer)

E. David Corvese* Vice Chairman of the Board and
- ------------------------------------- Director
E. DAVID CORVESE

Todd R. Palmieri* Executive Vice President--
- ------------------------------------- Business Development and
TODD R. PALMIERI Director

Leslie B. Daniels* Director
- -------------------------------------
LESLIE B. DANIELS

Louis A. Luzzi* Director
- -------------------------------------
LOUIS A. LUZZI

Scott R. Yablon* Director
- -------------------------------------
SCOTT R. YABLON

- --------

* RICHARD H. FRIEDMAN, PURSUANT TO A POWER OF ATTORNEY EXECUTED BY EACH OF THE
DIRECTORS AND OFFICERS NOTED ABOVE AND FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AS EXHIBIT 24 TO THIS REGISTRATION STATEMENT, BY SIGNING HIS NAME
HERETO, DOES HEREBY SIGN AND EXECUTE THIS AMENDMENT NO. 2 TO REGISTRATION
STATEMENT ON BEHALF OF EACH OF THE PERSONS NOTED ABOVE, IN THE CAPACITIES
INDICATED, AND DOES HEREBY SIGN AND EXECUTE THIS AMENDMENT NO. 2 TO
REGISTRATION STATEMENT ON HIS OWN BEHALF, IN THE CAPACITIES INDICATED.

/s/ Richard H. Friedman
_____________________________________
RICHARD H. FRIEDMAN

II-2

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES

To MIM Corporation and Subsidiaries:

We have audited in accordance with generally accepted auditing standards the
1993, 1994 and 1995 financial statements of MIM Corporation and Subsidiaries
included in this Registration Statement and have issued our report thereon
dated April 10, 1996 (except with respect to the matter discussed in Note 1,
as to which the date is May 24, 1996), which includes an explanatory paragraph
that describes the ability of the Company to continue as a going concern
discussed in Note 1 to the consolidated financial statements. Our audits were
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule listed in Item 16(b) of this Registration
Statement is the responsibility of the Company's management and is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements as of December 31, 1994 and 1995 and for the period from
inception (June 22, 1993) through December 31, 1993 and for the years ended
December 31, 1994 and 1995, and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.

Arthur Andersen LLP

Roseland, New Jersey
April 10, 1996

S-1

MIM CORPORATION AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE PERIOD FROM INCEPTION (JUNE 22, 1993) THROUGH DECEMBER 31, 1993 ANDFOR
THE YEARS ENDED DECEMBER 31, 1994 AND 1995

(IN THOUSANDS)

BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END
OF PERIOD EXPENSES CHARGES OF PERIOD
---------- ---------- ------- ----------

Period from inception (June 22, 1993)
through December 31, 1993
Accounts receivable................ $ 0 $ 0 $ 0 $ 0
Accounts receivable, other......... $ 0 $ 0 $ 0 $ 0
==== ====== === ======
Year ended December 31, 1994
Accounts receivable................ $ 0 $ 340 $ 0 $ 340
Accounts receivable, other......... $ 0 $ 0 $ 0 $ 0
==== ====== === ======
Year ended December 31, 1995
Accounts receivable................ $340 $ 20 $ 0 $ 360
Accounts receivable, other......... $ 0 $1,957 $ 0 $1,957
==== ====== === ======

S-2

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
-------- -----------

1 Form of Underwriting Agreement
10.23(a) Amendment No. 1 dated July 29, 1996 to Stock Option Agreement
II between E. David Corvese and John H. Klein dated as of
May 30, 1996
10.24(a) Amendment No. 1 dated July 29, 1996 to Repurchase Agreement
between E. David Corvese and John H. Klein dated as of May
30, 1996
10.30 Registration Rights Agreement-I dated July 29, 1996 between
MIM Corporation and John H. Klein, Richard H. Friedman, Les-
lie B. Daniels, E. David Corvese and MIM Holdings, LLC
10.31 Registration Rights Agreement-II dated July 29, 1996 between
MIM Corporation and John H. Klein, Richard H. Friedman and
Leslie B. Daniels
10.32 Registration Rights Agreement-III dated July 29, 1996 between
MIM Corporation and John H. Klein and E. David Corvese
23.1 Consent of Arthur Andersen LLP


 
                                                                       EXHIBIT 1

                                4,000,000 Shares
                                MIM CORPORATION

                                  Common Stock

                             UNDERWRITING AGREEMENT
                             ----------------------


                                                                 August   , 1996


PAINEWEBBER INCORPORATED
DILLON, READ & CO., INC.
 As Representatives of the
 several Underwriters
 named on Schedule I
c/o PaineWebber Incorporated
 1285 Avenue of the Americas
 New York, New York 10019

Dear Ladies and Gentlemen:

     MIM Corporation, a Delaware corporation (the "Company"), proposes to sell
an aggregate of 4,000,000 shares (the "Firm Shares") of the Company's Common
Stock, $.0001 par value per share (the "Common Stock"), to you and the other
underwriters named in Schedule I (collectively, the "Underwriters"), for whom
you are acting as representatives (the "Representatives").  The Company has also
agreed to grant to you and the other Underwriters an option (the "Option") to
purchase up to an additional 600,000 shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b).  The Firm
Shares and the Option Shares are hereinafter collectively referred to as the
"Shares."

     The initial public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the several Underwriters shall be
agreed upon by the Company and the Representatives, acting on behalf of the
several Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement").  The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto.  The offering of the Shares will be governed
by this Agreement, as supplemented by the Price Determination Agreement.  From
and after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and unless the context
otherwise indicates, all references contained herein to "this Agreement" and to
the phrase "herein" shall be deemed to include, the Price Determination
Agreement.

 
                                      -2-


     The Company confirms as follows its agreements with the Representatives and
the several other Underwriters:

     1.  Agreement to Sell and Purchase.
         ------------------------------ 

     (a) On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to each Underwriter named below, and each
Underwriter, severally and not jointly, agrees to purchase from the Company at
the purchase price per share for the Firm Shares to be agreed upon by the
Representatives and the Company in accordance with Section 1(c) or 1(d) and set
forth in the Price Determination Agreement, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I, plus such additional number
of Firm Shares which such Underwriter may become obligated to purchase pursuant
to Section 8 hereof.  Schedule I may be attached to the Price Determination
Agreement.

     (b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to 600,000 Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 45th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 45th day after
the date of the Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase.  On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.

     (c) The initial public offering price per share for the Firm Shares and the
purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement.  If the Company has elected to rely on Rule 430A, in the event such
price has not been agreed upon and the Price Determination Agreement has not
been executed by the close of business on the fourteenth business day following
the date on which the Registration Statement becomes effective, this Agreement
shall terminate forthwith, without liability of any party to any other party
except that Section 6 shall remain in effect.

 
                                      -3-

     (d) If the Company has elected not to rely on Rule 430A, the initial public
offering price per share for the Firm Shares and the purchase price per share
for the Firm Shares to be paid by the several Underwriters shall be agreed upon
and set forth in the Price Determination Agreement, which shall be dated the
date hereof, and an amendment to the Registration Statement (as hereinafter
defined) containing such per share price information shall be filed before the
Registration Statement becomes effective.

     2.  Delivery and Payment.  Delivery of the Firm Shares shall be made on the
         --------------------                                                   
Closing Date [to the Representatives for the accounts of the Underwriters at the
office of PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New
York 10019] [by credit to the account of PaineWebber Incorporated with The
Depository Trust Company ("DTC"), for further credit to the respective accounts
of the Underwriters] against payment of the purchase price by [wire transfer of
immediately available funds (net of the cost, if any, to PaineWebber
Incorporated of obtaining such immediately available funds) to an account
designated in writing by the Company at least one business day prior to the
Closing Date] [credit to the account of the Company with DTC].  Such payment
shall be made on the [third] [fourth] business day after the date on which the
first bona fide offering of the Shares to the public is made by the Underwriters
or at such time on such other date, not later than ten business days after such
date, as may be agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "Closing Date").

     To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.

     Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company.  For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.

     The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company.  The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.

 
                                      -4-

     3.  Representations and Warranties of the Company.  The Company represents,
         ---------------------------------------------                          
warrants and covenants to each Underwriter that:

     (a) A registration statement (Registration No. 333-05327) on Form S-1
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission.  The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the registration
statement.  Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives.  The
term "Registration Statement" means the registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by Rule
430A or Rule 434 of the Rules and Regulations.  If the Company files a
registration statement to register a portion of the Shares and relies on Rule
462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to the "Registration Statement" shall be deemed
to include the Rule 462 Registration Statement, as amended from time to time.
The term "Prospectus" means the prospectus as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date.

     (b) On the Effective Date, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included in the Prospectus, did or
will comply with all applicable provisions of the Act and the Rules and
Regulations and did or will contain all statements required to be stated therein
in accordance with the Act and the Rules and Regulations.  On the Effective Date
and when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.  At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a

 
                                      -5-

material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto.  For all purposes of this
Agreement, the statements contained (i) in the legend regarding stabilization
activities on the inside front cover page of the Prospectus and (ii) in the
first, third and sixth paragraphs and in the second and third sentences of the
eighth paragraph under the heading "Underwriting" in the Prospectus constitute
the only information relating to any Underwriter furnished in writing to the
Company by the Representatives specifically for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus.  The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Act.

     (c) The only subsidiaries (as defined in the Rules and Regulations) of the
Company are the subsidiaries listed on Exhibit 21 to the Registration Statement
(the "Subsidiaries").  The Company and each of its Subsidiaries is, and at the
Closing Date will be, duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.  The Company and each of its
Subsidiaries has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets owned
or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus.  The Company and each of its Subsidiaries is, and
at the Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so licensed or qualified would not have a material adverse effect on the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a whole.
Except as disclosed in the Registration Statement and the Prospectus, all of the
outstanding equity interests of the Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable and owned by the Company
free and clear of all liens, encumbrances and claims whatsoever.  Except for its
equity interests in the Subsidiaries, the Company does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the organizational documents of the Company and
each of its Subsidiaries and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
 

 
                                      -6-

     (d) The outstanding shares of Common Stock have been, and the Shares to be
issued and sold by the Company upon such issuance will be, duly authorized,
validly issued, fully paid and nonassessable by the Company and will not be
subject to any statutory or contractual preemptive right.  The description of
the Common Stock in the Registration Statement and the Prospectus is, and at the
Closing Date will be, complete and accurate in all material respects.  Except as
described in the Registration Statement and the Prospectus, the Company does not
have outstanding, and at the Closing Date will not have outstanding, any options
to purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock, any shares of capital stock of any Subsidiary or any
such warrants, convertible securities or obligations.

     (e) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the consolidated financial condition
of the Company as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus.  No other financial statements or schedules of the
Company are required by the Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus.  Arthur Andersen LLP (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations.  The statements included in the Registration
Statement with respect to the Accountants pursuant to Rule 509 of Regulation S-K
of the Rules and Regulations are true and correct in all material respects.

     (f) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

     (g) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been, will not have been and no development shall
have occurred which could reasonably be expected to result in any material
change in the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries, taken as a whole, arising for any reason
whatsoever, (ii) neither the

 
                                      -7-

Company nor any of its Subsidiaries has incurred nor will it incur any material
liabilities or obligations, direct or contingent, nor has it entered into nor
will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein and (iii) the Company has not
and will not have paid or declared any dividends or other distributions of any
kind on any class of its capital stock.

     (h) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, amended.

     (i) Except as described in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of their respective officers in their capacity as such, before or by any
Federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding could reasonably be expected to materially and adversely
affect the Company and its Subsidiaries, taken as a whole, or its business,
                   ---                 -------------------
properties, business prospects, condition (financial or otherwise) or results of
operations.

     (j) Except as set forth in the Registration Statement and the Prospectus,
the Company and each of its Subsidiaries has, and at the Closing Date will have,
(i) all governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business, unless noncompliance would not have a material
adverse effect on the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole, and (iii) performed all its obligations required
to be performed by it, and is not, and at the Closing Date will not be, in
default, under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement, lease, contract or other
agreement or instrument (collectively, a "contract or other agreement") to which
it is a party or by which its property is bound or affected, unless
nonperformance would not have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole.  To the best
knowledge of the Company and each of its Subsidiaries, no other party under any
material contract or other agreement to which it is a party is in default in any
respect thereunder.  Neither the Company nor any of its Subsidiaries is, nor at
the Closing Date will any of them be, in violation of any provision of its
articles of organization or in material violation of any provision of its by-
laws or similar document.

     (k) No consent, approval, authorization or order of, or filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization,

 
                                      -8-

issuance, transfer, sale or delivery of the Shares by the Company, in connection
with the execution, delivery and performance of this Agreement by the Company or
in connection with the taking by the Company of any action contemplated hereby,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.

     (l) The Company has full corporate power and authority to enter into this
Agreement.  This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company and is
enforceable against the Company in accordance with the terms hereof, except that
enforceability may be affected by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, fraudulent transfer and other similar laws
now or hereafter in effect and the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
The Formation (as defined in the Registration Statement and the Prospectus) was
duly authorized by the Company and was completed prior to the Closing Date.  The
Formation did not, and the performance of this Agreement and the consummation of
the transactions contemplated hereby and the application of the net proceeds
from the offering and sale of the Shares in the manner set forth in the
Prospectus under "Use of Proceeds" will not, result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its Subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the certificate of incorporation or by-laws of the Company or the organizational
documents of any of its Subsidiaries or any material contract or other agreement
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any of its
Subsidiaries.

     (m) The Company and each of its Subsidiaries has good title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company
and its Subsidiaries, taken as a whole.  The Company and each of its
Subsidiaries has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiaries.

 
                                      -9-

     (n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.  All such contracts to which the Company or any Subsidiary is a party
have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against the Company or such Subsidiary in
accordance with the terms thereof, except that enforceability may be affected by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and other similar laws now or hereafter in effect and the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.

     (o) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by this
Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.

     (p) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.

     (q) Except as set forth in the Registration Statement and the Prospectus,
no holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement.

     (r) The Shares have been duly authorized for inclusion, subject to official
notice of issuance, on the Nasdaq National Market.

     (s) Neither the Company nor any of its Subsidiaries is involved in any
material labor dispute nor, to the knowledge of the Company, is any such dispute
threatened.

     (t) The Company and its Subsidiaries own, or are licensed or otherwise have
the right to use, all material trademarks and trade names which are used in or
necessary for the conduct of their respective businesses as described in the
Prospectus.  To the knowledge of the Company, no claims have been asserted by
any person to the use of any such trademarks or trade names or challenging or
questioning the validity or effectiveness of any such trademark or trade name.
The use, in connection with the business and operations of the Company and its
Subsidiaries, of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person.

 
                                      -10-

     (u) Neither the Company nor any of its Subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or any Subsidiary has made any
payment of funds of the Company or any Subsidiary or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Prospectus.

     (v) The Company has complied, and until the completion of the distribution
of the Shares will comply, with all of the provisions of (including, without
limitation, filing all forms required by) Section 517.075 of the Florida
Securities and Investor Protection Act and regulation 3E-900.001 issued
thereunder with respect to the offering and sale of the Shares.

     (w) MIM Strategic Marketing, LLC has at all times since its inception been
classified, for Federal income tax purposes, as a partnership, and not as a
corporation or a publicly traded partnership.

     4.  Agreements of the Company.  The Company agrees with the several
         -------------------------                                      
Underwriters as follows:

     (a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have objected thereto in good faith.

     (b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information, (3)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period mentioned in the third sentence of Section 4(e) that in the judgment of
the Company makes any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading and (5) of receipt by
the Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus.  If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment.  The Company will
use its best efforts to comply with the

 
                                      -11-

provisions of and make all requisite filings with the Commission pursuant to
Rule 430A and to notify the Representatives promptly of all such filings.

     (c) The Company will furnish to the Representatives, without charge, two
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto
and will furnish to the Representatives, without charge, for transmittal to each
of the other Underwriters, a copy of the Registration Statement and any post-
effective amendment thereto, including financial statements and schedules but
without exhibits.

     (d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.

     (e) On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request.  The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith.  If during such period
of time any event shall occur which in the judgment of the Company or counsel to
the Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.

     (f) Prior to any public offering of the Shares by the Underwriters, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.

     (g) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who may
so request copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will

 
                                      -12-

furnish to the Representatives and each other Underwriter who may so request a
copy of each annual or other report it shall be required to file with the
Commission.

     (h) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of twelve months ended commencing after
the Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).

     (i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
preliminary prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) the word processing, printing and
reproduction of this Agreement, the Agreement Among Underwriters, any Dealer
Agreements and any Underwriters' Questionnaire, (4) furnishing (including costs
of shipping, mailing and courier) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be sold, (5) the
inclusion of the Shares on the Nasdaq National Market, (6) any filings required
to be made by the Underwriters with the NASD, and the fees (up to $7,000),
disbursements and other charges of counsel for the Underwriters in connection
therewith, (7) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the reasonable fees, disbursements and other
charges of counsel to the Underwriters in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
Surveys, (8) counsel to the Company, (9) the transfer agent for the Shares and
(10) the Accountants.

     (j) If this Agreement shall be terminated by the Company pursuant to any of
the provisions hereof (otherwise than pursuant to Section 8) or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.

     (k) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute,

 
                                      -13-

stabilization of the price of the shares of Common Stock to facilitate the sale
or resale of any of the Shares.

     (l) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company in the manner set forth in the Prospectus
under "Use of Proceeds" and shall file such reports with the Commission with
respect to the sale of the Shares and the application of the proceeds therefrom
as may be required in accordance with Rule 463 under the Act.

     (m) Except as provided in Section 4(n)(a) below, during the period of 180
days commencing at the Closing Date, the Company will not, without the prior
written consent of PaineWebber Incorporated, grant options to purchase shares of
Common Stock at a price less than the initial public offering price.

     (n) The Company will not, and will cause each of its executive officers and
directors and MIM Holdings, LLC to enter into agreements with the
Representatives in the form set forth in Exhibit B to the effect that they will
not, for a period of one-year after the date of the Prospectus, without the
prior written consent of PaineWebber Incorporated, offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock of the Company or warrants or other
rights to purchase such shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for any capital stock of the
Company or, in the case of the Company, file any registration statement in
respect of any of the foregoing, except that (a) the Company may issue shares of
Common Stock upon the exercise of options, or grant options to purchase shares
of Common Stock, or grant restricted stock awards, in each case pursuant to
stock option plans or in connection with other employee or director incentive
compensation arrangements, (b) directors, executive officers and MIM Holdings,
LLC may dispose of shares of Common Stock (i) as bona fide gifts to donees who
agree not to sell or otherwise dispose of such Common Stock during the one-year
period following the date of the Prospectus without the prior written consent of
PaineWebber Incorporated, (ii) pursuant to the laws of testamentary or intestate
descent, (iii) pursuant to a final and nonappealable order of a court or other
body of competent jurisdiction, or (iv) in consideration of the cashless
exercise of options under stock option plans or to fulfill tax withholding
obligations and (c) MIM Holdings, LLC may distribute or otherwise transfer
shares of Common Stock to its members who agree not to sell or otherwise dispose
of such Common Stock during the one-year period following the date of the
Prospectus without the prior written consent of PaineWebber Incorporated.

     5.  Conditions of the Obligations of the Underwriters.  In addition to the
         -------------------------------------------------                     
execution and delivery of the Price Determination Agreement, the obligations of
each Underwriter hereunder are subject to the following conditions:

 
                                      -14-

     (a) Notification that the Registration Statement has become effective shall
be received by the Representatives not later than 5:00 p.m., New York City time,
on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.

     (b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives did not object thereto
in good faith, and the Representatives shall have received certificates, dated
the Closing Date and the Option Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).

     (c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been, and no
development shall have occurred which could reasonably be expected to result in,
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) the Company and its Subsidiaries, taken as a whole, shall
not have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the Registration
Statement and the Prospectus, if in the sole judgment of the Representatives any
such development makes it impracticable or inadvisable to consummate the sale
and delivery of the Shares by the Underwriters at the initial public offering
price.

     (d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its Subsidiaries or
any of their respective officers or

 
                                      -15-

directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole.

     (e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, as if made
at the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to be fulfilled
or complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date shall have
been duly performed, fulfilled or complied with.

     (f) The Representatives shall have received, at the request of the Company,
opinions dated the Closing Date (and with respect to the Option Shares, the
Option Closing Date) and satisfactory in form and substance to counsel for
the Underwriters, from (i) Drinker Biddle & Reath, counsel to the Company, to
the effect set forth in Exhibit C, (ii) Hinkley, Allen & Snyder, special
regulatory counsel to the Company, to the effect set forth in Exhibit D and
(iii) Howell, Martin & Steegall, Tennessee counsel to the Company, to the effect
set forth in Exhibit E.

     (g) The Representatives shall have received an opinion dated the Closing
Date (and with respect to the Option Shares, the Option Closing Date) from
Cahill Gordon & Reindel, counsel to the Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which opinion shall
be satisfactory in all respects to the Representatives.

     In addition, Cahill Gordon & Reindel shall state that they have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants for the Company and your representatives at which the contents of
the Registration Statement and Prospectus and related matters were discussed,
and although such counsel are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts have come to their
attention which lead them to believe that the Registration Statement at the time
it became effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,

 
                                      -16-

in light of the circumstances under which they were made, not misleading (it
being understood that such counsel have not been requested to and do not make
any comment with respect to the financial statements, schedules and other
financial and statistical data contained in or incorporated by reference in the
Registration Statement and the Prospectus).

     (h) On the date of the Prospectus, the Accountants shall have furnished to
the Representatives a letter, dated the date of its delivery, addressed to the
Representatives and in form and substance satisfactory to the Representatives,
confirming that they are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations and with respect to the
financial and other statistical and numerical information contained in the
Registration Statement.  On the Closing Date and, as to the Option Shares, the
Option Closing Date, the Accountants shall have furnished to the Representatives
a letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date (specified in the
letter) not more than three days prior to the Closing Date and the Option
Closing Date which would require any change in their letter dated the date of
the Prospectus, if it were required to be dated and delivered at the Closing
Date and the Option Closing Date.  In addition, on the Closing Date, at the time
of purchase of the Shares, the Representatives shall be satisfied that the
Accountants will deliver to the Company an unqualified report with respect to
the consolidated financial statements of the Company.

     (i) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished by the Company to the Representatives an accurate
certificate, dated the date of its delivery, signed on behalf of the Company by
each of the Chief Executive Officer and the Chief Financial Officer of the
Company, in form and substance satisfactory to the Representatives, to the
effect that:

          (1) Each signer of such certificate has carefully examined the
     Registration Statement and the Prospectus and (A) as of the date of such
     certificate, such documents are true and correct in all material respects
     and do not omit to state a material fact required to be stated therein or
     necessary in order to make the statements therein not misleading and (B)
     since the Effective Date, no event has occurred as a result of which it is
     necessary to amend or supplement the Prospectus in order to make the
     statements therein not untrue or misleading in any material respect.

          (2) Each of the representations and warranties of the Company
     contained in this Agreement was, when originally made, and is, at the time
     such certificate is delivered, true and correct in all material respects.

 
                                      -17-

          (3) Each of the covenants required herein to be performed by the
     Company on or prior to the delivery of such certificate has been duly,
     timely and fully performed in all material respects and each condition
     herein required to be complied with by the Company on or prior to the date
     of such certificate has been duly, timely and fully complied with.

          (j) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).

          (k) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.

          (l) Prior to the Closing Date, the Shares shall have been duly
authorized for inclusion on the Nasdaq National Market upon official notice of
issuance.

          (m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.

          6.   Indemnification.
               --------------- 

          (a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, liabilities,
expenses and damages (including any and all investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), to which they, or any of
them, may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a

 
                                      -18-

material fact required to be stated in it or necessary to make the statements in
it not misleading, provided that (i) the Company will not be liable to the
extent that such loss, claim, liability, expense or damage arises from the sale
of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the Registration Statement, any
Preliminary Prospectus or the Prospectus and (ii) the Company will not be liable
to any Underwriter under the indemnity agreement in this Section 6(a) with
respect to any Preliminary Prospectus to the extent that any such loss, claim,
damage or liability of such Underwriter results solely from an untrue statement
of a material fact contained in, or the omission of a material fact from, such
Preliminary Prospectus which untrue statement or omission was completely
corrected in the Prospectus, if the Company shall sustain the burden of proving
that such Underwriter sold Shares to the person alleging such loss, claim,
damage or liability without sending or giving, at or prior to the written
confirmation of such sale, a copy of the Prospectus if the Company had
previously furnished copies thereof to such Underwriter within a reasonable
amount of time prior to such sale or such confirmation.  The Company and each
Underwriter acknowledge that the statements set forth (i) in the legend
regarding stabilization activities on the inside front cover page of the
Prospectus and (ii) in the first, third and sixth paragraphs and in the second
sentence of the eighth paragraph under the heading "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the only information
furnished in writing to the Company by or on behalf of the several Underwriters
for inclusion in any Preliminary Prospectus or Prospectus, and you, as
Representatives on behalf of the Underwriters, confirm that such statements are
correct.  This indemnity agreement will be in addition to any liability that the
Company might otherwise have.

          (b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the Registration Statement, the
Preliminary Prospectus or the Prospectus.  The Company acknowledges that the
statements set forth (i) in the legend regarding stabilization activities on the
inside front cover page of the Prospectus and (ii) in the first, third and sixth
paragraphs and in the second sentence of the eighth paragraph under the heading
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitute
the only information furnished in writing to the Company by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus, and you, as the Representatives,

 
                                      -19-

confirm that such statements are correct.  This indemnity will be in addition to
any liability that each Underwriter might otherwise have.

          (c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party.  If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense.  The indemnified party will
have the right to employ its own counsel (which shall be selected by PaineWebber
Incorporated in the event the indemnified party is an Underwriter, or a
director, officer, employee, or agent of an Underwriter, or a person that
controls an Underwriter) in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties.  It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties.  All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred.  An indemnifying party
will not be liable for any settlement of any action or claim effected without

 
                                      -20-

its written consent (which consent will not be unreasonably withheld).  No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other.  The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus.  If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering.  Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Representatives on behalf of the Underwriters, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission.  The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein.  The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed

 
                                      -21-

to include, for purposes of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.  Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint.  For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer and
director of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof.  Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 6(d).  No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).

          (e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Shares and payment therefor or (iii) any termination of this Agreement.

          7.   Termination.  The obligations of the several Underwriters under
               -----------                                                    
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing Date),
by notice to the Company from the Representatives, without liability on the part
of any Underwriter to the Company, if, prior to delivery and payment for the
Shares (or the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the NASDAQ Stock Market, (ii) trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or (iv) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or

 
                                      -22-

material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to market the Shares on the terms
and in the manner contemplated by the Prospectus.

          8.   Substitution of Underwriters.  If any one or more of the
               ----------------------------                            
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter.  If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement.  In any such case either the Representatives or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected.  Any action taken pursuant to this Section 8 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.

          9.   Miscellaneous.  Notice given pursuant to any of the provisions of
               -------------                                                    
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, MIM
Corporation, One Blue Hill Plaza, Pearl River, New York 10965, Attention:  Chief
Executive Officer, or (b) if to the Underwriters, to the Representatives at the
offices of PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New
York 10019, Attention: Corporate Finance Department.  Any such notice shall be
effective only upon receipt.  Any notice under Section 7 or 8 may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.

 
                                      -23-

          This Agreement has been and is made solely for the benefit of the
several Underwriters and the Company and of the controlling persons, directors
and officers referred to in Section 6, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.  The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from any of the
several Underwriters.

          All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.

          Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.

          THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

          This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.

          In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.

          This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.

 
                                      -24-

          Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.

                                    Very truly yours,

                                    MIM CORPORATION


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

 
                                      -25-

Confirmed as of the date first
above mentioned:

PAINEWEBBER INCORPORATED
DILLON, READ & CO., INC.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.

PAINEWEBBER INCORPORATED


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


DILLON, READ & CO., INC.


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

 
                                   SCHEDULE I

                                  UNDERWRITERS



                                                   Number of
Name of                                            Firm Shares
Underwriters                                       to be Purchased
- ------------                                       ---------------


PaineWebber Incorporated
Dillon, Read & Co., Inc.                           _________

  Total                                            4,000,000
                                                   =========

 
                                                                       EXHIBIT A



                                MIM CORPORATION

                             _____________________


                         PRICE DETERMINATION AGREEMENT
                         -----------------------------


                                                                 August   , 1996



PAINEWEBBER INCORPORATED
DILLON, READ & CO., INC.
 As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019

Dear Sirs:

          Reference is made to the Underwriting Agreement, dated August   , 1996
(the "Underwriting Agreement"), among MIM Corporation, a Delaware corporation
(the "Company"), and the several Underwriters named in Schedule I thereto or
hereto (the "Underwriters"), for whom PaineWebber Incorporated and Dillon, Read
& Co., Inc. are acting as representatives (the "Representatives").  The
Underwriting Agreement provides for the purchase by the Underwriters from the
Company, subject to the terms and conditions set forth therein, of an aggregate
of 4,000,000 shares (the "Firm Shares") of the Company's common stock, par value
$.0001 per share.  This Agreement is the Price Determination Agreement referred
to in the Underwriting Agreement.

                                                   Pursuant to Section 1 of the
Underwriting Agreement, the undersigned agree with the Representatives as
follows:

                                                   The initial public offering
price per share for the Firm Shares shall be $_______.

          The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.

                                      -2-
 
          The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.

          As contemplated by the Underwriting Agreement, attached as Schedule I
is a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.

          THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

          If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.

                                                   Very truly yours,

                                                   MIM CORPORATION


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

                          


                                     -3- 

Confirmed as of the date
 first above mentioned:


PAINEWEBBER INCORPORATED
DILLON, READ & CO., INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.

By:  PAINEWEBBER INCORPORATED


By:  ________________________
     Name:
     Title:


DILLON, READ & CO., INC.


By:  _______________________
     Name:
     Title:

                                      -3-

 
                                                                       EXHIBIT B

                           FORM OF LOCK-UP AGREEMENT
                           -------------------------

PAINEWEBBER INCORPORATED
DILLON, READ & CO., INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York  10019

Dear Sirs:

          In consideration of the agreement of the several Underwriters, for
which PaineWebber Incorporated and Dillon, Read & Co., Inc. (the
"Representatives") intend to act as Representatives, to underwrite a proposed
public offering (the "Offering") of up to 4,600,000 shares of Common Stock, par
value $.0001 per share (the "Common Stock") of MIM Corporation, a Delaware
corporation, as contemplated by a registration statement with respect to such
shares filed with the Securities and Exchange Commission on Form S-1
(Registration No. 333-05327), the undersigned hereby agrees that the undersigned
will not, for a period of one-year after the commencement of such Offering,
without the prior written consent of PaineWebber Incorporated, offer, sell,
contract to sell, grant any option to sell, or otherwise dispose of, directly or
indirectly, any shares of capital stock of the Company or warrants or other
rights to acquire shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for any capital stock of the
Company of which the undersigned is now, or may in the future become, the
beneficial owner within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934), except that the undersigned may dispose of shares of Common Stock
(i) as bona fide gifts to donees who agree not to sell or otherwise dispose of
such Common Stock during the one-year period following the date of the
commencement of the Offering without the prior written consent of PaineWebber
Incorporated, (ii) pursuant to the laws of testamentary or intestate descent,
(iii) pursuant to a final and nonappealable order of a court or other body of
competent jurisdiction, or (iv) in consideration of the exercise of options
under stock option plans or to fulfill tax withholding obligations.


                                          Very truly yours,

                                          By:
                                              -------------------------------

                                          Print Name:
                                                      -----------------------

 
                                                                       EXHIBIT C



                               FORM OF OPINION OF
                             COUNSEL TO THE COMPANY
                             ----------------------

          All references in this opinion to the Agreement shall include the
Price Determination Agreement.

          (a)  The Company and each of its Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
organization and has full power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and the
Prospectus.  Except as described in the Registration Statement and the
Prospectus, the Company is the sole record owner and, to our knowledge, the sole
beneficial owner of all of the equity interests of each of its Subsidiaries.
All of the outstanding shares of Common Stock have been, and the Shares, when
paid for by the Underwriters in accordance with the terms of the Agreement, will
be, duly authorized, validly issued, fully paid and nonassessable by the Company
and will not be subject to any preemptive right under (i) the statutes, judicial
and administrative decisions, and the rules and regulations of the governmental
agencies of the State of Delaware, (ii) the Company's certificate of
incorporation or by-laws or (iii) any instrument, document, contract or other
agreement referred to in the Registration Statement or any instrument, document,
contract or agreement filed as an exhibit to the Registration Statement.  Except
as described in the Registration Statement and the Prospectus, to the best of
our knowledge, there is no commitment or arrangement to issue, and there are no
outstanding options, warrants or other rights calling for the issuance of, any
share of capital stock of the Company or any Subsidiary to any person or any
security or other instrument that by its terms is convertible into, exercisable
for or exchangeable for capital stock of the Company.

          (b)  No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with (i) the Formation, (ii) the authorization, issuance, transfer,
sale or delivery of the Shares by the Company, (iii) the execution, delivery and
performance of the Agreement by the Company or (iv) the taking by the Company of
any action contemplated by this Agreement or in connection with the Formation,
except such as have been obtained under the Delaware General Corporation Law,
under the Act and the Rules and Regulations or otherwise and such as may be
required under state securities or "Blue Sky" laws in connection with the
Formation and the purchase and distribution by the Underwriters of the Shares to
be sold by the Company or by the by-laws and rules of the NASD in connection
with the purchase and distribution by the Underwriters of the Shares to be sold
by the Company.  Notwithstanding anything to the contrary contained in this item
(b), no opinion is given as to any consent, approval, authorization or order, or
any filing or declaration with, any court or governmental agency or body,
required under any Anti-kickback Laws (as defined in the Prospectus), the
Federal Robinson-Patman Act, the Federal Food, Drug and Cosmetics Act, Medicaid
or Medicare or any similar state health care program,


                                     -2- 

or any other laws or regulations governing the provision of pharmacy benefits by
the Company or the contemplated distribution of drugs as described in the
Registration Statement and Prospectus.

          (c)  The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus under
the caption "Capitalization."  The description of the capital stock of the
Company contained in the Prospectus is complete and accurate in all material
respects.  The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable statutory requirements.

          (d)  The Registration Statement and the Prospectus comply in all
material respects as to form with the applicable requirements of the Act and the
Rules and Regulations (except that we express no opinion as to financial
statements, schedules and other financial data contained in the Registration
Statement or the Prospectus).

          (e)  The statements under the headings "Certain Transactions,"
"Management -- Employment Agreements," and "Management -- Stock Incentive
Plans," insofar as such statements purport to summarize certain agreements or
documents referred to therein, and the statements under the headings
"Description of Capital Stock" and "Shares Eligible for Future Sale," insofar as
such statements constitute a summary of the Delaware General Corporation Law and
federal law, are accurate and fairly and correctly present the information
called for with respect to such agreements, documents or matters.

          (f)  To the best of our knowledge, any instrument, document, lease,
license, contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus has
been properly described or referred to therein and any Document required to be
filed as an exhibit to the Registration Statement has been filed as an exhibit
thereto; and, to the best of our knowledge, except as described in the
Registration Statement and Prospectus no default exists in the due performance
or observance of any material obligation, agreement, covenant or condition
contained in any Document filed or required to be filed as an exhibit to the
Registration Statement.

          (g)  To the best of our knowledge, except as disclosed in the
Registration Statement or the Prospectus, no person or entity has the right to
require the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.

          (h)  To the best of our knowledge, the Company is not in violation of,
or in default with respect to, any federal, state or local law, rule,
regulation, order, judgment or decree, except as may be described in the
Prospectus or such as in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business or


 
                                      -3-

assets of the Company and the Subsidiaries, taken as a whole, except that no
opinion is given as to any violation of, or default under, any Anti-kickback
Laws (as defined in the Prospectus), the Federal Robinson-Patman Act, the
Federal Food, Drug and Cosmetics Act, Medicaid or Medicare or any similar state
health care program, or any other laws or regulations governing the provision of
pharmacy benefits by the Company or the contemplated distribution of drugs as
described in the Registration Statement and Prospectus.

          (i)  The Company has full corporate power and authority to enter into
the Agreement, and the Agreement has been duly authorized, executed and
delivered by the Company.

          (j)  The Formation and the transactions described in the Prospectus
under the heading "Certain Transactions-Formation" have been duly authorized by
the Company and the Formation was completed prior to the Closing Date.

          (k)  The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Agreement do not and will not, and
the Formation did not, (i) violate the certificate of incorporation or by-laws
of the Company, (ii) breach or result in a default under, cause the time for
performance of any obligation to be accelerated under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its Subsidiaries pursuant to the terms of, (x) any indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement,
capital lease or other evidence of indebtedness of which we have knowledge, (y)
any voting trust arrangement or any contract or other agreement to which the
Company is a party that restricts the ability of the Company to issue securities
and of which we have knowledge or (z) any Document filed as an exhibit to the
Registration Statement, (iii) breach or otherwise violate any existing
obligation of the Company under any court or administrative order, judgment or
decree of which we have knowledge or (iv) violate applicable provisions of the
Delaware General Corporation Law or any statute or regulation of the United
States, except that, with respect to the foregoing clauses (iii) and (iv), no
opinion is given as to any breach or violation with respect to any obligation
under, or provision of, any Anti-kickback Laws (as defined in the Prospectus),
the Federal Robinson-Patman Act, the Federal Food, Drug and Cosmetics Act,
Medicaid or Medicare or any similar state health care program, or any other laws
or regulations governing the provision of pharmacy benefits by the Company or
the contemplated distribution of drugs as described in the Registration
Statement and Prospectus.

          (l)  Delivery of certificates for the Shares will, against payment
therefor as provided in the Agreement, transfer valid and marketable title
thereto to each Underwriter that has purchased such Shares in good faith and
without notice of any adverse claim with respect thereto.




                                      -4-
 
          (m)  The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.

          (n)  The Shares have been duly authorized for listing by the Nasdaq
National Market upon official notice of issuance.

          We hereby confirm to you that based solely upon a telephone
conversation with the Commission, the Registration Statement has become
effective under the Act and that no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or is pending, or, to the best of our knowledge, is threatened
or contemplated.

          We hereby further confirm to you that, to the best of our knowledge,
there are no actions, suits, proceedings or investigations pending or overtly
threatened in writing against the Company or any of its Subsidiaries, or any of
their respective officers or directors in their capacities as such, before or by
any court, governmental agency or arbitrator which (i) seek to challenge the
legality or enforceability of the Agreement, (ii) seek to challenge the legality
of the Formation or the legality or enforceability of any of the Documents
filed, or required to be filed, as exhibits to the Registration Statement, (iii)
seek damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement and the Prospectus,
seek money damages or seek to impose criminal penalties upon the Company, any of
its Subsidiaries or any of their respective officers or directors in their
capacities as such or (v) except as set forth in or contemplated by the
Registration Statement and the Prospectus, seek to enjoin any of the business
activities of the Company or any of its Subsidiaries or any of their respective
officers or directors in their capacities as such or the transactions described
in the Prospectus.

          We also advise you that we take no responsibility for the accuracy and
the completeness of the statements made or included in the Registration
Statement and the Prospectus by the Company.  However, in the course of the
preparation of the Registration Statement and the Prospectus by the Company, we
have conferred with representatives of the Company, with its auditors and with
the Underwriters and their counsel.  Although we have not undertaken to
determine independently and cannot assure the Underwriters as to the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to our attention which leads us to believe that the
Registration Statement at the time it became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus as of the effective date and as of the date hereof or any
amendment or supplement thereto contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements, in
the light of the circumstances




                                     -5- 

under which they were made, not misleading (except that we express no view as to
the financial statements, notes to financial statements, related schedules or
other financial information which are contained therein).

          This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person.

          In rendering the foregoing opinion, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the State of Delaware, and as to
matters of fact, upon certificates of officers of the Company and of government
officials; provided such counsel shall state that the opinion of any other
counsel is in form satisfactory to such counsel.  Copies of all such opinions
and certificates shall be furnished to counsel to the Underwriters on the
Closing Date.



 
                                                                       EXHIBIT D


                               FORM OF OPINION OF
                           SPECIAL REGULATORY COUNSEL
                           --------------------------

          We have made such investigations of the Company's business as we have
deemed necessary or appropriate to render the following opinion, including the
review of the Registration Statement and the Prospectus, particularly the
sections of the Registration Statement and the Prospectus relating to the
healthcare industry and the regulation thereof and other regulatory matters,
and, based upon the foregoing, we are of the opinion that:

          1.  the statements in the Prospectus set forth (i) under the
     subcaptions "--Government Regulation," "--FTC Consent Decree with RxCare"
     and the second paragraph of "--Effects of Certain Legal Proceedings" under
     the caption "Risk Factors," (ii) under the subcaptions "--Anti-Kickback
     Laws," "--Antitrust Laws," "--Drug Distribution Laws," "--State Regulation"
     and "--ERISA" under the caption "Business--Government Regulation" and (iii)
     in the sixth paragraph under the caption "Relationship with RxCare and
     TennCare," insofar as such statements constitute a summary of statutes,
     regulations, legal or governmental proceedings or documents (collectively,
     the "Regulatory Statements"), fairly present the information called for
     with respect to such statutes, regulations, legal or governmental
     proceedings or documents;

          2.  no consent, approval, authorization or order of, or any filing or
     declaration with, any court or governmental agency or body is required in
     connection with the Formation and the execution, delivery and performance
     of the Agreement by the Company;

          3.  the Company is not in violation of, or in default with respect to,
     any federal, state or local law, rule, regulation, order, judgment, or
     decree, except as may be described in the Prospectus or such as in the
     aggregate do not now have and will not in the future have a material
     adverse effect upon the operations, business or assets of the Company and
     the Subsidiaries, taken as a whole; and

          4.  the execution and delivery by the Company of, and the performance
     by the Company of its obligations under, the Agreement do not and will not,
     and the Formation did not, (i) breach or otherwise violate any existing
     obligation of the Company under any court or administrative order, judgment
     or decree of which we have knowledge or (ii) violate any applicable
     provisions of any statute or regulations in the States of Rhode Island and
     Massachusetts.

          The opinions set forth in items (2), (3) and (4) above are limited to
Federal Anti-Kickback Laws (as defined in the Prospectus), anti-kickback laws of
the States of Rhode Island and Massachusetts, the Federal Robinson-Patman Act,
the Federal Food, Drug and Cosmetics Act, Medicaid or Medicare or any similar
state healthcare program in the States of Rhode Island


                                     -2- 
and Massachusetts and any other laws or regulations of the States of Rhode
Island and Massachusetts governing the provision of pharmacy benefits by the
Company or the contemplated distribution of drugs as described in the
Registration Statement and Prospectus.

          We have participated in the preparation of the text included under the
captions "Business--Government Regulation," "Risk Factors--Government
Regulations," "Risk Factors--FTC Consent Decree with RxCare," the second
paragraph under "Risk Factors--Effects of Certain Legal Proceedings" and the
sixth paragraph under "Relationship with RxCare and TennCare" (together, the
"Pertinent Sections") in the Registration Statement and Prospectus and met with
representatives of the Company, counsel to the Company, the Underwriters and
counsel to the Underwriters and have conducted such other inquiries as described
above.  In the course of the foregoing and without assuming any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as expressly set forth above),
nothing has come to our attention which leads us to believe that the text
contained in the Pertinent Sections of the Registration Statement as of the
Effective Date, and the Pertinent Sections of the Prospectus at the Closing Date
and at the Option Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.  We express
no opinion as to financial statements, schedules or other financial data
contained in the Registration Statement or the Prospectus.



 
                                                                       EXHIBIT E


                               FORM OF OPINION OF
                               TENNESSEE COUNSEL
                               ------------------

          We have made such investigations of the Company's business as we have
deemed necessary or appropriate to render the following opinion, including the
review of the Registration Statement and the Prospectus, particularly the
sections of the Registration Statement and the Prospectus relating to the
healthcare industry and the regulation thereof and other regulatory matters,
and, based upon the foregoing, we are of the opinion that:

          1.  The Company is in good standing and is qualified to do business in
     the State of Tennessee.

          2.  No consent, approval, authorization or order of, or any filing or
     declaration with, any court or governmental agency or body in the State of
     Tennessee is required in connection with the Formation and the execution,
     delivery and performance of the Agreement by the Company.

          3.  The Company is not in violation of, or in default with respect to,
     any state or local law, rule, regulation, order, judgment, or decree,
     except as may be described in the Prospectus or such as in the aggregate do
     not now have and will not in the future have a material adverse effect upon
     the operations, business or assets of the Company and the Subsidiaries,
     taken as a whole.

          4.  The execution and delivery by the Company of, and the performance
     by the Company of its obligations under, the Agreement do not and will not,
     and the Formation did not, (i) breach or otherwise violate any existing
     obligation of the Company under any court or administrative order, judgment
     or decree of which we have knowledge or (ii) violate any applicable
     provisions of any statute or regulations in the State of Tennessee.

          5.  The statements contained in the Registration Statement and
     Prospectus that refer to Tennessee statutes or regulations relating to the
     Company's business accurately summarize such statutes and regulations and
     fairly present the information called for with respect to such statutes and
     regulations.

          6.  Nothing has come to our attention that leads us to conclude that
     the Company is not in compliance with those Tennessee statutes and
     regulations affecting the conduct of its business in Tennessee or that the
     Registration Statement, as of its effective date, and the Prospectus as of
     the Closing Date and the Option Closing Date, solely as they relate to
     Tennessee law, contained or contain any untrue statement of a material fact
     or omitted or omit to state a material fact required to be stated therein
     or necessary to make the statements therein not misleading.


 
                                                                EXHIBIT 10.23(a)

                                AMENDMENT NO. 1
                                       TO
                           STOCK OPTION AGREEMENT-II

     THIS AMENDMENT is made on July 29, 1996 between E. David Corvese
("Corvese") and John H. Klein ("Optionee").

                                   Background
                                   ----------

     1.  Pursuant to a Stock Option Agreement-II dated as of May 30, 1996 (the
"Option Agreement"), Corvese granted to Optionee the right and option (the
"Option") to purchase 1,860,000 of his shares of common stock, par value $.0001
per share, of MIM Corporation (the "Option Shares").

     2.  Corvese and Optionee wish to amend the Option Agreement to change the
purchase price of the Option Shares.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and intending to be legally bound hereby, the parties hereto agree as follows:

     1.  Section 2 of the Option Agreement is amended and restated in its
entirety to read as follows:

               "2. Purchase Price.  The purchase price per share (the "Option
                   --------------                                            
               Price") of the Option Shares shall be $7.50.

          2.   Upon exercise of the Option, Corvese shall have the right to
cause MIM Holdings, LLC ("Holdings") to sell and transfer to Optionee an
appropriate number of Holdings' shares of common stock of MIM Corporation in
lieu of Corvese's Option Shares in satisfaction of Corvese's obligations under
the Option Agreement.

          3.   This Agreement shall bind and inure to the benefit of the parties
hereto and the successors and assigns of Corvese and the executors,
administrators, legatees, heirs and legal representatives of Optionee.

          4.   This Agreement shall be construed in accordance with, and its
interpretation shall otherwise be governed by, the laws of the State of
Delaware, without regard to principles of conflict of laws thereof.

          5.   Except as provided in this Amendment, all of the terms and
provisions of the Option Agreement shall remain in full force and effect.

          6.   The foregoing amendment is effective as of May 30, 1996.

          IN WITNESS WHEREOF, Corvese and Optionee hereby execute this Amendment
as of the day and year first above written.


                                    /s/ E. David Corvese
                                    ____________________________________
                                    E. David Corvese


                                    /s/ John H. Klein
                                    ____________________________________
                                    John H. Klein


 
                                                                EXHIBIT 10.24(a)

                                AMENDMENT NO. 1
                                       TO
                              REPURCHASE AGREEMENT

     THIS AMENDMENT is made on July 29, 1996 between E. David Corvese
("Corvese") and John H. Klein ("Klein").

                                   Background
                                   ----------

     1.  Pursuant to a Repurchase Agreement dated as of May 30, 1996 (the
"Repurchase Agreement"), Klein granted to Corvese the right and option (the
"Option") to repurchase shares of common stock, par value $.0001 per share, of
MIM Corporation (the "Option Shares") purchased by Klein under a Stock Option
Agreement-II between Corvese and Klein dated as of May 30, 1996, as amended on
the date hereof.

     2.  Corvese and Klein wish to amend the Repurchase Agreement to change the
purchase price of the Option Shares.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and intending to be legally bound hereby, the parties hereto agree as follows:

     1.  Section 1 of the Option Agreement is amended by replacing the phrase
"purchase price of $.10 per share," with "purchase price of $7.50 per share,".

     2.  This Agreement shall bind and inure to the benefit of the parties
hereto and the successors and assigns of Corvese and the executors,
administrators, legatees, heirs and legal representatives of Klein.

     3.  This Agreement shall be construed in accordance with, and its
interpretation shall otherwise be governed by, the laws of the State of
Delaware, without regard to principles of conflict of laws thereof.

     4.  Except as provided in this Amendment, all of the terms and provisions
of the Repurchase Agreement shall remain in full force and effect.

     5.  The foregoing amendment is effective as of May 30, 1996.

     IN WITNESS WHEREOF, Corvese and Klein hereby execute this Amendment as of
the day and year first above written.


                                     /s/ E. David Corvese
                                     ____________________________________
                                     E. David Corvese


                                     /s/ John H. Klein
                                     ____________________________________
                                     John H. Klein


 
                                                                   EXHIBIT 10.30


                       REGISTRATION RIGHTS AGREEMENT - I
                       ---------------------------------


     THIS REGISTRATION RIGHTS AGREEMENT - I (the "Agreement") is made and
entered into on July 29, 1996 by and among MIM Corporation, a Delaware
corporation (the "Company"), E. David Corvese ("Corvese"), John H. Klein
("Klein"), Richard H. Friedman ("Friedman"), Leslie B. Daniels ("Daniels") and
MIM Holdings, LLC, a Rhode Island limited liability company ("Holdings").

                                    RECITALS
                                    --------

     1.  In order to induce Klein, Friedman and Daniels to combine their
experience, know-how, extensive relationships within the generic drug industry,
and strategic plans relating to the generic drug industry, as well as contracts
under negotiation relating to the drug distribution business, with that of the
Company, Corvese has, pursuant to Stock Option Agreements dated as of May 30,
1996, as amended on the date hereof, granted to Klein, Friedman and Daniels
options to purchase up to an aggregate of 5,460,000 of his shares of common
stock, par value $.0001 per share, of the Company ("Common Stock").

     2.  In order to induce Corvese to enter into such Stock Option Agreements
and in order to further induce Klein, Friedman and Daniels to so combine their
knowledge and above-mentioned assets relating to the generic drug industry with
that of the Company, the Company has agreed to provide registration rights with
respect to its Common Stock.


     The parties hereby agree as follows:

     1.  Definitions.
         ----------- 

     (a) The term "Holders" means, collectively, any and all persons who hold or
have the right to acquire Registrable Securities.

     (b) The term "Corvese Option Shares" means the shares of Common Stock
issuable by the Company pursuant to the Corvese Options.

     (c) The term "Corvese Options" means the options to purchase up to an
aggregate of 1,336,950 shares of Common Stock granted by the Company to Corvese
pursuant to the Company's stock option plan.

     (d) The term "Corvese Shares" means the 3,600,000 shares of Common Stock
currently held by Corvese, except that such term shall not include any shares
while and to the extent they remain subject to the terms of the Daniels Option
Agreement, the Klein Option Agreement or the Friedman Option Agreement.

 
     (e) The term "Daniels Option Shares" means the shares of Common Stock that
Daniels has the option to purchase pursuant to the Daniels Option Agreement.

     (f) The term "Daniels Option Agreement" means the Stock Option Agreement
dated as of May 30, 1996 between Daniels and Corvese, whereby Daniels has the
option to purchase from Corvese up to 300,000 shares of Common Stock.

     (g)  The term "Holdings Shares" means the 2,323,053 shares of Common Stock
currently held by Holdings.

     (h) The term "Klein Option Shares" means the shares of Common Stock that
Klein has the option to purchase pursuant to the Klein Option Agreement.

     (i) The term "Klein Option Agreement" means the Stock Option Agreement
dated as of May 30, 1996 between Klein and Corvese, whereby Klein has the option
to purchase from Corvese up to 1,800,000 shares of Common Stock.

     (j) The term "Friedman Option Shares" means the shares of Common Stock that
Friedman has the option to purchase pursuant to the Friedman Option Agreement.

     (k) The term "Friedman Option Agreement" means the Stock Option Agreement
dated as of May 30, 1996 between Friedman and Corvese, whereby Friedman has the
option to purchase from Corvese up to 1,500,000 shares of Common Stock.

     (l) The term "Registrable Securities" means any and all of the following:
(1) the Corvese Shares, (2) the Corvese Option Shares, (3) the Daniels Option
Shares, (4) the Holdings Shares, (5) the Klein Option Shares, (6) the Friedman
Option Shares, and (7) any other securities issued in exchange for or as
dividends or other distributions on, or by way of a split of, any of the
foregoing Shares; provided, however, that Registerable Securities will cease to
                  --------  -------                                            
be Registrable Securities when (i) a registration statement filed pursuant to
the Securities Act of 1933, as amended (the "Act"), covering such Registrable
Securities has been declared effective and they have been disposed of pursuant
to such effective registration statement, (ii) they are distributed to the
public pursuant to Rule 144 (or any similar provision then in force) under the
Act, (iii) they are eligible to be sold pursuant to Rule 144(k) under the Act
without limitation as to the amount of securities to be sold or as to the manner
of sale, or (iv) they have been otherwise transferred and the Company has
delivered new certificates or other evidences of ownership for them not subject
to any legal or other restriction on transfer.

                                       2

 
     2.  Demand Registration.
         ------------------- 

     (a) Request for Registration.  Subject to the terms of this Section 2, at
         ------------------------                                             
any time after the first anniversary of the closing of the Company's initial
public offering of equity securities under the Act ("IPO") and ending on the
tenth anniversary of the closing of the Company's IPO, the Holders holding in
the aggregate at least 2,250,000 shares of the then outstanding Registrable
Securities (the "Demand Holders") may make a written request for registration
under the Act of all or part of their Registrable Securities, which request
shall state that the demand registration is pursuant to this Agreement (i.e.
Registration Rights Agreement - I) and shall specify the number of shares of
Registrable Securities to be included in the registration (a "Demand
Registration"); provided, however, that the Company shall not be required to
                --------  -------                                           
effect more than one (1) Demand Registration under this Agreement.  Within five
(5) business days after receipt of such request from the Demand Holders for the
Demand Registration, the Company shall give written notice (the "Demand
Registration Notice") of such request to all Holders, and thereupon the Company
shall include in such Demand Registration all Registrable Securities with
respect to which the Company receives written requests for inclusion therein
within fifteen (15) business days after the date of the Demand Registration
Notice.  The number of shares of Registrable Securities set forth in this
Section 2(a) that is required to make a Demand Registration shall be equitably
adjusted to reflect any stock dividend, stock split, share combination, or
similar change in the capitalization of the Company occurring subsequent to the
date hereof.

     (b) Limitations on Demand.  Notwithstanding the foregoing, (1) the Company
         ---------------------                                                 
shall not be obligated to file a registration statement relating to the Demand
Registration under Section 2(a) hereof (i) if counsel to the Company renders an
opinion to the Company to the effect that registration is not required for the
proposed transfer of Registrable Securities or (ii) at any time during the six
month period immediately following the effective date of another registration
statement (other than a registration statement relating to shares of Common
Stock issuable upon exercise of employee stock options or in connection with any
employee benefit or similar plan of the Company or in connection with an
acquisition by the Company of another person); and

     (2) with respect to any registration statement filed or to be filed
pursuant to Section 2(a), if the Company's Board of Directors shall determine,
in its good faith judgment, that to maintain the effectiveness of such
registration statement or to permit such registration statement to become
effective (or, if no registration statement has yet been filed, to file such a
registration statement) would be significantly disadvantageous (a
"Disadvantageous Condition") to the Company or its stockholders in light of the
existence, or in anticipation, of any acquisition or financing activity
involving the Company or the unavailability for reasons beyond the Company's
reasonable control of any required financial statements, or any other event or
condition of similar significance to the Company, the Company may, until such
Disadvantageous Condition no longer exists, cause such registration statement to
be withdrawn and the effectiveness of such registration statement to

                                       3

 
be terminated or, if no registration statement has yet been filed, elect not to
file such registration statement.

     If the Company determines to take any action pursuant to clause 2(b)(2)
above, the Company shall deliver a notice to the Demand Holders and to any other
Holders selling Registrable Securities pursuant to an effective registration
statement to such effect, and furnish to such persons a certified copy of the
resolution of the Board of Directors authorizing such action, together with a
general description of the applicable Disadvantageous Condition.  Upon the
receipt of any such notice, such persons shall forthwith discontinue use of the
prospectus contained in such registration statement and, if so directed by the
Company, shall deliver to the Company all copies of the prospectus then covering
such Registrable Securities current at the time of receipt of such notice (or,
if no registration statement has yet been filed, all drafts of the prospectus
covering such Registrable Securities).  If any Disadvantageous Condition shall
cease to exist, the Company shall promptly notify the Demand Holders (and any
other Holders who shall have ceased selling securities pursuant to an effective
registration statement as a result of such Disadvantageous Condition) to such
effect.  The Company shall, if any registration statement shall have been
withdrawn, file, at such time as it in good faith deems appropriate, a new
registration statement covering the Registrable Securities that were covered by
such withdrawn registration statement, and the effectiveness of such
registration statement shall be maintained for such time as may be necessary so
that the period of effectiveness of such new registration statement, when
aggregated with the period during which such withdrawn registration statement
was effective, shall be such time as may be otherwise required by this
Agreement.

     (c) Effective Registration; Expenses.  A registration will not count as the
         --------------------------------                                       
Demand Registration under Section 2(a) hereof until it has become effective;
provided, however, that except to the extent otherwise provided below in this
- --------  -------                                                            
Section 2(c), if the Demand Holders shall cause or request the Company to
withdraw any registration statement filed in connection with the Demand
Registration, such Holders shall nevertheless be deemed to have used their
Demand Registration under this Agreement.  Notwithstanding the foregoing and
anything in Subsection 2(a) to the contrary, at any time after the withdrawal by
the Company of any such registration statement at the request of the Demand
Holders, such Holders may request the Company to reinstate such withdrawn
registration statement, if permitted under the Act, or to file another
registration statement, in accordance with the procedures set forth in this
Section 2, whereupon the Company shall so reinstate such withdrawn registration
statement or file such other registration statement, as the case may be,
provided that such Holders agree in writing to reimburse the Company for all
Registration Expenses (as defined in Section 6 hereof) over and above those
Registration Expenses which the Company would have incurred had such Demand
Registration not been withdrawn.  The Company shall use its best efforts to
cause the registration statement relating to the Demand Registration to remain
effective for the lesser of 90 days or the time until all Registrable Securities
involved therein have been sold (the "Effective Period").  Except as provided
above, the Company will pay all Registration Expenses in connection therewith,
whether or not the Registration Statement becomes effective.

                                       4

 
     (d) Underwritten Offering; Priority on Demand Registrations.  The Company
         -------------------------------------------------------              
shall have the right to require in good faith that the offering of Registrable
Securities pursuant to the Demand Registration be in the form of an underwritten
offering.  In such event, if the managing underwriter or underwriters of such
offering in good faith advise the Company in writing that in its or their
opinion the aggregate amount of Common Stock requested to be included in such
offering would materially and adversely affect the success of such offering or
the price of the Common Stock to be offered, then the Company shall reduce the
number of shares of Common Stock to be included in such Demand Registration to
the amount of Common Stock which the Company is advised can be sold in such
offering, in the manner set forth in the next sentence.  For purposes of this
Section 2(d), the amount of Common Stock to be included in the offering shall be
determined in the following order of priority: (x) first, Registrable Securities
requested to be included in such Demand Registration, pro rata among the Holders
in proportion to the number of Registrable Securities sought to be registered by
each of the Holders, (y) second, Common Stock to be sold by the Company in such
Demand Registration, and (z) third, Common Stock requested to be included in
such Demand Registration by other stockholders of the Company exercising
"piggyback" registration rights, pro rata among such other stockholders in
proportion to the number of shares of Common Stock sought to be registered by
such other stockholders, to the extent necessary to reduce the total amount of
Common Stock to be included in such Demand Registration to the amount
recommended by such managing underwriter or underwriters.

     (e) Selection of Underwriters.  If the Demand Registration is in the form
         -------------------------                                            
of an underwritten offering, the Company shall first offer to PaineWebber
Incorporated ("PaineWebber") and/or Dillon, Read & Co. Inc. ("Dillon"), the
position of manager or managers with respect to the offering, provided that
PaineWebber and/or Dillon shall perform such services as underwriter at their or
its then customary market rates for similar underwriting services.  If within
seven days neither PaineWebber nor Dillon agree to act as manager or managers of
the offering, the Company may select any other manager or managers to administer
the offering, which manager or managers must be reasonably acceptable to the
Demand Holders.

     (f) Termination of Rights.  Notwithstanding anything to the contrary
         ---------------------                                           
contained herein, in the event of the merger or consolidation of the Company
with, or the sale or other disposition, directly or indirectly, of substantially
all of the business and assets of the Company on a consolidated basis to, an
"Unrelated Third-Party" (i.e. a party who is not an affiliate, as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended, of the
Company), all rights to demand or participate in a registration of Registrable
Securities under this Agreement shall terminate at the effective time of such
merger, consolidation or sale.

                                       5

 
     3.  Piggyback Registration.
         ---------------------- 

     Subject to the terms of this Section 3, if the Company proposes to file a
registration statement under the Act with respect to an offering of its Common
Stock, whether for its own account or for the account of any other security
holder or both (other than a registration statement (i) on Form S-4 or S-8 (or
any form substituting therefor), (ii) filed in connection with an exchange offer
or an offering of securities solely to the Company's existing stockholders or
employees, or (iii) relating to a Demand Registration under Section 2(a)
hereof), during the period commencing on the closing of the Company's IPO and
ending on the third anniversary of the closing of the Company's IPO, the Company
shall in each case give written notice of such proposed filing to each Holder at
least twenty (20) days before the anticipated filing date, and such notice shall
offer each Holder the opportunity to register such number of Registrable
Securities as it may request in writing within ten (10) days after the date of
such notice.  The Company shall use its reasonable best efforts to cause the
Registrable Securities as to which registration shall have been so requested by
a Holder to be included among the securities to be covered by the registration
statement proposed to be filed by the Company.  In the event that any
registration pursuant to this Section 3 shall be, in whole or in part, an
underwritten public offering, the Company shall use its reasonable best efforts
to cause the managing underwriter or underwriters of a proposed underwritten
offering to permit such Holders to include such securities in such offering on
the same terms and conditions as any similar securities of the Company included
therein.  Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver a written opinion to the Company to the
effect that the total amount of securities which the Holders, the Company and
any other persons or entities intend to include in such offering would
materially and adversely affect the success of such offering, then the Company
shall reduce the number of shares of Common Stock to be included in such
offering to the amount of Common Stock which the Company is so advised can be
sold in such offering, in the manner set forth in the next sentence.  For
purposes of this Section 3, the amount of Common Stock to be included in the
offering shall be determined in the following order of priority: (a) first,
Common Stock to be sold by the Company pursuant to such offering and (b) second,
Common Stock requested to be included in such registration, pro rata among the
stockholders of the Company (who have rights to include shares of Common Stock
in such registration) in proportion to the number of shares of Common Stock
sought to be registered by such stockholders, to the extent necessary to reduce
the total amount of Common Stock to be included in such offering to the amount
recommended by such managing underwriter or underwriters.

     4.   Holdback Agreements.
          ------------------- 

          (a) Restriction on Public Sale by Holder of Registrable Securities.
              --------------------------------------------------------------  
To the extent not inconsistent with applicable law, each Holder agrees not to
effect any public sale or distribution of the issue being registered or a
similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Act, during the 14 days prior to, and during the 90-day

                                       6

 
period beginning on, the effective date of any registration statement referred
to in Section 2 or Section 3 hereof (except as part of the registration).

          (b) Restrictions on Public Sale by the Company and Others.  The
              -----------------------------------------------------      
Company agrees not to effect, on its own behalf or for the benefit of any other
security holder, any public sale or distribution of any securities similar to
those being registered, or any securities convertible into or exchangeable or
exercisable for such securities (other than any such sale or distribution of
such securities in connection with (i) an exchange offer or an offering of
securities solely to the Company's existing stockholders or employees or (ii)
any merger or consolidation by the Company or any subsidiary thereof or the
acquisition by the Company or a subsidiary thereof of the capital stock or
substantially all of the assets of any other person), during the 14 days prior
to the effective date of the registration statement referred to in Section 2 or
Section 3 hereof and during the Effective Period.

     5.   Registration Procedures.
          ----------------------- 

          (a) Whenever a Holder (each a "Selling Holder") has requested that any
Registrable Securities be registered pursuant to Section 2 or 3 hereof, the
Company will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as reasonably practicable, and in connection
with any such request, the Company will as expeditiously as possible:

          (i) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities,
including all financial statements required by the Commission to be filed
therewith, and use its reasonable best efforts to cause such registration
statement to become and remain effective for the Effective Period;

          (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the Effective Period and comply with the provisions of the Act with respect to
the disposition of all Registrable Securities covered by such registration
statement;

          (iii)     furnish to each Selling Holder, prior to filing a
registration statement, copies of such registration statement as proposed to be
filed, and thereafter such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as each Selling Holder may
reasonably request in order to facilitate the disposition of such Registrable
Securities owned by each Selling Holder;

                                       7

 
          (iv) use its best efforts to register or qualify such Registrable
Securities under the state securities or blue sky laws of such jurisdictions as
the managing underwriter or underwriters shall reasonably request, and do any
and all other acts and things which may be reasonably necessary or advisable to
enable each Selling Holder to consummate the disposition in such jurisdictions
of such Registrable Securities owned by each Selling Holder; provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (iv), (B) subject itself to taxation in any such jurisdiction, or (C)
consent to general service of process in any such jurisdiction;

          (v) use its reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable each Selling
Holder to consummate the disposition of such Registrable Securities;

          (vi) notify each Selling Holder at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, and the company will prepare a supplement or amendment to such
prospectus as soon as reasonably practicable thereafter so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;

          (vii)     enter into and perform customary agreements (including,
without limitation, an underwriting agreement containing customary
representations, underwriters compensation and indemnity and other customary
terms and conditions) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;

          (viii)    make available for inspection by each Selling Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by a Selling
Holder or any such underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties and
other pertinent information of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all pertinent information reasonably requested by any such Inspector in
connection with such registration statement.  Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (A)
the disclosure of such Records is necessary to avoid or correct a

                                       8

 
misstatement or omission in the registration statement, (B) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (C) the information in such Records has been made
generally available to the public.  The seller of Registrable Securities agrees
that it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent disclosure of
the Records deemed confidential;

          (ix) in the event such sale is pursuant to an underwritten offering,
use its reasonable best efforts to obtain a "cold comfort" letter from the
Company's independent certified public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as the managing underwriter reasonably requests;

          (x) use its reasonable best efforts to obtain an opinion or opinions
from counsel for the Company in customary form addressed to the managing
underwriter or underwriters, if any;

          (xi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the end
of the fiscal quarter in which the registration statement becomes effective,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Act; and

          (xii)     use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange, if any, on
which similar securities issues by the Company are then listed, provided that
the applicable listing requirements are satisfied.

          (b) The Company may require each Selling Holder to furnish to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request.

          (c) Each Selling Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5(a)(vi) hereof, it will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until its receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(a)(vi) hereof, and, if so directed by the
Company, each Selling Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.  In the event the Company shall give any
such notice, the Company shall use its reasonable best efforts to extend the
period during which such registration

                                       9

 
statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and excluding the date of the giving of such
notice pursuant to Section 5(a)(vi) hereof to and including the date when such
Selling Holder shall have received the copies of the supplemented or amended
prospectus contemplated by Section 5(a)(vi) hereof.

     6.   Registration Expenses.
          --------------------- 

          Except as set forth in Section 2(c) hereof, all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all  registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), rating agency fees, printing expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the fees and
expenses incurred in connection with the listing of the securities to be
registered on each securities exchange on which such securities are required to
be listed, and fees and disbursement of counsel for the Company and its
independent certified public accountants (including "cold comfort" letters
required by or incident to such performance), securities acts liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, and fees and expenses of other persons retained by the
Company (all such expenses being herein called "Registration Expenses"), but
excluding any underwriting discounts or commissions attributable to the sale of
Registrable Securities, will be borne by the Company; provided, however, that in
connection with the registration or qualification of the Registrable Securities
under state securities laws, nothing herein shall be deemed to require the
Company to make any payments to third parties in order to obtain "lock-up,"
escrow or other extraordinary agreements.  Each Selling Holder shall pay the
fees and expenses of its own counsel, underwriting discounts and commissions
attributable to the sale of the Registrable Securities, and its other expenses.

     7.   Indemnification; Contribution.
          ----------------------------- 

          (a) Indemnification by the Company.  The Company shall agree to
              ------------------------------                             
indemnify, to the full extent permitted by law, each Holder, its officers,
directors and agents and each person who controls such Holder (within the
meaning of the Act), and any investment adviser thereof or agent therefor,
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees) caused by any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein (in the case of a prospectus, in the light of the circumstances
under which they were made) not misleading, except insofar as the same are
caused by or contained in any information with respect to such Holder furnished
in writing to the Company by such Holder for use therein or caused by such

                                       10

 
Holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto in accordance with the requirements of
the Act after the Company has furnished such Holder with a copy of the same.  If
requested by the underwriters of the Registrable Securities, the Company will
also indemnify such underwriters, their officers and directors and each person
who controls such underwriters (within the meaning of the Act) to the same
extent as provided above with respect to the indemnification of the Holders.

          (b) Indemnification by the Selling Holders.  In connection with any
              --------------------------------------                         
registration statement in which a Selling Holder is participating, the Selling
Holder will furnish to the Company in writing such information and affidavits
with respect to such Holder as the Company reasonably requests for use in
connection with any such registration statement or prospectus and shall
indemnify, to the full extent permitted by law, the Company, its directors and
officers and each person who controls the Company (within the meaning of the
Act) against any losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees) resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto, or necessary to make the statements
therein (in the case of a prospectus, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is caused by or contained in any
information or affidavit with respect to such Holder or the shares or its
investment therein furnished in writing by such Holder, or caused by such
Holder's failure to deliver a copy of the prospectus or any amendments or
supplements thereto in accordance with the requirements of the Act after the
Company has furnished such Holder with a copy of the same.

          (c) Conduct of Indemnification Proceedings.  Any person entitled to
              --------------------------------------                         
indemnification hereunder shall give prompt written notice to the indemnifying
party after the receipt by such person of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which such person may claim indemnification or contribution pursuant
to this Agreement and, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to such
indemnified party.  If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
reasonable judgment of counsel for such indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.  The indemnifying party will not be subject to any liability for
any settlement made without its consent.

                                       11

 
          (d) Contribution.  If the indemnification provided for in this Section
              ------------                                                      
7 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.  The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 7(c) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

          If indemnification is available under this Section 7, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 7(a) and (b) hereof without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 7(d).

     8.   Participation in Underwritten Registrations.
          ------------------------------------------- 

          A Selling Holder may not participate in any registration hereunder
unless such Holder (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements, and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.

     9.   Miscellaneous.
          ------------- 

          (a) Amendments and Waivers.  Except as otherwise provided herein, the
              ----------------------                                           
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
without the written consent of the Company and Holders holding in the aggregate
at least 66% of the outstanding Registrable Securities.

                                       12

 
          (b) Notices.  Any notice or other communications required or permitted
              -------                                                           
hereunder shall be validly given, made or served, when delivered personally or
by telecopier (except for legal process), or upon receipt by the party entitled
to receive the notice when sent by registered or certified mail, postage
prepaid, or by a recognized overnight delivery service, addressed as follows or
to such other address or addresses or telecopier number as may hereafter be
furnished to the Company in writing by notice similarly given by one party to
the other parties hereto:

          To the Company:        MIM Corporation
                                 One Blue Hill Plaza
                                 Pearl River, New York  10965
                                 Telecopier No.: (914) 735-3599
                                 Attn: Chief Financial Officer and Secretary

          To E. David Corvese
          or MIM Holdings, LLC:  c/o MIM Corporation
                                 25 North Road
                                 Peace Dale, Rhode Island  02883
                                 Telecopier No.: (401) 783-3520
   
          To John H. Klein or
          Richard H. Friedman:   c/o MIM Corporation
                                 One Blue Hill Plaza
                                 Pearl River, New York  10965
                                 Telecopier No.: (914) 735-3599

          To Leslie B. Daniels:  c/o CAI Advisors & Co.
                                 767 Fifth Avenue
                                 New York, New York  10153
                                 Telecopier No.: (212) 319-0232


Notice given by telecopier shall be deemed delivered on the day the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee.  Notice given by mail as set out above shall be deemed
received three days after the date the same is postmarked, except that such
notice given by a recognized overnight delivery service as set forth above shall
be deemed received on the business day following the date the same is sent.

          (c) Successors and Assigns.  This Agreement, and all covenants and
              ----------------------                                        
agreements contained in this Agreement by or on behalf of any of the parties
hereto, shall bind and inure to the benefit of the respective successors and
permitted assigns of the parties hereto (including, without limitation,
transferees of any Restricted Securities) whether so expressed or not; provided,
                                                                       -------- 
however, that registration rights conferred herein on the Holders shall only
- -------                                                                     
inure to the benefit of a transferee of a Holder's Restricted Securities if (i)
the transfer is made pursuant to the laws of testamentary or intestate descent,
(ii) the transfer is

                                       13

 
made as a bona fide gift or (iii) with respect to a transferee of Holdings, the
transfer is made pursuant to a distribution to the members of Holdings,
provided, that in each of the foregoing cases, as a condition to such transfer,
such transferee shall deliver to the Company a written instrument by which it
agrees to be bound by the obligations imposed upon the Holders under this
Agreement.  Except as otherwise provided above, this Agreement shall not be
assignable by a Holder, by operation of law or otherwise, without the prior
written consent of the Company.

          (d) Headings.  The headings in this Agreement are for convenience of
              --------                                                        
reference only and shall not limit or otherwise affect the meaning hereof.

          (e) Severability.  In the event that any one or more of the provisions
              ------------                                                      
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.

          (f) Entire Agreement.  The rights granted to each of the Holders
              ----------------                                            
hereunder are in addition to the rights a Holder may have pursuant to a
Registration Rights Agreement dated the date hereof among the Company, Klein,
Friedman and Daniels, and a Registration Rights Agreement dated the date hereof
among the Company, Corvese and Klein.  With respect to the Company and each
Holder individually, this Agreement, together with the other Registration Rights
Agreements referred to above, is intended by such parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of such parties in respect of the subject matter
contained herein and therein.  There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein and therein.

          (g) Counterparts.  This Agreement may be executed in one or more
              ------------                                                
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

          (h) Governing Law.  This Agreement shall be governed by and construed
              -------------                                                    
in accordance with the internal laws of the State of Delaware applicable to
contracts made and to be performed wholly therein without regard to principles
of conflict of laws.

                                       14

 
          IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.

                                    MIM Corporation


                                    By: /s/ Richard H. Friedman
                                        ----------------------------------


                                    /s/ E. David Corvese
                                    --------------------------------------
                                    E. David Corvese


                                    /s/ John H. Klein
                                    --------------------------------------
                                    John H. Klein


                                    /s/ Richard H. Friedman
                                    --------------------------------------
                                    Richard H. Friedman


                                    /s/ Leslie B. Daniels
                                    --------------------------------------
                                    Leslie B. Daniels



                                    MIM Holdings, LLC


                                    By: /s/ E. David Corvese
                                        ----------------------------------


 

                                       15


 
                                                                   EXHIBIT 10.31


                       REGISTRATION RIGHTS AGREEMENT - II
                       ----------------------------------

     THIS REGISTRATION RIGHTS AGREEMENT - II (the "Agreement") is made and
entered into on July 29, 1996 by and among MIM Corporation, a Delaware
corporation (the "Company"), John H. Klein ("Klein"), Richard H. Friedman
("Friedman") and Leslie B. Daniels ("Daniels").

                                    RECITALS
                                    --------

     1.  In order to induce Klein, Friedman and Daniels to combine their
experience, know-how, extensive relationships within the generic drug industry,
and strategic plans relating to the generic drug industry, as well as contracts
under negotiation relating to the drug distribution business, with that of the
Company, E. David Corvese ("Corvese") has, pursuant to Stock Option Agreements
dated as of May 30, 1996, as amended on the date hereof, granted to Klein,
Friedman and Daniels options to purchase up to an aggregate of 5,460,000 of his
shares of common stock, par value $.0001 per share, of the Company ("Common
Stock").

     2.  In order to induce Corvese to enter into such Stock Option Agreements
and in order to further induce Klein, Friedman and Daniels to so combine their
knowledge and above-mentioned assets relating to the generic drug industry with
that of the Company, the Company has agreed to provide registration rights with
respect to its Common Stock.


     The parties hereby agree as follows:

     1.   Definitions.
          ----------- 

          (a) The term "Holders" means, collectively, any and all persons who
hold or have the right to acquire Registrable Securities.

          (b) The term "Daniels Option Shares" means the shares of Common Stock
that Daniels has the option to purchase pursuant to the Daniels Option
Agreement.

          (c) The term "Daniels Option Agreement" means the Stock Option
Agreement dated as of May 30, 1996 between Daniels and Corvese, whereby Daniels
has the option to purchase from Corvese up to 300,000 shares of Common Stock.

          (d) The term "Klein Option Shares" means the shares of Common Stock
that Klein has the option to purchase pursuant to the Klein Option Agreement.

          (e) The term "Klein Option Agreement" means the Stock Option Agreement
dated as of May 30, 1996 between Klein and Corvese, whereby Klein has the option
to purchase from Corvese up to 1,800,000 shares of Common Stock.

 
          (f) The term "Friedman Option Shares" means the shares of Common Stock
that Friedman has the option to purchase pursuant to the Friedman Option
Agreement.

          (g) The term "Friedman Option Agreement" means the Stock Option
Agreement dated as of May 30, 1996 between Friedman and Corvese, whereby
Friedman has the option to purchase from Corvese up to 1,500,000 shares of
Common Stock.

          (h) The term "Registrable Securities" means any and all of the
following:  (1) the Daniels Option Shares, (2) the Klein Option Shares, (3) the
Friedman Option Shares, and (4) any other securities issued in exchange for or
as dividends or other distributions on, or by way of a split of, any of the
foregoing Shares; provided, however, that Registrable Securities will cease to
                  --------  -------                                           
be Registrable Securities when (i) a registration statement filed pursuant to
the Securities Act of 1933, as amended (the "Act"), covering such Registrable
Securities has been declared effective and they have been disposed of pursuant
to such effective registration statement, (ii) they are distributed to the
public pursuant to Rule 144 (or any similar provision then in force) under the
Act, (iii) they are eligible to be sold pursuant to Rule 144(k) under the Act
without limitation as to the amount of securities to be sold or as to the manner
of sale, or (iv) they have been otherwise transferred and the Company has
delivered new certificates or other evidences of ownership for them not subject
to any legal or other restriction on transfer.

     2.   Demand Registration.
          ------------------- 

          (a) Request for Registration.  Subject to the terms of this Section 2,
              ------------------------                                          
at any time after the first anniversary of the closing of the Company's initial
public offering of equity securities under the Act ("IPO") and ending on the
tenth anniversary of the closing of the Company's IPO, the Holders holding in
the aggregate at least 1,900,000 shares of the then outstanding Registrable
Securities (the "Demand Holders") may make a written request for registration
under the Act of all or part of their Registrable Securities, which request
shall state that the demand registration is pursuant to this Agreement (i.e.
Registration Rights Agreement - II) and shall specify the number of shares of
Registrable Securities to be included in the registration (a "Demand
Registration"); provided, however, that the Company shall not be required to
                --------  -------                                           
effect more than one (1) Demand Registration under this Agreement.  Within five
(5) business days after receipt of such request from the Demand Holders for the
Demand Registration, the Company shall give written notice (the "Demand
Registration Notice") of such request to all Holders, and thereupon the Company
shall include in such Demand Registration all Registrable Securities with
respect to which the Company receives written requests for inclusion therein
within fifteen (15) business days after the date of the Demand Registration
Notice.  The number of shares of Registrable Securities set forth in this
Section 2(a) that is required to make a Demand Registration shall be equitably
adjusted to reflect any stock dividend, stock split, share combination, or
similar change in the capitalization of the Company occurring subsequent to the
date hereof.

                                       2

 
          (b) Limitations on Demand.  Notwithstanding the foregoing, (1) the
              ---------------------                                         
Company shall not be obligated to file a registration statement relating to the
Demand Registration under Section 2(a) hereof (i) if counsel to the Company
renders an opinion to the Company to the effect that registration is not
required for the proposed transfer of Registrable Securities or (ii) at any time
during the six month period immediately following the effective date of another
registration statement (other than a registration statement relating to shares
of Common Stock issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company or in
connection with an acquisition by the Company of another person); and

          (2) with respect to any registration statement filed or to be filed
pursuant to Section 2(a), if the Company's Board of Directors shall determine,
in its good faith judgment, that to maintain the effectiveness of such
registration statement or to permit such registration statement to become
effective (or, if no registration statement has yet been filed, to file such a
registration statement) would be significantly disadvantageous (a
"Disadvantageous Condition") to the Company or its stockholders in light of the
existence, or in anticipation, of any acquisition or financing activity
involving the Company or the unavailability for reasons beyond the Company's
reasonable control of any required financial statements, or any other event or
condition of similar significance to the Company, the Company may, until such
Disadvantageous Condition no longer exists, cause such registration statement to
be withdrawn and the effectiveness of such registration statement to be
terminated or, if no registration statement has yet been filed, elect not to
file such registration statement.

     If the Company determines to take any action pursuant to clause 2(b)(2)
above, the Company shall deliver a notice to the Demand Holders and to any other
Holders selling Registrable Securities pursuant to an effective registration
statement to such effect, and furnish to such persons a certified copy of the
resolution of the Board of Directors authorizing such action, together with a
general description of the applicable Disadvantageous Condition.  Upon the
receipt of any such notice, such persons shall forthwith discontinue use of the
prospectus contained in such registration statement and, if so directed by the
Company, shall deliver to the Company all copies of the prospectus then covering
such Registrable Securities current at the time of receipt of such notice (or,
if no registration statement has yet been filed, all drafts of the prospectus
covering such Registrable Securities).  If any Disadvantageous Condition shall
cease to exist, the Company shall promptly notify the Demand Holders (and any
other Holders who shall have ceased selling securities pursuant to an effective
registration statement as a result of such Disadvantageous Condition) to such
effect.  The Company shall, if any registration statement shall have been
withdrawn, file, at such time as it in good faith deems appropriate, a new
registration statement covering the Registrable Securities that were covered by
such withdrawn registration statement, and the effectiveness of such
registration statement shall be maintained for such time as may be necessary so
that the period of effectiveness of such new registration statement, when
aggregated with the period during which such withdrawn registration statement
was effective, shall be such time as may be otherwise required by this
Agreement.

                                       3

 
          (c) Effective Registration; Expenses.  A registration will not count
              --------------------------------                                
as the Demand Registration under Section 2(a) hereof until it has become
effective; provided, however, that except to the extent otherwise provided below
           --------  -------                                                    
in this Section 2(c), if the Demand Holders shall cause or request the Company
to withdraw any registration statement filed in connection with the Demand
Registration, such Holders shall nevertheless be deemed to have used their
Demand Registration under this Agreement.  Notwithstanding the foregoing and
anything in Subsection 2(a) to the contrary, at any time after the withdrawal by
the Company of any such registration statement at the request of the Demand
Holders, such Holders may request the Company to reinstate such withdrawn
registration statement, if permitted under the Act, or to file another
registration statement, in accordance with the procedures set forth in this
Section 2, whereupon the Company shall so reinstate such withdrawn registration
statement or file such other registration statement, as the case may be,
provided that such Holders agree in writing to reimburse the Company for all
Registration Expenses (as defined in Section 5 hereof) over and above those
Registration Expenses which the Company would have incurred had such Demand
Registration not been withdrawn.  The Company shall use its best efforts to
cause the registration statement relating to the Demand Registration to remain
effective for the lesser of 90 days or the time until all Registrable Securities
involved therein have been sold (the "Effective Period").  Except as provided
above, the Company will pay all Registration Expenses in connection therewith,
whether or not the Registration Statement becomes effective.

          (d) Underwritten Offering; Priority on Demand Registrations.  The
              -------------------------------------------------------      
Company shall have the right to require in good faith that the offering of
Registrable Securities pursuant to the Demand Registration be in the form of an
underwritten offering. In such event, if the managing underwriter or
underwriters of such offering in good faith advise the Company in writing that
in its or their opinion the aggregate amount of Common Stock requested to be
included in such offering would materially and adversely affect the success of
such offering or the price of the Common Stock to be offered, then the Company
shall reduce the number of shares of Common Stock to be included in such Demand
Registration to the amount of Common Stock which the Company is advised can be
sold in such offering, in the manner set forth in the next sentence.  For
purposes of this Section 2(d), the amount of Common Stock to be included in the
offering shall be determined in the following order of priority: (x) first,
Registrable Securities requested to be included in such Demand Registration, pro
rata among the Holders in proportion to the number of Registrable Securities
sought to be registered by each of the Holders, (y) second, Common Stock to be
sold by the Company in such Demand Registration, and (z) third, Common Stock
requested to be included in such Demand Registration by other stockholders of
the Company exercising "piggyback" registration rights, pro rata among such
other stockholders in proportion to the number of shares of Common Stock sought
to be registered by such other stockholders, to the extent necessary to reduce
the total amount of Common Stock to be included in such Demand Registration to
the amount recommended by such managing underwriter or underwriters.

                                       4

 
          (e) Selection of Underwriters.  If the Demand Registration is in the
              -------------------------                                       
form of an underwritten offering, the Company shall first offer to PaineWebber
Incorporated ("PaineWebber") and/or Dillon, Read & Co. Inc. ("Dillon"), the
position of manager or managers with respect to the offering, provided that
PaineWebber and/or Dillon shall perform such services as underwriter at their or
its then customary market rates for similar underwriting services.  If within
seven days neither PaineWebber nor Dillon agree to act as manager or managers of
the offering, the Company may select any other manager or managers to administer
the offering, which manager or managers must be reasonably acceptable to the
Demand Holders.

          (f) Termination of Rights.  Notwithstanding anything to the contrary
              ---------------------                                           
contained herein, in the event of the merger or consolidation of the Company
with, or the sale or other disposition, directly or indirectly, of substantially
all of the business and assets of the Company on a consolidated basis to, an
"Unrelated Third-Party" (i.e. a party who is not an affiliate, as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended, of the
Company), and all rights to demand or participate in a registration of
Registrable Securities under this Agreement shall terminate at the effective
time of such merger, consolidation or sale.

     3.   Holdback Agreements.
          ------------------- 

          (a) Restriction on Public Sale by Holder of Registerable Securities.
              ---------------------------------------------------------------  
To the extent not inconsistent with applicable law, each Holder agrees not to
effect any public sale or distribution of the issue being registered or a
similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Act, during the 14 days prior to, and during the 90-day
period beginning on, the effective date of any registration statement referred
to in Section 2 hereof (except as part of the registration).

          (b) Restrictions on Public Sale by the Company and Others.  The
              -----------------------------------------------------      
Company agrees not to effect, on its own behalf or for the benefit of any other
security holder, any public sale or distribution of any securities similar to
those being registered, or any securities convertible into or exchangeable or
exercisable for such securities (other than any such sale or distribution of
such securities in connection with (i) an exchange offer or an offering of
securities solely to the Company's existing stockholders or employees or (ii)
any merger or consolidation by the Company or any subsidiary thereof or the
acquisition by the Company or a subsidiary thereof of the capital stock or
substantially all of the assets of any other person), during the 14 days prior
to the effective date of the registration statement referred to in Section 2
hereof and during the Effective Period.

                                       5

 
     4.   Registration Procedures.
          ----------------------- 

          (a) Whenever a Holder (each a "Selling Holder") has requested that any
Registrable Securities be registered pursuant to Section 2 hereof, the Company
will use its reasonable best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as reasonably practicable, and in connection
with any such request, the Company will as expeditiously as possible:

          (i) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities,
including all financial statements required by the Commission to be filed
therewith, and use its reasonable best efforts to cause such registration
statement to become and remain effective for the Effective Period;

          (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the Effective Period and comply with the provisions of the Act with respect to
the disposition of all Registrable Securities covered by such registration
statement;

          (iii) furnish to each Selling Holder, prior to filing a
registration statement, copies of such registration statement as proposed to be
filed, and thereafter such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as each Selling Holder may
reasonably request in order to facilitate the disposition of such Registrable
Securities owned by each Selling Holder;

          (iv) use its best efforts to register or qualify such Registrable
Securities under the state securities or blue sky laws of such jurisdictions as
the managing underwriter or underwriters shall reasonably request, and do any
and all other acts and things which may be reasonably necessary or advisable to
enable each Selling Holder to consummate the disposition in such jurisdictions
of such Registrable Securities owned by each Selling Holder; provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (iv), (B) subject itself to taxation in any such jurisdiction, or (C)
consent to general service of process in any such jurisdiction;

          (v) use its reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable each Selling
Holder to consummate the disposition of such Registrable Securities;

                                       6

 
          (vi) notify each Selling Holder at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, and the company will prepare a supplement or amendment to such
prospectus as soon as reasonably practicable thereafter so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;

          (vii) enter into and perform customary agreements (including,
without limitation, an underwriting agreement containing customary
representations, underwriters compensation and indemnity and other customary
terms and conditions) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;

          (viii) make available for inspection by each Selling Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by a Selling
Holder or any such underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties and
other pertinent information of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all pertinent information reasonably requested by any such Inspector in
connection with such registration statement.  Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (A)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement, (B) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (C) the information in such Records has been made generally
available to the public.  The seller of Registrable Securities agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;

          (ix) in the event such sale is pursuant to an underwritten offering,
use its reasonable best efforts to obtain a "cold comfort" letter from the
Company's independent certified public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as the managing underwriter reasonably requests;

                                       7

 
          (x) use its reasonable best efforts to obtain an opinion or opinions
from counsel for the Company in customary form addressed to the managing
underwriter or underwriters, if any;

          (xi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the end
of the fiscal quarter in which the registration statement becomes effective,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Act; and

          (xii) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange, if any, on
which similar securities issues by the Company are then listed, provided that
the applicable listing requirements are satisfied.

          (b) The Company may require each Selling Holder to furnish to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request.

          (c) Each Selling Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
4(a)(vi) hereof, it will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until its receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4(a)(vi) hereof, and, if so directed by the
Company, each Selling Stockholder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Stockholder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.  In the event the Company shall give any
such notice, the Company shall use its reasonable best efforts to extend the
period during which such registration statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
excluding the date of the giving of such notice pursuant to Section 4(a)(vi)
hereof to and including the date when such Selling Holder shall have received
the copies of the supplemented or amended prospectus contemplated by Section
4(a)(vi) hereof.

     5.   Registration Expenses.
          --------------------- 

          Except as set forth in Section 2(c) hereof, all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all  registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), rating agency fees, printing expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and

                                       8

 
employees performing legal or accounting duties), the fees and expenses incurred
in connection with the listing of the securities to be registered on each
securities exchange on which such securities are required to be listed, and fees
and disbursement of counsel for the Company and its independent certified public
accountants (including "cold comfort" letters required by or incident to such
performance), securities acts liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, and fees and
expenses of other persons retained by the Company (all such expenses being
herein called "Registration Expenses"), but excluding any underwriting discounts
or commissions attributable to the sale of Registrable Securities, will be borne
by the Company; provided, however, that in connection with the registration or
qualification of the Registrable Securities under state securities laws, nothing
herein shall be deemed to require the Company to make any payments to third
parties in order to obtain "lock-up," escrow or other extraordinary agreements.
Each Selling Holder shall pay the fees and expenses of its own counsel,
underwriting discounts and commissions attributable to the sale of the
Registrable Securities, and its other expenses.

     6.   Indemnification; Contribution.
          ----------------------------- 

          (a) Indemnification by the Company.  The Company shall agree to
              ------------------------------                             
indemnify, to the full extent permitted by law, each Holder, its officers,
directors and agents and each person who controls such Holder (within the
meaning of the Act), and any investment adviser thereof or agent therefor,
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees) caused by any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein (in the case of a prospectus, in the light of the circumstances
under which they were made) not misleading, except insofar as the same are
caused by or contained in any information with respect to such Holder furnished
in writing to the Company by such Holder for use therein or caused by such
Holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto in accordance with the requirements of
the Act after the Company has furnished such Holder with a copy of the same.  If
requested by the underwriters of the Registrable Securities, the Company will
also indemnify such underwriters, their officers and directors and each person
who controls such underwriters (within the meaning of the Act) to the same
extent as provided above with respect to the indemnification of the Holders.

          (b) Indemnification by the Selling Holders.  In connection with any
              --------------------------------------                         
registration statement in which a Selling Holder is participating, the Selling
Holder will furnish to the Company in writing such information and affidavits
with respect to such Holder as the Company reasonably requests for use in
connection with any such registration statement or prospectus and shall
indemnify, to the full extent permitted by law, the Company, its directors and
officers and each person who controls the Company (within the

                                       9

 
meaning of the Act) against any losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees) resulting from any untrue or
alleged untrue statement of a material fact or any omission or alleged omission
of a material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto, or necessary to make
the statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is caused by or
contained in any information or affidavit with respect to such Holder or the
shares or its investment therein furnished in writing by such Holder, or caused
by such Holder's failure to deliver a copy of the prospectus or any amendments
or supplements thereto in accordance with the requirements of the Act after the
Company has furnished such Holder with a copy of the same.

          (c) Conduct of Indemnification Proceedings.  Any person entitled to
              --------------------------------------                         
indemnification hereunder shall give prompt written notice to the indemnifying
party after the receipt by such person of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which such person may claim indemnification or contribution pursuant
to this Agreement and, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to such
indemnified party.  If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
reasonable judgment of counsel for such indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.  The indemnifying party will not be subject to any liability for
any settlement made without its consent.

          (d) Contribution.  If the indemnification provided for in this Section
              ------------                                                      
6 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.  The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred

                                       10

 
to above shall be deemed to include, subject to the limitations set forth in
Section 6(c) hereof, any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

          If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 6(a) and (b) hereof without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 6(d).

     7.   Participation in Underwritten Registrations.
          ------------------------------------------- 

          A Selling Holder may not participate in any registration hereunder
unless such Holder (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements, and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.

     8.   Miscellaneous.
          ------------- 

          (a) Amendments and Waivers.  Except as otherwise provided herein, the
              ----------------------                                           
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
without the written consent of the Company and Holders holding in the aggregate
at least 1,900,000 of the outstanding Registrable Securities.

          (b) Notices.  Any notice or other communications required or permitted
              -------                                                           
hereunder shall be validly given, made or served, when delivered personally or
by telecopier (except for legal process), or upon receipt by the party entitled
to receive the notice when sent by registered or certified mail, postage
prepaid, or by a recognized overnight delivery service, addressed as follows or
to such other address or addresses or telecopier number as may hereafter be
furnished to the Company in writing by notice similarly given by one party to
the other parties hereto:

          To the Company:       MIM Corporation
                                One Blue Hill Plaza
                                Pearl River, New York  10965
                                Telecopier No.: (914) 735-3599
                                Attn: Chief Financial Officer and Secretary

                                       11

 
          To John H. Klein or
          Richard H. Friedman:  c/o MIM Corporation
                                One Blue Hill Plaza
                                Pearl River, New York  10965
                                Telecopier No.: (914) 735-3599

          To Leslie B. Daniels: c/o CAI Advisors & Co.
                                767 Fifth Avenue
                                New York, New York  10153
                                Telecopier No.: (212) 319-0232


Notice given by telecopier shall be deemed delivered on the day the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee.  Notice given by mail as set out above shall be deemed
received three days after the date the same is postmarked, except that such
notice given by a recognized overnight delivery service as set forth above shall
be deemed received on the business day following the date the same is sent.

          (c) Successors and Assigns.  This Agreement, and all covenants and
              ----------------------                                        
agreements contained in this Agreement by or on behalf of any of the parties
hereto, shall bind and inure to the benefit of the respective successors and
permitted assigns of the parties hereto (including, without limitation,
transferees of any Restricted Securities) whether so expressed or not; provided,
                                                                       -------- 
however, that registration rights conferred herein on the Holders shall only
- -------                                                                     
inure to the benefit of a transferee of a Holder's Restricted Securities if (i)
the transfer is made pursuant to the laws of testamentary or intestate descent
or (ii) the transfer is made as a bona fide gift, provided, that in each of the
foregoing cases, as a condition to such transfer, such transferee shall deliver
to the Company a written instrument by which it agrees to be bound by the
obligations imposed upon the Holders under this Agreement.  Except as otherwise
provided above, this Agreement shall not be assignable by a Holder, by operation
of law or otherwise, without the prior written consent of the Company.

          (d) Headings.  The headings in this Agreement are for convenience of
              --------                                                        
reference only and shall not limit or otherwise affect the meaning hereof.

          (e) Severability.  In the event that any one or more of the provisions
              ------------                                                      
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.

                                       12

 
          (f) Entire Agreement.  The rights granted to each of the Holders
              ----------------                                            
hereunder are in addition to the rights a Holder may have pursuant to a
Registration Rights Agreement dated the date hereof among the Company, Klein,
Friedman, Daniels, Corvese and MIM Holdings, LLC, and a Registration Rights
Agreement dated the date hereof among the Company, Corvese and Klein.  With
respect to the Company and each Restricted Holder individually, this Agreement,
together with the other Registration Rights Agreements referred to above, is
intended by such parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
such parties in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein.

          (g) Counterparts.  This Agreement may be executed in one or more
              ------------                                                
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

          (h) Governing Law.  This Agreement shall be governed by and construed
              -------------                                                    
in accordance with the internal laws of the State of Delaware applicable to
contracts made and to be performed wholly therein without regard to principles
of conflict of laws.

          IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.

                                    MIM Corporation

                                    By: /s/ Richard H. Friedman
                                        --------------------------------------


                                    /s / John H. Klein
                                    ------------------------------------------
                                    John H. Klein


                                    /s/ Richard H. Friedman
                                    ------------------------------------------
                                    Richard H. Friedman


                                    /s/ Leslie B. Daniels
                                    ------------------------------------------
                                    Leslie B. Daniels

                                       13


 
                                                                   EXHIBIT 10.32


                      REGISTRATION RIGHTS AGREEMENT - III
                      -----------------------------------


     THIS REGISTRATION RIGHTS AGREEMENT - III (the "Agreement") is made and
entered into on July 29, 1996 by and among MIM Corporation, a Delaware
corporation (the "Company"), E. David Corvese  ("Corvese") and John H. Klein
("Klein").

                                    RECITALS
                                    --------

     1.  In order to induce Klein to combine his experience, know-how, extensive
relationships within the generic drug industry, and strategic plans relating to
the generic drug industry, as well as contracts under negotiation relating to
the drug distribution business, with that of the Company, Corvese has, pursuant
to a Stock Option Agreement dated as of May 30, 1996, as amended on the date
hereof, granted to Klein, an option to purchase up to 1,860,00 of his shares of
common stock, par value $.0001 per share, of the Company ("Common Stock").
Pursuant to the terms of a Repurchase Agreement dated as of May 30, 1996, as
amended on the date hereof, Klein has given Corvese the right to repurchase
certain shares of Common Stock issued upon exercise of Klein's option commencing
seven months after the occurrence of certain events.

     2.  In order to induce Corvese to enter into such Stock Option Agreement
and in order to further induce Klein to so combine his knowledge and above-
mentioned assets relating to the generic drug industry with that of the Company,
the Company has agreed to provide registration rights with respect to its Common
Stock.


     The parties hereby agree as follows:

     1.                      Definitions.
                             ----------- 

          (a) The term "Holders" means, collectively, any and all persons who
hold or have the right to acquire Registrable Securities.

          (b) The term "Corvese Option Shares" means the shares of Common Stock
that Corvese, upon the occurrence of certain events, has the option to purchase
pursuant to the Repurchase Agreement.

          (c) The term "Corvese Shares" means 1,860,000 shares of Common Stock
currently held by Corvese, except that such term shall not include any shares
while and to the extent they remain subject to the terms of the Klein Option
Agreement.

          (d) The term "Klein Option Shares" means the shares of Common Stock
that Klein has the option to purchase pursuant to the Klein Option Agreement,
except

 
that such term shall not include any shares while and to the extent they are or
may be subject to repurchase under the terms of the Repurchase Agreement.

          (e) The term "Klein Option Agreement" means the Stock Option Agreement
dated as of May 30, 1996 between Klein and Corvese, whereby Klein has the option
to purchase from Corvese up to 1,860,000 shares of Common Stock.

          (f) The term "Repurchase Agreement" means the Repurchase Agreement
dated as of May 30, 1996 between Klein and Corvese, whereby Corvese will have
the option to repurchase from Klein up to 1,860,000 shares of Common Stock upon
the occurrence of certain events.

          (g) The term "Registrable Securities" means any and all of the
following:  (1) the Corvese Shares, (2) the Corvese Option Shares, (3) the Klein
Option Shares, and (4) any other securities issued in exchange for or as
dividends or other distributions on, or by way of a split of, any of the
foregoing Shares; provided, however, that Registrable Securities will cease to
                  --------  -------                                           
be Registrable Securities when (i) a registration statement filed pursuant to
the Securities Act of 1933, as amended (the "Act"), covering such  Registrable
Securities has been declared effective and they have been disposed of pursuant
to such effective registration statement, (ii) they are distributed to the
public pursuant to Rule 144 (or any similar provision then in force) under the
Act, (iii) they are eligible to be sold pursuant to Rule 144(k) under the Act
without limitation as to the amount of securities to be sold or as to the manner
of sale, or (iv) they have been otherwise transferred and the Company has
delivered new certificates or other evidences of ownership for them not subject
to any legal or other restriction on transfer.

     2.                  Demand Registration.
                         ------------------- 

          (a) Request for Registration.  Subject to the terms of this Section 2,
              ------------------------                                          
at any time after the first anniversary of the closing of the Company's initial
public offering of equity securities under the Act ("IPO") and ending on the
eighth anniversary of the closing of the Company's IPO, the Holders holding in
the aggregate at least 940,000 shares of the then outstanding Registrable
Securities (the "Demand Holders") may make a written request for registration
under the Act of all or part of their Registrable Securities, which request
shall state that the demand registration is pursuant to this Agreement (i.e.
Registration Rights Agreement - III) and shall specify the number of shares of
Registrable Securities to be included in the registration (a "Demand
Registration"); provided, however, that the Company shall not be required to
                --------  -------                                           
effect more than one (1) Demand Registration under this Agreement.  Within five
(5) business days after receipt of such request from the Demand Holders for the
Demand Registration, the Company shall give written notice (the "Demand
Registration Notice") of such request to all Holders, and thereupon the Company
shall include in such Demand Registration all Registrable Securities with
respect to which the Company receives written requests for inclusion therein
within fifteen (15) business days after the date of the Demand Registration
Notice.  The number of shares of Registrable Securities set forth in this

                                       2

 
Section 2(a) that is required to make a Demand Registration shall be equitably
adjusted to reflect any stock dividend, stock split, share combination, or
similar change in the capitalization of the Company occurring subsequent to the
date hereof.

          (b) Limitations on Demand.  Notwithstanding the foregoing, (1) the
              ---------------------                                         
Company shall not be obligated to file a registration statement relating to the
Demand Registration under Section 2(a) hereof (i) if counsel to the Company
renders an opinion to the Company to the effect that registration is not
required for the proposed transfer of Registrable Securities or (ii) at any time
during the six month period immediately following the effective date of another
registration statement (other than a registration statement relating to shares
of Common Stock issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company or in
connection with an acquisition by the Company of another person); and

          (2) with respect to any registration statement filed or to be filed
pursuant to Section 2(a), if the Company's Board of Directors shall determine,
in its good faith judgment, that to maintain the effectiveness of such
registration statement or to permit such registration statement to become
effective (or, if no registration statement has yet been filed, to file such a
registration statement) would be significantly disadvantageous (a
"Disadvantageous Condition") to the Company or its stockholders in light of the
existence, or in anticipation, of any acquisition or financing activity
involving the Company or the unavailability for reasons beyond the Company's
reasonable control of any required financial statements, or any other event or
condition of similar significance to the Company, the Company may, until such
Disadvantageous Condition no longer exists, cause such registration statement to
be withdrawn and the effectiveness of such registration statement to be
terminated or, if no registration statement has yet been filed, elect not to
file such registration statement.

     If the Company determines to take any action pursuant to clause 2(b)(2)
above, the Company shall deliver a notice to the Demand Holders and to any other
Holders selling Registrable Securities pursuant to an effective registration
statement to such effect, and furnish to such persons a certified copy of the
resolution of the Board of Directors authorizing such action, together with a
general description of the applicable Disadvantageous Condition.  Upon the
receipt of any such notice, such persons shall forthwith discontinue use of the
prospectus contained in such registration statement and, if so directed by the
Company, shall deliver to the Company all copies of the prospectus then covering
such Registrable Securities current at the time of receipt of such notice (or,
if no registration statement has yet been filed, all drafts of the prospectus
covering such Registrable Securities).  If any Disadvantageous Condition shall
cease to exist, the Company shall promptly notify the Demand Holders (and any
other Holders who shall have ceased selling securities pursuant to an effective
registration statement as a result of such Disadvantageous Condition) to such
effect.  The Company shall, if any registration statement shall have been
withdrawn, file, at such time as it in good faith deems appropriate, a new
registration statement covering the Registrable Securities that were covered by
such withdrawn

                                       3

 
registration statement, and the effectiveness of such registration statement
shall be maintained for such time as may be necessary so that the period of
effectiveness of such new registration statement, when aggregated with the
period during which such withdrawn registration statement was effective, shall
be such time as may be otherwise required by this Agreement.

          (c) Effective Registration; Expenses.  A registration will not count
              --------------------------------                                
as the Demand Registration under Section 2(a) hereof until it has become
effective; provided, however, that except to the extent otherwise provided below
           --------  -------                                                    
in this Section 2(c), if the Demand Holders shall cause or request the Company
to withdraw any registration statement filed in connection with the Demand
Registration, such Holders shall nevertheless be deemed to have used their
Demand Registration under this Agreement.  Notwithstanding the foregoing and
anything in Subsection 2(a) to the contrary, at any time after the withdrawal by
the Company of any such registration statement at the request of the Demand
Holders, such Holders may request the Company to reinstate such withdrawn
registration statement, if permitted under the Act, or to file another
registration statement, in accordance with the procedures set forth in this
Section 2, whereupon the Company shall so reinstate such withdrawn registration
statement or file such other registration statement, as the case may be,
provided that such Holders agree in writing to reimburse the Company for all
Registration Expenses (as defined in Section 6 hereof) over and above those
Registration Expenses which the Company would have incurred had such Demand
Registration not been withdrawn.  The Company shall use its best efforts to
cause the registration statement relating to the Demand Registration to remain
effective for the lesser of 90 days or the time until all Registrable Securities
involved therein have been sold (the "Effective Period").  Except as provided
above, the Company will pay all Registration Expenses in connection therewith,
whether or not the Registration Statement becomes effective.

          (d) Underwritten Offering; Priority on Demand Registrations.  The
              -------------------------------------------------------      
Company shall have the right to require in good faith that the offering of
Registrable Securities pursuant to the Demand Registration be in the form of an
underwritten offering.  If the managing underwriter or underwriters of such
offering in good faith advise the Company in writing that in its or their
opinion the aggregate amount of Common Stock requested to be included in such
offering would materially and adversely affect the success of such offering or
the price of the Common Stock to be offered, then the Company shall reduce the
number of shares of Common Stock to be included in such Demand Registration to
the amount of Common Stock which the Company is advised can be sold in such
offering, in the manner set forth in the next sentence.  For purposes of this
Section 2(d), the amount of Common Stock to be included in the offering shall be
determined in the following order of priority: (x) first, Registrable Securities
requested to be included in such Demand Registration, pro rata among the Holders
in proportion to the number of Registrable Securities sought to be registered by
each of the Holders, (y) second, Common Stock to be sold by the Company in such
Demand Registration, and (z) third, Common Stock requested to be included in
such Demand Registration by other stockholders of the Company exercising
"piggyback" registration rights, pro rata among such other stockholders in
proportion to the number of shares of Common Stock sought to be registered by
such other stockholders, to

                                       4

 
the extent necessary to reduce the total amount of Common Stock to be included
in such Demand Registration to the amount recommended by such managing
underwriter or underwriters.

          (e) Selection of Underwriters.  If the Demand Registration is in the
              -------------------------                                       
form of an underwritten offering, the Company shall first offer to PaineWebber
Incorporated ("PaineWebber") and/or Dillon, Read & Co. Inc. ("Dillon"), the
position of manager or managers with respect to the offering, provided that
PaineWebber and/or Dillon shall perform such services as underwriter at their or
its then customary market rates for similar underwriting services.  If within
seven days neither PaineWebber nor Dillon agree to act as manager or managers of
the offering, the Company may select any other manager or managers to administer
the offering, which manager or managers must be reasonably acceptable to the
Demand Holders.

          (f) Termination of Rights.  Notwithstanding anything to the contrary
              ---------------------                                           
contained herein, in the event of the merger or consolidation of the Company
with, or the sale or other disposition, directly or indirectly, of substantially
all of the business and assets of the Company on a consolidated basis to, an
"Unrelated Third-Party" (i.e. a party who is not an affiliate, as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended, of the
Company), all rights to demand or participate in a registration of Registrable
Securities under this Agreement shall terminate at the effective time of such
merger, consolidation or sale.

     3.   Piggyback Registration.
          ---------------------- 

     Subject to the terms of this Section 3, if the Company proposes to file a
registration statement under the Act with respect to an offering by the Company
of its Common Stock, whether for its own account or for the account of any other
security holder or both (other than a registration statement (i) on Form S-4 or
S-8 (or any form substituting therefor), (ii) filed in connection with an
exchange offer or an offering of securities solely to the Company's existing
stockholders or employees or (iii) relating to a Demand Registration under
Section 2(a) hereof), during the period commencing on the earlier of (a) the
date upon which Corvese's repurchase rights under the Repurchase Agreement
commence or (b) the date upon which Corvese's repurchase rights under the
Repurchase Agreement terminate, and ending on the third anniversary of such
earlier date, the Company shall in each case give written notice of such
proposed filing to each Holder at least twenty (20) days before the anticipated
filing date, and such notice shall offer each Holder the opportunity to register
such number of Registrable Securities as it may request in writing within ten
(10) days after the date of such notice.  The Company shall use its reasonable
best efforts to cause the Registrable Securities as to which registration shall
have been so requested by a Holder to be included among the securities to be
covered by the registration statement proposed to be filed by the Company.  In
the event that any registration pursuant to this Section 3 shall be, in whole or
in part, an underwritten public offering, the Company shall use its reasonable
best efforts to cause the managing underwriter or underwriters of a proposed
underwritten

                                       5

 
offering to permit such Holders to include such securities in such offering on
the same terms and conditions as any similar securities of the Company included
therein.  Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver a written opinion to the Company to the
effect that the total amount of securities which the Holders, the Company and
any other persons or entities intend to include in such offering would
materially and adversely affect the success of such offering, then the Company
shall reduce the number of shares of Common Stock to be included in such
offering to the amount of Common Stock which the Company is so advised can be
sold in such offering, in the manner set forth in the next sentence.  For
purposes of this Section 3, the amount of Common Stock to be included in the
offering shall be determined in the following order of priority: (y) first,
Common Stock to be sold by the Company pursuant to such offering and (z) second,
Common Stock requested to be included in such registration, pro rata among the
stockholders of the Company (who have rights to include shares of Common Stock
in such registration) in proportion to the number of shares of Common Stock
sought to be registered by such stockholders, to the extent necessary to reduce
the total amount of Common Stock to be included in such offering to the amount
recommended by such managing underwriter or underwriters.

     4.   Holdback Agreements.
          ------------------- 

          (a) Restriction on Public Sale by Holder of Registrable Securities.
              --------------------------------------------------------------  
To the extent not inconsistent with applicable law, each Holder agrees not to
effect any public sale or distribution of the issue being registered or a
similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Act, during the 14 days prior to, and during the 90-day
period beginning on, the effective date of any registration statement referred
to in Section 2 or Section 3 hereof (except as part of the registration).

          (b) Restrictions on Public Sale by the Company and Others.  The
              -----------------------------------------------------      
Company agrees not to effect, on its own behalf or for the benefit of any other
security holder, any public sale or distribution of any securities similar to
those being registered, or any securities convertible into or exchangeable or
exercisable for such securities (other than any such sale or distribution of
such securities in connection with (i) an exchange offer or an offering of
securities solely to the Company's existing stockholders or employees or (ii)
any merger or consolidation by the Company or any subsidiary thereof or the
acquisition by the Company or a subsidiary thereof of the capital stock or
substantially all of the assets of any other person), during the 14 days prior
to the effective date of the registration statement referred to in Section 2 or
Section 3 hereof and during the Effective Period.

                                       6

 
     5.   Registration Procedures.
          ----------------------- 

          (a) Whenever a Holder (each a "Selling Holder") has requested that any
Registrable Securities be registered pursuant to Section 2 or 3 hereof, the
Company will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as reasonably practicable, and in connection
with any such request, the Company will as expeditiously as possible:

          (i) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities,
including all financial statements required by the Commission to be filed
therewith, and use its reasonable best efforts to cause such registration
statement to become and remain effective for the Effective Period;

          (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the Effective Period and comply with the provisions of the Act with respect to
the disposition of all Registrable Securities covered by such registration
statement;

          (iii)     furnish to each Selling Holder, prior to filing a
registration statement, copies of such registration statement as proposed to be
filed, and thereafter such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as each Selling Holder may
reasonably request in order to facilitate the disposition of such Registrable
Securities owned by each Selling Holder;

          (iv) use its best efforts to register or qualify such Registrable
Securities under the state securities or blue sky laws of such jurisdictions as
the managing underwriter or underwriters shall reasonably request, and do any
and all other acts and things which may be reasonably necessary or advisable to
enable each Selling Holder to consummate the disposition in such jurisdictions
of such Registrable Securities owned by each Selling Holder; provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (iv), (B) subject itself to taxation in any such jurisdiction, or (C)
consent to general service of process in any such jurisdiction;

          (v) use its reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable each Selling
Holder to consummate the disposition of such Registrable Securities;

                                       7

 
          (vi) notify each Selling Holder at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, and the company will prepare a supplement or amendment to such
prospectus as soon as reasonably practicable thereafter so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;

          (vii)     enter into and perform customary agreements (including,
without limitation, an underwriting agreement containing customary
representations, underwriters compensation and indemnity and other customary
terms and conditions) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;

          (viii)    make available for inspection by each Selling Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by a Selling
Holder or any such underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties and
other pertinent information of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all pertinent information reasonably requested by any such Inspector in
connection with such registration statement.  Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (A)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement, (B) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (C) the information in such Records has been made generally
available to the public.  The seller of Registrable Securities agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;

          (ix) in the event such sale is pursuant to an underwritten offering,
use its reasonable best efforts to obtain a "cold comfort" letter from the
Company's independent certified public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as the managing underwriter reasonably requests;

                                       8

 
          (x) use its reasonable best efforts to obtain an opinion or opinions
from counsel for the Company in customary form addressed to the managing
underwriter or underwriters, if any;

          (xi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the end
of the fiscal quarter in which the registration statement becomes effective,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Act; and

          (xii)     use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange, if any, on
which similar securities issues by the Company are then listed, provided that
the applicable listing requirements are satisfied.

          (b) The Company may require each Selling Holder to furnish to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request.

          (c) Each Selling Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5(a)(vi) hereof, it will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until its receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(a)(vi) hereof, and, if so directed by the
Company, each Selling Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.  In the event the Company shall give any
such notice, the Company shall use its reasonable best efforts to extend the
period during which such registration statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
excluding the date of the giving of such notice pursuant to Section 5(a)(vi)
hereof to and including the date when such Selling Holder shall have received
the copies of the supplemented or amended prospectus contemplated by Section
5(a)(vi) hereof.

     6.   Registration Expenses.
          --------------------- 

          Except as set forth in Section 2(c) hereof, all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all  registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), rating agency fees, printing expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and

                                       9

 
employees performing legal or accounting duties), the fees and expenses incurred
in connection with the listing of the securities to be registered on each
securities exchange on which such securities are required to be listed, and fees
and disbursement of counsel for the Company and its independent certified public
accountants (including "cold comfort" letters required by or incident to such
performance), securities acts liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, and fees and
expenses of other persons retained by the Company (all such expenses being
herein called "Registration Expenses"), but excluding any underwriting discounts
or commissions attributable to the sale of Registrable Securities, will be borne
by the Company; provided, however, that in connection with the registration or
qualification of the Registrable Securities under state securities laws, nothing
herein shall be deemed to require the Company to make any payments to third
parties in order to obtain "lock-up," escrow or other extraordinary agreements.
Each Selling Holder shall pay the fees and expenses of its own counsel,
underwriting discounts and commissions attributable to the sale of the
Registrable Securities, and its other expenses.

     7.   Indemnification; Contribution.
          ----------------------------- 

          (a) Indemnification by the Company.  The Company shall agree to
              ------------------------------                             
indemnify, to the full extent permitted by law, each Holder, its officers,
directors and agents and each person who controls such Holder (within the
meaning of the Act), and any investment adviser thereof or agent therefor,
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees) caused by any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein (in the case of a prospectus, in the light of the circumstances
under which they were made) not misleading, except insofar as the same are
caused by or contained in any information with respect to such Holder furnished
in writing to the Company by such Holder for use therein or caused by such
Holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto in accordance with the requirements of
the Act after the Company has furnished such Holder with a copy of the same.  If
requested by the underwriters of the Registrable Securities, the Company will
also indemnify such underwriters of the Registrable Securities, their officers
and directors and each person who controls such underwriters (within the meaning
of the Act), to the same extent as provided above with respect to the
indemnification of the Holders.

          (b) Indemnification by the Selling Holders.  In connection with any
              --------------------------------------                         
registration statement in which a Selling Holder is participating, the Selling
Holder will furnish to the Company in writing such information and affidavits
with respect to such Holder as the Company reasonably requests for use in
connection with any such registration statement or prospectus and shall
indemnify, to the full extent permitted by law, the Company, its directors and
officers and each person who controls the Company (within the

                                       10

 
meaning of the Act) against any losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees) resulting from any untrue or
alleged untrue statement of a material fact or any omission or alleged omission
of a material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto, or necessary to make
the statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is caused by or
contained in any information or affidavit with respect to such Holder or the
shares or its investment therein furnished in writing by such Holder, or caused
by such Holder's failure to deliver a copy of the prospectus or any amendments
or supplements thereto in accordance with the requirements of the Act after the
Company has furnished such Holder with a copy of the same.

          (c) Conduct of Indemnification Proceedings.  Any person entitled to
              --------------------------------------                         
indemnification hereunder shall give prompt written notice to the indemnifying
party after the receipt by such person of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which such person may claim indemnification or contribution pursuant
to this Agreement and, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to such
indemnified party.  If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
reasonable judgment of counsel for such indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.  The indemnifying party will not be subject to any liability for
any settlement made without its consent.

          (d) Contribution.  If the indemnification provided for in this Section
              ------------                                                      
7 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.  The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred

                                       11

 
to above shall be deemed to include, subject to the limitations set forth in
Section 7(c) hereof, any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

          If indemnification is available under this Section 7, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 7(a) and (b) hereof without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 7(d).

     8.   Participation in Underwritten Registrations.
          ------------------------------------------- 

          A Selling Holder may not participate in any registration hereunder
unless such Holder (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements, and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.

     9.   Miscellaneous.
          ------------- 

          (a) Amendments and Waivers.  Except as otherwise provided herein, the
              ----------------------                                           
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
without the written consent of all parties hereto.

          (b) Notices.  Any notice or other communications required or permitted
              -------                                                           
hereunder shall be validly given, made or served, when delivered personally or
by telecopier (except for legal process), or upon receipt by the party entitled
to receive the notice when sent by registered or certified mail, postage
prepaid, or by a recognized overnight delivery service, addressed as follows or
to such other address or addresses or telecopier number as may hereafter be
furnished to the Company in writing by notice similarly given by one party to
the other parties hereto:

          To the Company:     MIM Corporation
                              One Blue Hill Plaza
                              Pearl River, New York  10965
                              Telecopier No.: (914) 735-3599
                              Attn: Chief Financial Officer and Secretary

                                       12

 
          To E. David Corvese:  c/o MIM Corporation
                                25 North Road
                                Peace Dale, Rhode Island  02883
                                Telecopier No.: (401) 783-3520

          To John H. Klein:     c/o MIM Corporation
                                One Blue Hill Plaza
                                Pearl River, New York  10965
                                Telecopier No.: (914) 735-3599

Notice given by telecopier shall be deemed delivered on the day the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee.  Notice given by mail as set out above shall be deemed
received three days after the date the same is postmarked, except that such
notice given by a recognized overnight delivery service as set forth above shall
be deemed received on the business day following the date the same is sent.

          (c) Successors and Assigns.  This Agreement, and all covenants and
              ----------------------                                        
agreements contained in this Agreement by or on behalf of any of the parties
hereto, shall bind and inure to the benefit of the respective successors and
permitted assigns of the parties hereto (including, without limitation,
transferees of any Restricted Securities) whether so expressed or not; provided,
                                                                       -------- 
however, that registration rights conferred herein on the Holders shall only
- -------                                                                     
inure to the benefit of a transferee of a Holder's Restricted Securities if (i)
the transfer is made pursuant to the laws of testamentary or intestate descent
or (ii) the transfer is made as a bona fide gift, provided, that in each of the
foregoing cases, as a condition to such transfer, such transferee shall deliver
to the Company a written instrument by which it agrees to be bound by the
obligations imposed upon the Holders under this Agreement.  Except as otherwise
provided above, this Agreement shall not be assignable by a Holder, by operation
of law or otherwise, without the prior written consent of the Company.

          (d) Headings.  The headings in this Agreement are for convenience of
              --------                                                        
reference only and shall not limit or otherwise affect the meaning hereof.

          (e) Severability.  In the event that any one or more of the provisions
              ------------                                                      
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.

                                       13

 
          (f) Entire Agreement.  The rights granted to each of the Holders
              ----------------                                            
hereunder are in addition to the rights a Holder may have pursuant to a
Registration Rights Agreement dated the date hereof among the Company, Klein,
Friedman and Daniels, and a Registration Rights Agreement dated the date hereof
among the Company, Corvese, Klein, Friedman, Daniels and MIM Holdings, LLC.
With respect to the Company and each Holder individually, this Agreement,
together with the other Registration Rights Agreements referred to above, is
intended by such parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
such parties in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein.

          (g) Counterparts.  This Agreement may be executed in one or more
              ------------                                                
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

          (h) Governing Law.  This Agreement shall be governed by and construed
              -------------                                                    
in accordance with the internal laws of the State of Delaware applicable to
contracts made and to be performed wholly therein without regard to principles
of conflict of laws.

          IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.

                                    MIM Corporation


                                    By:/s/ Richard H. Friedman
                                       ---------------------------


                                    /s/ E. David Corvese
                                    ---------------------------
                                    E. David Corvese
                                    
                                    
                                    /s/ John H. Klein
                                    ---------------------------
                                    John H. Klein
 

                                       14


 
                                                                    EXHIBIT 23.1
 
                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
 
  As independent public accountants, we hereby consent to the use of our
reports and to all references to our firm included in or made a part of this
registration statement.
 
                                           Arthur Andersen LLP
   
Roseland, New Jersey 
July 29, 1996