[Letterhead of MIM Corporation]



October 1, 2002

Mr. James S. Lusk
42 Colts Glen Lane
Basking Ridge, NJ 07920


         Re:    MIM Corporation and Subsidiaries
                --------------------------------

Dear Jim:

         MIM Corporation, a Delaware corporation (the "Company"), is pleased to
offer you employment as the Company's Chief Financial Officer, on the terms and
subject to the conditions set forth below. The terms and conditions of your
employment would be as follows:

1. POSITION AND DUTIES:

Executive Vice President and Chief Financial Officer.

In such capacity, you shall be the principal financial and accounting officer of
the Company  and shall be  responsible  for all  financial  reporting  and other
matters  typical  of a Chief  Financial  Officer.  In such  capacity,  you  will
faithfully  perform the duties of said office and position and such other duties
of an  executive,  managerial  and  administrative  nature as are  specified and
designated from time to time by the Company's Board of Directors.

You will report  primarily  to, and shall have such  further  duties as shall be
assigned to you by the Chief  Executive  Officer of the Company,  subject to the
authority of the Board of Directors. Subject to the terms and conditions of this
Agreement, you acknowledge and understand that you are an employee at will.

2. BASE COMPENSATION:

Your base  salary  will be at an annual rate of  $300,000.00  per year,  payable
bi-weekly, or at such other times as other employees of the Company are paid.

3. LONG-TERM INCENTIVE
    COMPENSATION:

As further compensation hereunder, effective upon the later to occur of the date
you  commence  your  employment  with  the  Company  and the  date  you  execute
definitive  agreements with respect to each such grant,  the Company would grant
to you 150,000 non-qualified stock options ("Options") to purchase the Company's
common stock,  par value $0.0001 per share ("Common  Stock").  The Options shall
vest in equal  installments on the first,  second and third anniversary dates of
your  employment.  The grant and vesting of your options would be subject to the
terms and conditions set forth in the form of a definitive  non-qualified  stock



<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 2

option agreement. Such options shall be priced at the closing stock price on the
trading day immediately preceding your first day of employment with the Company.
Six months after the commencement of your employment, you will be reviewed and a
determination will be made, in the Company's sole and absolute discretion, as to
the granting of additional Options.

4.    TRANSPORTATION
      ALLOWANCE:

During your employment, the Company will provide you with a monthly allowance of
$1000 for the use of an automobile.

5.    PARTICIPATION IN HEALTH
      AND OTHER BENEFIT PLANS:

During your employment with the Company,  you shall be permitted,  if and to the
extent eligible, to participate in all employee health and other related benefit
plans,  policies and practices  now or hereafter  available to members of senior
management  generally and  maintained by or on behalf of the Company,  including
the  Company's  medical  expense  reimbursement  plan  (the  "MERP")  and a life
insurance  policy equal to three times your then annual salary.  Nothing in this
agreement shall preclude the Company from terminating or amending any such plans
or coverage so as to eliminate,  reduce or otherwise  change any benefit payable
thereunder.

You shall be eligible to  participate  in the Company's  1998 Cash Bonus Program
For Key Employees.  During the first calendar year of your employment, you would
participate  pro rata based on the number of days during calendar year 2002 that
you were employed by the Company.

6. EXPENSES:

Subject  to such  policies  as may  from  time to  time  be  established  by the
Company's  Board of  Directors,  the Company  would pay or reimburse you for all
reasonable and necessary  expenses  (which shall include  professional  fees and
dues reasonably  necessary to the performance of your duties hereunder) actually
incurred or paid by you during the term of your employment in the performance of
your duties,  upon  submission and approval of expense  statements,  vouchers or
other supporting  information in accordance with the then customary practices of
the Company.



<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 3


7. VACATION:

You would be entitled to four weeks (20 business days) vacation  during the term
of your employment.

8. TERMINATION; SEVERANCE
    CHANGE OF CONTROL:

If your  employment  with the Company is terminated  for any reason  whatsoever,
whether by you or the Company, the Company would not be liable for, or obligated
to pay you any bonus compensation or any other compensation  contemplated hereby
not already paid or not already accrued at the date of such termination,  and no
other  benefits  shall  accrue  or  vest  subsequent  to such  date.  If you are
terminated by the Company (or any successor)  other than for "Cause" (as defined
below), (i) you will be entitled to receive severance payments equal to one year
of salary at your then current  salary  level,  payable in  accordance  with the
Company's  then  applicable  payroll  practices  and  subject to all  applicable
federal, state and local withholding;  and (ii) all outstanding unvested Options
granted to you (or hereafter under the Bonus Program) and held by you shall vest
and  become  immediately  exercisable  and shall  otherwise  be  exercisable  in
accordance  with their terms and you shall become vested in any pension or other
deferred  compensation other than pension or deferred  compensation under a plan
intended to be qualified under Section 401(a) or 403(a) of the Internal  Revenue
Code of 1986,  as  amended  (the  "Code");  and (iii) you shall  have no further
rights  to  any  other  compensation  or  benefits  hereunder  on or  after  the
termination  of employment or any other rights  hereunder.  For purposes of this
Agreement,  "Cause" shall mean any of the  following:  (1)  commission by you of
criminal conduct which involves moral turpitude; (2) acts which constitute fraud
or self-dealing by or on the part of you against the Company, including, without
limitation,  misappropriation  or embezzlement;  (3) your willful  engagement in
conduct  which  is  materially  injurious  to the  Company;  or (4)  your  gross
misconduct  in  the  performance  of  duties  as an  employee  of  the  Company,
including,  without limitation,  failure to obey lawful written  instructions of
the Board of Directors of the Company,  any  committee  thereof or any executive
officer of the  Company or failure to correct any conduct  which  constitutes  a
breach of any  written  agreement  between you and the Company or of any written
policy  promulgated  by the  Board of  Directors  of  either  the  Company,  any
committee thereof or any executive officer of the Company,  in either case after
not less than ten days' notice in writing to you of the  Company's  intention to
terminate you if such failure is not corrected  within the specified  period (or
after such shorter notice period if the Company in good faith deems such shorter
notice period to be necessary due to the  possibility of material  injury to the
Company).  In addition,  if you are terminated by the Company (or any successor)


<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 4


within one year of a "Change of Control" (as defined  below) or, within such one
(1) year period,  you elect to terminate your employment  after the Company or a
successor entity materially reduces your authority, duties and responsibilities,
or assigns you duties  materially  inconsistent  with your position or positions
with the  Company or a  successor  entity  immediately  prior to such  Change of
Control, (I) you shall receive severance payments equal to one year of your then
current salary (and  reimbursement  for expenses incurred prior to the effective
date of the  termination of employment;  (II) all outstanding  unvested  Options
granted to you (or hereafter under the Bonus Program) and held by you shall vest
and  become  immediately  exercisable  and shall  otherwise  be  exercisable  in
accordance  with their terms and you shall become vested in any pension or other
deferred  compensation other than pension or deferred  compensation under a plan
intended to be qualified under Section 401(a) or 403(a) of the Code; ; and (III)
you shall have no further rights to any other compensation or benefits hereunder
on or after the termination of employment or any other rights hereunder.


For purposes of this Agreement,  "Change of Control" means the occurrence of one
or more of the following: (i) a "person" or "group" within the means the meaning
of sections  13(d) and 14(d) of the  Securities  and  Exchange  Act of 1934 (the
"Exchange Act") becomes the "beneficial owner" (within the meaning of Rule l3d-3
under  the  Exchange  Act) of  securities  of the  Company  (including  options,
warrants, rights and convertible and exchangeable securities) representing 50.1%
or  more  of the  combined  voting  power  of  the  Company's  then  outstanding
securities  in  any  one  or  more  transactions  unless  approved  by at  least
two-thirds  of the Board of  Directors  then  serving  at that  time;  provided,
however,  that  purchases  by employee  benefit  plans of the Company and by the
Company  or its  affiliates  shall  be  disregarded;  or (ii) any  sale,  lease,
exchange  or  other  transfer  (in  one  transaction  or  a  series  of  related
transactions)  of all,  or  substantially  all, of the  operating  assets of the
Company;  or (iii) a merger or consolidation,  or a transaction having a similar
effect, where (A) the Company is not the surviving corporation, (B) the majority
of the Common Stock of the Company is no longer held by the  stockholders of the
Company immediately prior to the transaction,  or (C) the Company's Common Stock
is converted  into cash,  securities  or other  property  (other than the common
stock of a company  into  which the  Company is  merged),  unless  such  merger,
consolidation or similar transaction is with a subsidiary of the Company or with
another company,  a majority of whose outstanding  capital stock is owned by the
same  persons or entities  who own a majority of the  Company's  Common Stock at
such  time;  or (iv) at any annual or special  meeting  of  stockholders  of the
Company  at which a quorum is  present  (or any  adjournments  or  postponements
thereof),  or by  written  consent  in  lieu  thereof,  directors  (each  a "New
Director" and collectively the "New Directors") then  constituting a majority of
the Company's Board of Directors shall be duly elected to serve as New Directors
and such New Directors  shall have been elected by  stockholders  of the Company
who shall be an (I) "Adverse Person(s)";  (II) "Acquiring  Person(s)";  or (III)
"40%  Person(s)"  (as each of the terms set forth in (I), (II), and (III) hereof
are defined in that certain Amended and Restated Rights Agreement, dated May 20,
1999, between the Company and American Stock Transfer & Trust Company, as Rights
Agent.


<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 5


9.  Termination Upon Disability

If by  virtue of ill  health  or other  disability  you are  unable  to  perform
substantially  and  continuously  the duties  assigned  to you for more than 180
consecutive or non-consecutive days out of any consecutive  twelve-month period,
the Company shall have the right,  to the extent  permitted by law, to terminate
your  employment  upon written  notice;  provided  that the Company will have no
right to terminate your  employment if, in the opinion of a qualified  physician
reasonably  acceptable to the Company, it is reasonably certain that you will be
able to resume your duties on a regular  full-time  basis  within 30 days of the
date  you  receive  notice  of  such  termination.  Upon a  termination  of your
employment by virtue of  disability,  (i) you shall receive  severance  payments
equal to one year of your then current  salary (and  reimbursement  for expenses
incurred prior to the effective date of the  termination of employment and other
benefits  (including  bonuses awarded but not yet paid) earned and accrued under
this  agreement  prior  to  the  effective  date  of  the  termination  of  your
employment; (ii) you shall receive for a period of one year after termination of
employment  continuing  coverage under the health benefit plans and programs you
would have received under this agreement as would have applied in the absence of
such termination,  it being expressly understood and agreed that nothing in this
clause (ii) shall restrict the ability of the Company to amend or terminate such
plans and programs from time to time in its sole discretion;  provided, however,
that the Company  shall in no event be required  to provide any  coverage  after
such  time as you  become  entitled  to  coverage  under the  benefit  plans and
programs of another  employer  or  recipient  of your  services  (and  provided,
further,  that  such  entitlement  shall be  determined  without  regard  to any
individual  waivers  or  other   arrangements);   (iii)  all  fully  vested  and
exercisable  Options  granted to and held by you may be exercised by you or your
estate or beneficiaries  for a period of one (1) year from and after the date of
your  disability;  and  (iv) you  shall  have no  further  rights  to any  other
compensation or benefits hereunder on or after the termination of employment, or
any other rights hereunder.

<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 6

10.  TERMINATION UPON DEATH:

If you die during the term of your  employment,  the  obligations of the Company
with respect to you shall terminate in their entirety,  except as follows:  Upon
death,  (i) you or your  estate or  beneficiaries  shall be  entitled to receive
accrued and unpaid salary  (including  bonuses awarded or declared and not paid)
and  reimbursement  for expenses incurred prior to the date of your termination;
(ii) all vested and exercisable  Options granted to you may be exercised by your
estate for a period of one (1) year from and after the date of your  death;  and
(iii) neither you or your estate or beneficiaries  shall have any further rights
to any other  compensation or benefits  hereunder on or after the termination of
employment, or any other rights hereunder.


11. RESTRICTIVE COVENANT:

As a condition to your  employment  with the  Company,  you will be obligated to
enter  into a  restrictive  covenant  agreement  between  you and  the  Company,
covering,  among  other  things,  non-competition  provisions,  non-solicitation
provisions, and the protection of the Company's trade secrets. That agreement is
attached hereto as Exhibit A.

12. OTHER TERMS:

Your employment,  restrictive covenants and option agreements will include other
customary and usual terms,  provisions,  conditions and  representations  as are
found in the Company's similar arrangements with its employees.

<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 7


13. CONDITION TO EMPLOYMENT:

Your  employment  is  conditioned  on the approval of your  employment  and this
letter agreement by the Board of Directors of the Company.

14.  ARBITRATION:

If any dispute arises with respect to the rights and  obligations  hereunder and
is not resolved by us, such  dispute  will be submitted to binding  arbitration,
which shall be conducted in accordance  with the  commercial  arbitration  rules
(the "Rules") of the American  Arbitration  Association ("AAA") in effect at the
time  arbitration is commenced.  Arbitration may be commenced by either party by
service and filing of a demand for  arbitration in accordance  with the Rules of
the AAA  then in  effect.  There  shall  be one  arbitrator  in any  arbitration
pursuant  to this  agreement.  The  selection  of  arbitrator  shall  be made in
accordance  with the Rules of the AAA then in effect.  The venue of  arbitration
shall  be the  State of New  York,  City of New  York.  The  arbitrators  in any
arbitration  pursuant to this agreement shall apply the substantive  laws of the
State of New York. Any arbitral award obtained pursuant to this agreement may be
confirmed pursuant to Article 75 of the New York Civil Practice Law and Rules in
New York State  Supreme  Court or in any other court of  competent  jurisdiction
within or without the State of New York.




<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 8



         Please call me to discuss any  questions or comments  that you may have
regarding  these  terms.  After  I  receive  your  agreement  to the  foregoing,
definitive  documentation  will be prepared.  I look forward to hearing from you
and working with you. Best regards.

                                               Sincerely yours,

                                               MIM CORPORATON


                                               By: /s/ Richard H. Friedman
                                               --------------------------------
                                               Name:  Richard H. Friedman
                                               Title: Chairman and CEO


Agreed to and Accepted By:



/s/ James S. Lusk
------------------------
James S. Lusk


<PAGE>



                                                                       Exhibit A

                              RESTRICTIVE COVENANTS

         Covenant Against Competition; Other Covenants. You acknowledge that (i)
the principal business of the Company (for purposes of these restrictive
covenants, the "Company" shall include all subsidiaries and affiliates of MIM
Corporation) is the provision of a broad range of services designed to promote
the cost-effective delivery of pharmacy benefits, including pharmacy benefit
management services, claims processing, the purchasing of pharmaceutical
products on behalf of pharmacy networks and long term care facilities (including
assisted living facilities and nursing homes) and specialty pharmaceutical
programs and mail order pharmacy services, including the dispensing of
prescription pharmaceutical products, and the sale and distribution, on a retail
and wholesale basis, of OTC's, vitamins, supplements, herbals and other goods
typically offered for sale through a retail, mail order or internet on-line
pharmacy (such business, and any and all other businesses that after the date
hereof, and from time to time during the Term, become material with respect to
the Company's then-overall business, herein being collectively referred to as
the "Business"); (ii) the Company is dependent on the efforts of a certain
limited number of persons who have developed, or will be responsible for
developing the Company's Business; (iii) is national in scope; (iv) your work
for the Company will give you access to the confidential affairs and proprietary
information of the Company; (v) your covenants and agreements contained in these
Restrictive Covenants are essential to the business and goodwill of the Company;
and (vi) the Company would not have offered you employment but for the covenants
and agreements set forth herein. Accordingly, you covenant and agree that:

                  (a) At any time during your employment with the Company and
ending nine months following (i) termination of your employment with the Company
(irrespective of the reason for such termination) or (ii) payment of any
severance, whichever occurs last, you shall not engage, directly or indirectly,
in sales or marketing or otherwise assisting any company or other business
entity (which includes, without limitation, owning, managing, operating,
controlling, being employed by, giving financial assistance to, participating in
or being connected in any material way with any person or entity other than the
Company), engaged in (i) the Business or (ii) any material component of the
Business; provided, however, that the Executive's ownership as a passive
investor of less than two percent (2%) of the issued and outstanding stock of a
publicly held corporation shall not be deemed to constitute competition.

                  (b) During and after the period during which you are employed,
you shall keep secret and retain in strictest confidence, and shall not use for
his benefit or the benefit of others, except in connection with the Business and
affairs of the Company and its affiliates, all confidential matters relating to
the Company's Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by you heretofore or hereafter
directly or indirectly from the Company or any of its affiliates (the
"Confidential Company Information"), including, without limitation, information
with respect to (i) the strategic plans, budgets, forecasts, intended expansions

<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 10

of product, service, or geographic markets of the Company and its affiliates,
(ii) sales figures, contracts, agreements, and undertakings with or with respect
to customers, (iii) profit or loss figures, and (iv) customers, clients,
suppliers, sources of supply and customer lists, and shall not disclose such
Confidential Company Information to anyone outside of the Company except with
the Company's express written consent and except for Confidential Company
Information which is at the time of receipt or thereafter becomes publicly known
through no wrongful act of you or is received from a third party not under an
obligation to keep such information confidential and without breach of these
Restrictive Covenants or the Agreement. Notwithstanding the foregoing, this
section (b) shall not apply to the extent that you are acting to the extent
necessary to comply with legal process; provided that in the event that you are
subpoenaed to testify or to produce any information or documents before any
court, administrative agency or other tribunal relating to any aspect pertaining
to the Company, you shall immediately notify the Company thereof.

                  (c) During the period commencing on the date hereof and ending
one year following the date upon which you shall cease to be an employee of the
Company or its affiliates, you shall not, without the Company's prior written
consent, directly or indirectly, (i) solicit or encourage to leave the
employment or other service of the Company or any of its affiliates, any
employee or independent contractor thereof or hire (on your behalf or any other
person or entity) any employee or independent contractor who has left the
employment or other service of the Company or any of its affiliates within one
year of the termination of such employee's or independent contractor's
employment or other service with the Company and its affiliates, or (ii)
solicit, contact, market to, work for, or assist others in soliciting any
customer or client of the Company with whom the Company was in contact with or
was providing goods and services to at the time of your termination of
employment with the Company. During such period, you will not, whether for your
own account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the Company's or any of its
affiliates' relationship with, or endeavor to entice away from the Company or
any of its affiliates, any person who during the Term is or was a customer or
client of the Company or any of its affiliates.

                  (d) All memoranda, notes, lists, records, property and any
other tangible product and documents (and all copies thereof) made, produced or
compiled by you or made available to you concerning the Business of the Company
and its affiliates shall be the Company's property and shall be delivered to the
Company at any time on request.

<PAGE>

Mr. James S. Lusk
October 1, 2002
Page 11


         Rights and Remedies upon Breach of Restrictive Covenants.
         --------------------------------------------------------

                  (a) You acknowledge and agree that any breach by him of any of
the provisions of sections (a) through (d) above (the "Restrictive Covenants")
would result in irreparable injury and damage for which money damages would not
provide an adequate remedy. Therefore, if you breach, or threaten to commit a
breach of, any of the Restrictive Covenants, the Company and its affiliates
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the other and severally enforceable, and all of which
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company and its affiliates under law or in
equity (including, without limitation, the recovery of damages):

                  (b) The right and remedy to have the Restrictive Covenants
specifically enforced (without posting bond and without the need to prove
damages) by any court having equity jurisdiction, including, without limitation,
the right to an entry against you of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations, threatened
or actual, and whether or not then continuing, of such covenants.

                  (c) The right and remedy to require you to account for and pay
over to the Company and its affiliates all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by you as the result of any transactions constituting a breach of the
Restrictive Covenants, and you shall account for and pay over such Benefits to
the Company and, if applicable, its affected affiliates.

                  (d) You agree that in any action seeking specific performance
or other equitable relief, you will not assert or contend that any of the
provisions of these Restrictive Covenants are unreasonable or otherwise
unenforceable. The existence of any claim or cause of action by you, whether
predicated on the Agreement or otherwise, shall not constitute a defense to the
enforcement of the Restrictive Covenants.
`
Agreed to and accepted by:


-----------------------------
James S. Lusk