SECOND AMENDMENT AND CONSENT, dated as of January 9, 2002 ("Second
Amendment"), to the RECEIVABLES PURCHASE AND TRANSFER AGREEMENT, dated as of
November 1, 2000 (as amended prior to the date hereof, the "Original RPTA", and
as it may be amended, modified or supplemented on and after the date hereof,
including by this Second Amendment, the "RPTA"), among SCRIP SOLUTIONS, INC. (as
successor by merger to MIM Health Plans, Inc.), a Delaware corporation (together
with its corporate successors and assigns, "Scrip", and in its capacity as
primary servicer thereunder, the "Primary Servicer"), each of the parties named
on Schedule I thereto (each, including Scrip, a "Provider" and collectively, the
"Providers"), and MIM FUNDING LLC, a Delaware limited liability company
(together with its successors and assigns, the "Purchaser") and consented to by
HFG HEALTHCO-4 LLC (the "Lender"), as assignee of the Purchaser. Unless
otherwise defined herein, terms in the RPTA are used herein as therein defined.
MIM Health Plans, Inc. has merged (the "Merger") with and into its
wholly owned subsidiary Pro-Mark Holdings, Inc., and Pro-Mark Holdings, Inc., as
the surviving corporation, has changed its name to Scrip Solutions, Inc.
MIM Corporation ("Parent") is entering into that certain Stock Purchase
Agreement, dated as of January 9, 2002, by and among Vitality Home Infusion
Services, Inc. ("Vitality"), Marc Wiener, Barbara Kammerer and the Parent (the
"Vitality Purchase Agreement") attached hereto as Exhibit A, pursuant to which
the Parent has agreed to purchase all of the outstanding stock of Vitality
pursuant to the terms set forth therein (the "Vitality Acquisition").
The Primary Servicer and the Providers have requested that the Lender
consent to the Parent entering into the Vitality Purchase Agreement. In
connection with such consent, the Merger and the Vitality Purchase Agreement,
the parties to the hereto have agreed to amend certain provisions of the RPTA
pursuant to this Second Amendment.
Accordingly, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, and subject to the fulfillment of the conditions set forth below,
the parties hereto agree as follows:
SECTION 1. CONSENT
The Purchaser hereby consents to, and waives any breach under the RPTA
as the sole result of (i) the Merger, (ii) the name change of Pro-Mark Holdings,
Inc. to Scrip Solutions, Inc., and (iii) the name change of Continental Pharmacy
to Scrip Pharmacy, Inc. The Lender hereby acknowledges and consents to such
consent and waiver.
The Lender agrees to deliver to the Parent a consent (in substantially
the form of Exhibit B) to the execution and delivery by the Parent of the
Vitality Purchase Agreement.
SECTION 2. AMENDMENTS TO RPTA
The Original RPTA is hereby amended, effective as of the effective date
of the consummation of the Vitality Acquisition, as follows:
SECTION 2.1 Exhibit I to the Original RPTA is hereby amended by adding the
following definition in its proper alphabetical order:
"Total Liabilities" means, at any date of determination, the
total liabilities of the Parent and its Subsidiaries on a consolidated
basis which would be classified as liabilities at such date
(including, without limitation, Current Liabilities and long-term
liabilities), computed and calculated in accordance with GAAP,
excluding, however, borrowings under the Loan Agreement.
SECTION 2.2 Exhibit I to the Original RPTA is hereby amended by deleting the
defined term "Equity" and substituting therefor the following new definition:
"Equity" means the amount set forth on the consolidated balance
sheets of the Parent as equity.
SECTION 2.3 Clause (s) of Exhibit V to the Originator RPTA (Consolidated Net
Worth) is hereby amended by removing the table appearing in such clause and
substituting therefor the following new table:
Fiscal Quarter Ending Amount
--------------------- ------
March 31, 2002 $60,000,000
June 30, 2002 $62,500,000
September 30, 2002 $65,000,000
December 31, 2002 $67,500,000
March 31, 2003 and $70,000,000
each fiscal quarter thereafter
SECTION 2.4 Clause (v) of Exhibit V to the Originator RPTA (Consolidated EBITDA)
is hereby amended by removing the table appearing in such clause and
substituting therefor the following new table:
Fiscal Quarter Ending Amount
--------------------- ------
March 31, 2002 and $3,000,000
each fiscal quarter thereafter
SECTION 2.5 Clause (x) of Exhibit V to the Originator RPTA is hereby amended by
removing such clause in its entirety and substituting therefor the following:
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(x) The Providers' Total Liabilities to Equity Ratio. The ratio
of Total Liabilities of the Parent to Equity exceeds the ratio set
forth below as of the end of the corresponding fiscal quarter
indicated below:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 and 1.50:1.00
each fiscal quarter thereafter
SECTION 2.6 Clause (y) of Exhibit V to the Originator RPTA (Debt to Consolidated
Tangible Net Worth) is hereby amended by removing such clause in its entirety
and substituting therefor the following:
(y) [Intentionally Omitted]
SECTION 2.7 Clause (z) of Exhibit V to the Originator RPTA (Current Ratio) is
hereby amended by removing the table appearing in such clause and substituting
therefor the following new table:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 and 1.00:1.00
each fiscal quarter thereafter
SECTION 2.8 Clause (aa) of Exhibit V to the Originator RPTA (Consolidated
Working Capital) is hereby amended by removing the table appearing in such
clause and substituting therefor the following new table:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 and $5,000,000
each fiscal quarter thereafter
SECTION 2.9 Clause (bb) of Exhibit V to the Originator RPTA (Consolidated
Tangible Net Worth) is hereby amended by removing the table appearing in such
clause and substituting therefor the following new table:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 $(8,500,000)
June 30, 2002 $(6,500,000)
September 30, 2002 $(3,500,000)
December 31, 2002 $ 0
March 31, 2003 and $ 2,500,000
each fiscal quarter thereafter
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SECTION 3. ACKNOWLEDGMENT BY SCRIP
SECTION 3.1 Scrip hereby acknowledges that, following the Merger, it is the
successor to all of the duties, responsibilities and obligations of MIM Health
Plans, Inc. as a Provider and Primary Servicer under the RPTA and related
Documents (as such term is defined in the Loan Agreement) and hereby undertakes,
agrees and assumes all of such duties, responsibilities and obligations.
SECTION 3.2 The Primary Servicer agrees and undertakes to cause Vitality to
enter into the Subscription Agreement substantially in the form of Exhibit C
hereto substantially simultaneously with the consummation of Vitality
Acquisition.
SECTION 3.3 The Primary Servicer agrees and undertakes to cause MIM Corporation
to enter into the Guaranty substantially in the form of Exhibit D and the
Assignment of Guaranty as Collateral Security substantially in the form of
Exhibit E substantially simultaneously with the consummation of Vitality
Acquisition.
SECTION 3.4 The Primary Servicer agrees and undertakes to cause the chief
financial officer of MIM Corporation to deliver a Solvency Certificate
substantially in the form of Exhibit F substantially simultaneously with the
consummation of Vitality Acquisition.
SECTION 4. CONDITIONS PRECEDENT
This Second Amendment shall not become effective until the following
conditions have been satisfied in full or waived in writing by the Purchaser and
the Lender as its assignee:
(a) All required corporate and limited liability company
actions in connection with the execution and delivery of this Second
Amendment, the Merger, the Stock Purchase Agreement and the Vitality
Acquisition shall have been taken, and each shall be satisfactory in
form and substance to the Lender, and the Lender shall have received
all information and copies of all documents, including, without
limitation, records of requisite corporate and limited liability
company action that the Lender may reasonably request, to be certified
by the appropriate corporate or limited liability company person or
government authorities;
(b) Each document (including, without limitation, any UCC-1
Financing Statements) required by law or requested by the Lender to be
filed, registered or recorded in order to create in favor of the Lender
a first priority perfected security interest in the Collateral (as
defined in the Loan Agreement) shall have been properly filed,
registered or recorded in each jurisdiction in which the filing,
registrations or recordation thereof is so required or requested. The
Lenders shall have received evidence satisfactory to it, of each such
filing, registration or recordation.
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(c) Fully executed counterparts of this Second Amendment
and the Stock Purchase Agreement.
SECTION 5. MISCELLANEOUS
SECTION 5.1 The Providers each hereby certify, represent and warrant that (i)
the representations and warranties in the RPTA are true and correct (and after
having given effect to the Merger), with the same force and effect as if made on
such date, except as they may specifically refer to an earlier date, in which
case they were true and correct as of such date,(ii) no unwaived Event of
Termination, a Group-Wide Event of Termination, a Servicer Termination Event or
a Group-Wide Servicer Event of Termination or would constitute such an Event of
Termination, Group-Wide Event of Termination, Servicer Termination Event or
Group-Wide Servicer Event of Termination has occurred or is continuing (nor any
event that but for notice or lapse of time or both would constitute an Event of
Termination, a Group-Wide Event of Termination, a Servicer Termination Event or
a Group-Wide Servicer Event of Termination or would constitute such an Event of
Termination, Group-Wide Event of Termination, Servicer Termination Event or
Group-Wide Servicer Event), (iii) each of the Providers and the Primary
Servicer, as applicable has the corporate power and authority to execute and
deliver this Second Amendment, the agreements and documents related to the
Merger, the Stock Purchase Agreement and to consummate the Vitality Acquisition,
and (iv) no consent of any other person (including, without limitation,
shareholders or creditors of any Provider or Vitality), and no action of, or
filing with any governmental or public body or authority is required to
authorize, or is otherwise required in connection with the the execution and
performance of this Second Amendment, the Merger or the Vitality Acquisition,
other than, in each case, such that have been obtained.
SECTION 5.2 The terms "Agreement", "hereof", "herein" and similar terms as used
in the RPTA shall mean and refer to, from and after the effectiveness of this
Second Amendment, the RPTA as amended by this Second Amendment, and as it may in
the future be amended, restated, modified or supplemented from time to time in
accordance with its terms. Except as specifically agreed herein, the RPTA is
hereby ratified and confirmed and shall remain in full force and effect in
accordance with its terms.
SECTION 5.3 THIS SECOND AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF
THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 5.4 This Second Amendment may be executed in counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
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SECTION 5.5 Delivery of an executed counterpart of a signature page by
telecopier shall be effective as delivery of a manually executed counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
PROVIDERS: SCRIP SOLUTIONS, INC.
(as successor by merger to MIM Health Plans, Inc.)
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chairman & Chief Executive Officer
AMERICAN DISEASE MANAGEMENT ASSOCIATES, LLC
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chairman & Chief Executive Officer
SCRIP PHARMACY, INC. (f/k/a Continental Pharmacy, Inc.)
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chairman & Chief Executive Officer
PURCHASER: MIM FUNDING LLC
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chief Executive Officer
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PRIMARY SERVICER: SCRIP SOLUTIONS, INC.
(as successor by merger to MIM Health Plans, Inc.)
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chairman & Chief Executive Officer
CONSENTED TO:
MIM CORPORATION
By: /s/ Richard Friedman
--------------------------------
Name: Richard Friedman
Title: Chairman & Chief Executive Officer
HFG HEALTHCO-4 LLC
By: HFG Healthco-4, Inc., a member
By: /s/ Dean A. Christiansen
--------------------------------
Name: Dean A. Christiansen
Title: President
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SCHEDULE I
LIST OF PROVIDERS
Name Jurisdiction of Organization
American Disease Management Associates, LLC Delaware
Scrip Pharmacy, Inc. Ohio
Scrip Solutions, Inc. Delaware
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