EXHIBIT
        10.1

       

      EMPLOYMENT
        AGREEMENT 

       

      This
        Employment Agreement (the “Agreement”) is made and entered into effective as of
        the first day of December, 2005, by and between DRUGMAX, INC., a Nevada
        corporation (the “Company”), and EDGARDO A. MERCADANTE, an individual
        (“Executive”). 

       

      WITNESSETH:
        

       

      WHEREAS,
        the Company provides a wide variety of prescription and non-prescription
        healthcare-related diagnostic products used for the treatment of chronic
        diseases through its specialty pharmacies and online, and distributes
        pharmaceuticals, over-the-counter products, health and beauty aids, nutritional
        supplements and other related products through its wholesale distribution
        centers (such activities, together with all other activities of the Company
        and
        its subsidiaries, as conducted at or prior to the termination of this Agreement,
        and any future activities reasonably related thereto which are contemplated
        by
        the Company and/or its subsidiaries at the termination of this Agreement
        identified in writing by the Company to Executive at the date of such
        termination, are hereinafter referred to as the “Business Activities”);


       

      WHEREAS,
        the Company desires to employ Executive upon the terms and subject to the
        terms
        and conditions set forth in this Agreement; and, 

       

      WHEREAS,
        Executive desires to be employed by the Company upon the terms and subject
        to
        the conditions set forth in this Agreement. 

       

      NOW,
        THEREFORE, in consideration of the premises, the mutual promises, covenants
        and
        conditions herein contained and for other good and valuable considerations,
        the
        receipt and sufficiency of which are hereby acknowledged, the parties hereto
        intending to be legally bound hereby agree as follows: 

       

      Section
        1. Employment.
        The
        Company hereby employs Executive, and Executive hereby accepts employment
        with
        the Company, all upon the terms and subject to the conditions set forth in
        this
        Agreement. 

       

      Section
        2. Capacity
        and Duties.
        Executive is and shall be employed in the capacity of Chief Executive Officer
        and Chairman of the Board of Directors of the Company and shall have such
        duties, responsibilities and authorities as are assigned to him by the Board
        of
        Directors of the Company (the “Board”). Subject to the control and general
        directions of, and the general policies and guidelines established, by the
        Board
        and except as otherwise herein provided, Executive shall devote such of his
        business time, best efforts and attention as necessary to promote and advance
        the business of the Company and its subsidiaries and to perform diligently
        and
        faithfully all the duties, responsibilities and obligations of Executive
        to be
        performed by him under this Agreement. Executive’s duties shall include ongoing
        management and oversight of the general business operations of the Company
        and
        its subsidiaries. During the Employment Period (as hereinafter defined),
        Executive may engage in other business activities; provided, however, that
        such
        activities do not unreasonably interfere with Executive’s performance of his
        obligations hereunder or violate Section 15 or Section 18 hereof; and
provided,
        further,
        that
        any such activity is fully disclosed to the Company. 

       

      Section
        3. Term
        of Employment.
        The
        initial term of employment of Executive by the Company pursuant to this
        Agreement shall be for the period (the “Initial Term”) commencing on December 1,
        2005 (the “Commencement Date”) and ending on November 30, 2008, or such earlier
        date that Executive’s employment is terminated in accordance with the provisions
        of this Agreement. The Initial Term automatically shall be extended for
        successive additional one year periods (each, an “Extended Term”) unless written
        notice is given by either party to the other party no later than 120 days
        prior
        to the expiration of the Initial Term or any Extended Term. (The Initial
        Term,
        together with each and any Extended Term, is sometimes hereinafter called
        the
“Employment Period”). 

       

      Section
        4. Place
        of Employment.
        Executive’s principal place of work shall be located at the principal offices of
        the Company in Farmington, Connecticut. 


      
        
          
          

        

        
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      Section
        5. Compensation.
        During
        the Employment Period, subject to all the terms and conditions of this Agreement
        and as compensation for all services to be rendered by Executive under this
        Agreement, the Company shall pay to or provide Executive with the following:
        

       

      5.01
        Base
        Salary.
        The
        Company shall compensate Executive during the life of this agreement for
        his
        services hereunder no less than a base annual salary of Three Hundred Forty-Six
        Thousand Four Hundred and Sixty-Six and 12/100 Dollars ($346,466.12), payable
        at
        such intervals (at least biweekly), net of applicable federal state and local
        taxes of any kind required by law to be withheld with respect to such payment,
        as salaries are paid generally to other executive officers of the Company.
        For
        fiscal years beginning 2007 and thereafter, the Board shall examine and modify
        Executive’s base salary with reference to prevailing competitive standards for
        comparable positions in organizations similar to the Company, as determined
        by
        an independent consultant approved by the Board and Executive. 

       

      5.02
        Cash
        Bonus.
        The
        Company shall pay to Executive an annual bonus as specified in a plan adopted
        each year by the Board. For fiscal year 2006, Executive’s incentive at target
        performance levels shall be no less than 100% of base pay. 

       

      5.03
        Other
        Benefits.
        The
        Company shall provide Executive with the other benefits specified on Exhibit
        5.03 attached hereto, which benefits shall not be deemed to be lieu of any
        other
        benefits or compensation to which Executive is entitled hereunder or otherwise.
        

      


      5.04 Stock
        Options and Restricted Stock.
        At the
        end of the first year of the Initial Term, the Company shall issue to Executive
        stock options and restricted stock at fair market value and comparable in
        amounts to those issued to a chief executive officer and chairman of the
        board
        of directors of a comparable publicly-traded corporation. 

       

      Section
        6. Adherence
        to Standards.
        Executive shall comply with the written policies, standards, rules and
        regulations of the Company from time to time established for all executive
        officers of the Company. 

       

      Section
        7. Review
        of Performance.
        The
        Board shall periodically review and evaluate the performance of Executive
        under
        this Agreement with Executive. 

       

      Section
        8. Expenses.
        The
        Company shall reimburse Executive for all reasonable, ordinary and necessary
        expenses (including, but not limited to, automobile and other business travel
        and customer entertainment expenses) incurred by him in connection with his
        employment hereunder in accordance with Company policy; provided, however,
        Executive shall render to the Company a complete and accurate accounting
        of all
        such expenses in accordance with the substantiation requirements of Section
        274
        of the Internal Revenue Code of 1986, as amended (the “Code”), as a condition
        precedent to such reimbursement. 

       

      Section
        9. Termination
        with Cause by the Company.
        This
        Agreement may be terminated with Cause (as hereinafter defined) by the Company
        provided that the Company shall (i) give Executive the Notice of Termination
        (as
        hereinafter defined), and (ii) pay Executive his annual base salary through
        the
        Termination Date (as hereinafter defined) at the rate in effect at the time
        the
        Notice of Termination is given, plus any bonus or incentive compensation
        which
        has been earned or has become payable pursuant to the terms of any compensation
        or benefit plan as of the Termination Date. Notwithstanding the foregoing,
        if
        Executive is terminated with Cause pursuant to Section 11.02(ii) and,
        subsequently, charges are dropped, Executive is found not guilty or otherwise
        cleared of wrongdoing, before or after trial or following appeal, then in
        such
        event, the Company shall promptly thereupon pay Executive (or to his estate
        in
        the event of Executive’s death) two year’s severance equal to the amount of the
        compensation and other benefits described in Section 5 of this Agreement
        to
        which Executive was entitled as of the Termination Date, with such payments
        being made in equal installments over the 24 months following the Termination
        Date, and such other amount as may be necessary to make Executive whole for
        any
        incremental taxes due as a result of such severance payments. In addition,
        all
        stock options issued to Executive shall immediately be vested as of the
        Termination Date.

       


      
        
          
          

        

        
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      Section
        10. Termination
        without Cause by the Company or for Good Reason by Executive;
        Non-Renewal.
        This
        Agreement may be terminated by (i) the Company by reason of the death or
        Disability (as hereinafter defined) of Executive or for no reason at all,
        or
        (ii) Executive for Good Reason (as hereinafter defined); provided that if
        this
        Agreement is terminated or not renewed pursuant to either of subsections
        (i) or
        (ii) of this Section 10 prior to November 30, 2009, or if the Company fails
        to
        renew this Agreement (as permitted by Section 3) through November 30, 2009,
        the
        Company shall pay to Executive (or to his estate in the event of termination
        due
        to Executive’s death) two year’s severance equal to the amount of the
        compensation and other benefits described in Section 5 of this Agreement
        to
        which Executive was entitled as of the Termination Date, with such payments
        being made in equal installments over the 24 months following the Termination
        Date, and such other amount as may be necessary to make Executive whole for
        any
        incremental taxes due because such payments are deemed to be an excess parachute
        payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
        Code of 1986, as amended (whether such payments are paid in cash or stock,
        pursuant to Executive’s election described below). The remaining balance of any
        payments or other sums due Executive hereunder (or under Section 9) shall
        be
        immediately due and payable in a lump sum upon a Sale of the Company (as
        hereinafter defined). A Sale shall mean a sale of all or substantially all
        of
        the assets of the Company, a change of more than fifty percent of the voting
        power of the Company, a merger or consolidation of the Company with or into
        another entity, or if persons who at the Termination Date constituted the
        Board
        of Directors cease for any reason to constitute at least a majority of the
        Board
        of Directors. In addition, all stock options and restricted stock issued
        to
        Executive shall immediately be vested as of the Termination Date. If the
        Executive should fail to renew this Agreement at any time other than for
        Good
        Reason or if the Company should fail to renew the Agreement after November
        30,
        2009, the Company shall not be required to pay any compensation to Executive
        other than his annual base salary through the last day of the then current
        term
        of the Employment Period, plus any bonus or incentive compensation which
        has
        been earned or has become payable pursuant to the terms of any compensation
        or
        benefit plan as of such date but which has not yet been paid. 

       

      Executive’s
        right to terminate his employment for Good Reason shall not be affected by
        his
        incapacity due to physical or mental illness. In the event of termination
        by
        reason of Executive’s death or Disability, medical, hospitalization or
        disability benefits coverage comparable to those provided by the Company
        during
        Executive’s lifetime shall be provided to his spouse and dependents for the
        remaining term of this Agreement and thereafter will provide Executive’s spouse
        and dependents with the option of purchasing such benefits coverage through
        the
        Company. The benefits provided under this Section 10 shall not be less favorable
        to Executive and his spouse and dependents in terms of amounts, deductibles
        and
        costs, if any, than such benefits provided by the Company to Executive, his
        spouse and dependents as of the Termination Date. This Section 10 shall not
        be
        interpreted so as to limit any benefits to which Executive, as a terminated
        employee of the Company, or his family may be entitled under the Company’s life
        insurance, medical, hospitalization or disability plans following his
        Termination Date or under applicable law. 

       

      At
        Executive’s election, in his sole discretion, any sums payable to Executive
        pursuant to this Section 10 may be paid to Executive either in cash or shares
        of
        common stock of the Company. Any portion of such sums that are paid in cash
        shall be paid to Executive at such intervals (at least biweekly), net of
        applicable federal state and local taxes of any kind required by law to be
        withheld with respect to such payment, at the same time as salaries are paid
        generally to other executive officers of the Company, unless there is a Sale
        as
        provided above in which event, all sums due Executive shall immediately be
        due
        and payable. All sums payable hereunder shall constitute severance payments
        (and
        not salary continuation payments, whether in cash or stock, at Executive’s
        election) and shall not be subject to offset for any reason or repayment
        in the
        event Executive becomes employed elsewhere. Upon the breach by Executive
        of
        Section 18 of this Agreement, the Company shall be entitled to cease making
        the
        remainder of any such cash payments then owed to Executive. 

       


      
        
          
          

        

        
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      If
        Executive elects to receive any portion of any sums payable to Executive
        pursuant to this Section 10 in common stock, the number of shares due to
        Executive shall be determined by dividing such sum by the average closing
        price
        per share of the common stock during the ten trading days immediately preceding
        the termination or expiration, as applicable, of this Agreement. One-third
        of
        such shares shall be paid within thirty days of termination or non-renewal,
        as
        applicable, and two-thirds of such shares shall be paid on the last day of
        the
        non-competition period contemplated by Section 18 of this Agreement; provided,
        however, that if the non-competition period extends for more than one year
        after
        such termination or expiration, as applicable, one-third of such shares shall
        be
        paid within thirty days of termination or non-renewal, as applicable, one-third
        of the shares shall be paid on the first anniversary of such termination
        or
        expiration, as applicable, and the remaining shares shall be paid on the
        last
        day of the non-competition period contemplated by Section 18 of this Agreement;
        provided, further, that should Executive breach Section 18 of this Agreement,
        any shares that have not yet been paid shall be canceled and returned to
        the
        Company. For each tranche of shares of common stock issued to Executive
        hereunder, the Company shall deliver registered shares or as promptly as
        commercially reasonable thereafter, but in any event within 60 days, the
        Company
        shall register the resale of such shares and keep the registration statement
        in
        effect for not less than three (3) years. 

       

      Section
        11. Definitions.
        In
        addition to the words and terms elsewhere defined in this Agreement, certain
        capitalized words and terms used in this Agreement shall have the meanings
        given
        to them by the definitions and descriptions in this Section 11 unless the
        context or use indicates another or different meaning or intent, and such
        definition shall be equally applicable to both the singular and plural forms
        of
        any of the capitalized words and terms herein defined. The following words
        and
        terms are defined terms under this Agreement: 

       

      11.01
        “Disability” shall mean a physical or mental illness which, in the judgment of
        the Company after consultation with the licensed physician attending Executive,
        impairs Executive’s ability to substantially perform his duties under this
        Agreement as an employee and as a result of which he shall have been absent
        from
        his duties with the Company on a full-time basis for six consecutive months.
        

      


      11.02
        A
        termination with “Cause” shall mean a termination of this Agreement by reason of
        (i) Executive’s conviction of a felony or a crime involving moral turpitude or
        any other crime involving dishonesty, disloyalty or fraud with respect to
        the
        Company; or (ii) Executive’s arrest or indictment of any lesser crime or offense
        committed in connection with the performance of Executive’s duties hereunder; or
        (iii) if Executive willfully impedes or endeavors to influence, obstruct
        or
        impede or fails to materially cooperate with an investigation authorized
        by the
        Board of Directors of the Company, a self-regulatory organization or a
        governmental department or agency. 

       

      11.03
        “Good Reason” shall mean the occurrence of any of the following events without
        Executive’s prior express written consent: (i) any material change in his
        status, title, authorities or responsibilities (including reporting
        responsibilities) under this Agreement which represents a demotion from such
        status, title, position or responsibilities (including reporting
        responsibilities); the assignment to him of any duties or work responsibilities
        which are materially inconsistent with his status, title, position or work
        responsibilities set forth in this Agreement or which are materially
        inconsistent with the status, title, position or work responsibilities of
        a
        chief executive officer and chairman of the board of directors of a
        publicly-traded corporation; or any removal of Executive from, or failure
        to
        appoint, elect, reappoint or reelect Executive to, any of such positions,
        except
        in connection with the termination of his employment with Cause, or as a
        result
        of his death or Disability; provided,
        however,
        that no
        change in title, authorities or responsibilities customarily attributable
        solely
        to the Company ceasing to be a publicly traded corporation shall constitute
        Good
        Reason hereunder; (ii) the relocation of the principal office of the Company
        or
        the reassignment of Executive to a location more than thirty (30) miles from
        Farmington, Connecticut; (iii) the failure by the Company to continue in
        effect
        any incentive, bonus or other compensation plan in which Executive participates,
        unless an equitable arrangement (embodied in an ongoing substitute or


       


      
        
          
          

        

        
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      alternative
        plan) has been made with respect to the failure to continue such plan, or
        the
        failure by the Company to continue Executive’s participation therein, or any
        action by the Company which would directly or indirectly materially reduce
        his
        participation therein or reward opportunities thereunder; provided, however,
        that Executive continues to meet all eligibility requirements thereof; (iv)
        the
        failure by the Company to continue in effect any Executive benefit plan
        (including any medical, hospitalization, life insurance or disability benefit
        plan in which Executive participates), or any material fringe benefit or
        prerequisite enjoyed by him unless an equitable arrangement (embodied in
        an
        ongoing substitute or alternative plan) has been made with respect to the
        failure to continue such plan, or the failure by the Company to continue
        Executive’s participation therein, or any action by the Company which would
        directly or indirectly materially reduce his participation therein or reward
        opportunities thereunder, or the failure by the Company to provide him with
        the
        benefits to which he is entitled under this Agreement; provided, however,
        that
        Executive continues to meet all eligibility requirements thereof; (v) any
        other
        material breach by the Company of any provision of this Agreement; (vi) the
        failure of the Company to obtain a satisfactory agreement from any successor
        or
        assign of the Company to assume and agree to perform this Agreement, as
        contemplated in Section 21 hereof; (vii) any purported termination of
        Executive’s employment which is not effected pursuant to a Notice of Termination
        satisfying the requirements of this Agreement; and for purposes of this
        Agreement, no such purported termination shall be effective; or (viii) if
        during
        any twelve month period, persons who at the beginning of such period constitute
        the Board of Directors cease for any reason to constitute at least a majority
        of
        the Board of Directors. 

       

      11.04
        Notice
        of Termination.
“Notice
        of Termination” shall mean a written notice which shall indicate the specific
        termination provision in this Agreement relied upon and shall set forth in
        reasonable detail the facts and circumstances claimed to provide a basis
        for
        termination of Executive’s employment under the provision so indicated;
        provided, however, no such purported termination shall be effective without
        such
        Notice of Termination; provided further, however, any purported termination
        by
        the Company or by Executive shall be communicated by a Notice of Termination
        to
        the other party hereto in accordance with Section 13 of this Agreement.


       

      11.05
        Termination
        Date.
        “Termination Date” shall mean the date specified in the Notice of Termination
        (which, in the case of a termination pursuant to Section 9 of this Agreement
        shall not be less than 60 days, and in the case of a termination pursuant
        to
        Section 10 of this Agreement shall not be more than 60 days, from the date
        such
        Notice of Termination is given); provided, however, that if within 30 days
        after
        any Notice of Termination is given the party receiving such Notice of
        Termination notifies the other party that a dispute exists concerning the
        termination, the Termination Date shall be the date finally determined by
        either
        mutual written agreement of the parties or by the final judgment, order or
        decree of a court of competent jurisdiction (the time for appeal therefrom
        having expired and no appeal having been taken). 

       

      Section
        12. Fees
        and Expenses.
        The
        Company shall pay all legal fees and related expenses (including the costs
        of
        experts, evidence and counsel) incurred by Executive as a result of a contest
        or
        dispute over Executive’s termination of employment if such contest or dispute is
        resolved in Executive’s favor. 

       

      Section
        13. Notices.
        For the
        purposes of this Agreement, notices and all other communications provided
        for in
        the Agreement shall be in writing and shall be deemed to have been duly given
        when personally delivered or sent by certified mail, return receipt requested,
        postage prepaid, or by expedited (overnight) courier with established national
        reputation, shipping prepaid or billed to sender, in either case addressed
        to
        the respective addresses last given by each party to the other (provided
        that
        all notices to the Company shall be directed to the attention of the Board
        with
        a copy to the Secretary of the Company) or to such other address as either
        party
        may have furnished to the other in writing in accordance herewith. All notices
        and communication shall be deemed to have been received on the date of delivery
        thereof, on the third business day after the mailing thereof, or on the second
        day after deposit thereof with an expedited courier service, except that
        notice
        of change of address shall be effective only upon receipt. 

       


      
        
          
          

        

        
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      Section
        14. Life
        Insurance.
        The
        Company may, at any time after the execution of this Agreement, apply for
        and
        procure as owner and for its own benefit, life insurance on Executive, in
        such
        amounts and in such form or forms as the Company may determine. Executive
        shall,
        at the request of the Company, submit to such medical examinations, supply
        such
        information, and execute such documents as may be required by the insurance
        company or companies to whom the Company has applied for such insurance.
        Executive hereby represents that to his knowledge he is in excellent physical
        and mental condition and is not under the influence of alcohol, drugs or
        similar
        substance. 

       

      Section
        15. Proprietary
        Information and Inventions.
        Executive understands and acknowledges that: 

       

      15.01
        Trust.
        Executive’s employment creates a relationship of confidence and trust between
        Executive and the Company with respect to certain information applicable
        to the
        business of the Company and its subsidiaries (collectively, the “Group”) or
        applicable to the business of any vendor or customer of any of the Group,
        which
        may be made known to Executive by the Group or by any vendor or customer
        of any
        of the Group or learned by Executive during the Employment Period. 

       

      15.02
        Proprietary
        Information.
        The
        Group possesses and will continue to possess information that has been created,
        discovered, or developed by, or otherwise become known to, the Group (including,
        without limitation, information created, discovered, developed or made known
        to
        Executive during the period of or arising out of his employment by the Company)
        or in which property rights have been or may be assigned or otherwise conveyed
        to the Group, which information has commercial value in the business in which
        the Group is engaged and is treated by the Group as confidential. Except
        as
        otherwise herein provided, all such information is hereinafter called
“Proprietary Information,” which term, as used herein, shall also include, but
        shall not be limited to, data, functional specifications, computer programs,
        know-how, research, technology, improvements, developments, designs, marketing
        plans, strategies, forecasts, new products, unpublished financial statements,
        budgets, projections, licenses, franchises, prices, costs, and customer,
        supplier and potential acquisition candidates lists. Notwithstanding anything
        contained in this Agreement to the contrary, the term “Proprietary Information”
shall not include (i) information which is in the public domain, (ii)
        information which is published or otherwise becomes part of the public domain
        through no fault of Executive, (iii) information which Executive can demonstrate
        was in Executive’s possession at the time of disclosure and was not acquired by
        Executive directly or indirectly from any of the Group on a confidential
        basis,
        (iv) information which becomes available to Executive on a non-confidential
        basis from a source other than any of the Group and which source, to the
        best of
        Executive’s knowledge, did not acquire the information on a confidential basis,
        or (v) information required to be disclosed by any federal or state law,
        rule or
        regulation or by any applicable judgment, order or decree or any court or
        governmental body or agency having jurisdiction in the premises. 

       

      All
        Proprietary Information shall be the sole property of the Group and their
        respective assigns. Executive assigns to the Company any rights Executive
        may
        have or acquire in such Proprietary Information. At all times, both during
        Executive’s employment by the Company and after its termination, Executive shall
        keep in strictest confidence and trust all Proprietary Information, and
        Executive shall not use or disclose any Proprietary Information without the
        written consent of the Group, except as may be necessary in the ordinary
        course
        of performing Executive’s duties as an Executive of the Company. 

       

      Section
        16. Surrender
        of Documents; No Disparagement.
        Executive shall, at the request of the Company, promptly surrender to the
        Company or its nominee any Proprietary Information or document, memorandum,
        record, letter or other paper in his possession or under his control relating
        to
        the operation, business or affairs of the Group. Executive further agrees
        that
        he shall not, either during the Employment Period or at any time thereafter,
        in
        any way disparage the Company. 

       


      
        
          
          

        

        
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      Section
        17. Other
        Agreements.
        Executive represents and warrants that Executive’s performance of all the terms
        of this Agreement and as an Executive of the Company does not, and will not,
        breach any agreement to keep in confidence proprietary information acquired
        by
        Executive in confidence or in trust prior to Executive’s employment by the
        Company. Executive has not entered into, and shall not enter into, any
        agreement, either written or oral, which is in conflict with this Agreement
        or
        which would be violated by Executive entering into, or carrying out his
        obligations under, this Agreement. 

       

      Section
        18. Restrictive
        Covenant.
        Executive acknowledges and recognizes Executive’s possession of Proprietary
        Information and the highly competitive nature of the business of the Group
        and,
        accordingly, agrees that in consideration of the premises contained herein
        Executive will not, during the period of Executive’s employment by the Company
        and for the period ending on the later of November 30, 2009, or the first
        anniversary of the Termination Date, (i) directly or indirectly engage in
        any
        Business Activities in the United States, whether such engagement shall be
        as an
        employer, officer, director, owner, employee, consultant, stockholder, partner
        or other participant in any Business Activities, (ii) assist others in engaging
        in any Business Activities in the manner described in the foregoing clause
        (i),
        or (iii) induce employees of the Company to terminate their employment with
        the
        Company or engage in any Business Activities in the United States; provided,
        however, that the ownership of no more than two percent of the outstanding
        capital stock of a corporation whose shares are traded on a national securities
        exchange or on the over-the-counter market shall not be deemed engaging in
        any
        Business Activities. Notwithstanding the foregoing, if the Company fails
        to make
        any payment required by Section 10 of this Agreement within five days of
        notice
        of non-payment by Executive to the Company or if there is a Sale, then the
        covenants in this Section 18 immediately shall terminate. 

       

      Section
        19. Remedies.
        Executive acknowledges and agrees that the Company’s remedy at law for a breach
        or a threatened breach of the provisions herein would be inadequate, and
        in
        recognition of this fact, in the event of a breach or threatened breach by
        Executive of any of Sections 15, 16, 17 or 18 of this Agreement, it is agreed
        that the Company shall be entitled to equitable relief in the form of specific
        performance, a temporary restraining order, a temporary or permanent injunction
        or any other equitable remedy which may then be available, without posting
        bond
        or other security. Executive acknowledges that the granting of a temporary
        injunction, a temporary restraining order or other permanent injunction merely
        prohibiting Executive from engaging in any Business Activities would not
        be an
        adequate remedy upon breach or threatened breach of this Agreement, and
        consequently agrees upon any such breach or threatened breach to the granting
        of
        injunctive relief prohibiting Executive from engaging in any activities
        prohibited by this Agreement. No remedy herein conferred is intended to be
        exclusive of any other remedy, and each and every such remedy shall be
        cumulative and shall be in addition to any other remedy given hereunder now
        or
        hereinafter existing at law or in equity or by statute or otherwise.


       

      Section
        20. Successive
        Employment Notice.
        Within
        five business days after the Termination Date, Executive shall provide notice
        to
        the Company of Executive’s next intended employment. If such employment is not
        known by Executive at such date, Executive shall notify the Company immediately
        upon determination of such information. Executive shall continue to provide
        the
        Company with notice of Executive’s place and nature of employment and any change
        in place or nature of employment during the period ending two years after
        the
        Termination Date. Failure of Executive to provide the Company with such
        information in an accurate and timely fashion shall be deemed to be a breach
        of
        this Agreement and shall entitle the Company to all remedies provided for
        in
        this Agreement as a result of such breach.

      


      Section
        21. Successors.
        This
        Agreement shall be binding on the Company and any successor to any of its
        businesses or assets. Without limiting the effect of the prior sentence,
        the
        Company shall use its best efforts to require any successor or assign (whether
        direct or indirect, by purchase, merger, consolidation or otherwise) to all
        or
        substantially all of the business and/or assets of the Company to expressly
        assume and agree to perform this Agreement in the same manner and to the
        same
        extent that the Company would be required to perform it if no such succession
        or
        assignment had taken place. As used in this Agreement, “Company” shall mean the
        Company as hereinbefore defined and any successor or assign to its business
        and/or assets as aforesaid which assumes and agrees to perform this Agreement
        or
        which is otherwise obligated under this Agreement by the first sentence of
        this
        Section 21, by operation of law or otherwise. 

       


      
        
          
          

        

        
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      Section
        22. Binding
        Effect.
        This
        Agreement shall inure to the benefit of and be enforceable by Executive’s
        personal and legal representatives, executors, administrators, successors,
        heirs, distributees, devisees and legatees. If Executive should die while
        any
        amounts would still be payable to him hereunder if he had continued to live,
        all
        such amounts, unless otherwise provided herein, shall be paid in accordance
        with
        the terms of this Agreement to Executive’s estate. 

       

      Section
        23. Modification
        and Waiver.
        No
        provision of this Agreement may be modified, waived or discharged unless
        such
        waiver, modification or discharge is agreed to in writing and signed by
        Executive and such officer as may be specifically designated by the Board.
        No
        waiver by either party hereto at any time of any breach by the other party
        hereto of, or compliance with, any condition or provision of this Agreement
        to
        be performed by such other party shall be deemed a waiver of similar or
        dissimilar provisions or conditions at the same or at any prior or subsequent
        time. 

       

      Section
        24. Headings.
        Headings used in this Agreement are for convenience only and shall not be
        used
        to interpret or construe its provisions. 

       

      Section
        25. Amendments.
        No
        amendments or variations of the terms and conditions of this Agreement shall
        be
        valid unless the same is in writing and signed by each of the parties hereto.
        

       

      Section
        26. Severability.
        The
        invalidity or unenforceability of any provision of this Agreement, whether
        in
        whole or in part, shall not in any way affect the validity or enforceability
        of
        any other provision herein contained. Any invalid or unenforceable provision
        shall be deemed severable to the extent of any such invalidity or
        unenforceability. It is expressly understood and agreed that, while the Company
        and Executive consider the restrictions contained in this Agreement reasonable
        for the purpose of preserving for the Company the goodwill, other proprietary
        rights and intangible business value of the Company, if a final judicial
        determination is made by a court having jurisdiction that the time or territory
        or any other restriction contained in this Agreement is an unreasonable or
        otherwise unenforceable restriction against Executive, the provisions of
        such
        clause shall not be rendered void but shall be deemed amended to apply as
        to
        maximum time and territory and to such other extent as such court may judicially
        determine or indicate to be reasonable. 

       

      Section
        27. Governing
        Law; Venue.
        This
        Agreement shall be construed and enforced pursuant to the laws of the State
        of
        Connecticut, excluding its choice of law provisions. Both parties submit
        to the
        jurisdiction of the United States District Court, District of Connecticut
        at
        Hartford and the Superior Court in and for Hartford County, Connecticut,
        as the
        exclusive proper forum in which to adjudicate any case or controversy arising
        hereunder. The prevailing party shall be entitled to an award of its reasonable
        attorneys’ fees incurred in connection with any such judicial proceedings.


       

      Section
        28. Counterparts.
        This
        Agreement may be executed in more than one counterpart and each counterpart
        shall be considered an original. 

       

      Section
        29. Exhibits.
        The
        Exhibits attached hereto are incorporated herein by reference and are an
        integral part of this Agreement. 

       

      IN
        WITNESS WHEREOF, this Agreement has been duly executed by the Company and
        Executive in four counterparts as of the date first above written. 

       

      
        	 	 	 
	 	
                DRUGMAX,
                  INC.

              
	 
 	 
 	 
 
	 	By:  	/s/ Peter
                Grua
	 	
                

                Peter
                  Grua

                Chairman,
                  Compensation Committee

              


        	 	 	 
	 	
                EXECUTIVE

              
	 
 	 
 	 
 
	 	By:  	/s/ Edgardo
                A. Mercadante
	 	
                

                Edgardo
                  A. Mercadante

              


      

       

       

      8