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Exhibit 10.1                                                 Chronimed Inc.
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MEMO                                              CONFIDENTIAL

TO:       STEVE RUSSEK                            FOR RECIPIENT ONLY

FROM:     HANK BLISSENBACH

CC:

DATE:     OCTOBER 26, 1999

RE:       RETENTION INCENTIVE

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AS YOU KNOW, THE COMPANY HAS ANNOUNCED THAT IT HAS ENGAGED A FINANCIAL SERVICES
FIRM TO SEEK STRATEGIC ALTERNATIVES TO TAKE THE BUSINESS FORWARD AND GROW THE
COMPANY MOST EFFECTIVELY. THE END PRODUCT OF THIS MAY INCLUDE A TRANSACTION
WHICH RESULTS IN A MERGER, ACQUISITION OR SALE OF ALL OR PART OF THE COMPANY. IF
SUCH A TRANSACTION IS TO BE SUCCESSFULLY COMPLETED, THE COMPANY BELIEVES IT IS
NECESSARY TO RETAIN CERTAIN KEY PERSONNEL DURING THE PERIOD BETWEEN NOW AND THE
CLOSING OF SUCH A TRANSACTION. YOU HAVE BEEN SELECTED TO PARTICIPATE IN A KEY
EMPLOYEE RETENTION ARRANGEMENT, IF YOU SO AGREE. THE REST OF THIS MEMO EXPLAINS
THIS INCENTIVE PLAN, AND ITS CONDITIONS.

TO QUALIFY FOR THE INCENTIVE, YOU MUST REMAIN EMPLOYED UNTIL THE EARLIER OF A
TRANSACTION CLOSING OR FEBRUARY 28, 2000. HOWEVER, IF THE BOARD OF DIRECTORS HAS
ACCEPTED A LETTER OF INTENT BY DECEMBER 31, 1999, BUT A TRANSACTION HAS NOT YET
CLOSED, THE COMPANY MAY EXTEND THE DATE YOU MUST REMAIN EMPLOYED TO THE EARLIER
OF THE ACTUAL DATE OF CLOSING OR MARCH 31, 2000. PAYMENT OF THE INCENTIVE WILL
BE 30 DAYS FOLLOWING DATE OF VESTING (THE DATE YOU ARE FULLY QUALIFIED AND
ENTITLED TO RECEIVE THE INCENTIVE). YOU AGREE THAT IF YOU INITIATE A TERMINATION
OF EMPLOYMENT PRIOR TO BEING FULLY VESTED IN THIS INCENTIVE PLAN, OR IF YOU ARE
TERMINATED BY THE COMPANY FOR CAUSE, YOU WILL FORFEIT ALL RIGHTS TO THE
INCENTIVE.

THE INCENTIVE IS IN THE FORM OF A ONE TIME CASH BONUS, BEFORE TAXES AND
DEDUCTIONS OF: $30,000.00 (THIRTY THOUSAND DOLLARS)

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YOU UNDERSTAND THAT THIS IS A SPECIAL ONE TIME BONUS ARRANGEMENT. BY AGREEING TO
ACCEPT THIS INCENTIVE ARRANGEMENT, YOU AGREE THAT YOU WILL KEEP THE EXISTENCE
AND THE TERMS OF THIS AGREEMENT CONFIDENTIAL, AND YOU WILL NOT SHARE IT WITH ANY
OTHER PERSON EXCEPT YOUR IMMEDIATE FAMILY AND/OR FINANCIAL ADVISOR. THOSE
INDIVIDUALS ALSO MUST KEEP THIS CONFIDENTIAL. BREACH OF THIS CONFIDENTIALITY
PROVISION WILL RESULT IN FORFEITURE OF INCENTIVE. THIS CONFIDENTIALITY AGREEMENT
WILL REMAIN INTACT AS LONG AS YOU REMAIN EMPLOYED WITH CHRONIMED.

YOU ALSO UNDERSTAND AND AGREE THAT THIS IS SOLELY AN INCENTIVE AGREEMENT. IT
DOES NOT CHANGE THE STATUS OF ANY OTHER ASPECTS OF YOUR EMPLOYMENT RELATIONSHIP
WITH CHRONIMED, AND IS NOT AN EMPLOYMENT CONTRACT.

PLEASE SIGN THIS MEMO AS AN INDICATION OF YOUR ACCEPTANCE OF THIS AGREEMENT, AND
KEEP A COPY FOR YOUR RECORDS.

I HAVE READ AND UNDERSTAND THE TERMS OF THIS INCENTIVE PLAN. I AGREE TO ACCEPT
ITS TERMS AND CONDITIONS.


 /S/ STEVEN B. RUSSEK                  /S/ SHAWN FEATHERSTON, VP HUMAN RESOURCES
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SIGNATURE OF EMPLOYEE                  COMPANY - NAME/TITLE


   10/26/99
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DATE