Exhibit 10.125

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October 24, 2006

Martin G. Baum

6012 Farm Pond Road

Apex, NC 27523

 

  Re: Settlement of Employment and Compensation Related Matters

Dear Marty:

This letter agreement sets forth the terms of a settlement resolving all
outstanding issues, compensation, contractual rights and entitlements of any
nature including but not limited to rights to severance and other compensation
and all other rights or claims arising from all current and past employment
agreements and relationships of Martin G. Baum (“Employee”) with: (i) TEAMM
Pharmaceuticals, Inc. (“TEAMM”), (ii) Accentia Biopharmaceuticals, Inc.
(“Accentia”), and (iii) all subsidiaries of Accentia including but without
limitation Biovest International, Inc. (“Biovest”) (collectively “All Accentia
Subsidiaries”); Accentia, All Accentia Subsidiaries, and TEAMM are collectively
referred to at times herein as the “Entities”. This Letter Agreement is entered
into by Employee and Accentia for good and valuable consideration in hand
received and is a binding contract.

This Letter Agreement resolves and settles all matters relating to all rights,
claims, actions, obligations, accruals and entitlements of any and all
description, including but not limited to all employment, consulting and
director relationships, between Employee and each of the Entities (“All
Outstanding Rights”) on an amicable basis, so that both Employee and the
Entities can look to the future while maintaining a cordial and professional
relationship.

In settlement of any and All Outstanding Rights, of Employee with the Entities,
Employee and the Entities agree to the following:

 

  1. Memorandum of Understanding. On October 12, 2006, Employee and Accentia
entered into a Memorandum of Understanding a copy of which is attached as
Exhibit A. The Memorandum of Understanding is superseded by this Letter
Agreement.

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Martin G. Baum

October 24, 2006

Page 2

 

  2. Severance. All employment agreements and other relationships including but
not limited to director positions held by Employee with each of the Entities,
including but without limitation Accentia, TEAMM and Biovest, and each of their
subsidiaries, will be terminated effective on a date after the date hereof to be
determined by Accentia but not later than October 28, 2006 (Severance Date). On
October 12, 2006, Employee submitted resignations as a member of the Board of
Directors of Accentia, TEAMM and Biovest in the form of Exhibit B which shall
survive the execution of this Agreement in Principle and which shall become
effective on the last to occur of: (i) execution of this Letter Agreement and
(ii) for each resignation upon the acceptance of the resignation by the Boards
of Directors of each of the respective companies.

 

  3. Severance Compensation. As sole and complete severance compensation,
Accentia shall pay Employee: (a) an amount equal to one year of Employee’s
current Base Salary to be paid monthly after all normal withholding and (b) a
lump sum severance payment of $30,000 to be paid on the Severance Date
(“Severance Compensation”). The Severance Compensation is in full and complete
resolution, payment and settlement of all rights held by Employee related to his
employment and all other relationships with each of the Entities, including but
without limitation Accentia, TEAMM and Biovest, and each of their subsidiaries
from the beginning of time through the Severance Date including but not limited
to the termination of all employment agreements, the satisfaction of any and all
severance or compensation obligations, settlement of all accrued compensation,
bonus compensation, deferred compensation, vacation compensation, director
compensation or expense reimbursement, expense reimbursement and all other
compensation or payment of any nature or description which is owed, claimed or
which may in the future be claimed to be owed to Employee by any of the
Entities. Normal FICA and tax withholding will be deducted from the monthly
Settlement Compensation and only net amounts will be paid to Employee. Employee
shall be responsible for paying his own COBRA payments.

 

  4. Reimbursement. On the Severance Date, without admitting any wrongdoing,
Employee shall pay to Accentia $2,760 in settlement of prior disputed expense
reimbursements submitted by Gary Cantrell.

 

  5. Furniture. Employee may on the Severance Date (in his discretion) purchase
the desk and credenza and bookshelf and two file cabinets located in his office
for $1,000.

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Martin G. Baum

October 24, 2006

Page 3

 

  6. Stock Options. All stock options granted to Employee under the stock option
plan of any Entity shall vest on the Severance Date and Employee shall have the
time permitted by the applicable Incentive Stock Option Plan to exercise said
options (i.e., 90 days following the Severance Date to exercise options granted
under the Accentia Incentive Stock Option Plan and 60 days following the
Severance Date to exercise said options granted under the Biovest Incentive
Stock Option Plan). The option shares and other shares in any Entity held by
Employee shall not be subject to any company imposed lock-up but all such shares
and options of Accentia shall be subject tot the Accentia Insider Trading Policy
for six months following the Severance Date. Employee and Accentia agree that
Employee has been granted the following options and except for the following
options Employee has no right or claim to any options in Accentia, Biovest or
any other Entity: (i) 336,803 options in Accentia, 100,000 options in Biovest,
no options in Teamm and no options in any other Entity or subsidiary of any
Entity.

 

  7. Confidentiality. All existing Confidentiality Agreements and Inventors
Rights Agreements between Employee and each Entity shall remain in full effect
during the period that any Severance Compensation is required to be made paid
hereunder and shall be enforceable notwithstanding this Letter Agreement or the
severance provided for herein. Employee shall treat all information learned
during his employment, including but not limited to information relating to the
Entities’ business activities, clinical trials, processes and procedures
regarding all products owned or being developed by the Entities including, but
not limited to, BiovaxID, AutovaxID, SinuNase, MDTurbo, AllerNase and all
business relationships with any business or governmental entity including the
NCI, any clinical site and any investigator regarding each Entity as proprietary
and confidential and not disclose same except with the prior written consent of
the Entity. This agreement for Employee to retain all information regarding the
Entities confidential shall remain in effect even though the Entities may
disclose public information through press releases or filings with the SEC with
the requirement that Employee take a “no comment” position on all information
regarding the Entities. Notwithstanding the foregoing, however, nothing herein
shall be construed as preventing, restricting, or precluding disclosure of any
information as required by law or pursuant to any subpoena or rule of Court in
connection with any litigation, arbitration, governmental investigation, or
similar proceeding.

 

  8.

Non-Competition. The Entities will waive and release Employee from the
provisions of any and all existing non-competition agreements provided however,
that for so long as Employee is entitled to receive any Severance Compensation
hereunder, Employee shall not solicit any employee of any Entity nor solicit or
interfere with the relationship between any Entity and

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Martin G. Baum

October 24, 2006

Page 4

 

 

their customers or any contract parties nor make any negative statement
regarding any Entity or the business or business conduct of any Entity.

 

  9. 401K. The Employee’s 401(k) account maintained at Morgan Stanley will be
disbursed to or for the benefit of Employee in accordance with the provisions of
the plan document.

 

  10. Recommendations. The termination of Employee will be considered due to
strategic considerations and Entities will provide favorable recommendations in
the form of Exhibit C upon request of potential employers. Any public
announcement of the severance shall be in the form of Exhibit D provided however
Accentia and Biovest may issue a press release and file an 8-K discussing Mr
Baum in the same manner as other non-independent directors resigning from the
Board. Accentia and Biovest shall be permitted to make any filings required by
the SEC. Employee shall not make any statement that could reasonably be
anticipated to damage the reputation or business of any Entity or any officer or
director or affiliate of any Entity. Likewise, the Entities will not disparage
Employee in regard to the performance and all other aspects of the Employment
relationship with Employee.

 

  11. General Releases. Upon the Severance Date, Employee and the Entites shall
execute and exchange mutual general releases in the form of Exhibit E (in the
case of the release to be executed by Employee) and Exhibit F (in the case of
the release to be executed by the Entities).

 

  12. Choice of law. This Agreement shall be governed by and interpreted in
light of the laws of the State of Florida.

 

  13. Notices. Notices required or permitted to be given pursuant to this
Agreement shall be sent via certified RRR or overnight courier, with proof of
receipt as follows:

If to the Entities:

Accentia Biopharmaceuticals, Inc.

324 S. Hyde Park Avenue, Suite 350

Tampa, FL 33606

Attn: James A. McNulty, C.P.A., Secretary/Treasurer

If to Employee:

Martin G. Baum

6012 Farm Pond Road

Apex, NC 27523

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Martin G. Baum

October 24, 2006

Page 5

 

  14. Counterparts. This Agreement may be signed in two counterparts, each of
which shall constitute an original, but both of which together shall constitute
one and the same agreement. However, this document will not be binding on either
of the parties until each party has received delivery of an original executed on
behalf of each of the parties.

In the event that the terms of settlement outlined in this letter meet with your
approval, kindly so indicate by signing where indicated below and returning one
signed copy of this Letter Agreement to my attention. If you should have any
questions with regard to this matter, please do not hesitate to contact me.

Very truly yours,

Frank E. O’Donnell, M.D.

Accentia Biopharmaceuticals, Inc.

Teamm Pharmaceuticals, Inc.

The undersigned has read and understood the terms set forth herein and
acknowledges, agrees to and accepts these terms.

 

/s/ Martin Baum   Date:  

10/26/06

Martin Baum, Individually    

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Exhibit A

MEMORANDUM OF UNDERSTANDING

Set forth herein is the understanding of Accentia Biopharmaceuticals, Inc
(Accentia) and Marty Baum (Mr. Baum) regarding the termination of Mr. Baum’s
employment and all other relationships with and the satisfaction of all
entitlements of Mr. Baum including but not limited to compensation, bonuses,
severance payments, vacation and all other entitlements of any description from
Accentia and each of its subsidiaries including but not limited to Biovest
International, Inc. (Subsidiaries). This Memorandum of Understanding is subject
to the approval of the Board of Directors of Accentia and is further subject to
the execution of a mutually agreeable definitive Severance Agreement by Accentia
and Mr. Baum.

 

  1. Severance. All employment agreements and other relationships including but
not limited to director positions with Accentia and each of its Subsidiaries
will be terminated effective on a date after the date hereof to be determined by
Accentia but not later than October 28, 2006 (Severance Date). On the date
hereof, Mr. Baum shall tender his resignation from the Board of Directors of
Accentia, Teamm and Biovest subject to the condition that the Accentia Board of
Directors approves this Memorandum of Understanding.

 

  2. Severance Compensation. As sole and complete severance compensation,
Accentia shall pay Mr. Baum: (a) an amount equal to one year of Mr. Baum’s
current Base Salary to be paid monthly after all normal withholding and (b) a
lump sum severance payment of $30,000 to be paid on the Severance Date.

 

  3. Reimbursement. On the Severance Date, without admitting any wrong doing,
Mr. Baum shall pay Accentia $2,760 in settlement of prior disputed expense
reimbursements submitted by Gary Cantrell.

 

  4. Furniture. Mr. Baum may on the Severance Date (in his discretion) purchase
the desk and credenza and bookshelf and two file cabinents located in his office
for $1,000.

 

  5. Stock Options. All stock options granted to Mr. Baum under the Accentia and
Subsidiary stock option plan shall vest on the Severance Date and Mr. Baum shall
have 90 days following the Severance Date to exercise said options. The option
shares and other shares held by Mr. Baum shall not be subject to any company
imposed lock-up but all such shares shall be subject tot the Accentia Insider
Trading Policy for six months following the Severance Date.

 

  6. General Releases. On the Severance Date, the parties shall exchange mutual
general releases.

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  7. Covenant Not to Compete. Mr. Baum’s existing Covenant Not to Compete shall
be terminated on the Severance Date and Mr. Baum shall then be relieved of any
obligation thereunder. However, Mr. Baum shall remain subject to existing
restrictions on solicitation of employees, customers or contract parties of
Accentia and its Subsidiaries.

 

  8. References. The parties shall agree to make no disparaging statements
regarding each other and Accentia shall agree to provide favorable
recommendations for Mr. Baum. Any announcement of the severance shall be in the
Accentia press release regarding the re-alignment of the Board of Directors to
achieve independence as required by NASDAQ.

 

Accentia Biopharmaceuticals, Inc.               Dated:   ______________________
Sam Duffey, General Counsel               Dated:   ______________________ Marty
Baum      

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Exhibit B

[TEAMM Letterhead]

Board of Directors

Teamm Pharmaceuticals, Inc.

Attention: Frank O’Donnell                                         
                            October 26, 2006

Gentlemen,

I hereby tender my resignation from the Board of Directors of Teamm
Pharmaceuticals, Inc (“Teamm”) and from membership on all committees of the
Teamm Board of Directors to be effective upon acceptance by the Teamm Board of
Directors. I have enjoyed the opportunity to serve with you on Teamm’s Board and
wish you and Teamm great success.

 

Sincerely, /s/ Marty Baum Marty Baum

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Board of Directors

Accentia Biopharmaceuticals, Inc.

Attention: Frank O’Donnell, Chairman                                         
            October 26, 2006

Gentlemen,

I hereby tender my resignation from the Board of Directors of Accentia
Biopharmaceuticals, Inc (“Accentia”) and from membership on all committees of
the Accentia Board of Directors to be effective upon acceptance by the Accentia
Board of Directors. I have enjoyed the opportunity to serve with you on
Accentia’s Board and wish you and Accentia great success.

 

Sincerely, /s/ Marty Baum Marty Baum

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Board of Directors

Biovest International, Inc.

Attention: Steve Arikian                                         
                            October 26, 2006

Gentlemen,

I hereby tender my resignation from the Board of Directors of Biovest
International, Inc. (“Biovest”) and from membership on all committees of the
Biovest Board of Directors to be effective upon acceptance by the Biovest Board
of Directors. I have enjoyed the opportunity to serve with you on Biovest’s
Board and wish you and Accentia great success.

 

Sincerely, /s/ Marty Baum Marty Baum

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Exhibit E

RELEASE OF ALL CLAIMS

The undersigned Martin Baum ( “Releasor”) in connection with a settlement
agreement resolving all employment-related claims by and with regard to the
Releasees (as defined below) hereby releases and forever discharges Accentia
Biopharmaceuticals, Inc. (“Accentia”), TEAMM Pharmaceuticals, Inc. (“TEAMM”),
Biovest International, Inc., (“BioVest”) and Analytica International, Inc., as
well as all officers and directors of each of the foregoing corporations and
their subsidiaries, affiliates, agents, servants, employees, officers, insurers,
successors, and assigns, and each and every one of them (hereinafter
collectively referred to as “Releasees”) of and from any and all claims, demands
or causes of action, which the Releasor now has or claims to have, or which may
hereinafter accrue against the Releasees, arising or growing out of any event
occurring at any time before the date hereof, including, without limiting the
generality of the foregoing, all claims, demands or causes of action arising out
of employment agreements and transactions involving Releasor and any one or more
of the Releasees. Nothing herein shall be construed to release or otherwise
effect any obligation of Releasor to repay money borrowed by Releasor from
Dr. O’Donnell or any affiliate of Dr. O’Donnell.

The undersigned agrees to defend, protect, indemnify and save harmless the said
Releasees if any person, firm or corporation shall assert or attempt to assert
any claim hereby released in settlement.

The amounts paid by or on behalf of said Releasees was paid in strict settlement
and compromise of the claim, without in any way admitting liability by or on
behalf of the Releasees, or to be considered or construed as a waiver by, an
estoppel against, or a bar to any Releasee denying liability in other
proceedings. No promise has been made to pay any further or other sums or any
other further or other consideration for this Release. This is a full and final
release for all liability and/or damage known and unknown.

The undersigned is of legal age, under no disability and is duly authorized to
execute the Release, and has read and fully understands the above and foregoing
Release. The terms of this Release are contractual and not a mere recital.

Wherever in this instrument any party shall be designated or referred to by name
or general reference, such designation is intended to and shall have the same
effect as if the words “heirs, executors, administrators, personal or legal
representatives, successors and assigns” had been inserted after each and every
such designation and all the terms, easements and conditions herein contained
shall be for and shall inure to the benefit of and shall bind the respective
parties hereto, and their heirs, executors, administrators, personal or legal
representatives, successors and assigns, respectively.

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IN WITNESS WHEREOF, the said Releasor has hereunto set his hand and seal or
caused these presents to be signed by their proper corporate officers and its
corporate seal to be hereto affixed, this 26th day of October 2006.

 

Signed, Sealed and Delivered

in the presence of

or attested

 

/s/ Martin Baum

  (L.S.)  

State of North Carolina, County of Wake:

Be it Remembered, that on October 26, 2006, before me the subscriber, a Notary/
Attorney-at-law of             , personally appeared Martin Baum and
             who, I am satisfied are the person(s) named to and who executed the
within Instrument, and thereupon they acknowledged that they signed, sealed and
delivered the same as their act and deed, for the uses and purposes therein
expressed.

 

/s/ Elizabeth D. Radtke

Notary/Attorney-at-law of

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Exhibit F

RELEASE OF ALL CLAIMS

The undersigned Accentia Biopharmaceuticals, Inc. , TEAMM Pharmaceuticals, Inc.,
Biovest International, Inc., and Analytica International, Inc. (collectively
referred to as “Releasors”), in connection with a settlement agreement resolving
all employment-related claims by and with regard to Martin Baum (“Releasee”),
and in consideration thereof, each of the undersigned hereby releases and
forever discharges said Releasee, his agents, servants, employees, officers,
insurers, successors, and assigns, and each and every one of them, of and from
any and all claims, demands or causes of action, which the undersigned now has
or claims to have, or which may hereinafter accrue against the Releasee, arising
or growing out of any event occurring at any time before the date hereof,
including, without limiting the generality of the foregoing, all claims, demands
or causes of action arising out of employment agreements and transactions
involving any one of more of the Releasors and Releasee. Nothing herein shall be
construed to release or otherwise effect any obligation of Releasee to repay
money borrowed by Releasee from Dr. O’Donnell or any affiliate of Dr. O’Donnell.

The undersigned agrees to defend, protect, indemnify and save harmless the said
Releasee if any person, firm or corporation shall assert or attempt to assert
any claim hereby released in settlement.

The covenants and agreements entered into on behalf of said Releasee were made
in strict settlement and compromise of any and all existing or potential claims,
without in any way admitting liability by or on behalf of the Releasee, or to be
considered or construed as a waiver by, an estoppel against, or a bar to the
Releasee denying liability in other proceedings. No promise has been made to pay
any further or other sums or any other further or other consideration for this
Release. This is a full and final release for all liability and/or damage known
and unknown.

The undersigned are each corporate entities in good standing and are authorized
to enter into this Release, and have read and fully understand the above and
foregoing Release. The terms of this Release are contractual and not a mere
recital.

Wherever in this instrument any party shall be designated or referred to by name
or general reference, such designation is intended to and shall have the same
effect as if the words “heirs, executors, administrators, personal or legal
representatives, successors and assigns” had been inserted after each and every
such designation and all the terms, easements and conditions herein contained
shall be for and shall inure to the benefit of and shall bind the respective
parties hereto, and their heirs, executors, administrators, personal or legal
representatives, successors and assigns, respectively.

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IN WITNESS WHEREOF, each of the said Releasors has hereunto set its hand and
seal or caused these presents to be signed by its proper corporate officers and
its corporate seal to be hereto affixed, this     day of         2006.

 

Signed, Sealed and Delivered

in the presence of

or attested

       

Accentia Biopharmaceuticals, Inc.

      Biovest International, Inc.  

/s/ Francis E. O’Donnell, Jr.

 

(L.S.)

       

/s/ Steven Arikian

  (L.S.)

Analytica International, Inc.

      TEAMM Pharmaceuticals, Inc.  

/s/ Steven Arikian

 

(L.S.)

       

/s/ Francis E. O’Donnell, Jr.

  (L.S.)