Document:

CONFIDENTIAL

      

      

      Binding
        Commitment for $3 million Credit Line 

      for
        NexMed, Inc.

      (NASDAQ:
        NEXM)

      

      

      
        	
                Lender:
                  

              	
                Southpoint
                  Master Fund LP

              
	 	 
	
                Total
                  Amount: 

              	
                $3
                  million 

              
	 	 
	
                Draw
                  Down:

              	
                Each
                  Draw Down shall not exceed $600,000 per 30 days. NexMed (the “Company”)
                  will draw down only when the Company’s cash and cash equivalents is below
                  $1 million. The Company will give notice to the Investor at least
                  5 days
                  prior to any Draw Down, and has the right to make no Draw Down
                  and up to
                  five Draw Downs during the Term of the Credit Line. 

              
	 	 
	
                Term:
                  

              	
                The
                  Credit Line expires on December 31, 2008. In the event the results
                  from
                  the Novartis Phase 3 trials on NexMed’s anti-fungal product are negative,
                  then further Draw Downs on the Credit Line shall be prohibited.
                  

              
	 	 
	
                Repayment:

              	
                Repayment
                  of Draw Downs shall be made in shares of NEXM stock or cash at
                  the
                  Lender’s option on December 31, 2008. The number of shares issued shall
                  be
                  equal to the amount of the Draw Down divided by $1.01 (92.5% of
                  the 5 day
                  VWAP for the five day period ended May 9, 2008). Lender shall notify
                  the
                  Company 5 days prior to repayment date as to whether repayment
                  shall be in
                  NEXM shares or cash. 

              
	 	 
	
                Warrants:
                  

              	
                In
                  consideration for making available the Credit Line, the Lender
                  shall
                  receive warrants to purchase 250,000 shares of NEXM common stock,
                  which
                  shall vest immediately upon the execution of the Commitment. The
                  Warrants
                  shall have a three-year term at an exercise price of $1.15 (105%
                  of the 5
                  day VWAP for the five day period ended May 9, 2008). The re-sale
                  of the
                  shares issued upon the exercise of the Warrants shall have piggyback
                  registration rights. All other terms and conditions of the Warrants
                  shall
                  be identical to the warrants dated January 23, 2006 held by the
                  Lender.
                  

              
	 	 
	
                Registration:

              	
                NexMed
                  shall file a Registration Statement within 30 days of its re-payment
                  in
                  full if shares are issued. The NEXM shares issued will be restricted
                  until
                  the contemplated Registration Statement becomes effective. All
                  other terms
                  and conditions of the Registration Statement shall be identical
                  to the
                  registration statement filed in connection with the January 23,
                  2006
                  private placement of NEXM stock.

              

      

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

       

      
        	
                Effectiveness:

              	
                Both
                  parties agree that this
                  Commitment shall become binding upon execution by both parties.
                  

              

      

      

      

      Agreed
        by NexMed, Inc.:

       

      

      
        	
                /s/
                  Mark Westgate

              	 
	
                Name:
                  Mark Westgate

              	 
	
                Title:
                  Vice President & CFO

              	 
	
                Date:
                  May 12, 2008

              	 

      

      

      

      

      Agreed
        by Southpoint Master Fund LP:

      By:
        Southpoint GP, LP, its general partner

      By:
        Southpoint GP, LLC, its general partner

      

      

      
        	
                /s/
                  Robert Butts

              	 
	
                Name:
                  Robert Butts

              	 
	
                Title:
                  Member

              	 
	
                Date:
                  May 12, 2008

              	 

      

      
 

      
        
           

        

        
          2Unassociated Document

    SEPARATION
      AGREEMENT AND RELEASE

     

    This
      Separation Agreement and Release (the “Agreement”), is made and entered as of
      the 14th day of April, 2008 (the “Effective Date”), by and between Avantair,
      Inc. (the “Company”) and John Waters (the “Executive”).

    WHEREAS,
      the
      Executive was an employee of the Company holding the position of Chief Financial
      Officer, and was a member of the Board of Directors of the Company;
      and

     

    WHEREAS,
      the
      Company and the Executive severed their employment relationship with the
      Executive on April 11, 2008 (the “Separation Date”);

     

    NOW,
      THEREFORE,
      in
      consideration of the promises herein contained, and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      Company and the Executive, intending to be legally bound hereby, agree as
      follows:

     

    1. Other
      than for the payment of salary and benefits through the Separation Date, which
      the Company agrees to pay, the Executive acknowledges that he is entitled to
      no
      damages, payments, benefits, compensation, remuneration, back pay, front pay,
      costs, expenses or fees of any kind as a result of his employment with the
      Company and/or the termination of that employment, except as provided in this
      Agreement.

     

    2. Simultaneously
      with the delivery by Executive to Company of an executed copy of this Agreement,
      Company shall deliver to Executive (a) warrants for One Cent ($.01) exercisable
      for an aggregate of Two Hundred Thousand (200,000) shares of the Company’s
      common stock and (b) a stock certificate for Thirty-Three Thousand Three Hundred
      Thirty-Four (33,334) shares of the Company’s common stock.

     

    3. In
      consideration for the Executive’s promises contained herein, and in
      full
      satisfaction of the Company’s obligations, if any, described in the Employment
      Agreement between the Executive and the Company (the “Employment Agreement”),
the
      Company shall:

     

    
      	 	
              a.

            	
              within
                a reasonable time, not to exceed ten (10) days from the Effective
                Date,
                pay the Executive an amount equal to eight (8) months pay at the
                Executive’s salary on the Separation Date;
                and

            

    

     

    
      	 	
              b.

            	
              reimburse
                the Executive for all premiums for COBRA benefits upon presentation
                of
                documentary evidence of payment of same by the Executive, for a period
                of
                eight (8) months from the date of this Agreement or until such time
                that
                Executive obtains employment providing health benefits, whichever
                time
                period is shorter, and the Executive agrees to notify the Company
                immediately of any employment during this eight (8) month period
                which
                provides health insurance benefits.

            

    

     

    4. Executive
      agrees not to transfer by any method any or all of the shares of the Company’s
      stock under his ownership or control for a period of six (6) months following
      the date this Agreement becomes effective, subject to its terms (“Trading
      Restriction Period”). Notwithstanding the prior sentence, however, the Trading
      Restriction Period shall become null and void should Barry
      J.
      Gordon, Chairman of the Board of the Company, Arthur H. Goldberg, a director
      of
      the Company, or Steven F. Santo, Chief Executive Officer of the Company transfer
      by any method any or all of their respective shares during the Trading
      Restriction Period.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    5. At
      the
      conclusion of the Trading Restriction Period, Executive’s unrestricted shares
      shall be freely tradable in the open market, subject to the Company’s “Right of
      First Refusal” described in Paragraph 6 below, and in compliance with applicable
      securities laws.

     

    6. For
      a
      twelve (12) month period following the conclusion of the Trading Restriction
      Period, the Company shall have a superior right to that of any third party
      to
      purchase the Executive’s shares of the Company’s common stock (“Right of First
      Refusal”). The Company shall have five (5) days after Executive provides notice
      of his intent to sell his shares in the open market or pursuant to a bona fide
      offer in a private transaction, to exercise its Right of First Refusal, in
      accordance with the following provisions:

     

    
      	 	
              a.

            	
              If
                the Executive intends to sell his shares in the open market, such
                sale(s)
                shall be limited to 20,000 shares during any two-week period and
                the
                notice Executive provides to the Company pursuant to this Paragraph
                6
                shall state that Executive intends to sell his shares in the open
                market.
                If the Company exercises its Right of First Refusal in response to
                Executive’s notice of his intent to sell the shares in the open market,
                the Company shall pay Executive the higher of (a) the market price
                of the
                Executive’s shares at 4:00 p.m. Eastern Standard Time on the day Executive
                provides notice of his intent to sell his shares and (b) the highest
                market price of Executive’s shares during the period from the time
                Executive provides notice of his intent to sell his shares and the
                Company
                exercises its Right of First
                Refusal;

            

    

     

    
      	 	
              b.

            	
              In
                the event the Executive desires to sell any or all of his shares
                in
                private transaction, the notice Executive provides to the Company
                pursuant
                to this Paragraph 6 shall state that Executive intends to sell his
                shares
                pursuant to a bona fide offer in a private transaction and further
                shall
                provide sufficient facts to afford the Company notice of the number
                of
                shares to be sold and the purchase price of those shares. If the
                Company
                exercises its Right of First Refusal in response to Executive’s notice of
                his intent to sell any or all of his shares in a private transaction,
                the
                Company shall pay the same price per share, and purchase all of the
                shares
                encompassed by the bona fide offer;
                and

            

    

     

    
      	 	
              c.

            	
              Any
                transfer of Executive’s shares made in violation of this Agreement shall
                be null and void.

            

    

     

    7. Neither
      party’s performance of its obligations under this Agreement shall be construed
      or interpreted as an admission of any wrongdoing, fault, or
      liability.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    8. In
      addition to the parties’ obligations described in Paragraphs 1-7 above, the
      parties’ obligations under this Agreement are further expressly conditioned upon
      the following:

     

    
      	 	
              a.

            	
              The
                Executive’s
                delivery to the Company of one copy of this Agreement, properly executed
                by the Executive and containing his original signature, along with
                further
                execution and/or delivery by the Executive of any and all other documents
                necessary to effectuate the provisions of this
                Agreement;

            

    

     

    
      	 	
              b.

            	
              The
                Executive’s agreement to cooperate fully with the Company’s reasonable
                requests for assistance from the Executive in transitioning his duties
                and
                responsibilities as former Chief Financial Officer of the Company
                to the
                Company’s designee(s) to ensure an orderly transition of those
                responsibilities for a period of eight (8) months following execution
                of
                this Agreement provided, however, that (i) the Company reimburses
                the
                Executive for all reasonable expenses incurred in connection with
                the
                Executive’s performance of his obligations under this Paragraph 8(b), only
                when such expenses have been pre-approved by an officer or director
                of the
                Company prior to the Executive incurring any such expense, (ii) the
                Executive will not have any responsibility for the accuracy of internal
                or
                external financial statements and (iii) the Company hereby indemnifies,
                and agrees to hold harmless, the Executive with respect to any claim
                or
                liability arising from, or relating to such assistance, only upon
                a final
                determination by a court of competent jurisdiction that any liability
                for
                such claim is not the result of Executive’s own negligent or intentionally
                wrongful conduct. 

            

    

     

    
      	 	
              c.

            	
              The
                Executive’s representation that he has not instituted, and will not
                institute in the future, any actions, suits, claims, appeals, grievances,
                arbitration, complaints or charges with any court, tribunal or federal,
                state or city agency or other remedial body against the Company,
                its
                principals and/or affiliates
                relating to matters arising out of or involving the Executive’s employment
                with the Company, or the termination of that employment; except that
                nothing in this Agreement precludes the Executive from instituting
                a
                claim, charge, suit, action or appeal for the purpose of enforcing
                his
                contractual rights under this
                Agreement;

            

    

     

    
      	 	
              d.

            	
              The
                Executive’s agreement not to solicit or contact any person concerning the
                maintenance of any claims or actions whatsoever against the Company,
                its
                principals and/or affiliates; except that nothing
                in
                this Agreement precludes the Executive from responding to legal process.
                The Executive further agrees that in the event the Executive or his
                counsel is served with a subpoena order or other legal process seeking
                disclosure of information rendered confidential by this Agreement,
                Executive or his counsel will inform the Company by telephone on
                the date
                on which the Executive becomes aware such subpoena or legal process
                is
                served and provide the Company’s counsel a copy of such subpoena or legal
                process no later than the third business day from the date that Executive
                or his counsel receives same. Executive further agrees that neither
                he nor
                his counsel will voluntarily comply with any such subpoena or legal
                process until affording the Company a reasonable opportunity to oppose
                the
                disclosure sought by the subpoena or legal process; provided, however,
                that nothing herein shall prevent such disclosure if a court of competent
                jurisdiction orders such disclosure after the Company’s application to
                prevent same is denied, or if the Company authorizes such disclosure.
                In
                the event such subpoena or legal process requires an immediate response
                such that it is impracticable to provide the Company with the opportunity
                to oppose such disclosure as described herein, then Executive’s
                obligations under this paragraph are limited to providing notice
                to the
                Company by facsimile or email as soon as practicable.
                

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    
      	 	
              e.

            	
              The
                Executive’s representation and warranty that he has not actually or
                purportedly, in whole or in part, assigned or transferred to any
                person or
                entity any claim which the Executive may have had or has against
                the
                Company or its principals, agents, officers, employees, attorneys
                and/or
                affiliates, and accordingly hereby agrees to indemnify, defend and
                hold
                harmless the Company for any claim based upon or arising out of such
                assignment or transfer;

            

    

     

    
      	 	
              f.

            	
              The
                Executive’s agreement
                that he shall comply with Paragraph 7 of the Employment Agreement,
                “Non-Competition, Non-Solicitation” for a period of sixteen (16) months,
                provided, however, that the Executive shall not be required to comply
                with
                Paragraph 7 of the Employment Agreement, “Non-Competition,
                Non-Solicitation” after a Change of Control or upon Sale of the Company;
                and the terms “Change-in-Control” and “Sale of the Company” in this
                Agreement shall mean the acquisition by another entity and/or person
                of
                all or substantially all of the assets of the
                Company.

            

    

     

    
      	 	
              g.

            	
              The
                Executive’s agreement that he shall, within a reasonable time, not to
                exceed ten (10) days, return all property of the Company to the Company
                and the term “property” in this Paragraph 8(g) shall include, but not be
                limited to any and all Company confidential information as that term
                is
                defined in the Employment
                Agreement;

            

    

     

    
      	 	
              h.

            	
              The
                Executive’s agreement that he shall comply with Paragraph 8 of the
                Employment Agreement, “Protection of Confidential Information”;
                

            

    

     

    
      	 	
              i.

            	
              The
                Executive’s agreement that he shall provide the Company with notice that
                he is resigning as a director and as Chief Financial Officer of the
                Company simultaneously with his execution of this Agreement, in the
                form
                attached hereto as Exhibit A;

            

    

     

    
      	 	
              j.

            	
              The
                Executive’s employment with the Company is not being terminated for
                “Cause. The Executive is not being removed as a director of the Company
                for “Cause.” The Executive is resigning as a director and officer of the
                Company to pursue other interests. The Company’s Form 8-K filing with the
                SEC providing notice of Executive’s termination shall state only that “Mr.
                John Waters, the Company’s Chief Financial Officer, has departed the
                Company, and resigned his position as a director of the Company,
                effective
                April 11, 2008”;

            

    

     

    
      	 	
              k.

            	
              The
                parties’ agreement that they will not say, write or cause to be said or
                written, directly or indirectly, any statement that may be considered
                defamatory, negative, critical, malicious, belittling, unfavorable,
                pejorative, deprecatory, derogatory or disparaging with respect to
                the
                Executive or the Company, its principals, agents, officers, employees,
                attorneys and/or affiliates to any third party;
                and

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    
      	 	
              l.

            	
              The
                Company’s agreement that in response to any inquiries from prospective
                employers of the Executive, or anyone else, the Company shall state
                only
                the dates of the Executive’s employment with the Company and that the
                Executive served as the Company’s Chief Financial Officer, and as a member
                of the Board of Directors of the
                Company.

            

    

     

    9. In
      consideration for the above, and except with respect to the performance of
      obligations contained in this Agreement, the Executive, on behalf of himself
      and
      all heirs, personal representatives, and assigns does hereby fully, completely
      and unconditionally forever release and discharge the Company and its
      successors, assigns, current and former employees, directors, officers,
      trustees, shareholders, members, agents, parents, affiliates, subsidiaries,
      representatives, insurers, attorneys, independent contractors and all other
      related or affiliated persons and entities (the “Company Releasees”) of and from
      any and all liability, claims, causes, demands, obligations, actions, contracts,
      promises, agreements, damages, attorneys’ fees, costs, liabilities, rights and
      allegations of whatever kind and nature, known or unknown, whatsoever from
      the
      beginning of the world to the date of this Agreement, including, but not limited
      to, such matters based on, arising out of, or related to the Executive’s
      employment with the Company or the termination of that employment. This release
      includes, but shall not be limited to, any and all claims for breach of
      contract, implied or express; impairment of economic or business opportunity;
      intentional or negligent infliction of emotional distress; false arrest;
      assault; battery; false imprisonment; prima facie tort; defamation; libel;
      slander; negligent termination; malicious prosecution; or any other tort,
      whether intentional or negligent; or any claim or cause of action known or
      unknown under Title VII of The Civil Rights Act of 1964; the Equal Pay Act;
      the
      Fair Labor Standards Act; the Employment Retirement Income Security Act of
      1974
      (except as to claims pertaining to vested benefits under an employee benefit
      plan); the Rehabilitation Act of 1973; the Civil Rights Acts of 1866 and 1871;
      the Civil Rights Act of 1991 (Public Law 102-106, 105 Stat. 1071-1100); the
      Americans With Disabilities Act of 1990; the Family and Medical Leave Act of
      1993; the False Claims Act; the Labor Management Relations Act; the Age
      Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
      Act of 1990; the United States Constitution or any other federal, state, county
      or municipal statute or ordinance relating to employment or any claims growing
      out of any restrictions on the Company’s right to terminate its employees,
      including, but not limited to, claims relating to wages, bonuses, contract
      or
      wrongful discharge. This Agreement covers claims of which the Executive
      currently may or may not have knowledge; provided, however, that this release
      specifically excludes a release of any and all of the Company’s obligations
      under this Agreement and of any and all obligations of the Company under its
      certificate of incorporation, its by-laws, the laws of its state of
      incorporation or the applicable laws, if any, of any state in which the Company
      does business to indemnify Executive with respect to his acts or admissions
      as
      an employee or director of the Company. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    10. In
      consideration for the above, the Company, on behalf of itself and all heirs,
      personal representatives, and assigns, by execution of this Agreement, does
      hereby fully, completely and unconditionally forever release and discharge
      the
      Executive and his heirs, successors, assigns, current and former agents,
      affiliates, representatives, insurers, attorneys, independent contractors and
      all other related or affiliated persons and entities (“Executive Releasees”) of
      and from any and all liability, claims, causes, demands, obligations, actions,
      contracts, promises, agreements, damages, attorneys’ fees, costs, liabilities,
      rights and allegations of whatever kind and nature, known or unknown, whatsoever
      from the beginning of the world to the day of the date of this Agreement,
      including, but not limited to, such matters based on, arising out of, or related
      to the Executive’s employment with the Company or the termination of that
      employment and any and all claims for breach of contract, implied or express;
      impairment of economic or business opportunity; intentional or negligent
      infliction of emotional distress; false arrest; assault; battery; false
      imprisonment; prima facie tort; defamation; libel; slander; negligent
      termination; malicious prosecution; or any other tort, whether intentional
      or
      negligent; United States Constitution or any other federal, state, county or
      municipal statute or ordinance relating to employment; provided, however, that
      this release specifically excludes a release of any and all of the Executive’s
      obligations under this Agreement and further specifically excludes a release
      of
      any claims the Company may not release in accordance with its certificate of
      incorporation, its by-laws, the laws of its state of incorporation or the
      applicable laws, if any, of any state in which the Company does
      business.

     

    11. Any
      breach of this Agreement by either of the parties shall be considered a material
      breach. In the event of such a breach or threatened breach, the other party
      shall be entitled to appropriate injunctive relief, including an immediate
      temporary restraining order and/or permanent injunction without the necessity
      of
      posting a bond. The prevailing party shall be entitled to recover reasonable
      attorneys’ fees incurred in seeking relief for any such breach.

     

    12. The
      Executive acknowledges and agrees that in the event of any breach by the
      Executive of Paragraphs 8(b), 8(f), 8(h) or 8(k) above, the Company shall be
      entitled to the immediate return of all monies paid to the Executive under
      Paragraph 3(a) above.

     

    13. Both
      parties acknowledge that they understand that this Agreement is a legally
      binding agreement and have reviewed it with legal counsel before executing
      the
      Agreement. 

     

    14. Both
      parties represent and acknowledge that in executing this Agreement, they do
      not
      rely, and have not relied, upon any representation not set forth herein, made
      by
the
      other
      party or
      any of
      their respective employees, agents, or attorneys with regard to the subject
      matter, basis or fact of this Agreement or otherwise.

     

    15. Both
      parties acknowledge that this Agreement is intended to address and cover any
      rights they may
      have
      under the governing law. The parties’ signatures below will confirm that they
      are entering into this Agreement freely and with a full understanding of its
      terms and effect, including that they are giving up their respective rights
      to
      bring any claim against the
      other
      in accordance with Paragraphs 9 and 10 respectively above.

     

    16. The
      Executive acknowledges that he has been given twenty-one (21) days during which
      to consider this Agreement and that he executes this Agreement freely and
      voluntarily and that he is under no duress at the time of his
      execution.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    17. This
      Agreement shall be construed in accordance with, and governed by, the law of
      the
      State of New York, without regard to New York’s choice of law
      rules.

     

    18. The
      parties consent to the exclusive jurisdiction of the federal or state courts
      of
      the State of New York to resolve any and all disputes arising out of or relating
      to this Agreement; the parties agree that the prevailing party in any such
      dispute shall be entitled to recover reasonable attorneys’ fees 

     

    19. This
      Agreement sets forth the entire agreement between the parties and supersedes
      any
      and all prior or contemporaneous agreements or understandings between them
      pertaining to the subject matter hereof. This Agreement may be modified only
      by
      a subsequent and written instrument, executed by all parties.

     

    20. This
      Agreement shall become effective when the Agreement has been signed by each
      of
      the parties.

     

    21. This
      Agreement may be executed in counterparts and as so executed shall constitute
      one agreement, binding on all parties.

     

    22. If
      any
      provision of this Agreement or the application thereof becomes or is declared
      by
      a court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of this Agreement will continue in full force and effect; except
      that
      if the releases contained herein are declared illegal, void or unenforceable
      by
      a court of competent jurisdiction, the entire Agreement shall become a nullity
      and any amounts paid in consideration hereunder shall be returned to the
      Company. The parties further agree to replace any other illegal, void or
      unenforceable provision of this Agreement with a legal, valid, and enforceable
      provision that will achieve, to the extent possible, the economic, business,
      and
      other purposes of such illegal, void or unenforceable provision.

     

    23. There
      are
      no third-party beneficiaries to this Agreement.

     

     

    IN
      WITNESS THEREOF,
      the
      undersigned have executed this Agreement on the dates noted below.

     

    
      	 	 	 	ON BEHALF OF AVANTAIR, INC.
	 	 	 	 
	 	 	 	 
	/s/ John
              Waters	 	 	/s/ Steven
              F.
              Santo
	
              
John
              Waters	 	 	
              

              Steven
                F. Santo

              Chief
                Executive Officer

            

    

    
      	 	 	 	 
	April
              14, 2008	 	 	April
              14, 2008
	
              

              Date

            	 	 	
              

              Date

            
	 	 	 	 

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    

     

    EXHIBIT
      A

     

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    

    April
      11,
      2008

    

    

    Mr.
      Steven F. Santo

    Chief
      Executive Officer

    Avantair,
      Inc.

    4311
      General Howard Drive

    Clearwater,
      Florida 33762

    

    Dear
      Steve:

    

    Effective
      immediately, I hereby resign my positions as a director and Chief Financial
      Officer of Avantair, Inc.

    

    Sincerely,

    

    /s/
      John
      Waters

    

    John
      Waters

    
      
         

      

      
        9

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