Document:

Subordination Agmt

 Exhibit 10.26 
 SUBORDINATION AGREEMENT 
 THIS SUBORDINATION
AGREEMENT (this “Agreement”) is entered into as of the 17th day of November, 2010, by and between Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Subordinated Lender”), and LV Administrative
Services, Inc., a Delaware corporation, as administrative and collateral agent for the Lenders (as defined in the Security Agreement referred to below) (the “Agent” and together with the Lenders, the “Senior
Lenders” and each, a “Senior Lender”). Unless otherwise defined herein, capitalized terms used herein shall have the meaning ascribed to such terms in the Security Agreement. 

BACKGROUND 
 WHEREAS, on November 10, 2008 (the “Petition Date”), Biovest International, Inc. (“Biovest”) commenced a voluntary case for reorganization (the
“Biovest Chapter 11 Case”) under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Middle District of
Florida, Tampa Division; 
 WHEREAS, as of the Petition Date, Biovest was indebted to Laurus Master Fund,
Ltd. (In Liquidation), Valens U.S. SPV I, LLC, Valens Offshore SPV I, Ltd. and Valens Offshore SPV II, Corp. (collectively, the “Prepetition Lenders”) in an aggregate principal amount of $30,154,082.65, plus interest and other
amounts due thereon, according to proofs of claim filed by the Prepetition Lenders in the Biovest Bankruptcy Cases (the “Prepetition Debt”); 
 WHEREAS, in connection with Biovest incurring the Prepetition Debt, Biovest and Accentia issued to certain of the Prepetition Lenders warrants (the “Biovest Warrants”) to acquire
shares of the Biovest Common Stock as listed on Exhibit A attached to the Security Agreement; 

WHEREAS, in connection with Biovest incurring the Prepetition Debt, Biovest and Accentia, pursuant to various
agreements, granted to certain of the Prepetition Lenders an aggregate royalty equal to 19.50% of the net sales and license revenues from the Biovest Biologic Products received by Biovest (the “Biovest Royalty”); 

WHEREAS, in satisfaction of the Prepetition Debt, the cancellation of the Biovest Warrants, and the modification
of the Biovest Royalty, certain of the Prepetition Lenders have agreed to accept allowed secured claims against Biovest in the Biovest Chapter 11 Case in the aggregate amounts of $24,900,000.00 and $4,160,000.00, respectively (the
“Restructured Lenders Loans”), upon the terms and conditions set forth herein and in the Confirmed Plan, and in connection therewith the Senior Lenders and Biovest are entering into a Term Loan and Security Agreement dated as of the
date hereof (the “Security Agreement”); 

 WHEREAS, as of the Petition Date, Biovest was indebted to the
Subordinated Lender in a principal amount of $11,991,510 (the “Accentia Loan”), and the Accentia Loan is secured by a lien on substantially all of the assets of Biovest junior only to the Lien securing the Prepetition Debt;

 WHEREAS, pursuant to the Confirmed Plan, the Accentia Loan will be restructured as a new secured loan
in the principal amount of $11,991,510 plus interest (the “Restructured Accentia Loan”); 

WHEREAS, it is a condition to the Senior Lenders agreeing to the Restructured Lenders Loans that the Subordinated
Lender enter into this Agreement; and 
 NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby acknowledged, the Subordinated Lender and the Senior Lenders agree as follows: 
 TERMS 

1.        All obligations of Biovest to the Senior Lenders arising out of or
related to the Security Agreement or the BVTI Term Notes, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due are referred to as “Senior
Liabilities”. Any and all loans and other financial accommodations made by the Subordinated Lender to Biovest, including, without limitation, the Restructured Accentia Loan, together with all other obligations (whether monetary or
otherwise) of Biovest to the Subordinated Lender (in each case, including any interest, fees or penalties related thereto), howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or
due or to become due are referred to as “Junior Liabilities”. It is expressly understood and agreed that the term “Senior Liabilities”, as used in this Agreement, shall include, without limitation, any and all
interest, fees and penalties accruing on any of the Senior Liabilities after the commencement of any proceedings referred to in paragraph 4 of this Agreement, notwithstanding any provision or rule of law which might restrict the rights of the Senior
Lenders, as against Biovest or anyone else, to collect such interest, fees or penalties, as the case may be. 

2.        Except as expressly otherwise provided in this Agreement or the
Confirmed Plan or as the Agent may otherwise expressly consent in writing, and except for any Permitted Payments (as defined below), the payment of the Junior Liabilities shall be postponed and subordinated in right of payment and priority to the
payment in full of all Senior Liabilities. Furthermore, except for any Permitted Payments, whether directly or indirectly, no payments or other distributions whatsoever in respect of any Junior Liabilities shall be made (whether at stated maturity,
by acceleration or otherwise), nor shall any property or assets of Biovest be applied to the purchase or other acquisition or retirement of any Junior Liabilities until such time as the Senior Liabilities have been

  
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indefeasibly paid in full. Notwithstanding anything to the contrary contained in this Agreement, the Subordinated Lender may elect, pursuant to the terms of the Confirmed Plan, to convert all or
any portion of the Junior Liabilities to shares of Biovest Common Stock. For purposes of this Agreement, “Permitted Payments” means (i) any payments made by Biovest to the Subordinated Lender incident to the sharing of expenses
between the companies and in respect of the shared administrative and overhead costs of Biovest and the Subordinated Lender; provided, however, that in no event shall any such payments exceed in any one month more than $150,000 without the prior
written consent of the Agent, which consent shall not be unreasonably withheld if such payments are for healthcare premiums, Biovest employee 401(k) contributions, shared salary expense, and directors and officers liability insurance premiums; and
(ii) any repayment of any new loans made by the Subordinated Lender to Biovest after the date hereof, up to a maximum amount equal to the difference between (x) $3,000,000 and (y) the principal amount outstanding under the Exit Lender
Credit Facility as of the date hereof (as described in Section 2.2(a) of the Term A Notes). 

3.        The Subordinated Lender hereby subordinates all claims and security
interests it may have against, or with respect to, any of the assets of Biovest (the “Subordinated Lender Liens”), to the security interests granted by Biovest to the Agent, for the ratable benefit of the Senior Lenders, in respect
of the Senior Liabilities. The Senior Lenders shall not owe any duty to the Subordinated Lender as a result of or in connection with the Subordinated Lender Liens, including, without limitation, any marshalling of assets or protection of the rights
or interests of the Subordinated Lender. The Agent shall have the exclusive right to manage, perform and enforce the underlying terms of the Security Agreement, the Ancillary Agreements and each other document, instrument and agreement executed from
time to time in connection therewith (collectively, the “Senior Security Agreements”) relating to the assets of Biovest and to exercise and enforce its rights according to its discretion. The Subordinated Lender waives all rights to
affect the method or challenge the appropriateness of any action taken by the Agent in connection with the Agent’s enforcement of its rights under the Senior Security Agreements. Only the Agent shall have the right to restrict, permit, approve
or disapprove the sale, transfer or other disposition of the assets of Biovest. As between the Senior Lenders and the Subordinated Lender, the terms of this Agreement shall govern even if all or part of the Agent’s liens are avoided,
disallowed, set aside or otherwise invalidated. 
 4.        In the
event of any dissolution, winding up, liquidation, readjustment, reorganization or other similar proceedings relating to Biovest or to its creditors, as such, or to its property (whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership, or upon an assignment for the benefit of creditors, or any other marshalling of the assets and liabilities of Biovest, or any sale of all or substantially all of the assets of Biovest, or otherwise), the
Senior Liabilities shall first be paid in full before the Subordinated Lender shall be entitled to receive and to 

  
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retain any payment, distribution, other rights or benefits in respect of any Junior Liabilities. In order to enable the Senior Lenders to enforce their rights hereunder in any such action or
proceeding, the Agent is hereby irrevocably authorized and empowered in its discretion as attorney in fact for the Subordinated Lender to make and present for and on behalf of the Subordinated Lender such proofs of claim against Biovest as the Agent
may deem expedient or proper and to vote such proofs of claim in any such proceeding and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued and to apply the
same on account of any of the Senior Liabilities. In the event, prior to indefeasible payment in full of the Senior Liabilities, the Subordinated Lender shall receive any payment in respect of the Junior Liabilities and/or in connection with the
enforcement of the Subordinated Lender’s rights and remedies against Biovest, whether arising in connection with the Junior Liabilities or otherwise, then the Subordinated Lender shall forthwith deliver, or cause to be delivered, the same to
the Agent in precisely the form held by the Subordinated Lender (except for any necessary endorsement) and until so delivered the same shall be held in trust by the Subordinated Lender as the property of the Senior Lenders. 

5.        The Subordinated Lender will mark its books and records so as to
clearly indicate that its Junior Liabilities are subordinated in accordance with the terms of this Agreement. The Subordinated Lender will execute such further documents or instruments and take such further action as the Agent may reasonably request
from time to time to carry out the intent of this Agreement. 

6.        The Subordinated Lender hereby waives all diligence in collection or
protection of or realization upon the Senior Liabilities or any security for the Senior Liabilities. 

7.        Until the Senior Liabilities are indefeasibly paid in full, the
Subordinated Lender shall not, without the prior written consent of the Agent: (a) attempt to enforce or collect any Junior Liability or any rights in respect of any Junior Liabilities; or (b) commence, or join with any other creditor in
commencing, any bankruptcy, reorganization or insolvency proceedings with respect to Biovest. 

8.        The Senior Lenders may, from time to time, at their sole discretion,
and without notice to the Subordinated Lender, take any or all of the following actions: (a) retain or obtain a security interest in any property to secure any of the Senior Liabilities; (b) retain or obtain the primary or secondary
obligation of any other obligor or obligors with respect to any of the Senior Liabilities; (c) extend or renew for one or more periods (whether or not longer than the original period), alter, increase or exchange any of the Senior Liabilities,
or release or compromise any obligation of any nature of any obligor with respect to any of the Senior Liabilities; and (d) release its security interest in, or surrender, release or permit any substitution or exchange for, all or any part of
any property securing any of the Senior Liabilities, or extend or renew for one or more 

  
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periods (whether or not longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such property. 

9.        The Senior Lenders may, from time to time, without notice to the
Subordinated Lender, assign or transfer any or all of the Senior Liabilities or any interest in the Senior Liabilities; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer of the Senior Liabilities, such
Senior Liabilities shall be and remain Senior Liabilities for the purposes of this Agreement, and every immediate and successive assignee or transferee of any of the Senior Liabilities or of any interest in the Senior Liabilities shall, to the
extent of the interest of such assignee or transferee in the Senior Liabilities, be entitled to the benefits of this Agreement to the same extent as if such assignee or transferee were a Senior Lender, as applicable; provided, however, that, unless
the Senior Lender that is the assignor and/or transferor shall otherwise consent in writing, such Senior Lender shall have an unimpaired right, prior and superior to that of any such assignee or transferee, to enforce this Agreement, for the benefit
of such Senior Lender, as to those of the Senior Liabilities which such Senior Lender has not assigned or transferred. 
 10.        The Senior Lenders shall not be prejudiced in their rights under this Agreement by any act or failure to act of the Subordinated Lender, or any
noncompliance of the Subordinated Lender with any agreement or obligation, regardless of any knowledge thereof which any Senior Lender may have or with which any Senior Lender may be charged; and no action of any Senior Lender permitted under this
Agreement shall in any way affect or impair the rights of the Senior Lenders and the obligations of the Subordinated Lender under this Agreement. 
 11.        No delay on the part of any Senior Lender in the exercise of any right or remedy shall operate as a waiver of such right or remedy, and no single or
partial exercise by any Senior Lender of any right or remedy shall preclude other or further exercise of such right or remedy or the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this
Agreement be binding upon any Senior Lender except as expressly set forth in a writing duly signed and delivered on behalf of the Senior Lenders. For the purposes of this Agreement, Senior Liabilities shall have the meaning set forth in
Section 1 above, notwithstanding any right or power of the Subordinated Lender or anyone else to assert any claim or defense as to the invalidity or unenforceability of any such obligation, and no such claim or defense shall affect or impair
the agreements and obligations of the Subordinated Lender under this Agreement. 

12.        This Agreement shall continue in full force and effect after the
filing of any petition by or against Biovest under the Bankruptcy Code and all converted or succeeding cases in respect thereof. All references herein to Biovest shall be deemed to apply to Biovest as debtor-in-possession and to a trustee for
Biovest. If Biovest shall become subject to a proceeding under the Bankruptcy Code, and if the Senior Lenders shall desire to permit the use of cash collateral or to permit or provide post-petition financing from

  
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the Senior Lenders (or an affiliate or a third party satisfactory to the Senior Lenders) to Biovest under the Bankruptcy Code, the Subordinated Lender agrees as follows: (1) adequate notice
to the Subordinated Lender shall be deemed to have been provided for such consent or post-petition financing if the Subordinated Lender receives notice thereof three (3) business days (or such shorter notice as is given to the Senior Lenders)
prior to the earlier of (a) any hearing on a request to approve such post-petition financing or (b) the date of entry of an order approving same and (2) no objection will be raised by the Subordinated Lender to any such use of cash
collateral or such post-petition financing from the Senior Lenders (or an affiliate of the Senior Lenders). 

13.        This Agreement shall be binding upon the Subordinated Lender and the
Senior Lenders and upon the successors and assigns of the Subordinated Lender and the successors and assigns of the Senior Lenders. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of
which together shall be deemed to constitute one agreement. It is understood and agreed that if facsimile copies of this Agreement bearing facsimile signatures are exchanged between the parties hereto, such copies shall in all respects have the same
weight, force and legal effect and shall be fully as valid, binding, and enforceable as if such signed facsimile copies were original documents bearing original signature. 

14.        THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND
ENFORCED ACCORDING TO, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS PROVISIONS THEREOF AND SHALL BE BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. ANY ACTION BROUGHT
CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE SENIOR LENDERS MAY CHOOSE TO WAIVE THIS
PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The Subordinated Lender agrees to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its
reasonable attorneys’ fees and costs. Wherever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

[remainder of page intentionally left blank] 

  
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 IN WITNESS WHEREOF, this Subordination Agreement has been made and delivered
as of the date and year first written above 
  

					
	ACCENTIA BIOPHARMACEUTICALS INC.
		
	By:	 	 /s/ Samuel S. Duffey

		 	Name: Samuel S. Duffey
		 	Title: President
	
	 LV ADMINISTRATIVE SERVICES, INC.,
 as Collateral and Administrative Agent

		
	By:	 	 /s/ Patrick Regan

		 	Name:	 	 Patrick Regan

		 	Title:	 	 Authorized Signatory

  
 7Closing Shares Lock-Up Agmt

 Exhibit 10.27 
 CLOSING SHARES LOCK-UP AGREEMENT 
 November 17, 2010 

Biovest International, Inc: 
  

			
	Re:	  	Term Loan and Security Agreement, dated as of November 17, 2010 (the “Security Agreement”), by and among Biovest International, Inc. (the
“Company”), the Lenders signatory thereto and LV Administrative Services, Inc., as Administrative and Collateral Agent for the Lenders.

 Ladies and Gentlemen: 
 Capitalized terms not otherwise defined in this letter
agreement (the “Letter Agreement”) shall have the meanings set forth in the Security Agreement. Pursuant to the terms and conditions of the Security Agreement, the Lenders irrevocably agree with the Company that the sale, transfer
or assignment of all or any portion of the Closing Shares shall be subject to the terms and provisions of this Letter Agreement. 
 Sales of the Closing Shares by any of the Lenders (each, a “Selling Lender”) will be subject to, and the Selling Lenders will comply with, the limitations on the number of shares of
common stock of the Company that may be sold from time to time contained in Rule 144(e) of the Rules and Regulations under the Securities Act of 1933, as amended, promulgated by the United States Securities and Exchange Commission (“Rule
144(e)”), without regard to whether or not the Selling Lender is considered an “Affiliate” of the Company for purposes of Rule 144(e). For purposes of this paragraph, (i) sales of shares of Company common stock by the Selling
Lender that are not “Closing Shares” shall be aggregated with sales of Closing Shares by the Selling Lender in determining the extent to which sales of Closing Shares are subject to the limitations of this paragraph, and (ii) sales of
shares of common stock of the Company and Closing Shares by other Lenders and the affiliates of any Lender will be aggregated for purposes of calculating the limitations set forth in this paragraph. 

Pursuant to this Letter Agreement, the following legend shall be placed upon all the certificates for the Closing Shares: 

“The shares represented by this certificate are subject to a Closing Shares Lock-Up Agreement dated the 17th day of November, 2010, restricting the sale, transfer or assignment
of the shares. Any transfer or acquisition in violation of that Closing Shares Lock-Up Agreement is null and void.” 

In addition to the foregoing limitations, the Lenders agree that they will not offer, sell, contract to sell, hypothecate, pledge or
otherwise dispose of any of the Closing Shares (i) during the six (6) month period following the closing of each of the first two (2) common equity offerings of the Company (whether in a registered public offering or

 
in a private placement transaction), with gross proceeds of $10,000,000 or more, and (ii) during the three (3) month period following the closing of a common equity offering of the
Company (whether in a registered public offering or in a private placement transaction) that closes within three (3) months after the Closing Date, with gross proceeds of between and including $5,000,000 and $10,000,000. 

The restrictions imposed by this Letter Agreement (x) shall terminate following such time that the Company shall effect a
reorganization, consolidate with or merge into any other entity (where the Company is not the surviving entity), or transfer all or substantially all of its properties and assets and (y) shall not apply to transfers of the Closing Shares in a
private transaction including, without limitation, as a bona fide gift or gifts, provided that as a condition precedent to such transfer, the transferee thereof agrees to be bound in writing by the provisions of this Letter Agreement (including
provisions regarding aggregation of shares) as though such transferee were a Lender hereunder. 
 In addition, as to any Lender,
notwithstanding the foregoing restrictions, each Lender shall be permitted to pledge or otherwise use as collateral the Closing Shares it holds as part of a commercial or margin loan against all or substantially all of such Lender’s general
portfolio of securities, provided that the pledgee agrees to be bound in writing by the provisions of this Letter Agreement (including provisions regarding aggregation of shares) as though such pledgee were a Lender hereunder. 

The Company agrees that, in connection with a Lender’s sale of any of the Closing Shares as permitted by this Letter Agreement, it
will cooperate with the Lender and, at the Company’s expense, will cause its counsel to provide any necessary legal opinions and other information required to effect the removal of the above-referenced legend on the stock certificate for any of
such Closing Shares in accordance with applicable law. 
 The Lenders acknowledge that the execution, delivery and performance
of this Letter Agreement is a material inducement to the Company to complete the transactions contemplated by the Security Agreement and that the Company shall be entitled to specific performance of the Lenders’ obligations hereunder.

 Each of the parties hereto hereby represents that it has the power and authority to execute, deliver and perform this Letter
Agreement, that it has received adequate consideration therefor and that it will benefit from the closing of the transactions contemplated by the Security Agreement. 
 This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the parties hereto. This Letter Agreement shall be construed and enforced in accordance
with the laws of the State of New York without regard to the principles of conflict of laws. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern District of
New York and the courts of the State of New York located in 

  
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Manhattan, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper.
Each of the parties hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to each of the parties at the address in effect for notices
to it under the Security Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Each of the parties hereto hereby waives any right to a trial by jury. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. Each of the parties hereto agrees and understands that no issuance or sale of the Closing Shares is created or intended by virtue of this Letter Agreement.

 This Letter Agreement shall be binding on the successors and assigns of the Lenders with respect to the Closing Shares;
provided, however that any such successor or assign shall first enter into an agreement substantially the same as this Letter Agreement for the benefit of the Company before it may succeed to the rights of any Lender under this Letter Agreement.

 This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and
the same agreement. 
 ***SIGNATURE PAGE FOLLOWS*** 

  
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 IN WITNESS WHEREOF, the undersigned have signed this Letter Agreement as of the date first
written above. 
  

			
	LENDERS:
	
	PSOURCE STRUCTURED DEBT LIMITED,
	By: PSource Capital Ltd., It’s Investment Consultant

			
		
	By:	 	 /s/ Charles Lews

			
	Name: Charles Lews
	Title: Authorized Signatory
	Number of Closing Shares: 4,599,927
	
	VALENS U.S. SPV I, LLC

			
	By: Valens Capital Management, LLC, its investment manager

			
		
	By:	 	 /s/ Patrick Regan

			
	Name: Patrick Regan
	Title:  Authorized Signatory
	
	Number of Closing Shares: 1,036,468
	
	VALENS OFFSHORE SPV I, LTD.

			
	By: Valens Capital Management, LLC, its investment manager

			
		
	By:	 	 /s/ Patrick Regan

	Name: Patrick Regan
	Title:  Authorized Signatory
	
	Number of Closing Shares: 7,320,877

			
	
	LAURUS MASTER FUND LTD. (In Liquidation)

			
		
	By:	 	 /s/ Russell Smith

	Name: Russell Smith

			
	Title: Joint Official Liquidator (with no personal liability)

  
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	Number of Closing Shares: 1,877,510
		
	COMPANY:	 	
	
	BIOVEST INTERNATIONAL, INC.

			
		
	By:	 	 /s/ David Moser

			
	Name:	 	David Moser
	Title:	 	Secretary

  
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