EXHIBIT 4.11
SUBORDINATION AGREEMENT
This AGREEMENT entered into at Boston, Massachusetts, as of April 24, 1998,
between the undersigned holders of the 12% Senior Subordinated Debentures due
2005 of SeraCare, Inc. (each a "Creditor", and collectively, the "Creditors"),
and Xxxxx Brothers Xxxxxxxx & Co., a New York General Partnership with an
address of 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Lender").
For valuable consideration, receipt whereof is hereby acknowledged, and in
consideration of the loans, advances, discounts, renewals or extensions now or
hereafter made each by Lender to or for the account of SeraCare, Inc.
(hereinafter called the "Borrower"), each Creditor hereby agrees with the Lender
as follows:
1. Creditor represents to the Lender that the Borrower now owes Creditor
the principal amount of $16,000,000, together with accrued and unpaid
interest, fees and expenses (the "Debenture Indebtedness") and that
the Debenture Indebtedness has not been assigned to or subordinated in
favor of any other person or entity and that Creditor holds no
security therefor. Creditor further represents that the Debenture
Indebtedness is not represented by any notes or other negotiable
instruments, except that certain 12% Senior Subordinated Debenture,
dated February 13, 1998 (the "Debenture") by the Borrower in favor of
the Creditor which contains a legend indicating that the Debenture is
subordinate to the obligations owing by Borrower to Lender. Creditor
and, by its acknowledgment and agreement below, Borrower agree that if
at any time the Debenture Indebtedness is evidenced by any notes,
debentures, or instruments other than the Debenture, Creditor and
Borrower shall cause such notes, debentures, or instruments to contain
a legend substantially similar to the legend contained on the
Debenture.
2. Creditor hereby subordinates all present and future indebtedness of
the Borrower to Creditor (collectively, the "Pecks Indebtedness") to
any and all indebtedness now or hereafter owing by the Borrower to the
Lender (collectively, the "Lender Indebtedness") and agrees not to
demand, accept or receive any payment of principal or interest upon
account of the Pecks Indebtedness or any collateral therefor, until
all Lender Indebtedness has been paid in full, except for regularly
scheduled payments of principal and interest respecting the Pecks
Indebtedness, provided there is no existing event of default
continuing under Lender Indebtedness. Creditor will not commence or
join with any other creditor or creditors of Borrower in commencing
any bankruptcy, reorganization or insolvency proceedings against
Borrower. Creditor also subordinates any claims that Creditor might
assert against any guarantor of the Pecks Indebtedness to any and all
claims assertable by the Lender against guarantors of the Lender
Indebtedness.
3. Subject to the Lender's priority of liens in the Lender's collateral
securing the Lender Indebtedness, nothing in this Agreement shall
prohibit Creditor from taking action (except to commence or join with
any other creditor or creditors of Borrower in commencing any
bankruptcy, reorganization or insolvency proceedings against Borrower)
to enforce its rights under the Pecks Indebtedness after expiration of
the Standstill Period (as hereinafter defined) so long as there is no
existing uncured event of default involving the payment of money under
the Pecks
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Indebtedness. "Standstill Period" shall mean the period of
time commencing with the date on which Lender notifies Creditor that
an event of default has occurred under the Lender Indebtedness,
provided that such event of default has not been cured or waived, and
expiring one hundred and eighty (180) days after the notice to Lender.
If, during the Standstill Period, the default under the Lender
Indebtedness is cured or waived, the Standstill Period shall cease
running, and a new Standstill Period shall commence running when
Lender gives notice that an additional event of default has occurred
under the Lender Indebtedness. The Standstill Period shall be tolled
during any period of time that there is in effect an automatic stay
under the Bankruptcy Code or an injunction or restraining order issued
by a court prohibiting Lender from exercising its remedies, until a
court of competent jurisdiction has lifted such stay, injunction, or
restraint.
4. Subject to the terms of paragraph 2 of this Agreement, should any
payment be received by Creditor for or on account of any of the Pecks
Indebtedness, prior to the satisfaction of all Lender Indebtedness,
Creditor will forthwith deliver the same to the Lender, in precisely
the form received (except for Creditor's endorsement where necessary)
for application on account of the Borrower's obligations to the Lender
and, until so delivered, the same shall be held in trust by Creditor
as the property of the Lender.
5. In order to carry out the terms and the intent of this agreement more
effectively, Creditor will do all acts and execute all further
instruments reasonably requested by the Lender as necessary or
convenient to preserve for the Lender the benefit of this
Subordination Agreement.
6. Creditor further waives presentment, notice and protest in connection
with all negotiable instruments evidencing the indebtedness
subordinated hereby or Borrower's indebtedness to Lender, notice of
the acceptance of this agreement by Lender, notice of any loan made,
extension granted or other action taken in reliance hereon and all
demands and notices of every kind in connection with this agreement,
or the indebtedness of Borrower to Lender or to Creditor; assents to
any renewal, extension or postponement of the time of payment of the
Lender Indebtedness or any other indulgence with respect thereto, to
any substitution, exchange or release of collateral therefor and to
the addition or release of any person primarily or secondarily liable
thereon; and agrees to the provisions of any instrument, security or
other writing evidencing the Lender Indebtedness. No action which the
Lender, or the Borrower with the consent of the Lender, may take or
refrain from taking with respect to any Lender Indebtedness, or any
note or notes representing the same, or any collateral therefor,
including a waiver or release thereof or any agreement or agreements
(including guaranties) in connection therewith, shall affect this
agreement or the obligations of Creditor hereunder. If all Lender
Indebtedness is at any time hereafter paid in full and thereafter
Borrower again becomes indebted to the Lender, the provisions of this
agreement shall apply to said new indebtedness unless, before the same
is incurred, Creditor notifies the Lender in writing of the
cancellation of this agreement.
7. No waiver shall be deemed to be made by Lender of any of its rights
hereunder unless the same shall be in writing and shall be a waiver
only with respect to the specific instance involved unless otherwise
provided for in such waiver; and it shall in no way impair Lender's
rights or Creditor's obligations to it in any other respect or any
other time. This Subordination Agreement incorporates all discussions
and negotiations between Creditor and Lender concerning the
subordination provided by Creditor hereby, and no such discussions or
negotiations shall limit, modify or otherwise affect the provisions
hereof, and no provision hereof may be altered, amended, waived,
canceled or modified, except by a written instrument executed and
delivered by a duly authorized officer of Lender.
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8. The rights granted to the Lender hereunder are solely for its
protection and nothing herein contained shall impose on the Lender any
duties with respect to any property of the Borrower or Creditor
received hereunder, beyond reasonable care in its custody and
preservation while in the Lender's possession. The Lender shall have
no duty to preserve rights against prior parties in any instrument or
chattel paper received hereunder or pursuant to this agreement.
9. In the event of a conflict between the terms of this Agreement and the
terms of Section 8 of that certain Securities Purchase Agreement,
dated as of February 13, 1998, among Borrower, Avre, Inc., Binary
Associates, Inc., BHM Labs, Inc., SeraCare Acquisitions, Inc.,
SeraCare Technology, Inc., and the Creditors, the terms of this
Agreement shall govern. This agreement shall bind Creditor and
Creditor's heirs, successors, assigns and legal representatives and
shall inure to the benefit of the Lender and its successors and
assigns, and shall be governed by and construed in conformity with the
laws of the Commonwealth of Massachusetts.
EXECUTED under seal as of the date first above written.
Witness Creditors:
DECLARATION OF TRUST
FOR DEFINED BENEFIT PLANS
OF ZENECA HOLDINGS INC.
DECLARATION OF TRUST
FOR DEFINED BENEFIT PLANS
OF ICI AMERICAN HOLDINGS INC.
DELAWARE STATE EMPLOYEES'
RETIREMENT FUND
THE X. X. XXXXXXXXX FAMILY
FOUNDATION
By: Pecks Management Partners Ltd.,
Its Investment Advisor
----------------------------- By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, General Partner
ACCEPTED: XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx, Deputy Manager
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The Borrower above named hereby acknowledges notice of the within and
foregoing subordination and agrees to be bound by all the terms, provisions and
conditions thereof.
Witness Borrower:
----------------------------- By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx, Chairman and CEO
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