Exhibit 10.6

Loan and Security Agreement

(Loan to Biovax Investment LLC,

for Investment Through

Telesis CDE Two, LLC

into a portion of Biovest International Inc.’s subsidiary, Biovax, Inc.,
qualifying as

a QALICB under Section 45D of the Internal Revenue Code)

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”), made as of April 25, 2006
(the “Effective Date”), by Biovax Investment LLC, a Delaware limited liability
company (“Borrower”), having an office at 1101 30th Street, NW, Fourth Floor,
Washington, DC 20007, for the benefit of Biolender, LLC, a Delaware limited
liability company, its successors and/or assigns (“Lender”), having an office at
324 S. Hyde Park Ave., Suite 350, Tampa, Florida 33606.

RECITALS

WHEREAS, Borrower is the Investor Member of Telesis CDE Two, LLC, a Delaware
limited liability company (the “Company”), and the Company is governed by its
Amended and Restated Operating Agreement dated as of the date hereof (the
“Operating Agreement”) (capitalized terms not otherwise defined herein shall
have the definitions given them in the Operating Agreement);

WHEREAS, Borrower and Lender have agreed that Lender shall lend to Borrower,
concurrently with the execution and delivery of this Agreement, the principal
amount of up to Eight Million Five Hundred Thousand Dollars ($8,500,000) (the
“Leverage Loan”) evidenced by the Promissory Note from Borrower, as maker, to
Lender, as payee, bearing interest and payable on the terms stated therein,
dated concurrently with this Agreement (the “Note,” this Agreement and the Note
being collectively referred to herein as the “Leverage Loan Documents”); and

WHEREAS, in order to secure the full payment and performance by Borrower of all
of Borrower’s obligations, duties, expenses and liabilities under or in
connection with the Leverage Loan Documents as they may be now or hereafter
amended, modified or restated (such obligations, duties, expenses and
liabilities under and in connection with the Leverage Loan Documents and all
other sums of any kind which may or shall become due thereunder are collectively
referred to herein as the “Obligations”), Borrower is entering into this
Agreement for the benefit of Lender, as required by Lender as a condition of its
funding the Leverage Loan.

NOW, THEREFORE, in consideration of the recitals, covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereby agree as
follows:

 

  1. Definitions.

 

  (a) “Collateral” shall mean:

(i) All of Borrower’s right, title and interest in the Company, whether now
owned or hereafter acquired, including, without limitation, its membership
interest in the Company and its right to receive distributions, allocations and
payments under the Operating Agreement, as it may be modified from time to time
with the consent of Lender; and

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(ii) All products and proceeds, whether cash or noncash, of any and all of the
foregoing.

(b) “Event of Default” shall mean an event of default described in Paragraph 10
hereof.

2. Conditions to Funding the Leverage Loan. The obligation of the Lender to
enter into this Agreement and to fund the proceeds of the Leverage Loan is
subject to the receipt by the Lender of, or the occurrence of, the following,
all of which shall be satisfactory to the Lender and its counsel (collectively,
the “Funding Conditions”):

(a) This Agreement, duly executed and delivered by the Borrower;

(b) The signed original of the Note duly completed, executed and delivered by
the Borrower and dated as of the date hereof;

(c) A loan transaction opinion letter from Borrower’s counsel, in customary form
and content for the lending industry, including, but not limited to, opinions
that (i) Borrower has been duly formed, validly exists in good standing and has
the power and authority to execute and deliver the Leverage Loan Documents and
perform the Obligations and (ii) the Leverage Loan Documents are valid, binding
on Borrower and enforceable against Borrower in accordance with their terms;

(d) a membership certificate of the Company issued in the name of the Borrower,
evidencing a 99.99% membership interest of the Borrower as of the date hereof,
accompanied by a duly executed assignment in blank, in form reasonably
acceptable to the Lender;

(e) UCC-1 Financing Statements described in Paragraph 4 hereof, if required, or
any other instrument required to be executed and/or delivered by Borrower to
perfect Lender’s security interest in the Collateral; and

(f) any other documents that the Lender may reasonably require.

3. Obligation to Fund the Leverage Loan. Upon satisfaction by Borrower of the
Funding Conditions, Lender shall disburse to Borrower the proceeds of the
Leverage Loan.

4. Pledge of Collateral and Grant of Security Interest. Borrower does hereby
unconditionally and irrevocably assign, pledge, convey, transfer, deliver, set
over and grant unto Lender, its successors and assigns, as security for
Borrower’s complete and timely payment and performance of the Obligations, a
continuing first priority security interest in the Collateral under the Uniform
Commercial Code of the State of Delaware (being the state in which Borrower was
organized). The certificates and other instruments representing or evidencing
the Borrower’s membership interest in the Company shall be delivered to and held
by the Lender, and shall be

 

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accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Lender. Borrower hereby further grants
to Lender all rights in the Collateral as are available to a secured party of
such collateral under the Uniform Commercial Code of the State of Delaware and,
concurrently herewith, shall deliver to Lender UCC-1 Financing Statements
suitable for filing in the State of Delaware with respect to the Collateral, if
required to be executed by Borrower to perfect Lender’s security interest
therein, and agrees, upon request, to deliver any other documents which Lender
may reasonably request with respect thereto.

5. Further Deliveries to Lender. Borrower agrees to execute and to cause all
other necessary parties, and any successors and assigns thereof, to execute and
deliver to Lender such other agreements, instruments and documentation as Lender
may reasonably request from time to time to effect the conveyance, transfer, and
grant to Lender of each and all of Borrower’s right, title and interest in and
to the Collateral as security for the Obligations.

6. Proceeds and Products of the Collateral.

(a) Unless and until there occurs an Event of Default subject to the limitations
in Section 11(b) hereof, Lender agrees to forbear in exercising its right to
receive all benefits pertaining to the Collateral, and the Borrower shall be
permitted to exercise all rights and to receive all benefits of the Collateral,
including, without limitation, the right to exercise all voting, approval,
consent and similar rights of Borrower pertaining to the Collateral, payments
due under, proceeds, whether cash proceeds or noncash proceeds, and products of
the Collateral and retain and enjoy the same, provided, however, that Borrower
shall not cast any vote or give any approval, consent, waiver or ratification or
take any action which would be inconsistent with or violate any provision of
this Agreement.

(b) Borrower acknowledges and agrees with Lender that, unless Lender otherwise
consents, in Lender’s sole discretion, Borrower shall not exercise any voting,
approval, consent or other rights with respect to the Collateral at any time
after (i) the occurrence of an Event of Default, subject to the limitations of
Paragraph 11(b) hereof, or (ii) the delivery of notice from Lender instructing
Borrower not to exercise any such voting, approval, consent or other rights with
respect to the Collateral; provided, however, that Borrower shall exercise any
such right it may have under the Operating Agreement with respect to the
business affairs of the Company as is reasonably necessary to protect and
preserve the Collateral.

(c) Upon or at any time after the occurrence of an Event of Default, subject to
the limitations of Paragraph 11(b) hereof, Lender, at its option to be exercised
in its sole discretion, may exercise all rights and remedies granted under this
Agreement, including, without limitation, the right to require the obligors
under the Collateral to make all payments due under and to pay all proceeds,
whether cash proceeds or noncash proceeds, and products of the Collateral to
Lender. Upon the giving of any required notice, the security constituted by this
Agreement shall become immediately enforceable by Lender, without any
presentment, further demand, protest or other notice of any kind, all of which
are hereby expressly and irrevocably waived by Borrower. Borrower hereby
authorizes

 

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and directs each respective obligor under the agreements constituting the
Collateral, that upon receipt of written notice from Lender of an Event of
Default by Borrower hereunder, to assign, set over, transfer, distribute, pay
and deliver any and all Collateral or said payments, proceeds or products of the
Collateral to Lender, at such address as Lender may direct, at such time and in
such manner as Collateral and such payments, proceeds and products of the
Collateral would otherwise be distributed, transferred, paid or delivered to
Borrower. The respective obligors under the agreements constituting the
Collateral shall be entitled to conclusively rely on such notice and make all
such assignments and transfers of the Collateral and all such payments with
respect to the Collateral and pay all such proceeds and products of the
Collateral to Lender and shall have no liability to Borrower for any loss or
damage Borrower may incur by reason of said reliance.

7. No Assumption. Notwithstanding any of the foregoing, whether or not an Event
of Default shall have occurred, and whether or not Lender elects to foreclose on
its security interest in the Collateral as set forth herein, neither the
execution of this Agreement, receipt by Lender of any of Borrower’s right, title
and interest in and to the Collateral and the payments, proceeds and products of
the Collateral, now or hereafter due to Borrower from any obligor of the
Collateral, nor Lender’s foreclosure of its security interest in the Collateral,
shall in any way be deemed to obligate Lender to assume any of Borrower’s
obligations, duties, expenses or liabilities under the Collateral or any
agreements constituting the Collateral, as presently existing or as hereafter
amended, or under any and all other agreements now existing or hereafter drafted
or executed (collectively, “Borrower’s Liabilities”), unless Lender otherwise
agrees to assume any or all of Borrower’s Liabilities in writing. In the event
of foreclosure by Lender of its security interest in the Collateral, Borrower
shall remain bound and obligated to perform its Borrower’s Liabilities and
Lender shall not be deemed to have assumed any of Borrower’s Liabilities, except
as provided in the preceding sentence. In the event the entity or person
acquiring the Collateral at a foreclosure sale elects to assume Borrower’s
Liabilities, such assignee shall agree to be bound by the terms and provisions
of the applicable agreement.

8. Indemnification. (a) The Borrower agrees to pay or reimburse promptly the
Lender for (i) all reasonable out-of-pocket costs and expenses incurred by it
(including, without limitation, the reasonable fees and expenses of the Lender’s
counsel) in connection with (A) any modification, supplement or waiver (or
proposed modification, supplement or waiver) of any of the terms of this
Agreement or any of the other Leverage Loan Documents, (B) any Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or “work-out” (whether or not consummated)
of the Leverage Obligations, and (C) the enforcement of this Section 8; and
(ii) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any Governmental Authority in respect of this Agreement or any
of the other Leverage Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any of the Leverage Loan Documents or any
other document referred to herein or therein.

(b) The Borrower hereby agrees to indemnify the Lender and each of its
Affiliates and the respective directors, officers, employees, agents and
advisors (each such Person being

 

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called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Leverage Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Leverage Loan Documents of their respective
obligations thereunder or the consummation of the transactions contemplated
hereby, or (ii) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. The indemnity obligation in this Section shall survive the
repayment, satisfaction or discharge of the obligations under this Agreement.

9. Representations. Warranties and Covenants. In addition to the representations
made by Borrower in the Operating Agreement, Borrower makes the following
representations and warranties, which shall be deemed to be continuing
representations and warranties in favor of Lender, and covenants and agrees to
perform all acts necessary to maintain the truth and correctness, in all
material respects, of the following:

(a) The Borrower is duly organized or formed, validly existing and in good
standing under the Laws of the State of Delaware, has the legal power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted. The Borrower is duly qualified and
authorized to do business in each jurisdiction in which failure to be so
qualified and authorized would have a Material Adverse Effect.

(b) The Borrower is, and at the time of delivery of its membership certificate
of the Company to the Lender pursuant to Section 4 hereof will be, the sole
holder of record and the sole beneficial owner of the Collateral, free and clear
of any lien, charge or encumbrance thereon or affecting the title thereto,
except for the security interests created by this Agreement and any liens
securing unpaid capital contribution obligations to the Company, other than the
security interest in the Collateral pledged to Lender under Paragraph 4 hereof.
None of the Collateral is subject to any existing or subsequent assignment,
claim, lien, pledge, transfer or other security interest of any character, or to
any attachment, levy, garnishment or other judicial process or to any claim for
set-off, counterclaim, deduction or discount.

(c) None of the Collateral has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject. The Borrower’s
execution, delivery and performance of this Agreement and the pledge of the
Collateral hereunder do not, directly or indirectly, violate in any material
respect or result in a violation of any such laws. The Collateral shall at all
times while this Agreement remains in effect constitute the entire membership
interest of the Borrower in the Company.

 

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(d) The only assets of the Borrower is the Collateral and the capital
contributions from the Company to the Borrower. As of the date hereof, the
Borrower has no Indebtedness other than the Leverage Loans and unpaid capital
contribution obligations to the Company.

(e) None of the Collateral is, as of the date of this Agreement, margin stock,
and the Borrower shall, promptly after learning thereof, notify the Lender of
any of its Collateral which is or becomes margin stock and execute and deliver
in favor of the Lender any and all instruments, documents and agreements
(including, but not limited to Forms U-1) necessary to cause the pledge of such
margin stock to comply with all applicable laws.

(f) No consent, approval, authorization or other order of any Person and no
consent, authorization, approval, or other action by, and no notice to or filing
with, any governmental authority, is required to be made or obtained by the
Borrower either (i) for the pledge of its Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the Borrower
or (ii) for the exercise by the Lender of the voting or other rights provided
for in this Agreement or the remedies in respect of the Collateral pursuant to
this Agreement.

(g) To the best of the Borrower’s knowledge, information and belief, the pledge
of the Collateral to the Lender pursuant to this Agreement will create a valid
lien on and a perfected security interest in the Collateral pledged by the
Borrower, and the proceeds thereof, securing the payment of the Obligations
subject to no other lien, charge, encumbrance or security interest.

(h) This Agreement has been duly authorized, executed and delivered by the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms.

(i) The Borrower has delivered to Lender true and complete copies of the
Operating Agreement and any other agreements pertinent to the Collateral, and
such agreements are currently in full force and effect and have not been amended
or modified except as disclosed to Lender in writing.

(j) Borrower shall not, without the prior written consent of Lender, which
consent may be granted or denied in Lender’s sole discretion, further convey,
transfer, set over or pledge to any party any of its interests in the
Collateral. Borrower agrees to (i) warrant and defend its title to the
Collateral and the security interest created by this Agreement against all
claims of all persons (other than Lender and persons claiming through Lender),
and (ii) maintain and preserve the Collateral and such security interests.

(k) Borrower’s Employer Identification Number is 03-0587765 and its principal
place of business is located at 1101 30th Street, NW, Fourth Floor, Washington
DC 20007 .

 

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(l) Borrower agrees that it shall not, without at least thirty (30) days’ prior
written notification to Lender, move or otherwise change its principal place of
business.

(m) Borrower shall not exercise any voting rights, or give any approvals,
consents, waivers or other ratifications in respect to the Collateral which
would violate or contravene, or which would cause or otherwise authorize
Borrower to violate or contravene, any provision of this Agreement.

(n) Borrower agrees that it shall not permit the Company to:

 

  1. perform any act in violation of the Company Operating Agreement or any
applicable law or regulation thereunder;

 

  2. dissolve without the Consent of the Lender;

 

  3. file for Bankruptcy, merge or consolidate with any entity (except as
authorized herein) or do any other act that would make it impossible to carry on
the ordinary business of the Company;

 

  4. assign rights to specific Company property, other than pursuant to the
furtherance of the Company purpose;

 

  5. permit the admission of any person to the Company without the Lender’s
consent;

 

  6. perform any act that would subject the Lender to any liability in any
jurisdiction;

 

  7. confess a judgment against the Company;

 

  8. enter into any business or activity unrelated to the purposes set forth in
the Company’s operating agreement;

 

  9. take any action that would (i) cause the Company to lose its status as a
Qualified Community Development Entity or (ii) cause a Recapture Event with
respect to the Investor Member’s Qualified Equity Investment;

 

  10. sell, assign or otherwise transfer Company Property, as defined in the
Company Operating Agreement, except as expressly permitted in the Company
Operating Agreement;

 

  11. change the principal place of business of the Company;

 

  12. commingle the funds of the Company with those of any other person or
entity except that use of a zero balance or clearing account shall not
constitute a commingling of funds;

 

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  13. sell at any one time or in a series of related transactions all or
substantially all of the assets of the Company without the express consent of
the Lender;

 

  14. cause the Company to incur any indebtedness other than as expressly
permitted by the Company Operating Agreement;

 

  15. lend money to the managing member of the Company or any of its affiliates;

 

  16. redeem or purchase any interests in the Company without the consent of the
Lender;

 

  17. employ any Person as an employee of the Company;

 

  18. reinvest any amounts received by the Company in payment of, or for,
capital, equity or principal with respect to a Qualified Low Income Community
Investment without the Lender’s Consent.

 

  19. modify or amend the purpose of the Company as set forth in Section 2.04 of
the Company Operating Agreement;

 

  20. engage in any contract for service unless such contract provides for:
(i) all services to be rendered pursuant to a written contract that contains a
clause allowing termination without penalty on sixty (60) days notice; and
(ii) goods and services to be provided at a cost or the price no greater than
that which would be charged for such goods or services by independent parties.
Any loans made shall be made on commercially reasonable terms similar to those
which would be received from an unaffiliated lender making the same loan under
the circumstances.

10. Events of Default. Each of the following shall constitute an Event of
Default hereunder:

(a) An event of default by Borrower shall have occurred under the Operating
Agreement, and such default shall not have been cured within any applicable
grace period provided therein; or

(b) The Borrower shall fail to pay (i) any principal amount of the Note as and
when due and payable (whether at stated maturity or upon mandatory prepayment),
or (ii) any interest on the Note or any other amount payable under this
Agreement or any of the other Leverage Loan Documents within three (3) Business
Days after such interest or other amount is due and payable;

(c) Any representation or warranty of the Borrower herein or in any other
Leverage Loan Document proves to have been or will become incorrect or
misleading, or any certificate or opinion furnished hereunder proves to have
been incorrect or misleading as of the date it was delivered to the Lender;

 

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(d) The Borrower shall default in the observance or performance of any term,
covenant or agreement contained herein hereof, and such default shall continue
unremedied for a period of thirty (30) days after notice thereof to the Borrower
by the Lender;

(e) Any of the Leverage Loan Documents shall for any reason cease to be in full
force and effect (other than in accordance with its terms), or be declared null
and void or unenforceable in whole or in part, or the validity or enforceability
of any of the Leverage Loan Documents shall be challenged or be denied by any
party thereto (other than the Lender);

(f) Any judgment, decree, award or order for the payment of money in excess of
$50,000 in the aggregate, shall be rendered against the Borrower and such
judgment, decree, award or order shall continue unsatisfied and in effect for a
period of thirty (30) consecutive days without being vacated, discharged,
satisfied, or stayed or bonded pending appeal;

(g) The Borrower (i) shall not or shall be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due; or (ii) shall make a
general assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver, trustee or other similar
official for it or a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (iv) shall have any such petition or application
filed or any such proceeding commenced against it, in which an order for relief
is entered or adjudication or appointment is made and which remains undismissed
for a period of sixty (60) days or more; or (v) by any act or omission shall
indicate its consent to, approval of, or acquiescence in any such petition,
application, or proceeding, or order for relief, or the appointment of a
custodian, receiver, trustee or other similar official for all or any
substantial part of its properties; or (vi) shall suffer any such custodianship,
receivership, or trusteeship to continue undischarged for a period of sixty
(60) days or more; and

(h) There shall occur a development or event with respect to the Borrower that,
in the opinion of the Lender, could reasonably be expected to have a Material
Adverse Effect.

11. Remedies.

(a) Upon the occurrence of an Event of Default, Lender may by giving notice of
such Event of Default, at its option, do any one or more of the following,
subject to the limitations of Paragraph 11(b) hereof:

(i) Declare all of the Obligations secured hereby to be immediately due and
payable, whereupon all unpaid principal and interest on said Obligations and
other amounts declared due and payable shall become immediately due and payable
without presentment, demand, protest or notice of any kind; and

 

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(ii) Take possession of all or any of the Collateral, collect, and apply against
the Obligations, all payments due, proceeds, whether cash proceeds or noncash
proceeds, and products from any obligor under the agreements constituting the
Collateral, that would otherwise be paid to Borrower; and

(iii) Either personally, or by means of a court-appointed receiver, take
possession of all or any of the Collateral and exclude therefrom Borrower and
all others claiming under Borrower, and thereafter exercise all rights and
powers of Borrower with respect to the Collateral or any part thereof. In the
event Lender demands, or attempts to take possession of any of the Collateral in
the exercise of any rights under this Agreement, Borrower promises and agrees to
promptly turn over and deliver complete possession thereof to Lender; and

(iv) Without notice to or demand upon Borrower, make such payments and do such
acts as Lender may deem necessary to protect its security interest in the
Collateral, including, without limitation, paying, purchasing, contesting or
compromising any encumbrance, charge or lien which is prior to or superior to
the security interest granted hereunder, and in exercising any such powers or
authority to pay all expenses incurred in connection therewith; and

(v) Require Borrower to take all actions necessary to deliver such Collateral to
Lender, or an agent or representative designated by it; and

(vi) Foreclose upon this Agreement as herein provided or in any manner permitted
by law, and exercise any and all of the rights and remedies conferred upon
Lender in any document executed by Borrower in connection with the Obligations
secured hereby, either concurrently or in such order as Lender may determine;
and sell or cause to be sold in such order as Lender may determine, as a whole
or in part as Lender may determine, the Collateral, without affecting in any way
the rights or remedies to which Lender may be entitled under the other such
instruments; and

(vii) Sell or otherwise dispose of the Collateral at public sale, without having
the Collateral at the place of sale, and upon terms and in such manner as Lender
may determine. Lender may be a purchaser at any sale; and

(viii) Exercise any remedies of a secured party under the Uniform Commercial
Code of the State of Delaware or any other applicable law; and

(ix) By delivering written notice to the Company and to Borrower, succeed, or
designate its nominee or designee to succeed, to all right, title and interest
of Borrower (including, without limitation, the right, if any, to vote on or
take any action with respect to Company matters) as a member of the Company in
respect of the Collateral. Borrower hereby irrevocably authorizes and directs
the Company on receipt of any such notice (A) to deem and treat Lender or such
nominee or designee in all respects as a member (and not merely an assignee of a
member) of the Company, entitled to exercise all the rights, powers and
privileges

 

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(including the right to vote on or take any action with respect to Company
matters pursuant to the Operating Agreement, to receive all distributions, to be
credited with the capital account and to have all other rights, powers and
privileges appertaining to the Collateral to which Borrower would have been
entitled had the Collateral not been transferred to Lender or such nominee or
designee), and (B) to file an amended certificate of formation, if required,
admitting Lender or such nominee or designee as a member of the Company in place
of Borrower; and

(xi) The rights granted to Lender under this Agreement are of a special, unique,
unusual and extraordinary character. The loss of any of such rights cannot
reasonably or adequately be compensated by way of damages in any action at law,
and any material breach by Borrower of any of Borrower’s covenants, agreements
or obligations under this Agreement will cause Lender irreparable injury and
damage. In the event of any such breach, Lender shall be entitled, as a matter
of right, to injunctive relief or other equitable relief in any court of
competent jurisdiction to prevent the violation or contravention of any of the
provisions of this Agreement or to compel compliance with the terms of this
Agreement by Borrower. Lender is absolutely and irrevocably authorized and
empowered by Borrower to demand specific performance of each of the covenants
and agreements of Borrower in this Agreement. Borrower hereby irrevocably waives
any defense based on the adequacy of any remedy at law which might otherwise be
asserted by Borrower as a bar to the remedy of specific performance in any
action brought by Lender against Borrower to enforce any of the covenants or
agreements of Borrower in this Agreement.

(b) Notwithstanding anything to the contrary in this Agreement, the Lender
hereby agrees for eighty-seven months following the execution date of
this Agreement to forbear from exercising its remedies upon the occurrence of an
Event of Default hereunder, so long as all available cash flow of the Borrower
is being applied as required by its operating agreement in effect on the date
hereof, and as amended from time to time.

(c) Unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Lender shall give
Borrower at least ten (10) days’ prior written notice of the time and place of
any public sale of the Collateral subject to this Agreement or other intended
disposition thereof to be made. Such notice shall be conclusively deemed to have
been delivered to Borrower at the address set forth in Paragraph 9(d) hereof,
unless Borrower shall notify Lender in writing of its change of its principal
place of business and provide Lender with the address of its new principal place
of business.

(d) The proceeds of any sale under Paragraphs 11(a)(vi) and (vii) hereof shall
be applied as follows:

(i) To the repayment of the costs and expenses of retaking, holding and
preparing for the sale and the selling of the Collateral (including actual legal
expenses and attorneys’ fees) and the discharge of all assessments,
encumbrances,

 

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charges or liens, if any, on the Collateral prior to the lien hereof (except any
taxes, assessments, encumbrances, charges or liens subject to which such sale
shall have been made);

(ii) To the payment of the whole amount then due and unpaid of the Obligations;

(iii) To the payment of all other amounts then secured hereby; and

(iv) The aggregate surplus, if any, shall be paid to Borrower in a lump sum,
without recourse to Lender, or as a court or competent jurisdiction may direct.

(e) Lender shall have the right to enforce one or more remedies under this
Agreement, successively or concurrently, and such action shall not operate to
estop or prevent Lender from pursuing any further remedy which it may have, and
any repossession or retaking or sale of the Collateral pursuant to the terms
hereof shall not operate to release Borrower until full payment of any
deficiency has been made in cash.

(f) BORROWER ACKNOWLEDGES THAT LENDER MAY BE UNABLE TO EFFECT A PUBLIC SALE OF
ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO RESORT TO ONE OR MORE
PRIVATE SALES TO A RESTRICTED GROUP OF PURCHASERS WHO WILL BE OBLIGATED TO
AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR THEIR OWN ACCOUNT, FOR
INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE THEREOF. BORROWER
FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY BE AT PRICES AND ON TERMS
LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND AGREES THAT SUCH PRIVATE SALES
SHALL BE DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE MANNER AND THAT
LENDER HAS NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO PERMIT THE ISSUER
THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES ACT OF 1933.
BORROWER AGREES THAT LENDER SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS LENDER
DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL TO AVOID CONDUCTING A
PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS THE SAME MAY IN THE
FUTURE BE AMENDED, AND ACKNOWLEDGES THAT ANY SUCH ACTIONS SHALL BE COMMERCIALLY
REASONABLE. IN ADDITION, BORROWER AGREES TO EXECUTE, FROM TIME TO TIME, ANY
AMENDMENT TO THIS AGREEMENT OR OTHER DOCUMENT AS LENDER MAY REASONABLY REQUIRE
TO EVIDENCE THE ACKNOWLEDGMENTS AND CONSENTS OF BORROWER SET FORTH IN THIS
PARAGRAPH.

12. Attorneys’ Fees. Subject to Section 8, each of Borrower and Lender agrees to
pay to the other, upon demand, reasonable attorneys’ fees and all costs and
other expenses which the

 

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prevailing party expends or incurs in any dispute or litigation over any matters
described in this Agreement, including but not limited to the collection, or
defense against collection, of any amounts claimed to be payable by Borrower
hereunder or in the enforcement of this Agreement against Borrower, whether or
not suit is filed.

13. Further Documentation. Borrower hereby agrees to execute, from time to time,
one or more financing statements and such other instruments as may be required
to perfect the security interest created hereby, including any continuation or
amendments of such financing statements, and pay the cost of filing or recording
the same in the public records specified by Lender.

14. Waiver and Estoppel. Borrower represents and acknowledges that it knowingly
waives each and every one of the following rights, and agrees that it will be
estopped from asserting any argument to the contrary: (a) any promptness in
making any claim or demand hereunder; (b) any defense that may arise by reason
of the incapacity, lack of authority, death or disability of Borrower or the
failure to file or enforce a claim against Borrower’s estate (in administration,
bankruptcy or any other proceeding); (c) any defense based upon an election of
remedies by Lender which destroys or otherwise impairs any or all of the
Collateral; (d) the right of Borrower to proceed against Lender or any other
person, for reimbursement; and (e) all duty or obligation of the Lender to
perfect, protect, retain or enforce any security for the payment of amounts
payable by Borrower hereunder.

TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT SEVERALLY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT OR COUNTERCLAIM BROUGHT BY ANY PARTY TO THIS AGREEMENT
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT.

No delay or failure on the part of Lender in the exercise of any right or remedy
against Borrower or any other party against whom Lender may have any rights,
shall operate as a waiver of any agreement or obligation contained herein, and
no single or partial exercise by Lender of any rights or remedies hereunder
shall preclude other or further exercise thereof or other exercise of any other
right or remedy whether contained in this Agreement or in any of the other
documents regarding the Obligations, including without limitation the Operating
Agreement. No waiver of the rights of Lender hereunder or in connection herewith
and no release of Borrower shall be effective unless in writing executed by
Lender. No actions of Lender permitted under this Agreement shall in any way
impair or affect the enforceability of any agreement or obligation contained
herein.

15. Independent Obligations. The obligations of Borrower are independent of the
obligations of any other party which may be initially or otherwise responsible
for performance or payment of the Obligations, and a separate action or actions
for payment, damages or performance may be brought and prosecuted by Lender
against Borrower, individually, for the full amount of the Obligations then due
and payable, whether or not an action is brought against any other party,
whether or not the Lender is involved in any proceedings and whether or not the
Lender or the Borrower or other person is joined in any action or proceedings.

 

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16. No Offset Rights of Borrower. No lawful act of commission or omission of any
kind or at any time upon the part of Borrower shall in any way affect or impair
the rights of the Lender to enforce any right, power or benefit under this
Agreement, and no set-of recoupment, counterclaim, claim, reduction or
diminution of any obligation or any defense of any kind or nature which Borrower
has or may have against Lender or against any other party shall be available
against Lender in any suit or action brought by Lender to enforce any right,
power or benefit under this Agreement.

17. Power of Attorney. Borrower hereby authorizes Lender and appoints Lender as
its attorney-in-fact to file, effective upon the occurrence of an Event of
Default, on its behalf any financing statements, continuation statements or
other documentation required to perfect or continue the security interest
created hereby. This power, being coupled with an interest, shall be irrevocable
until all amounts secured hereby have been paid, satisfied and discharged in
full. Borrower acknowledges and agrees that the exercise by Lender of its rights
under this Paragraph 17 will not be deemed a satisfaction of any amounts owed
Lender unless Lender so elects.

18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. SUCH PARTIES FURTHER AGREE THAT IN THE EVENT OF DEFAULT,
THIS AGREEMENT MAY BE ENFORCED IN ANY COURT OF COMPETENT JURISDICTION IN THE
STATE OF DELAWARE AND THEY DO HEREBY SUBMIT TO THE JURISDICTION OF ANY AND ALL
SUCH COURT REGARDLESS OF THEIR RESIDENCE OR WHERE THIS AGREEMENT MAY BE
EXECUTED.

19. Successors and Assigns. All agreements, covenants, conditions and provisions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto.

20. Notices. Whenever any party hereto shall desire to, or be required to, give
or serve any notice, demand, request or other communication with respect to this
Agreement, each such notice, demand, request or communication shall be in
writing and shall be effective only if the same is delivered by personal service
(including, without limitation, courier or express service) or mailed certified
or registered mail, postage prepaid, return receipt requested, or sent by
telegram to the parties at the addresses shown throughout this Agreement or such
other addresses which the parties may provide to one another in accordance
herewith. If notice is sent to Lender, a copy of such notice shall also be given
to Lender’s counsel. If notice is sent to Borrower, a copy of such notice shall
also be given to Borrower’s counsel.

Notices delivered personally will be effective upon delivery to an authorized
representative of the party at the designated address; notices sent by mail in
accordance with the above paragraph will be effective upon execution by the
addressee of the Return Receipt Requested form.

21. Severability. Every provision of this Agreement is intended to be severable.
In the event any term or provision hereof is declared by a court of competent
jurisdiction to be illegal or invalid for any reason whatsoever, such illegality
or invalidity shall not affect the legality or validity of the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable.

 

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22. Amendment. This Agreement may be modified or rescinded only by a writing
expressly relating to this Agreement and signed by all of the parties.

23. Termination. This Agreement shall terminate, and shall be of no further
force or effect, and the Collateral shall be released from any lien hereunder,
upon the earlier to occur of the performance in full of the Obligations of the
Borrower or upon the mutual written consent of Borrower and Lender. Borrower and
Lender shall cooperate in the preparation and filing of all required documents
to terminate all UCC-1s that have been filed with respect to the security
interest under this Agreement.

24. Usuary Limitations. It is the intention of the Borrower and the Lender to
conform strictly to applicable usury laws. Accordingly, notwithstanding anything
to the contrary in this Agreement or the Note, amounts constituting interest
under applicable law and contracted for, chargeable or receivable hereunder or
under the Note shall under no circumstances, together with any other interest,
late charges or other amounts which may be interpreted to be interest contracted
for, chargeable or receivable hereunder or thereunder, exceed the maximum amount
of interest permitted by law, and in the event any amounts were to exceed the
maximum amount of interest permitted by law, such excess amounts shall be deemed
a mistake and shall either be reduced immediately and automatically to the
maximum amount permitted by law or, if required to comply with applicable law,
be canceled automatically and, if theretofore paid, at the option of the Lender,
be refunded to the Borrower or credited on the principal amount of the Note then
outstanding.

25. Non-Recourse Obligation. Notwithstanding any other terms or provisions of
this Agreement to the contrary, Borrower, its members, and its or their assigns
shall have no personal liability for repayment of the Leverage Loan or any
interest thereon or other charges in connection therewith, and Lender shall
instead look solely to the Collateral for the satisfaction of such debt or
liability if Borrower fails to make any payment thereof when due for any reason;
provided, however, that (a) Borrower shall have given irrevocable directions
(i) to the Company to pay to Borrower’s specified depository bank all cash
distributions from the Company to Borrower, and (ii) to such depository bank to
pay to Lender from such distributions required to pay Loan obligations, and
(b) nothing herein shall be construed to waive any right or remedy Lender may
have at law or in equity for damages arising in the event of fraud, intentional
misrepresentation, other willful misconduct, or gross negligence by Borrower or
any member of Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Loan and Security
Agreement as of the date first above written.

 

Borrower:

Biovax Investment LLC,

a Delaware limited liability company

By:  

 

Name:   Its:   Lender:

Biolender, LLC,

a Delaware limited liability company

By:  

/S/ JAMES A. MCNULTY

Name:   James A. McNulty Its:   CFO/Secretary of Biovest, Managing Member

Signature Page – Loan and Security Agreement