Exhibit 10.2

SECURED PROMISSORY NOTE

 

Amount: $7,799,000    Date: March 31, 2006

FOR VALUE RECEIVED, BIOVEST INTERNATIONAL, INC., a Delaware corporation (the
“Company”), promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate
Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George
Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”) or its
registered assigns or successors in interest, the sum of Seven Million Seven
Hundred Ninety-Nine Thousand Dollars ($7,799,000), together with any accrued and
unpaid interest hereon, on March 31, 2009 (the “Maturity Date”) if not sooner
paid. The original principal amount of this Secured Promissory Note (this
“Note”) subject to amortizing payments pursuant to Section 1.2 hereof is
hereinafter referred to as the “Amortizing Principal Amount” and the remaining
original principal amount of this Note is hereinafter referred to as the
“Non-Amortizing Principal Amount.” The Amortizing Principal Amount and the
Non-Amortizing Principal Amount are collectively referred to herein as the
“Principal Amount”.

Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Note and Warrant Purchase Agreement dated
as of the date hereof by and between the Company and the Holder (as amended,
modified and/or supplemented from time to time, the “Purchase Agreement”).

The Principal Amount of this Note that is contained in the Restricted Account
(as defined in the Restricted Account Agreement referred to in the Purchase
Agreement) on the date of the issuance of this Note is $7,500,000.

The following terms shall apply to this Note:

ARTICLE I

CONTRACT RATE AND AMORTIZATION

1.1 Contract Rate. Subject to Sections 3.2 and 4.10, interest payable on the
outstanding Principal Amount of this Note shall accrue at a rate per annum equal
to the “prime rate” published in The Wall Street Journal from time to time (the
“Prime Rate”), plus two percent (2.0%) (collectively with the Prime Rate
hereinafter, the “Contract Rate”); provided, however, that interest payable on
the outstanding Principal Amount of this Note that is contained in the
Restricted Account shall accrue at the Prime Rate (the “Restricted Account
Interest Rate”). The Contract Rate shall be increased or decreased as the case
may be for each increase or decrease in the Prime Rate in an amount equal to
such increase or decrease in the Prime Rate; each change to be effective as of
the day of the change in the Prime Rate. Except for the outstanding Principal
Amount of this Note that is contained in the Restricted Account and to which the
Restricted Account Interest Rate shall apply, the Contract Rate shall not at any
time be less than an aggregate amount equivalent to nine percent (9.0%).
Interest shall be calculated on

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the basis of a 360 day year. Interest on the Amortizing Principal Amount shall
be payable monthly, in arrears, commencing on May 1, 2006, on the first business
day of each consecutive calendar month thereafter through and including the
Maturity Date, and on the Maturity Date, whether by acceleration or otherwise.
Accrued interest on the Non-Amortizing Principal Amount shall be payable only on
the Maturity Date or, in the event of the prepayment of all or any portion of
the Non-Amortizing Principal Amount, accrued interest on the amount so redeemed
shall be paid on the date of prepayment or conversion, as the case may be.

1.2 Contract Rate Payments. The Contract Rate shall be calculated on the last
business day of each calendar month hereafter (other than for increases or
decreases in the Prime Rate which shall be calculated and become effective in
accordance with the terms of Section 1.1) until the Maturity Date.

1.3 Principal Amount Disbursement.

(a) On the date of issuance of this Note, the Holder shall make an initial loan
disbursement to the Company in the amount of Two Hundred Nine-Nine Thousand
Dollars ($299,000) (the “Initial Disbursement”).

(b) Following the Initial Disbursement, the Holder may, in its sole discretion,
make additional loan disbursements hereunder as part of this Note in the amounts
set forth in one or more loan notices in the form attached hereto as Exhibit A
(each, a “Loan Notice”) (which shall have been completed, as appropriate,
executed by a duly authorized officer of the Company and, upon delivery thereof
to the Holder, shall be deemed to be irrevocable and binding on the Company),
within three (3) Business Days after receipt of a Loan Notice or no later than
the proposed Borrowing Date (as defined in Exhibit A) set forth in such Loan
Notice.

1.4 Principal Payments. Amortizing payments of the aggregate Principal Amount
outstanding under this Note at any time and not contained in the Restricted
Account (as defined in the Restricted Account Agreement) shall be made by the
Company on July 1, 2006 and on the first business day of each succeeding month
thereafter through and including the Maturity Date (each, an “Amortization
Date”). Commencing on the first Amortization Date, the Company shall make
monthly payments to the Holder on each Amortization Date, each such payment in
the amount of $9060.61 (the “Monthly Principal Amount”), together with any
accrued and unpaid interest on such portion of the Amortizing Principal Amount
plus any and all other unpaid amounts which are then owing under this Note, the
Purchase Agreement and/or any other Related Agreement (collectively, the
“Monthly Amount”); provided that, following a release of an amount of funds from
the Restricted Account (as defined in the Restricted Account Agreement) for the
purposes set forth in the Restricted Account Side Letter (each, a “Release
Amount”), each Monthly Principal Amount due on each Amortization Date following
the 90th day following any such release shall be increased by an amount equal to
(x) such Release Amount divided by (y) the sum of (I) the number of Amortization
Dates remaining until the Maturity Date plus (II) one (1). Any outstanding
Principal Amount together with any accrued and unpaid interest and any and all
other unpaid amounts which are then owing by the Company to the Holder under
this Note, the Purchase Agreement and/or any other Related Agreement shall be
due and payable on the Maturity Date.

 

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ARTICLE II

PREPAYMENT

2.1 Optional Prepayment of Amortizing Principal Amount. The Company may prepay
outstanding Amortizing Principal Amount, in whole or in part, (the “Optional
Amortizing Prepayment”) by paying to the Holder a sum of money equal to the
Amortizing Principal Amount to be prepaid together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holder arising under this Note, the Purchase Agreement or any other Related
Agreement (the “Amortizing Prepayment Amount”) outstanding on the Amortizing
Prepayment Payment Date (as defined below). The Company shall deliver to the
Holder a written notice of prepayment (the “Notice of Amortizing Prepayment”)
specifying the date for such Optional Amortizing Prepayment (the “Amortizing
Prepayment Payment Date”), which date shall be no more than seven (7) business
days after the date of the Notice of Amortizing Prepayment (the “Prepayment
Period”). On the Amortizing Prepayment Payment Date, the Amortizing Redemption
Amount must be paid in immediately available funds to the Holder. In the event
the Company fails to pay the Amortizing Redemption Amount on the Amortizing
Prepayment Payment Date as set forth herein, then such Notice of Amortizing
Prepayment will be null and void.

2.2 Optional Prepayment of Non-Amortizing Principal Amount. The Company will
have the option of repaying the outstanding Non-Amortizing Principal Amount
(“Optional Non-Amortizing Prepayment”), in whole or in part, by paying the
Holder a sum of money equal to the Non-Amortizing Principal Amount to be
prepaid, together with accrued but unpaid interest thereon (the “Non-Amortizing
Prepayment Amount”) on the Non-Amortizing Prepayment Date (as defined below).
The Company shall deliver to the Holder a written notice of prepayment (the
“Notice of Non-Amortizing Prepayment”) specifying the date for such Optional
Non-Amortizing prepayment (the “Non-Amortizing Prepayment Date”), which date
shall be not less than seven (7) business days after the date of the Notice of
Non-Amortizing Prepayment (the “Non-Amortizing Prepayment Period”). On the
Non-Amortizing Prepayment Date, the Non-Amortizing Prepayment Amount shall be
paid (i) in good funds to the Holder, (ii) by furnishing the Holder written
direction to notify the bank holding the Restricted Account to release from the
Restricted Account and deliver to the Holder a sum of money equal to the
Non-Amortizing Prepayment Amount, or (iii) if the amount on deposit in the
Restricted Account is less than the Non-Amortizing Prepayment Amount, by
furnishing the Holder written direction to notify the bank holding the
Restricted Account to release all amounts on deposit in the Restricted Account
to the Holder and delivering to the Holder good funds in an amount equal to the
balance of the Non-Amortizing Prepayment Amount.

ARTICLE III

EVENTS OF DEFAULT

3.1 Events of Default. The occurrence of any of the following events set forth
in this Section 3.1 shall constitute an event of default (“Event of Default”)
hereunder:

(a) Failure to Pay. The Company fails to pay when due any installment of
principal, interest or other fees hereon in accordance herewith, or the Company
fails to pay any of the other Obligations (under and as defined in the Master
Security Agreement) when due, and, in any such case, such failure shall continue
unremedied for a period of five (5) days following the date upon which any such
payment was due.

 

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(b) Breach of Covenant. The Company or any of its Subsidiaries breaches any
covenant or any other term or condition of this Note in any material respect and
such breach, if subject to cure, continues unremedied for a period of thirty
(30) days after the occurrence thereof.

(c) Breach of Representations and Warranties. Any representation, warranty or
statement made or furnished by the Company or any of its Subsidiaries in this
Note, the Purchase Agreement or any other Related Agreement shall at any time be
false or misleading in any material respect on the date as of which made or
deemed made.

(d) Default Under Other Agreements. The occurrence of any default (or similar
term) in the observance or performance of any other agreement or condition
relating to any indebtedness for borrowed money or contingent obligation of the
Company or any of its Subsidiaries (including, without limitation, the
indebtedness evidenced by the Subordinated Debt Documentation), beyond the
period of grace (if any), the effect of which default is to cause, or permit the
holder or holders of such indebtedness or beneficiary or beneficiaries of such
contingent obligation to cause, such indebtedness to become due prior to its
stated maturity or such contingent obligation to become payable; provided that,
an Event of Default shall not arise under this Section 3.1(d) to the extent that
the amount of such indebtedness or contingent obligation under which a default
has occurred, (x) is not in excees of $100,000 in any single instance and
(y) when added to all other indebtedness or contingent obligations under which a
default (or similar term) has occurred, is not in excess of $250,000 in the
aggregate;

(e) Material Adverse Effect. Any change or the occurrence of any event which
could reasonably be expected to have a Material Adverse Effect.

(f) Bankruptcy. The Company or any of its Subsidiaries shall (i) apply for,
consent to or suffer to exist the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of creditors, (iii) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent,
(v) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, without challenge within ten (10) days of
the filing thereof, or failure to have dismissed, within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of effecting any of the foregoing;

(g) Judgments. Attachments or levies in excess of $100,000 in the aggregate are
made upon the Company or any of its Subsidiary’s assets or a judgment is
rendered against the Company’s property involving a liability of more than
$100,000 which shall not have been vacated, discharged, stayed or bonded within
thirty (30) days from the entry thereof;

 

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(h) Insolvency. The Company or any of its Subsidiaries shall admit in writing
its inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business;

(i) Change of Control. A Change of Control (as defined below) shall occur with
respect to the Company, unless Holder shall have expressly consented to such
Change of Control in writing. A “Change of Control” shall mean any event or
circumstance as a result of which (i) any “Person” or “group” (as such terms are
defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the
date hereof), other than the Holder, is or becomes the “beneficial owner” (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of 40% or more on a fully diluted basis of the then outstanding
voting equity interest in the Company, (ii) the Board of Directors of the
Company shall cease to consist of a majority of the Company’s board of directors
on the date hereof (or directors appointed by a majority of the board of
directors in effect immediately prior to such appointment), (iii) the Company or
any of its Subsidiaries merges or consolidates with, or sells all or
substantially all of its assets to, any other person or entity or
(iv) Dr. Francis O’Donnell shall cease to be a voting member of the Board of
Directors of the Company; provided, however, that with respect to sub-section
(ii) above, a reduction in the Board of Directors of the Company of designees of
the Parent shall not constitute a Change of Control, and provided, further, that
with respect to sub-sections (i) and (iii) above, a reduction in the Parent’s
ownership in the Company as a result of any dilution of its equity interest in
the Company or sale, distribution or other transfer of all or part of its equity
interest in the Company shall not constitute a Change of Control.

(j) Indictment; Proceedings. The indictment or threatened indictment of the
Company or any of its Subsidiaries or any executive officer of the Company or
any of its Subsidiaries under any criminal statute, or commencement or
threatened commencement of criminal or civil proceeding against the Company or
any of its Subsidiaries or any executive officer of the Company or any of its
Subsidiaries pursuant to which statute or proceeding penalties or remedies
sought or available include forfeiture of any material portion of the property
of the Company or any of its Subsidiaries;

(k) The Purchase Agreement and Related Agreements. (i) An Event of Default shall
occur under and as defined in the Purchase Agreement or any other Related
Agreement, (ii) the Company or any of its Subsidiaries shall breach any term or
provision of the Purchase Agreement or any other Related Agreement in any
material respect and such breach, if capable of cure, continues unremedied for a
period of fifteen (15) days after the occurrence thereof, (iii) the Company or
any of its Subsidiaries attempts to terminate, challenges the validity of, or
its liability under, the Purchase Agreement or any Related Agreement, (iv) any
proceeding shall be brought to challenge the validity, binding effect of the
Purchase Agreement or any Related Agreement or (v) the Purchase Agreement or any
Related Agreement ceases to be a valid, binding and enforceable obligation of
the Company or any of its Subsidiaries (to the extent such persons or entities
are a party thereto);

(l) Stop Trade. An SEC stop trade order or Principal Market trading suspension
of the Common Stock shall be in effect for five (5) consecutive days or five
(5) days during a period of ten (10) consecutive days, excluding in all cases a
suspension of all trading on a Principal Market, provided that the Company shall
not have been able to cure such trading suspension within thirty (30) days of
the notice thereof or list the Common Stock on another Principal Market within
sixty (60) days of such notice; or

 

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(m) Failure to Deliver Common Stock or Replacement Note. The Company’s failure
to deliver Common Stock to the Holder pursuant to and in the form required by
this Note and the Purchase Agreement and, if such failure to deliver Common
Stock shall not be cured within two (2) business days or the Company is required
to issue a replacement Note to the Holder and the Company shall fail to deliver
such replacement Note within seven (7) business days.

3.2 Default Interest. Following the occurrence and during the continuance of an
Event of Default, the Company shall pay additional interest on this Note in an
amount equal to two percent (2%) per month, and all outstanding obligations
under this Note, the Purchase Agreement and each other Related Agreement,
including unpaid interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such Event
of Default is cured or waived.

3.3 Default Payment. Following the occurrence and during the continuance of an
Event of Default, the Holder, at its option, may demand repayment in full of all
obligations and liabilities owing by Company to the Holder under this Note, the
Purchase Agreement and/or any other Related Agreement and/or may elect, in
addition to all rights and remedies of the Holder under the Purchase Agreement
and the other Related Agreements and all obligations and liabilities of the
Company under the Purchase Agreement and the other Related Agreements, to
require the Company to make a Default Payment (“Default Payment”). The Default
Payment shall be 130% of the outstanding principal amount of the Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all other
amounts payable hereunder. The Default Payment shall be applied first to any
fees due and payable to the Holder pursuant to this Note, the Purchase
Agreement, and/or the other Related Agreements, then to accrued and unpaid
interest due on this Note and then to the outstanding principal balance of this
Note. The Default Payment shall be due and payable immediately on the date that
the Holder has exercised its rights pursuant to this Section 3.3.

ARTICLE IV

MISCELLANEOUS

4.1 Issuance of New Note. Upon any partial prepayment of this Note, a new Note
containing the same date and provisions of this Note shall, at the request of
the Holder, be issued by the Company to the Holder for the principal balance of
this Note and interest which shall not have been converted or paid. Subject to
the provisions of Article III of this Note, the Company shall not pay any costs,
fees or any other consideration to the Holder for the production and issuance of
a new Note.

4.2 Cumulative Remedies. The remedies under this Note shall be cumulative.

4.3 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude

 

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other or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing hereunder are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

4.4 Notices. Any notice herein required or permitted to be given shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address provided in the Purchase Agreement executed in connection
herewith, and to the Holder at the address provided in the Purchase Agreement
for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th
Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such
other address as the Company or the Holder may designate by ten days advance
written notice to the other parties hereto. A Notice of Conversion shall be
deemed given when made to the Company pursuant to the Purchase Agreement.

4.5 Amendment Provision. The term “Note” and all references thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented, and any
successor instrument as such successor instrument may be amended or
supplemented.

4.6 Assignability. This Note shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement. The Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void,

4.7 Cost of Collection. In case of any Event of Default under this Note, the
Company shall pay the Holder reasonable costs of collection, including
reasonable attorneys’ fees.

4.8 Governing Law, Jurisdiction and Waiver of Jury Trial.

(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.

(b) THE PARTIES HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY,
ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR
ANY OF THE OTHER RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED
TO THIS NOTE OR ANY OF THE RELATED AGREEMENTS; PROVIDED,

 

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THAT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK;
AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE COMPANY
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.

(c) THE COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY HERETO WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER AND THE
COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

4.9 Severability. In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Note.

4.10 Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum rate permitted
by such law, any payments in excess of such maximum rate shall be credited
against amounts owed by the Company to the Holder and thus refunded to the
Company.

4.11 Security Interest and Guarantee. The Holder has been granted a security
interest (i) in certain assets of the Company and its Subsidiaries (if any) as
more fully described

 

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in the Master Security Agreement dated as of the date hereof and (ii) in the
equity interests of the Companies’ Subsidiaries pursuant to the Stock Pledge
Agreement dated as of the date hereof. The obligations of the Company under this
Note are guaranteed by the Parent and the Company’s Subsidiaries pursuant to the
Guaranty dated as of the date hereof.

4.12 Construction. Each party acknowledges that its legal counsel participated
in the preparation of this Note and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Note to favor any party
against the other.

4.13 Registered Obligation. This Note is intended to be a registered obligation
within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i) and the
Company (or its agent) shall register this Note (and thereafter shall maintain
such registration) as to both principal and any stated interest. Notwithstanding
any document, instrument or agreement relating to this Note to the contrary,
transfer of this Note (or the right to any payments of principal or stated
interest thereunder) may only be effected by (i) surrender of this Note and
either the reissuance by the Company of this Note to the new holder or the
issuance by the Company of a new instrument to the new holder, or (ii) transfer
through a book entry system maintained by the Company (or its agent), within the
meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

[Balance of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the Company has caused this Secured Promissory Note to be
signed in its name effective as of the date first written above.

 

BIOVEST INTERNATIONAL, INC.

By:

 

 

Name:

 

Title:

 

 

WITNESS:

 

 

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EXHIBIT A

LOAN NOTICE

To: LAURUS MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309
GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands
(“Holder”) under that certain Secured Promissory Note dated as of March 31, 2006
(as amended, restated, supplemented or otherwise modified from time to time,
(the “Note”) between Holder and BIOVEST INTERNATIONAL, INC., a Delaware
corporation (the “Company”).

Pursuant to Section 1.3(b) of the Note, this Loan Notice represents the request
of the Company, made on its behalf by                     , to borrow on
                    ,          (the “Borrowing Date”) from the Holder
$            .

The proceeds requested under this Loan Notice shall be used in conformity with
the Note.

The undersigned hereby certifies to you as follows:

 

  1. No Default under the Note has occurred and is continuing on the date hereof
or will be in existence on the Borrowing Date (before or after giving effect to
the proposed disbursement under the Note); and

 

  2. The representations and warranties made by the Company in the Purchase
Agreement are true in all respects (or, as to such representations and
warranties which are not subject to a materiality qualification, in all material
respects) on and as of such Borrowing Date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date).

Capitalized terms used herein which are not otherwise defined herein shall have
the meanings assigned to such terms in the Note.

 

Date:                     ,           BIOVEST INTERNATIONAL, INC.   By:  

 

  Name:     Title:  

 

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