Exhibit 10.4

VALENS OFFSHORE SPV II, CORP.

c/o Valens Capital Management, LLC

335 Madison Avenue

New York, New York 10017

As of January 31, 2008

Biovest International, Inc.

377 Plantation Street

Worcester, MA 01605

Attention: Chief Financial Officer

Gentlemen:

Reference is made to the Royalty Agreement dated as of December 10, 2007 (as
amended, modified or supplemented from time to time, the “Royalty Agreement”),
by and between Biovest International, Inc. (the “Company”) and Valens Offshore
SPV II, Corp. (“Valens Offshore”). Capitalized terms used herein that are not
defined shall have the meaning given to them in the Royalty Agreement.

Valens Offshore and the Company desire to amend the Royalty Agreement on the
terms and conditions set forth below.

In consideration of Valens Offshore’s agreement to continue to provide financial
accommodations to the Company and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree that:

a) Section 1.5 of the Royalty Agreement shall be amended and restated in its
entirety to read as follows:

“‘License Revenue’ shall mean:

(a) any and all Upfront Amounts, as supported by such documentation as Valens
Offshore shall from time to time request;

(b) without duplication of any Upfront Amounts previously calculated and paid
pursuant to subparagraph (a), any Sales Revenue, as supported by such
documentation as Valens Offshore shall from time to time request; and

(c) any and all Other Amounts, as supported by such documentation as Valens
Offshore shall from time to time request, less, to the extent applicable,:

(i) in the event Biovest has indicated in a prior writing to Valens Offshore
that Biovest will use at least 50% of such Other Amounts for the further
development and/or commercialization of the Biovest Biologic Products, solely
such amounts associated with such further development and/or commercialization
plus any reasonable costs and expenses associated therewith; and/or

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(ii) in the event Biovest has indicated in writing to Valens Offshore that
Biovest will use all or part of such Other Amounts to repay indebtedness due and
payable by Biovest (A) to any or all of Valens Offshore, Valens U.S. SPV I, LLC
and Laurus Master Fund, Ltd. or (B) following the indefeasible payment in full
of all indebtedness due and payable by Biovest to each of Valens Offshore,
Valens U.S. SPV I, LLC and Laurus Master Fund, Ltd., to any other creditor of
Biovest, and Valens Offshore has consented to such use in writing (which consent
will not be unreasonably withheld), solely such amounts associated with such
repayment of indebtedness.”

b) Section 1.6 of the Royalty Agreement shall be amended and restated in its
entirety to read as follows:

“‘Licensee’ shall mean any Third Party granted a license by Biovest to
manufacture, sell, or commercialize Biovest Biologic Products.”

c) a new Section 1.12 is added to the Royalty Agreement and shall read as
follows:

“1.12 “Other Amounts” shall mean any amounts other than Upfront Amounts and
Sales Revenue received by Biovest from a Licensee in connection with any Biovest
Biologic Product.”

d) a new Section 1.13 is added to the Royalty Agreement and shall read as
follows:

“1.13 “Sales Revenue” shall mean any and all revenue and other consideration
received by a Licensee from a Third Party for the sale of Biovest Biologic
Products, including but not limited to, revenue or royalties from sales by such
Licensee of Biovest Biologic Products, upfront revenue, milestone revenue,
royalty income, and the market value at the time of transfer of all non-monetary
consideration such as barter or counter-trade in the country of disposition.”

e) a new Section 1.14 is added to the Royalty Agreement and shall read as
follows:

“1.14 “Upfront Amounts” shall mean any and all advance revenue, advance
royalties or other similar consideration received by Biovest from a Licensee for
Biovest Biologic Products prior to the sale of such Biovest Biologic Products by
the Licensee to a Third Party.”

f) Section 4.7 of the Royalty Agreement shall be amended and restated in its
entirety to read as follows:

“Section 4.7 Right to Documentation. (a) Upon request, Valens Offshore shall
have the right to request reasonable documentation of Biovest’s calculations to
determine Biovest’s Net Sales and/or License Revenue and to request discussion
of such calculations with appropriate representatives of Biovest.

 

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(b) Within ten (10) business days following the execution and delivery of any
license agreement between any Licensee and Biovest, Biovest shall deliver to
Valens Offshore a true, complete and fully executed copy of such license
agreement.

(c) Within ten (10) business days following the receipt by Biovest of any
financial reporting documentation pursuant to any license agreement between
Biovest and a Licensee, Biovest shall deliver to Valens Offshore true and
complete copies of such financial reporting documentation.”

Except as specifically amended herein, the Royalty Agreement shall remain in
full force and effect, and is hereby ratified and confirmed. The execution,
delivery and effectiveness of this letter agreement shall not operate as a
waiver of any right, power or remedy of Valens Offshore, nor constitute a waiver
of any provision of the Royalty Agreement.

This letter agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and shall be governed
by and construed in accordance with the laws of the State of New York.

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This letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature
delivered by a party by facsimile or electronic transmission shall be deemed to
be an original signature hereto.

 

VALENS OFFSHORE SPV II, CORP.

By:

 

Valens Capital Management, LLC, its

investment manager

By:

 

/s/ Patrick Regan

Name:

  Patrick Regan

Title:

  Authorized Signatory

 

CONSENTED AND AGREED TO:

BIOVEST INTERNATIONAL, INC.

By:

 

/s/ Steven Arikian

Name:

  Steven Arikian, M.D.

Title:

  Chairman & CEO