Exhibit 10.35

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of the
17th day of November, 2010, by BIOVEST INTERNATIONAL, INC., a Delaware
corporation (the “Borrower”), in favor of CORPS REAL, LLC, an Illinois limited
liability company (the “Secured Party”).

Recitals

WHEREAS, on November 10, 2008, Accentia Biopharmaceuticals, Inc. and its
subsidiaries, including the Borrower, filed their Voluntary Petitions for relief
under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court
for the Middle District of Florida, Tampa Division (the “Bankruptcy Court”),
which cases have been jointly administered under Case No. 8:08-bk-17795-KRM (the
“Bankruptcy Cases”);

WHEREAS, Secured Party provided to Borrower debtor in possession post-petition
financing (the “DIP Facility”) to fund its business operations during the
Bankruptcy Cases;

WHEREAS, Borrower has filed a First Amended Joint Plan of Reorganization dated
as of August 16, 2010 (as modified, the “Plan”) in the Bankruptcy Cases which
sets forth the terms and method of repayment of the outstanding balance of the
DIP Facility;

WHEREAS, the Bankruptcy Court entered an order confirming the Plan on
November 2, 2010 (the “Confirmation Order”), and the Plan became effective on
November 17, 2010;

WHEREAS, pursuant to that certain Plan Secured Promissory Note of even date
herewith made by Borrower for the benefit of Secured Party (the “Note”), Secured
Party has agreed to loan to Borrower up to a maximum principal amount of
$3,169,223.44 (the “Loan”), in accordance with, and as authorized by, the
Confirmation Order and the Plan; and

WHEREAS, in order to more fully secure Borrower’s obligations under the Note,
Borrower has agreed to grant to Secured Party a first priority lien on and
security interest in all property and assets of Borrower, in accordance with,
and as authorized by, the Confirmation Order and the Plan, which lien and
security interest shall be senior to all other liens on and security interests
in property and assets of Borrower.

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and other good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound thereby, agree as follows:

Section 1.  Security Interest.  Borrower hereby grants to Secured Party a
security interest (the “Security Interest”) in the items of collateral described
on Exhibit A attached hereto and in all attachments, additions, replacements,
substitutions, and accessions and in all proceeds thereof in any form now
existing, after acquired and hereafter arising (collectively, the “Collateral”).

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Section 2.    Indebtedness Secured.  This Agreement and the Security Interest
created hereunder secure payment of the Loan owing by Borrower to Secured Party,
and whether the Loan is, from time to time, reduced and thereafter increased or
entirely extinguished and thereafter reincurred (the “Indebtedness”). The
Indebtedness includes any credit extended, sums advanced, and any expenses
incurred by Secured Party and specifically includes the Loan of Secured Party to
Borrower evidenced by the Note.

Section 3.    Covenants and Warranties.  Borrower hereby covenants and warrants
that, at the execution hereof and at all times throughout the duration hereof:

(a) Borrower will join with Secured Party to file, wherever Secured Party deems
appropriate, financing statements in the form and content required by Secured
Party, describing the Collateral in the same manner as it is described herein
and Borrower will pay all costs of such filing. From time to time at the request
of Secured Party, Borrower shall execute one or more financing statements and
such other documents and do such other acts and things, all as Secured Party may
reasonably request, regarding the Security Interest in the Collateral.

(b) Secured Party may examine and inspect the Collateral at any time, wherever
located.

Section 4.    Event of Default.  The occurrence of any of the following shall
constitute an “Event of Default”:

(a)        Borrower’s failure to make payment of any principal, interest, fees,
costs, charges, expenses, or other sums payable from time to time hereunder or
under the Note when required hereunder or thereunder, and, in any such case,
such failure shall continue for (i) in the case of a payment of scheduled
principal or interest, a period of five (5) business days following the date
upon which any such payment was due, or (ii) in the case of any other amount
payable, a period of five (5) business days following the date of Borrower’s
receipt from Secured Party of a written notice identifying the amount due and
providing reasonable supporting details;

(b)        Borrower 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 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 fail to have dismissed
within forty-five (45) 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;

(c)        Borrower shall cease operation of its present business; or

(d)        Borrower directly or indirectly sells, assigns, transfers, conveys,
or suffers or permits to occur any sale, assignment, transfer or conveyance of
all or substantially all of its assets, except as permitted herein.

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Section 5.    Secured Party’s Rights and Remedies.  Upon the occurrence of any
Event of Default or at any time thereafter, and subject to the provisions of the
Confirmation Order and the Plan as applicable:

(a) Secured Party may, at its option, declare all of the Indebtedness secured by
this Agreement (notwithstanding any provisions of any agreement with respect to
the Indebtedness to the contrary) immediately due and payable without demand or
notice of any kind, and the Indebtedness thereupon shall become due and payable
immediately without demand or notice (but with such adjustments, if any, with
respect to interest or other charges as may be provided for in the promissory
notes or other writings evidencing the Indebtedness secured).

(b) Secured Party and its agents are authorized to enter into and enter onto any
premises where the Collateral may be located for the purpose of taking
possession of the Collateral and any records thereof and Secured Party may, at
its option, demand that Borrower, at Borrower’s expense, assemble the Collateral
and make the Collateral available to Secured Party at a convenient place
acceptable to Secured Party and, after notice to Borrower as hereinafter
provided and other reasonable notice to secured parties of record, Secured Party
may sell or otherwise dispose of the Collateral at public or private sale,
without further notice or advertisement, at which sale Secured Party may become
the purchaser.

(c) Secured Party may demand that Borrower shall, upon receipt by Borrower of
any proceeds covered hereby or of any check, draft, or other instrument
representing the proceeds, forthwith and without further notice or demand
deliver the same to Secured Party in the form in which the said items are
received, endorsed by Borrower for payment to Secured Party.

(d) Secured Party may by written notice deem Borrower to have transferred the
Collateral to Secured Party and to have constituted and appointed Secured Party
its true and lawful attorney-in-fact with full and irrevocable power and
authority in the name, place and stead of Borrower, from time to time, in
Secured Party’s discretion to demand, collect, receive and give receipts for any
and all monies due on the Collateral or due otherwise under or with respect to
any of the Collateral and to endorse any checks or other instruments or orders
and to file any claims and take any other action or proceeding deemed by Secured
Party appropriate for the purpose of collecting any and all such monies whenever
they may become payable. Secured Party may reasonably require Borrower to assist
Secured Party in any and all such collections.

(e) Secured Party shall have and may exercise, from time to time, any and all
rights and remedies of a secured party under the Uniform Commercial Code of
Illinois and any and all rights and remedies available to a secured party under
any other applicable law.

(f) Any notice of sale, disposition, or other intended action by Secured Party,
mailed to Borrower at its business offices in Tampa, Florida or at any other
address to which Borrower has requested in writing that notices be sent, at
least five (5) business days prior to such action, shall constitute reasonable
notice to Borrower.

(g) In the event of a sale or other disposition of the Collateral or the receipt
of any proceeds of the Collateral by Secured Party, after all of the
Indebtedness with appropriate interest and all costs and expenses of Secured
Party with respect to the possession and sale of the

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Collateral have been paid in full as appropriate, the surplus, if any, shall be
paid to Borrower by Secured Party, and any Collateral remaining shall be
transferred and reassigned to Borrower by Secured Party; and in the event of a
deficiency, there shall be due from Borrower and Borrower shall immediately pay
to Secured Party the difference between the amounts received by Secured Party
and the remaining sum secured hereby, plus all costs and expenses of Secured
Party in repossessing, transporting, repairing, storing, selling or otherwise
handling the Collateral pursuant to such sale or other disposition.

(h) All remedies hereunder shall be cumulative and not alternative. Borrower
shall pay promptly the costs and expenses of Secured Party of collection of any
and all Indebtedness, enforcement of rights under this Agreement, including
reasonable attorneys’ fees, and those costs, expenses, and attorneys’ fees
incurred in appellate proceedings and expenses and attorneys’ fees on any
actions otherwise with respect to the Collateral.

Section 6.    Rights and Remedies of Borrower.  Subject to the provisions of the
Plan and the Confirmation Order, as applicable, Borrower shall have the rights
and remedies provided in this Agreement and Borrower specifically waives and
releases all rights provided in Article 9 of the Uniform Commercial Code in
force in the State of Illinois on the date of this Agreement.

Section 7.    Miscellaneous.

(a) Borrower authorizes Secured Party, at Borrower’s expense, to file any
financing statement or statements relating to the Collateral (without Borrower’s
signature thereon) which Secured Party deems appropriate, and Borrower appoints
Secured Party as Borrower’s attorney-in-fact to execute any such financing
statement or statements in Borrower’s name and to perform all other acts which
Secured Party deems appropriate to perfect and to continue perfection of the
Security Interest.

(b) Without limiting any other right of Secured Party, whenever Secured Party
has the right to declare any Indebtedness to be immediately due and payable
(whether or not it has so declared), Secured Party may set off against the
Indebtedness all monies then owed to Borrower by Secured Party in any capacity
whether due or not and Secured Party shall be deemed to have exercised its right
to set off immediately at the time its right to such election accrues.

(c) Upon Borrower’s failure to perform any of its duties hereunder, Secured
Party may but it shall not be obligated to perform any of such duties and
Borrower shall forthwith upon demand reimburse Secured Party for any expense
incurred by Secured Party in so doing.

(d) No delay or omission by Secured Party in exercising any right hereunder or
with respect to any Indebtedness shall operate as a waiver of that or any other
right, and no single or partial exercise of any right shall preclude Secured
Party from any other or further exercise of any other right or remedy. Secured
Party may cure any default by Borrower in any reasonable manner without waiving
the default so cured and without waiving any other prior or subsequent default
by Borrower.

(e) Secured Party shall have no obligation to take and Borrower shall have the
sole responsibility for taking any steps to preserve rights against all prior
parties. Borrower waives presentment for payment, notice of protest, notice of
nonpayment, notice of dishonor and protest

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of any instrument at any time held by Secured Party on which Borrower is in any
way liable and, if waivable, waives notice of any other action taken by Secured
Party.

(f) The singular pronoun shall include the plural, and the neuter shall include
the masculine and feminine.

(g) This Agreement may not be modified or amended nor shall any provision of it
be waived except by a written instrument signed by Borrower and Secured Party.

(h) This Agreement is a continuing agreement and shall survive any closing and
shall remain in force until Secured Party shall provide written notice of its
termination and thereafter until all of the Indebtedness contracted for or
created before receipt of the notice and any extension or renewals of that
Indebtedness (whether made before or after receipt of the notice), together with
all interest thereon both before and after the notice, shall be paid in full.

Section 8.    Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois, without reference to
principles of choice or conflict of law thereunder. Whenever possible, each
provision of this Agreement shall be interpreted to be effective and valid under
applicable law. If any provision of this Agreement is prohibited by or invalid
under applicable law, the provision shall be ineffective only to the extent of
the prohibition or invalidity, without invalidating the remainder of the
provision or the other remaining provisions of this Agreement.

Section 9.    Notice.  All notices, requests, demands, claims, and other
communications hereunder shall be in writing and given in accordance with the
notice provisions of the Note.

Section 10.    Jurisdiction.  THE BORROWER HEREBY CONSENTS AND AGREES THAT THE
STATE AND/OR FEDERAL COURTS LOCATED IN THE STATE OF ILLINOIS SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
BORROWER, ON THE ONE HAND, AND THE SECURED PARTY, ON THE OTHER HAND, PERTAINING
TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT;
PROVIDED, THAT THE BORROWER ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE STATE OF ILLINOIS; AND
FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE SECURED PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE SECURED PARTY. THE BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND THE BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE
BORROWER AND THE SECURED PARTY HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREE THAT
SERVICE OF SUCH

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SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE BORROWER OR THE SECURED PARTY, AS APPLICABLE, AT THE ADDRESS
SET FORTH IN THE FIRST PARAGRAPH OF THE NOTE AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF THE BORROWER’S OR THE SECURED PARTY’S, AS
APPLICABLE, ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAIL, PROPER POSTAGE PREPAID.

Section 11.    Confirmation Order and Plan.  This Agreement is executed pursuant
to the terms of the Confirmation Order and the Plan, and the liens and security
interests in the Collateral granted herein to Secured Party shall have the
priority as set forth in the Confirmation Order and the Plan as applicable. To
the extent there is any conflict or inconsistency between this Agreement and the
Confirmation Order or the Plan, the Confirmation Order or the Plan as applicable
shall control.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above-written.

 

BORROWER:

BIOVEST INTERNATIONAL, INC.,

a Delaware corporation

By:  

/s/David D. Moser

Name:

 

David D. Moser

Title:

 

Secretary/Director of Legal Affairs

SECURED PARTY:

CORPS REAL, LLC, an Illinois limited

liability company

By:

 

/s/ Ronald E. Osman

Name:

 

Ronald E. Osman

Title:

 

Manager

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Exhibit A

Description of the Collateral

The term “Collateral” shall include all of the property and assets of Biovest
International, Inc. of every kind or type whatsoever, tangible, intangible,
real, personal and mixed, whether now owned or existing or hereafter acquired or
arising and regardless of where located, and including, without limitation, all
proceeds, rents and products of all of the foregoing and all distributions
thereon.