Document:

Royalty Agreement dated October 29, 2007, between Biovest and Valens U.S.

 Exhibit 10.4 
 FUNDS ESCROW AGREEMENT 
 This Funds Escrow
Agreement (this “Agreement”) is dated as of the 30th day of October 2007 among BIOVEST INTERNATIONAL, INC., a Delaware corporation (the
“Company”), VALENS U.S. SPV I, LLC (the “Purchaser”), and Loeb & Loeb LLP (the “Escrow Agent”): 
 WITNESSET: 
 WHEREAS, the Purchaser has advised the Escrow Agent that the Company and the
Purchaser have entered into a Note Purchase Agreement (the “Note Purchase Agreement”) for the sale by the Company to the Purchaser of a secured promissory note (the “Secured Promissory Note”); 
 WHEREAS, the Company and the Purchaser wish to deliver to the Escrow Agent copies of the Documents (as hereafter defined) and, following the satisfaction
of all closing conditions relating to the Documents, the Purchaser to deliver the Escrowed Payment (as hereafter defined), in each case, to be held and released by Escrow Agent in accordance with the terms and conditions of this Agreement; and

 WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the terms and conditions of this Agreement; 
 NOW THEREFORE, the parties agree as follows: 
 ARTICLE I 
 INTERPRETATION 
 1.1 Definitions. Whenever used in this Agreement, the following terms shall have the meanings set forth below. 
 (a) “Agreement” means this Agreement, as amended, modified and/or supplemented from time to time by written agreement among the parties hereto. 
 (b) “Closing Payments” means the closing payments to be paid under the terms of the Note Purchase Agreement. 
 (c) “Disbursement Letter” means that certain letter delivered to the Escrow Agent by the Company, acceptable in form and
substance to the Purchaser, setting forth wire instructions and amounts to be funded at the Closing. 
 (d)
“Documents” means copies of the Disbursement Letter, the Note Purchase Agreement and the Secured Promissory Note. 
 (e) “Escrowed Payment” means $245,000. 

 1.2 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto
with respect to the arrangement with the Escrow Agent and supersedes all prior agreements, understandings, negotiations and discussions of the parties, whether oral or written with respect to the arrangement with the Escrow Agent. There are no
warranties, representations and other agreements made by the parties in connection with the arrangement with the Escrow Agent except as specifically set forth in this Agreement. 
 1.3 Extended Meanings. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine
gender include the feminine and neuter genders. The word “person” includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative. 
 1.4 Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions
hereof may be waived, in each case only by a written instrument signed by all parties hereto, or, in the case of a waiver, by the party waiving compliance. Except as expressly stated herein, no delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or future exercise of any other right, power or privilege hereunder.

 1.5 Headings. The division of this Agreement into articles, sections, subsections and paragraphs and the insertion of headings are
for convenience of reference only and shall not affect the construction or interpretation of this Agreement. 
 1.6 Law Governing this
Agreement; Consent to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. With respect to any suit, action or proceeding relating
to this Agreement or to the transactions contemplated hereby (“Proceedings”), each party hereto irrevocably submits to the exclusive jurisdiction of the courts of the County of New York, State of New York and the United States District
court located in the county of New York in the State of New York. Each party hereto hereby irrevocably and unconditionally (a) waives trial by jury in any Proceeding relating to this Agreement and for any related counterclaim and
(b) waives any objection which it may have at any time to the laying of venue of any Proceeding brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not have jurisdiction over such party. As between the Company and the Purchaser, the prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees and
costs. In the event that any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, then the remainder of this Agreement shall not be affected and shall remain in full force and effect.

 1.7 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement 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 Agreement to favor any party against the other. 
  

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 ARTICLE II 
 APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT 
 2.1 Appointment. The Company and the
Purchaser hereby irrevocably designate and appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent by its execution and delivery of this Agreement hereby accepts such appointment under the terms and
conditions set forth herein. 
 2.2 Copies of Documents to Escrow Agent. On or about the date hereof, the Purchaser and the Company
shall deliver to the Escrow Agent copies of the Documents executed by such parties. 
 2.3 Delivery of Escrowed Payment to Escrow
Agent. Following the satisfaction of all closing conditions relating to the Documents (other than the funding of the Escrowed Payment), the Purchaser shall deliver to the Escrow Agent the Escrowed Payment. At such time, the Escrow Agent shall
hold the Escrowed Payment as agent for the Company, subject to the terms and conditions of this Agreement. 
 2.4 Intention to Create
Escrow Over the Escrowed Payment. The Purchaser and the Company intend that the Escrowed Payment shall be held in escrow by the Escrow Agent and released from escrow by the Escrow Agent only in accordance with the terms and conditions of this
Agreement. 
 ARTICLE III 
 RELEASE OF ESCROW 
 3.1 Release of Escrow. Subject to the provisions of Section 4.2, the Escrow Agent shall
release the Escrowed Payment from escrow as follows: 
 (a) Upon receipt by the Escrow Agent of (i) oral instructions
from David Grin and/or Eugene Grin (each of whom is a director of the Purchaser) consenting to the release of the Escrowed Payment from escrow in accordance with the Disbursement Letter following the Escrow Agent’s receipt of the Escrowed
Payment, (ii) the Disbursement Letter, and (iii) the Escrowed Payment, the Escrowed Payment shall promptly be disbursed in accordance with the Disbursement Letter. The Disbursement Letter shall include, without limitation, Escrow
Agent’s authorization to retain from the Escrowed Payment the Escrow Agent’s fee as set forth on Schedule A hereto for acting as Escrow Agent hereunder and payment of the Closing Payments, each in accordance with the Disbursement Letter.

 (b) Upon receipt by the Escrow Agent of a final and non-appealable judgment, order, decree or award of a court of competent
jurisdiction (a “Court Order”) relating to the Escrowed Payment, the Escrow Agent shall remit the Escrowed Payment in accordance with the Court Order. Any Court Order shall be accompanied by an opinion of counsel for the party
presenting the Court Order to the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to the effect that the court issuing the Court Order is a court of competent jurisdiction and that the Court Order is final and non-appealable.

  

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 3.2 Acknowledgement of Company and Purchaser; Disputes. The Company and the Purchaser acknowledge
that the only terms and conditions upon which the Escrowed Payment are to be released from escrow are as set forth in Sections 3 and 4 of this Agreement. The Company and the Purchaser reaffirm their agreement to abide by the terms and conditions of
this Agreement with respect to the release of the Escrowed Payment. Any dispute with respect to the release of the Escrowed Payment shall be resolved pursuant to Section 4.2 or by written agreement between the Company and Purchaser. 

ARTICLE IV 
 CONCERNING THE
ESCROW AGENT 
 4.1 Duties and Responsibilities of the Escrow Agent. The Escrow Agent’s duties and responsibilities shall be
subject to the following terms and conditions: 
 (a) The Purchaser and the Company acknowledge and agree that the Escrow
Agent (i) shall not be required to inquire into whether the Purchaser, the Company or any other party is entitled to receipt of any Document or all or any portion of the Escrowed Payment; (ii) shall not be called upon to construe or review
any Document or any other document, instrument or agreement entered into in connection therewith; (iii) shall be obligated only for the performance of such duties as are specifically assumed by the Escrow Agent pursuant to this Agreement;
(iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, instrument, statement, request or document furnished to it hereunder and believed by the Escrow Agent in good faith to be genuine
and to have been signed or presented by the proper person or party, without being required to determine the authenticity or correctness of any fact stated therein or the propriety or validity or the service thereof; (v) may assume that any
person purporting to give notice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so; (vi) shall not be responsible for the identity, authority or rights of any person, firm
or company executing or delivering or purporting to execute or deliver this Agreement or any Document or any funds deposited hereunder or any endorsement thereon or assignment thereof; (vii) shall not be under any duty to give the property held
by Escrow Agent hereunder any greater degree of care than Escrow Agent gives its own similar property; and (viii) may consult counsel satisfactory to Escrow Agent (including, without limitation, Loeb & Loeb, LLP or such other counsel
of Escrow Agent’s choosing), the opinion of such counsel to be full and complete authorization and protection in respect of any action taken, suffered or omitted by Escrow Agent hereunder in good faith and in accordance with the opinion of such
counsel. 
 (b) The Purchaser and the Company acknowledge that the Escrow Agent is acting solely as a stakeholder at their
request and that the Escrow Agent shall not be liable for any action taken by Escrow Agent in good faith and believed by Escrow Agent to be authorized or within the rights or powers conferred upon Escrow Agent by this 

  

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Agreement. The Purchaser and the Company hereby, jointly and severally, indemnify and hold harmless the Escrow Agent and any of Escrow Agent’s partners,
employees, agents and representatives from and against any and all actions taken or omitted to be taken by Escrow Agent or any of them hereunder and any and all claims, losses, liabilities, costs, damages and expenses suffered and/or incurred by the
Escrow Agent arising in any manner whatsoever out of the transactions contemplated by this Agreement and/or any transaction related in any way hereto, including the fees of outside counsel and other costs and expenses of defending itself against any
claims, losses, liabilities, costs, damages and expenses arising in any manner whatsoever out the transactions contemplated by this Agreement and/or any transaction related in any way hereto, except for such claims, losses, liabilities, costs,
damages and expenses incurred by reason of the Escrow Agent’s gross negligence or willful misconduct. The Escrow Agent shall owe a duty only to the Purchaser and the Company under this Agreement and to no other person. 
 (c) The Purchaser and the Company shall jointly and severally reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including counsel fees (which counsel may be Loeb & Loeb LLP or such other counsel of the Escrow Agent’s choosing) incurred in connection with the performance of its duties and responsibilities hereunder, which shall not (subject to
Section 4.1(b)) exceed $1,000. 
 (d) The Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
(5) business days prior written notice of resignation to the Purchaser and the Company. Prior to the effective date of resignation as specified in such notice, the Purchaser and Company will issue to the Escrow Agent a joint instruction
authorizing delivery of the Documents and the Escrowed Payment to a substitute Escrow Agent selected by the Purchaser and the Company. If no successor Escrow Agent is named by the Purchaser and the Company, the Escrow Agent may apply to a court of
competent jurisdiction in the State of New York for appointment of a successor Escrow Agent, and deposit the Documents and the Escrowed Payment with the clerk of any such court, and/or otherwise commence an interpleader or similar action for a
determination of where to deposit the same. 
 (e) The Escrow Agent does not have and will not have any interest in the
Documents and the Escrowed Payment, but is serving only as escrow agent, having only possession thereof. 
 (f) The Escrow
Agent shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized hereby or within the rights or powers conferred upon it hereunder, nor for action taken or omitted by it in good faith, and
in accordance with advice of counsel (which counsel may be Loeb & Loeb LLP or such other counsel of the Escrow Agent’s choosing), and shall not be liable for any mistake of fact or error of judgment or for any acts or omissions of any
kind except to the extent any such liability arose from its own willful misconduct or gross negligence. 
  

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 (g) This Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations shall be read into this Agreement. 
 (h) The
Escrow Agent shall be permitted to act as counsel for the Purchaser or the Company, as the case may be, in any dispute as to the disposition of the Documents and the Escrowed Payment, in any other dispute between the Purchaser and the Company,
whether or not the Escrow Agent is then holding the Documents and/or the Escrowed Payment and continues to act as the Escrow Agent hereunder. 
 (i) The provisions of this Section 4.1 shall survive the resignation of the Escrow Agent or the termination of this Agreement. 
 4.2 Dispute Resolution; Judgments. Resolution of disputes arising under this Agreement shall be subject to the following terms and conditions: 
 (a) If any dispute shall arise with respect to the delivery, ownership, right of possession or disposition of the Documents and/or the
Escrowed Payment, or if the Escrow Agent shall in good faith be uncertain as to its duties or rights hereunder, the Escrow Agent shall be authorized, without liability to anyone, to (i) refrain from taking any action other than to continue to
hold the Documents and the Escrowed Payment pending receipt of a joint instruction from the Purchaser and the Company, (ii) commence an interpleader or similar action, suit or proceeding for the resolution of any such dispute; and/or
(iii) deposit the Documents and the Escrowed Payment with any court of competent jurisdiction in the State of New York, in which event the Escrow Agent shall give written notice thereof to the Purchaser and the Company and shall thereupon be
relieved and discharged from all further obligations pursuant to this Agreement. The Escrow Agent may, but shall be under no duty to, institute or defend any legal proceedings which relate to the Documents and the Escrowed Payment. The Escrow Agent
shall have the right to retain counsel if it becomes involved in any disagreement, dispute or litigation on account of this Agreement or otherwise determines that it is necessary to consult counsel which such counsel may be Loeb & Loeb LLP
or such other counsel of the Escrow Agent’s choosing. 
 (b) The Escrow Agent is hereby expressly authorized to comply
with and obey any Court Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow Agent shall not be liable to the Purchaser and the Company or to any other person, firm, company or entity by reason of such compliance.

 ARTICLE V 
 GENERAL
MATTERS 
 5.1 Termination. This escrow shall terminate upon disbursement of the Escrowed Payment in accordance with the terms of
this Agreement or earlier upon the agreement in writing of the Purchaser and the Company or resignation of the Escrow Agent in accordance with the terms hereof. 
  

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 5.2 Notices. All notices, requests, demands and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given one (1) day after being sent by telecopy (with copy delivered by overnight courier, regular or certified mail): 
  

					
	(a)	  	If to the Company, to:	  	Biovest International, Inc.
		  		  	377 Plantation Street
		  		  	Worcester, MA 01605
		  		  	Fax: (508) 798-0899
		  		  	Attention: Chief Financial Officer
			
		  	With a copy to:	  	Nixon Peabody LLP
		  		  	401 Ninth Street, N.W., Suite 900
		  		  	Washington, DC 20004
		  		  	Attention: Herbert F. Stevens, Esq.
		  		  	Facsimile: (202) 585-8080
			
	(b)	  	If to the Purchaser, to:	  	Valens U.S. SPV I, LLC
		  		  	c/o Valens Capital Management, LLC
		  		  	335 Madison Avenue, 10th Floor
		  		  	New York, New York 10017
		  		  	Fax: (212) 581-037
		  		  	Attention: Portfolio Services
			
	(c)	  	If to the Escrow Agent, to:	  	Loeb & Loeb LLP
		  		  	345 Park Avenue
		  		  	New York, New York 10154
		  		  	Fax:(212) 407-4990
		  		  	Attention: Scott J. Giordano, Esq.

 or to such other address as any of them shall give to the others by notice made pursuant to this Section 5.2.

 5.3 Interest. The Escrowed Payment shall not be held in an interest bearing account nor will interest be payable in connection
therewith. 
 5.4 Assignment; Binding Agreement. Neither this Agreement nor any right or obligation hereunder shall be assignable by
any party without the prior written consent of the other parties hereto. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and assigns. 
 5.5 Invalidity. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it
being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. 
  

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 5.6 Counterparts/Execution. This Agreement may be executed in any number of counterparts and by
different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same agreement. This Agreement may be executed by facsimile transmission.

 [Remainder of Page Intentionally Left Blank, 
 Signatures Appear on Following Page] 
  

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

			
	COMPANY:
	
	BIOVEST INTERNATIONAL, INC.
		
	By:	 	 /s/ Steven Arikian

	Name:	 	Steven Arikian, M.D.
	Title:	 	Chairman & CEO
	
	PURCHASER:
	
	VALENS U.S. SPV I, LLC
	
	 By: Valens Capital Management, LLC,
 its
investment manager

		
	By:	 	 /s/ Patrick Regan

	Name:	 	Patrick Regan
	Title:	 	Authorized Signatory
	
	ESCROW AGENT:
	
	LOEB & LOEB LLP
		
	By:	 	 /s/ Scott J. Giordano

	Name:	 	Scott J. Giordano
	Title:	 	Partner

  

 9Secured Promissory Note dated October 30, 2007 between Biovest and Valens

 Exhibit 10.5 
 SECURED PROMISSORY NOTE 
  

			
	Amount: $255,000.00	  	Date: October 30, 2007

 FOR VALUE RECEIVED, BIOVEST INTERNATIONAL,
INC., a Delaware corporation (the “Company”), promises to pay to VALENS OFFSHORE SPV II, CORP. c/o Valens Capital Management, LLC, 335 Madison Avenue, 10th Floor, New York, New York 10017, Fax: 212-581-5037 (the “Holder”) or its registered assigns or successors in interest, the sum of Two Hundred Fifty-Five Thousand Dollars ($255,000), together with any
accrued and unpaid interest hereon, on March 31, 2009 (the “Maturity Date”) if not sooner paid in full. 
 Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Note 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 following terms shall apply to this Secured Promissory
Note (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 (the “Principal Amount”) 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”). 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, 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 the basis of a 360 day year. Interest on the Principal Amount shall be payable monthly, in arrears, commencing on November 1, 2007, 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. 
 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 Disbursement. 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 Fifty-Five Thousand Dollars ($255,000). 
 1.4 Principal
Payments. 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. 

 ARTICLE II 
 PREPAYMENT 
 2.1 Optional Prepayment of Principal Amount. The Company may prepay outstanding
Principal Amount, in whole or in part, (the “Optional Prepayment”) by paying to the Holder a sum of money equal to the 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 “Prepayment Amount”) outstanding on the Prepayment Payment Date (as defined below). The Company shall deliver to
the Holder a written notice of prepayment (the “Notice of Prepayment”) specifying the date for such Optional Prepayment (the “Prepayment Payment Date”), which date shall be no more than seven (7) business days
after the date of the Notice of Prepayment (the “Prepayment Period”). On the Prepayment Payment Date, the Prepayment Amount must be paid in immediately available funds to the Holder. In the event the Company fails to pay the
Prepayment Amount on the Prepayment Payment Date as set forth herein, then such Notice of Prepayment will be null and void. 
 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. 
 (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, 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 excess 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; 
 (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, if any;

 (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 
 (m) Failure to Deliver Replacement Note. The Company shall be required to issue a replacement
Note to the Holder pursuant to the terms of this Note and/or the Purchase Agreement and the Company shall fail to deliver such replacement Note within seven (7) business days. 
 (n) The Valens U.S. Purchase Agreement and Related Agreements. (i) An Event of Default shall occur under and as defined in the Note Purchase
Agreement dated as of the date hereof by and between the Company and Valens U.S. SPV I, LLC (as amended, modified and/or supplemented from time to time, the “Valens U.S. Purchase Agreement”) or any other Related Agreement (as
defined in the Valens U.S. Purchase Agreement), (ii) the Company or any of its Subsidiaries shall breach any term or provision of the Valens U.S. Purchase Agreement or any other Related Agreement (as defined in the Valens U.S. Purchase
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 Valens U.S. Purchase Agreement or any Related Agreement (as defined in the Valens U.S. Purchase Agreement), (iv) any proceeding shall be brought to challenge the validity, binding effect of the Valens
U.S. Purchase Agreement or any Related Agreement (as defined in the Valens U.S. Purchase Agreement), or (v) the Valens U.S. Purchase Agreement or any Related Agreement (as defined in the Valens U.S. Purchase 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); 

 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 five percent (5.0%) per annum, 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 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 the Holder or at such other address as the Company or the Holder may designate by ten days advance written notice to the
other parties hereto. 
 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’s 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, 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 NONCONVENIENS. 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. LV Administrative Services, Inc., as agent for the Holder, has been granted a security interest in all assets of the Company as more fully described in the Master Security Agreement
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] 

 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:	 	 /s/ Steven Arikian

		 		 	Name:	 	Steven Arikian, M.D.
		 		 	Title:	 	Chairman & CEO
				
	WITNESS:

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