Loan And Security Agreement

EXHIBIT 10.4

EXECUTION VERSION

Loan and Security Agreement (Loan to AutovaxID Investment LLC,

for Investment Through

St. Louis New Markets Tax Credit Fund-II, LLC into a portion of Biovest International Inc.' s subsidiary, AutovaxID, Inc., qualifying as a QALICB under Section 45D of the Internal Revenue Code)

THIS LOAN AND SECURITY AGREEMENT (this " Agreement" ), made as of December 8, 2006 (the " Effective Date" ), by AutovaxID Investment LLC, a Missouri limited liability company (" Borrower" ), having an office at 1015 Locust Street, Suite 1200, St. Louis, Missouri 63101, for the benefit of Biolender II, LLC, a Delaware limited liability company, its successors and/or assigns (" Lender" ), having an office at 324 S. Hyde Park Ave., Suite 350, Tampa, Florida 33606.

RECITALS WHEREAS, Borrower is the Investor Member of St. Louis New Markets Tax Credit Fund-II, LLC, a Missouri limited liability company (the " Company" ), and the Company is governed by its Amended and Restated Operating Agreement dated as of December 8, 2006 (the " Company Operating Agreement" ) (capitalized terms not otherwise defined herein shall have the definitions given them in the Operating Agreement);

WHEREAS, Borrower and Lender have agreed that Lender shall lend to Borrower, concurrently with the execution and delivery of this Agreement, the principal amount of up to Five Million Six Hundred Thousand Dollars ($5,600,000) (the " Leverage Loan" ) evidenced by the Promissory Note from Borrower, as maker, to Lender, as payee, bearing interest and payable on the terms stated therein, dated concurrently with this Agreement (the " Note," this Agreement and the Note being collectively referred to herein as the " Leverage Loan Documents" ); and

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

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

1. Definitions .

(a) " Collateral" shall mean: (i) All of Borrower' s right, title and interest in the Company, whether now owned or hereafter acquired, including, without limitation, its membership

interest in the Company and its right to receive distributions, allocations and payments under the Operating Agreement, as it may be modified from time to time with the consent of Lender; and

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

(b) " Event of Default" shall mean an event of default described in Section 10 hereof.

2. Conditions to Funding the Leverage Loan . The obligation of the Lender to enter into this Agreement and to fund the proceeds of the Leverage Loan is subject to the receipt by the Lender of, or the occurrence of, the following, all of which shall be satisfactory to the Lender and its counsel (collectively, the " Funding Conditions" ): (a) This Agreement, duly executed and delivered by the Borrower; (b) The signed original of the Note duly completed, executed and delivered by the Borrower and dated as of the date hereof; (c) A loan transaction opinion letter from Borrower' s counsel, in customary form and content for the lending industry, including, but not limited to, opinions that (i) Borrower has been duly formed, validly exists in good standing and has the power and authority to execute and deliver the Leverage Loan Documents and perform the Obligations and (ii) the Leverage Loan Documents are valid, binding on Borrower and enforceable against Borrower in accordance with their terms;

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

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

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

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

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


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

5. Further Deliveries to Lender . Borrower agrees to execute and to cause all other necessary parties, and any successors and assigns thereof, to execute and deliver to Lender such other agreements, instruments and documentation as Lender may reasonably request from time to time to effect the conveyance, transfer, and grant to Lender of each and all of Borrower' s right, title and interest in and to the Collateral as security for the Obligations. 6. Proceeds and Products of the Collateral .

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

(b) Borrower acknowledges and agrees with Lender that, unless Lender otherwise consents, in Lender' s sole discretion, Borrower shall not exercise any voting, approval, consent or other rights with respect to the Collateral at any time after (i) the occurrence of an Event of Default, subject to the limitations of Section 11(b) hereof, or (ii) the delivery of notice from Lender instructing Borrower not to exercise any such voting, approval, consent or other rights with respect to the Collateral; provided, however, that Borrower shall exercise any such right it may have under the Company Operating Agreement with respect to the business affairs of the Company as is reasonably necessary to protect and preserve the Collateral. (c) Upon or at any time after the occurrence of an Event of Default, subject to the limitations of Section 11(b) hereof, Lender, at its option to be exercised in its sole discretion, may exercise all rights and remedies granted under this Agreement, including, without limitation, the right to require the obligors under the Collateral to make all payments due under and to pay all proceeds, whether cash proceeds or noncash proceeds, and products of the Collateral to Lender. Upon the giving of any required notice, the security constituted by this Agreement shall become immediately enforceable by Lender, without any presentment, further demand, protest or other notice of any kind, all of which


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

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

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


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(b) The Borrower hereby agrees to indemnify the Lender and each of its Affiliates and the respective directors, officers, employees, agents and advisors (each such Person being called an " Indemnitee" ) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Leverage Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Leverage Loan Documents of their respective obligations thereunder or the consummation of the transactions contemplated hereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. The indemnity obligation in this Section shall survive the repayment, satisfaction or discharge of the obligations under this Agreement. 9. Representations. Warranties and Covenants . In addition to the representations made by Borrower in the Operating Agreement, Borrower makes the following representations and warranties, which shall be deemed to be continuing representations and warranties in favor of Lender, and covenants and agrees to perform all acts necessary to maintain the truth and correctness, in all material respects, of the following:

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

(b) The Borrower is, and at the time of delivery of its membership certificate of the Company to the Lender pursuant to Section 4 hereof will be, the sole holde ...