Exhibit 10.27

CLOSING SHARES LOCK-UP AGREEMENT

November 17, 2010

Biovest International, Inc:

 

Re:    Term Loan and Security Agreement, dated as of November 17, 2010 (the
“Security Agreement”), by and among Biovest International, Inc. (the “Company”),
the Lenders signatory thereto and LV Administrative Services, Inc., as
Administrative and Collateral Agent for the Lenders.

Ladies and Gentlemen:

Capitalized terms not otherwise defined in this letter agreement (the “Letter
Agreement”) shall have the meanings set forth in the Security Agreement.
Pursuant to the terms and conditions of the Security Agreement, the Lenders
irrevocably agree with the Company that the sale, transfer or assignment of all
or any portion of the Closing Shares shall be subject to the terms and
provisions of this Letter Agreement.

Sales of the Closing Shares by any of the Lenders (each, a “Selling Lender”)
will be subject to, and the Selling Lenders will comply with, the limitations on
the number of shares of common stock of the Company that may be sold from time
to time contained in Rule 144(e) of the Rules and Regulations under the
Securities Act of 1933, as amended, promulgated by the United States Securities
and Exchange Commission (“Rule 144(e)”), without regard to whether or not the
Selling Lender is considered an “Affiliate” of the Company for purposes of Rule
144(e). For purposes of this paragraph, (i) sales of shares of Company common
stock by the Selling Lender that are not “Closing Shares” shall be aggregated
with sales of Closing Shares by the Selling Lender in determining the extent to
which sales of Closing Shares are subject to the limitations of this paragraph,
and (ii) sales of shares of common stock of the Company and Closing Shares by
other Lenders and the affiliates of any Lender will be aggregated for purposes
of calculating the limitations set forth in this paragraph.

Pursuant to this Letter Agreement, the following legend shall be placed upon all
the certificates for the Closing Shares:

“The shares represented by this certificate are subject to a Closing Shares
Lock-Up Agreement dated the 17th day of November, 2010, restricting the sale,
transfer or assignment of the shares. Any transfer or acquisition in violation
of that Closing Shares Lock-Up Agreement is null and void.”

In addition to the foregoing limitations, the Lenders agree that they will not
offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of any
of the Closing Shares (i) during the six (6) month period following the closing
of each of the first two (2) common equity offerings of the Company (whether in
a registered public offering or

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in a private placement transaction), with gross proceeds of $10,000,000 or more,
and (ii) during the three (3) month period following the closing of a common
equity offering of the Company (whether in a registered public offering or in a
private placement transaction) that closes within three (3) months after the
Closing Date, with gross proceeds of between and including $5,000,000 and
$10,000,000.

The restrictions imposed by this Letter Agreement (x) shall terminate following
such time that the Company shall effect a reorganization, consolidate with or
merge into any other entity (where the Company is not the surviving entity), or
transfer all or substantially all of its properties and assets and (y) shall not
apply to transfers of the Closing Shares in a private transaction including,
without limitation, as a bona fide gift or gifts, provided that as a condition
precedent to such transfer, the transferee thereof agrees to be bound in writing
by the provisions of this Letter Agreement (including provisions regarding
aggregation of shares) as though such transferee were a Lender hereunder.

In addition, as to any Lender, notwithstanding the foregoing restrictions, each
Lender shall be permitted to pledge or otherwise use as collateral the Closing
Shares it holds as part of a commercial or margin loan against all or
substantially all of such Lender’s general portfolio of securities, provided
that the pledgee agrees to be bound in writing by the provisions of this Letter
Agreement (including provisions regarding aggregation of shares) as though such
pledgee were a Lender hereunder.

The Company agrees that, in connection with a Lender’s sale of any of the
Closing Shares as permitted by this Letter Agreement, it will cooperate with the
Lender and, at the Company’s expense, will cause its counsel to provide any
necessary legal opinions and other information required to effect the removal of
the above-referenced legend on the stock certificate for any of such Closing
Shares in accordance with applicable law.

The Lenders acknowledge that the execution, delivery and performance of this
Letter Agreement is a material inducement to the Company to complete the
transactions contemplated by the Security Agreement and that the Company shall
be entitled to specific performance of the Lenders’ obligations hereunder.

Each of the parties hereto hereby represents that it has the power and authority
to execute, deliver and perform this Letter Agreement, that it has received
adequate consideration therefor and that it will benefit from the closing of the
transactions contemplated by the Security Agreement.

This Letter Agreement may not be amended or otherwise modified in any respect
without the written consent of each of the parties hereto. This Letter Agreement
shall be construed and enforced in accordance with the laws of the State of New
York without regard to the principles of conflict of laws. Each of the parties
hereto hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court sitting in the Southern District of New York and the
courts of the State of New York located in

 

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Manhattan, for the purposes of any suit, action or proceeding arising out of or
relating to this Letter Agreement, and hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that (i) it is not personally
subject to the jurisdiction of such court, (ii) the suit, action or proceeding
is brought in an inconvenient forum, or (iii) the venue of the suit, action or
proceeding is improper. Each of the parties hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by receiving a copy thereof sent to each of the
parties at the address in effect for notices to it under the Security Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Each of the parties hereto hereby waives any right
to a trial by jury. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each of the parties
hereto agrees and understands that no issuance or sale of the Closing Shares is
created or intended by virtue of this Letter Agreement.

This Letter Agreement shall be binding on the successors and assigns of the
Lenders with respect to the Closing Shares; provided, however that any such
successor or assign shall first enter into an agreement substantially the same
as this Letter Agreement for the benefit of the Company before it may succeed to
the rights of any Lender under this Letter Agreement.

This Letter Agreement may be executed in two or more counterparts, all of which
when taken together may be considered one and the same agreement.

***SIGNATURE PAGE FOLLOWS***

 

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IN WITNESS WHEREOF, the undersigned have signed this Letter Agreement as of the
date first written above.

 

LENDERS: PSOURCE STRUCTURED DEBT LIMITED,
By: PSource Capital Ltd., It’s Investment Consultant

By:  

/s/ Charles Lews

Name: Charles Lews Title: Authorized Signatory Number of Closing Shares:
4,599,927 VALENS U.S. SPV I, LLC

By: Valens Capital Management, LLC, its investment manager

By:  

/s/ Patrick Regan

Name: Patrick Regan Title:  Authorized Signatory Number of Closing Shares:
1,036,468 VALENS OFFSHORE SPV I, LTD.

By: Valens Capital Management, LLC, its investment manager

By:  

/s/ Patrick Regan

Name: Patrick Regan Title:  Authorized Signatory Number of Closing Shares:
7,320,877

LAURUS MASTER FUND LTD. (In Liquidation)

By:  

/s/ Russell Smith

Name: Russell Smith

Title: Joint Official Liquidator (with no personal liability)

 

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Number of Closing Shares: 1,877,510 COMPANY:   BIOVEST INTERNATIONAL, INC.

By:  

/s/ David Moser

Name:   David Moser Title:   Secretary

 

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