Exhibit 10.1

LV ADMINISTRATIVE SERVICES, INC.

as Administrative and Collateral Agent

420 LEXINGTON AVENUE, SUITE 2840

NEW YORK, NY 10170

MAY 10, 2012

Biovest International, Inc.

324 South Hyde Park Avenue, Suite 350

Tampa, Florida 33606

Attn: Chief Executive Officer/President

Re: Sale and/or Repayment of Biovest Term Notes

Ladies and Gentlemen:

Reference is made to: (a) that certain Term Loan & Security Agreement dated as of November 17, 2010 (as amended, supplemented, restated or modified from time to time, the “Term Loan & Security Agreement”) by and between LV Administrative Services, Inc. (“LV”) as Agent for and on behalf of each of Laurus Master Fund, Ltd. (in liquidation) (“Laurus”), Erato Corporation (“Erato”), Valens Offshore SPV I, Ltd. (“VOF”), Valens Offshore SPV II, Corp. (“VOF2”), Valens U.S. SPV I, LLC. (“VUS”), PSource Structured Debt Limited (“PSD”) and the other creditor parties named therein from time to time (Laurus, Erato, VOF, VOF2, VUS, PSD and such other creditor parties, collectively, the “Lenders”) and Biovest International, Inc. (“Biovest”); (b) Secured Term Notes A and B (the “Term Notes”) issued on or about November 17, 2010 to the Lenders; and (c) the Ancillary Agreements (as defined in the Term Loan & Security Agreement). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Term Loan & Security Agreement or the Ancillary Agreements, as applicable.

WHEREAS, as of November 17, 2010, (i) Laurus was issued 1,877,510 shares of Biovest common stock, (ii) VOF was issued 7,320,877, (iii) VUS was issued 1,036,468 shares of Biovest common stock and (iv) PSD was issued 4,599,927 shares of Biovest common stock; and

WHEREAS, Biovest is seeking to arrange for one or more purchaser(s), which may include a direct purchase by Biovest, to, acquire on or before August 15, 2012 the Term Notes and Term Loan & Security Agreement together with a large portion of the Biovest common stock owned by certain of the Lenders and one-half of the BiovaxID Biologic Products Royalty owned by the Lenders for an aggregate purchase price of approximately $31 million; and

WHEREAS, pursuant to Section 42 of the Term Loan & Security Agreement, LV has the authority to enter into this Letter Agreement modifying, amending and waiving certain terms and provisions of the Term Loan & Security Agreement and the Ancillary Agreements, which action will constitute the valid and binding action on behalf of each of the Lenders, subject to their acknowledgement and consent of same.

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In consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Biovest and LV as designated Agent for and on behalf of the Lenders hereby agree to, and acknowledge, the following:

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(i) Biovest has all requisite power and authority and full legal capacity to execute and deliver this Letter Agreement and to perform its obligations hereunder;

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(ii) Biovest is duly organized, validly existing and in good standing under the laws of the state of Delaware;

(iii) all of Biovest’s representations and warranties set forth in the Term Notes, the Term Loan & Security Agreement and each other Ancillary Agreement are true and correct as of the date hereof (or when given if expressly limited to a specific date), all covenant requirements set forth therein have been met and there current does not exist any default or event of default under such documents and/or instruments;

(iv) The execution, delivery and performance of this Letter Agreement by the undersigned on behalf of Biovest and the consummation of the transactions contemplated hereby by Biovest have been duly and validly authorized by all requisite action on the part of Biovest, and no other proceedings on Biovest’s part are necessary to authorize the execution, delivery or performance of this Letter Agreement; and

(v) The execution, delivery and performance of this Letter Agreement by Biovest and the consummation of the transactions contemplated hereby do not conflict with or result in any material breach of, constitute a material default under, result in a material violation of, result in the creation of any material lien, security interest, charge or encumbrance upon any material assets of Biovest (except as may be expressly contemplated herein), or require any material authorization, consent, approval, exemption or other material action by or notice to any court, other governmental body or other third party, under the provisions of any material indenture, mortgage, lease, loan agreement or other material agreement or instrument to which Biovest is bound, or any law, statute, rule or regulation or order, judgment or decree to which Biovest is subject.

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IN WITNESS WHEREOF, the parties hereto have executed this Letter Agreement as of the date first set forth above.

EXHIBIT A

FORM OF OPTION AND LOCK-UP AGREEMENT

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PSOURCE STRUCTURED DEBT LIMITED

SARNIA HOUSE, LE TRUCHOT

ST PETER PORT. GUERNSEY, GY1 4NA

                 , 201    

Biovest International, Inc.

324 South Hyde Park Avenue, Suite 350

Tampa, Florida 33606

Attn: Chief Executive Officer/President

Gentlemen:

PSource Structured Debt Limited (“PSD”) is an owner of record or beneficially of certain shares of common stock (“Common Stock”) of the Company. The Company proposes to enter into an amendment to: (i) the Term Loan & Security Agreement dated as of November 17, 2010 (as amended, supplemented, restated or modified from time to time, the “Term Loan & Security Agreement”) by and between LV Administrative Services, Inc. (“LV”) as Agent for and on behalf of each of Laurus Master Fund, Ltd. (in liquidation) (“Laurus”), Erato Corporation (“Erato”), Valens Offshore SPV I, Ltd. (“VOF”), Valens Offshore SPV II, Corp. (“VOF2”), Valens U.S. SPV I, LLC. (“VUS”), PSource Structured Debt Limited (“PSD”) and the other creditor parties named therein from time to time (Laurus, Erato, VOF, VOF2, VUS, PSD and such other creditor parties, collectively, the “Lenders”); (ii) Secured Term Notes A and B (the “Term Notes”) issued on or about November 17, 2010 to the Lenders by the Company; and (iii) the Ancillary Agreements (as defined in the Term Loan & Security Agreement) (the “Transaction”). PSD recognizes that the Transaction will be of benefit to PSD and will benefit the Company. PSD acknowledges that the Company is relying on the representations and agreements of PSD contained in this letter agreement in carrying out the Transaction.

In consideration of the foregoing and solely in respect of 3,000,000 shares of Common Stock currently owned either of record or beneficially by PSD (the “Restricted Common Stock”), PSD hereby agrees that it will not, without the prior written consent of the Company, directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise dispose of any shares (collectively, a “Transfer”) of the Restricted Common Stock currently owned either of record or beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by PSD, or publicly announce an intention to do any of the foregoing, during the period (the “Restricted Period”) commencing on the date hereof and ending on May     , 2014, subject to the exclusions and termination events otherwise described in this letter agreement. The restrictions as set forth in the immediately preceding sentence shall not apply to: (1) during the Restricted Period the Transfer of any or all of the shares of Restricted Common Stock owned by PSD to any affiliate of PSD, liquidating trust (or another similarly purposed structure) the beneficiaries of which are PSD’s shareholders and/or investors or any other party in a private sale transaction; provided, however,

that it shall be a condition to such Transfer that the transferee executes and delivers to the Company an agreement stating that the transferee is receiving and holding the Restricted Common Stock subject to the provisions of this letter agreement, and there shall be no further transfer of such Restricted Common Stock except in accordance with this letter agreement; and (ii) during the period commencing on the twelve (12) month anniversary of the date hereof through the expiration of the Restricted Period, the Transfer of any or all of the shares of Restricted Common Stock owned by PSD to any other party; provided, that, PSD shall obtain the prior written consent from the Company for each such proposed Transfer (which consent shall not be unreasonably withheld by the Company); provided, further, that, to the extent that the Company does not respond to a request for consent from PSD within 5 business days of delivery thereof, consent to such proposed Transfer shall be deemed granted by the Company. Furthermore, to the extent and in the manner as described in clauses (i) through (iii) below, the Transfer restrictions set forth above in this letter agreement shall be automatically terminated and of no further force or effect (each, a “Release”):

(i) on the 90^th day immediately following the date hereof (the “Partial Release Date”), a Release shall occur in respect of that number of shares of the Restricted Common Stock determined by using the following formula (the “90^th Day Released Shares”):

X = 3,000,000 – (3,000,000 x (Y/$30,900,000))

X =    Number of shares of Restricted Common Stock to be released

Y =    The aggregate amount of all repayments made by or on behalf of the Company of the outstanding principal balance of the Term Notes and received by LV between May     , 2012 and the Partial Release Date.

For example: a repayment of an aggregate amount of $20 million by the Partial Release Date would result in the release of approximately 35% of the Restricted Common Stock (or 1,058,253 shares of the Restricted Common Stock) from the Transfer restrictions set forth in this letter agreement and as a second example a repayment of $25 million would result in the release of approximately 19% of the Restricted Common Stock (or 572,816 shares of the Restricted Common Stock) from the Transfer restrictions set forth in this letter agreement.

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(ii) if a Trigger Event shall have occurred then, in such case, on the later to occur of the Partial Release Date and the date of expiration of the Purchase Option Exercise Period (as defined below), a Release shall also occur in respect of those shares of Restricted Common Stock available for purchase by the Company from PSD pursuant to the terms of this letter agreement that are not subject to a timely executed and delivered Purchase Option Notice (as defined below) hereunder (the “Additional Released Shares”); and

(iii) if a Trigger Event shall have occurred and a Purchase Option Notice delivered in accordance with the terms and conditions of this Agreement, on the date of expiration of the Closing Period (as defined below) a Release shall occur in respect of all remaining shares of Restricted Common Stock not otherwise previously Released hereunder, and, at the sole option of PSD, all agreements related to a proposed Closing shall be automatically terminated and have no further force or effect.

PSD also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of the Restricted Common Stock held by PSD except in compliance with the foregoing restrictions (subject to all exclusions and termination events as also described in this letter agreement).

In the event that at any time during the Restricted Period, the average closing price of the Common Stock (as reported by Bloomberg, L.P.) for twenty (20) consecutive trading days is greater than or equal to $1.25 per share at the end of each such day (the “Trigger Event” and, the last day of such Trigger Event, the “Trigger Date”), PSD hereby grants to the Company, subject to the terms and conditions herein described, the right to purchase (the “Purchase Option”) from PSD for a cash purchase price of $0.50 per share in a single transaction up to that number of shares of Restricted Common Stock as determined using the following formula (the “Maximum Available Share Formula”):

X = 3,000,000 x (Y/$30,900,000)

X =     Number of shares of Restricted Common Stock available for purchased by the Company upon occurrence of Trigger Date.

Y =     The aggregate amount of all repayments of the outstanding principal balance of the Term Notes made by or on behalf of the Company (and received by LV) between May     , 2012 and the Partial Release Date.

For example: the occurrence of a Trigger Event and an aggregate repayment of $20 million by the Partial Release Date would result in a Purchase Option right for up to approximately 65% of the Restricted Common Stock (or 1,941,747 shares of the Restricted Common Stock) and as a second example, the occurrence of a Trigger Event and an aggregate repayment of $25 million would result in a Purchase Option right for up to approximately 81% of the Restricted Common Stock (or 2,427,184 shares of the Restricted Common Stock).

In the event that the Company wishes to exercise the Purchase Option, the Company shall deliver no later than the twentieth (20th) day following delivery of notice from PSD of the occurrence of the Trigger Event (the “Purchase Option Exercise Period”), a notice (the “Purchase Option Notice”) to the offices of PSD c/o                                         or such other location designated in writing by PSD (with a copy to LV at                                         or such other location designated in writing by LV) setting forth (i) the proposed date of such exercise, and (ii) subject to the restriction imposed by the Maximum Available Share Formula, the number of shares of Restricted Common Stock subject to such exercise of the Purchase Option. In the event that a Trigger Event occurs prior to the Partial Release Date, to the extent that the Company repays additional principal indebtedness under the Term Notes after expiration of the Purchase Option Exercise Period and prior to the Partial Release Date, on the Partial Release Date the Company may revise upon written notice to PSD that number of shares of Restricted Common Stock subject to such Purchase Option exercise by recalculating the Maximum Available Share Formula incorporating such additional repaid principal indebtedness. The closing for the exercise of the Purchase Option (the “Closing”) shall take place, and all cash payments from the Company to PSD shall be delivered to LV, no later than one hundred (100) days following first receipt of a Purchase Option Notice (the “Closing Period”) at the offices of the PSD, or such other location designated in writing by PSD. At the Closing, PSD shall deliver the applicable shares of Restricted Common Stock related to such Closing, deeds, assignments and other instruments of sale, assignment and transfer of the Restricted Common Stock related to such Closing (including, without limitation, evidence of due authorization, execution and

delivery of the instruments of transfer, evidence of title and the absence of any liens or competing claims) as the Company shall reasonably request to effectively transfer good and valid title to the Restricted Common Stock related to such Closing. The Company shall pay any registration fees or other similar stamp or other taxes or fees payable or due upon the exercise of the Purchase Option and any such sale, assignment and/or transfer related thereto. The Company hereby acknowledges that PSD beneficial owns or is owner of record of shares of Common Stock in addition to the Restricted Common Stock (the “Non-Restricted Common Stock”) and further agrees that the restrictions set forth in this letter agreement do not apply to the Non-Restricted Common Stock (though other restrictions may from time to time apply under law or contract).

This Letter Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.

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 ‘pdf’ or other electronic transmission shall be deemed to be an original signature hereto.

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IN WITNESS WHEREOF, the parties hereto have executed this Letter Agreement as of the date first set forth above.