Exhibit 10.2

OPTION AGREEMENT

THIS OPTION AGREEMENT (this “Option Agreement”) is made and entered into as of
May 9, 2008, by and between BIOVEST INTERNATIONAL, INC., a Delaware corporation
(the “Company”), and Ronald E. Osman (the “Purchaser”).

RECITALS

WHEREAS, the Company has entered into a transaction with the Purchaser whereby
Purchaser has loaned the sum of $1,000,000 to the Company and the Company has
issued to the Purchaser a Convertible Promissory Note in the aggregate principal
amount of One Million Dollars ($1,000,000); and

WHEREAS the Company wishes to issue to the Purchaser an option to enter into an
additional Promissory Note to loan up to an additional $1,000,000 upon the same
Note terms (the “Option”); and

WHEREAS, the Purchaser desires to obtain the Option on the terms and conditions
set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

1. OPTION TO INCREASE INVESTMENT: At any time prior to the Maturity Date of the
Note, as defined therein, and prior to the Company providing written notice to
Purchaser of the receipt of a Term Sheet for a financing transaction resulting
in net proceeds of at least $15 million to the Company which will trigger, at
Purchaser’s election, payment of the outstanding sums due under this Note,
Purchaser may elect to provide an additional loan of up to an additional
$1,000,000 to the Company (the “Additional Loan”), and Company hereby agrees to
accept the Additional Loan, upon the following terms:

a. Purchaser may elect to advance to the Company an Additional Loan of up to the
full amount of the original Note, in increments of $100,000;

b. All terms and conditions of the Additional Loan shall be the same as those
reflected in the original Note (i.e. interest rate of 10% per annum, maturity of
the earlier of 12 months from date of the note or, at the election of Purchaser,
the date of a financing resulting in net proceeds of at least $15 million to the
Company, convertible into Company Common Stock at a conversion price of $0.50
per share, issuance of warrants to purchase 2 shares of the Company’s Common
Stock for each dollar of the Additional Loan with those warrants having an
exercise price of $0.50 per share and a term of seven years);

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c. In order to facilitate Purchaser’s evaluation of this Option, Company hereby
agrees to provide information to Purchaser with respect to each of the following
occurrences, at Purchaser’s discretion, to allow Purchaser to be able to access
the status of the following Milestone Events:

 

  (i) Milestone Event—Cephalon meeting is being scheduled for May 2008. Cephalon
has conducted due diligence regarding BiovaxID and has requested a meeting with
Biovest based on the DMC press release to discuss a business/license agreement
for BiovaxID.

 

  (ii) Milestone Event—FDA meeting being scheduled for May 2008 regarding
unblinding and pathway to approval for BiovaxID.

 

  (iii) Milestone Event—Millipore meeting being scheduled for May 2008.
Millipore has conducted due diligence regarding AutovaxID and has requested a
meeting with Biovest to discuss a business/license agreement for AutovaxID.

 

  (iv) Milestone Event— Unblinding of interim Phase 3 trial results scheduled
for mid-June 2008.

 

  (v) Milestone Event—EMEA meeting to discuss process for approval being
scheduled for June 2008.

 

  (vi) Milestone Event—Final unblinded results and P-value anticipated for
August 2008.

 

  (vii) Milestone Event—Meeting with FDA re: submission for accelerated approval
anticipated for September 2008.

 

  (viii) Milestone Event-Meeting with EMEA regarding Named Patient Basis
approval anticipated for September 2008.

Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries
will provide any material, non-public information to the Purchaser unless the
Purchaser signs a confidentiality agreement and otherwise complies with
Regulation FD, under the federal securities laws.

2. Purchaser shall provide written notice to the Company of Purchaser’s election
to make the Additional Loan, which notice shall specify the amount of the
Additional Loan and shall designate a closing date of not earlier than three
days and not later than 7 days after the date of the notice.

3. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given:

 

  (i) upon personal delivery to the party to be notified;

 

  (ii) when sent by confirmed facsimile if sent during normal business hours of
the recipient, if not, then on the next business day;

 

  (iii) three (3) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or

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  (iv) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.

 

  (v) All communications shall be sent as follows:

 

If to the Company,

to:

 

Biovest International, Inc.

324 South Hyde Park Avenue, Suite 350

Tampa, Florida 33606

Attention: Chief Financial Officer

Facsimile: 813-258-6912

    with a copy to:    

Samuel Duffey, Esq.

324 South Hyde Park Avenue, Suite 350

Tampa, Florida 33606

Facsimile: 813-258-6912

 

If to the Purchaser,

to:

 

Attn: Ronald E. Osman

1602 W. Kimmel St.

P. O. Box 939

Marion, IL 62959

Facsimile: 618-997-4983

    with a copy to:    

 

   

 

   

 

   

 

 

or at such other address as the Company or the Purchaser may designate by
written notice to the other parties hereto given in accordance herewith.

4. This Option Agreement may be executed by facsimile signatures and in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one agreement.

[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed the OPTION AGREEMENT as of
the date set forth in the first paragraph hereof.

 

COMPANY:     PURCHASER: BIOVEST INTERNATIONAL, INC.     RONALD E. OSMAN By:  

/s/ Steven Arikian

    By:  

/s/ Ronald E. Osman

Name:   Steven Arikian, M.D.       Title:   Chairman and CEO