LEASE TERMINATION AGREEMENT

Exhibit 10.01

LEASE TERMINATION AGREEMENT

THIS LEASE TERMINATION AGREEMENT dated as of July 26, 2007, by and among JOHN F. POWER, AS TRUSTEE OF KNH REALTY TRUST, under a Declaration of Trust dated January 29, 1981, recorded with the Suffolk County Registry of Deeds in Book 9664, Page 114, having an address c/o Farley White Management Company, 10 High Street, Suite 900, Boston, Massachusetts 02110 (“Landlord”), POINT THERAPEUTICS, INC., having an address of 155 Federal Street, Boston, Massachusetts 02110 (“Tenant”), BROWN BROTHERS HARRIMAN  & CO., having an address of 140 Broadway, New York, New York 10005 (“Brown Brothers”), and NUTTER MCCLENNEN & FISH, LLP , having an address of World Trade Center West, 155 Seaport Boulevard, Boston, Massachusetts 02210 (“Escrow Agent”).

Background

Landlord and Tenant have entered into a Lease, dated as of March 16, 2005, pertaining to the premises containing approximately 14,493 rentable square feet located on the fourth floor of the buildings known and numbered as 155 Federal Street and 10 High Street in Boston, Massachusetts (“Lease”).

Tenant’s obligations under the Lease are partially secured by a Letter of Credit, dated March 28, 2005, issued by Brown Brothers, naming Boston Federal Associates (“BFA”), the sole beneficiary of KNH Realty Trust, as the beneficiary of the Letter of Credit, a copy of which is attached to this Agreement as Exhibit A (“Letter of Credit”). Tenant’s obligations to Brown Brothers are secured by certain cash collateral held by Brown Brothers and a UCC-1 Financing Statement on the Personal Property (defined in Section 5 of this Agreement).

Landlord and Tenant have agreed to an early termination of the Lease upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Termination . The Lease shall be and is hereby terminated and cancelled and the term thereof is brought to an end effective as of July 31, 2007 (“Termination Date”) with the same force and effect as if such date were the date set for expiration of the term, subject to the following conditions:

2. Rent . On or before the Termination Date, Tenant shall pay the Fixed Rent in the amount of $32,609.25, plus all additional rent for Real Estate Taxes and Operating Costs in the amount of $332.00, due through August 31, 2007.

3. Letter of Credit . Escrow Agent hereby acknowledges receipt of the original Letter of Credit in escrow. Landlord, BFA and Tenant hereby direct Brown Brothers to: (i) send to Escrow Agent an original UCC-3 Termination Statement pertaining to Brown Brothers’ security interest on the Personal Property (defined in Section 5 of this Agreement); and (ii) release $300,000 from its cash collateral and to wire such amount to Escrow Agent, in accordance with the following wiring instructions, to be held in escrow subject to the terms of this Agreement (“Escrowed Funds”):

Landlord, BFA and Tenant acknowledge and agree that upon Escrow Agent’s receipt of the Escrowed Funds, Escrow Agent may release the Letter of Credit from escrow and deliver the original Letter of Credit to Brown Brothers, whereupon the Letter of Credit may be canceled by Brown Brothers. When Escrow Agent is unconditionally prepared to deliver the original Letter of Credit to Brown Brothers, Escrow Agent may release the Escrowed Funds to Landlord and cause the UCC-3 Termination Statement to be filed with the Massachusetts Secretary of the Commonwealth.

4. Option to Extend; Right of First Offer . Tenant shall have no option to extend the term and no right of first offer to lease any space within the Building.

5. Bill of Sale . Tenant hereby conveys to Landlord all of Tenant’s right, title and interest in and to all furniture, fixtures and equipment located in the Premises, including the telephone system, but specifically excluding all books and records, computers and the leased equipment (collectively, the “Personal Property”).

Tenant warrants and represents to Landlord that, after giving effect to the provisions of this Agreement and the termination of Brown Brothers’ security interest in the Personal Property, title to the Personal Property is free and clear of any lien, claim or encumbrance created by, through or under Tenant, but otherwise Tenant has not made and does not make any express or implied warranty or representation of any kind whatsoever with respect to the Personal Property,

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including but not limited to: title; merchantability of the Personal Property or its fitness for any particular purpose; the design or condition of the Personal Property; the quality or capacity of the Personal Property; workmanship or compliance of the Personal Property with the requirements of any law, rule, specification or contract pertaining thereto; or patent infringement or latent defects. Landlord accepts the Personal Property on an “as is, where is” basis.

6. Yield Up . Effective as of the Termination Date, Tenant remises, releases, quitclaims and surrenders to Landlord, its successors and assigns, all of Tenant’s rights in and to the Premises. Tenant shall vacate the Premises on or before the Termination Date and shall leave the Premises in the yield-up condition required under the Lease on the expiration of the term, including, without limitation, leaving the same broom clean, free of personal effects and in good order, repair and condition, and removing all of its property, except for the Personal Property described in Section 5 of this Agreement, from the Premises.

7. Mutual Releases . Effective as of the Termination Date, each party hereby releases, discharges and acquits the other parties, and the other parties’ members, partners, affiliates, subsidiaries, officers, directors, agents, attorneys, employees, successors and assigns from any and all debts, claims, liabilities, demands, damages, actions and causes of actions of any kind and all kinds whatsoever, whether known or unknown, suspected or unsuspected, that such party has or could have against the other as of the date hereof, arising out of or relating in any way to the Lease and the occupancy or use of the Premises by Tenant first arising from and after the Termination Date, except for (i) any obligations of Tenant that are expressly stated to survive expiration or termination of the Lease under the terms and provisions of the Lease; and (ii) each party’s obligations under this Agreement.

8. Voluntary Agreement . The parties have read this Agreement, and on the advice of counsel they have freely and voluntarily entered into this Agreement.

9. Entire Agreement . This Agreement constitutes the entire agreement of the parties regarding the subject matter hereof and supersedes all prior dealings between them with respect to such subject matter and may not be amended except by an instrument in writing signed by all the parties.

10. Successors and Assigns . This document shall become effective and binding only upon the execution and delivery of this Agreement by Landlord, BFA, Ten