Exhibit 10.1

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT

AND WAIVER

This TERMINATION AGREEMENT AND WAIVER (this “Agreement”) is entered into as of
October 5, 2012, by and among KaloBios Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the undersigned holders of the Company’s
capital stock (the “Holders”).

WHEREAS, the Company intends to offer, issue and sell shares of the Company’s
common stock (the “Shares”) in an initial public offering (the “Offering”) and
intends to undertake a registration of the Shares (the “Registration”) by
preparing, executing and filing with the Securities and Exchange Commission a
registration statement on Form S-1 (the “Registration Statement”) under the
Securities Act of 1933, as amended (the “Act”);

WHEREAS, the Company and certain of the Holders are parties to that certain
Amended and Restated Investors’ Rights Agreement, dated as of May 2, 2012 (the
“Rights Agreement”), which grants the Holders, among other things, certain
notice and registration rights in connection with the Registration;

WHEREAS, pursuant to Section 1.3(a) of the Rights Agreement if the Company
proposes to register any of its stock or other securities pursuant to the Act in
connection with the public offering of such securities, subject to certain
exceptions, the Company is obligated to promptly give written notice to all
Holders (as defined in the Rights Agreement) of such registration, and the
Company shall, subject to certain exceptions, use best efforts to cause to be
registered under the Act all of the Registrable Securities (as defined in the
Rights Agreement) that each such Holder has requested to be registered;

WHEREAS, pursuant to Section 1.3(c) of the Rights Agreement upon the
effectiveness of the Company’s first Form 10 registration statement, the Company
shall, among other obligations, (i) use its reasonable best efforts to file a
registration statement on Form S-1 covering the resale, among other securities,
of the shares of Common Stock issued or issuable upon conversion of the shares
of the Company’s Preferred Stock and (ii) use its reasonable best efforts to
cause its Common Stock, including all Re-Sale Shares (as defined in the Rights
Agreement), to be quoted on an OTC Quotation System and, if otherwise eligible
pursuant to applicable listing requirements, to be listed on a national
securities exchange as soon as practicable following the Company’s acceptance
for quotation on an OTC Quotation System;

WHEREAS, pursuant to Sections 2.1 through 2.7 and Section 3.10 of the Rights
Agreement the Company has is obligated to perform certain obligations to its
Investors including, but not limited to, delivering financial statements,
providing certain information rights, providing a right of first offer with
respect to sales of its Shares (as defined in the Rights Agreement), implement
certain vesting provisions on its grants of stock options, maintain certain
insurance policies, hold meetings of its Board of Directors at least bimonthly
and pay the

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reasonable out of pocket expenses of all Directors (as defined therein) in
attending all meetings of the Board of Directors and committees thereof and
performing their duties as Directors;

WHEREAS, pursuant to Section 2.9 of the Rights Agreement the Company is
restricted from taking certain actions without the express prior written consent
of the Fidelity Investors (as defined in the Rights Agreement);

WHEREAS, pursuant to Section 2.10 of the Rights Agreement the Company is
obligated to, among other things, use its commercially reasonable efforts to
cause the managing underwriters of its Initial Public Offering (as defined in
the Rights Agreement), if such Initial Public Offering is consummated at least
one (1) year after the date of the Rights Agreement, to designate a number of
shares equal to five percent (5%) of the Common Stock to be offering in such
Initial Public Offering for sale under a “directed share program”;

WHEREAS, the Holders, including, without limitation, the Fidelity Investors,
desire to facilitate a successful Offering by (i) waiving all notice and
registration rights provided in Sections 1.3(a) and 1.3(c) (and to the extent
applicable Section 1.5) of the Rights Agreement in connection with the
Registration, (ii) effective upon the consummation of the Offering, terminating
the covenants contained in Sections 2.1 through 2.7, Section 2.9 and
Section 3.10 of the Rights Agreement, and (iii) acknowledging that Section 2.10
shall not apply to the Offering and waiving all notice and rights thereunder
with respect to the Offering.

WHEREAS, the Company and certain of the Holders are parties to that certain
Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of
May 2, 2012 (the “Co-Sale Agreement”);

WHEREAS, the Company and certain of the Holders are parties to that certain
Amended and Restated Voting Agreement, dated as of May 2, 2012 (the “Voting
Agreement”);

WHEREAS, the Holders desire to facilitate a successful Offering by terminating
the Co-Sale Agreement and the Voting Agreement, contingent upon and effective
immediately prior to the consummation of the Offering;

WHEREAS, the Holders understand that the Company and the underwriters of the
Offering will proceed with the Offering in reliance on this Agreement;

WHEREAS, Section 3.7 of the Rights Agreement provides that any term of the
Rights Agreement (other than Section 2.1 and Section 2.9) may be amended or
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the holders of
at least sixty-percent (60%) of the Registrable Securities (as defined therein);
provided, however, that any amendment that adversely and disproportionately
affects the shares of Series E Preferred Stock (or shares of Common Stock
issuable upon conversion thereof) in a manner different than the other series of
Preferred Stock or the Common Stock shall require the prior written consent of
the holders of at least sixty percent (60%) of the then outstanding shares of
Series E Preferred Stock;

 

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WHEREAS, any amendment, modification, termination or waiver of Section 2.1 (as
so far as it relates to the rights of the Fidelity Investors thereunder) and 2.9
of the Rights Agreement shall require the express prior written consent of the
Fidelity Investors;

WHEREAS, Section 9 of the Co-Sale Agreement provides that the Co-Sale Agreement
shall terminate and be of no further force or effect upon the date specified by
written consent or agreement of the holders of not less than sixty percent
(60%) of the then outstanding Preferred Shares (as defined therein); and

WHEREAS, Section 14 of the Voting Agreement provides that the Voting Agreement
shall terminate and be of no further force or effect upon the date specified by
written consent or agreement of the holders of a majority of the outstanding
Common Stock held by the Common Holders (as defined therein) and the holders of
not less than sixty percent (60%) of the outstanding shares of Preferred Stock.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Waiver of Notice and Registration Rights under Section 1.3(a). Pursuant to
Section 3.7 of the Rights Agreement, the Holders hereby waive (a) any and all
rights (including all notice rights related thereto) to include in the
Registration any Registrable Securities held by the Holders in the Offering
provided under Section 1.3(a) of the Rights Agreement (including any rights
under Section 1.5 of the Rights Agreement) and (b) any noncompliance by the
Company with the procedures called for by the Rights Agreement with respect to
Section 1.3(a).

2. Waiver of Section 1.3(c). Pursuant to Section 3.7 of the Rights Agreement,
the Holders hereby waive any noncompliance by the Company with the procedures
called for by the Rights Agreement under Section 1.3(c) relating to the
Company’s obligation to use its reasonable best efforts to file a Registration
Statement on Form S-1 covering the resale of the Re-Sale Shares (as defined in
the Rights Agreement) provided that such waiver shall no longer be effective
after June 30, 2013 if the Offering has not been consummated by such date.

3. Acknowledgment and Waiver of Directed Share Obligations. The Holders hereby
acknowledge that Section 2.10 of the Rights Agreement shall not apply to the
Offering, so long as the Offering is consummated prior to May 2, 2013. In
addition, pursuant to Section 3.7 of the Rights Agreement, the Holders hereby
waive all obligations of the Company in connection with the Offering as set
forth in Section 2.10 of the Rights Agreement, including, without limitation,
the Company’s obligation to use its commercially reasonable efforts to cause the
managing underwriter(s) of the Offering to designate a number of shares for sale
under a “directed shares program.”

4. Termination of Covenants in Rights Agreement. Pursuant to Section 3.7 of the
Rights Agreement (and Section 2.9 of the Rights Agreement pursuant to the rights
of the Fidelity Investors), the Company and the Holders (including the Fidelity
Investors (as defined therein)) hereby acknowledge and agree that, contingent
upon and effective immediately prior to the consummation of the Offering, the
covenants set forth in Section 1.3(c), Sections 2.1 through

 

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2.7, Section 2.9 and Section 3.10 of the Rights Agreement shall be terminated
and of no further force and effect.

5. Continued Validity of Rights Agreement. Except as waived or terminated
hereby, the Rights Agreement shall continue in full force and effect as
originally constituted.

6. Termination of Co-Sale Agreement. Pursuant to Section 9 of the Co-Sale
Agreement, the Company and the Holders hereby acknowledge and agree that,
contingent upon and effective immediately prior to the consummation of the
Offering, the Co-Sale Agreement and all rights and obligations of all parties
thereunder shall be terminated, any post-termination rights which would
otherwise survive termination shall be terminated and the Co-Sale Agreement
shall be null and void and of no effect whatsoever.

7. Termination of Voting Agreement. Pursuant to Section 14 of the Voting
Agreement, the Company and the Holders hereby acknowledge and agree that,
contingent upon and effective immediately prior to the consummation of the
Offering, the Voting Agreement and all rights and obligations of all parties
thereunder shall be terminated, any post-termination rights which would
otherwise survive termination shall be terminated and the Voting Agreement shall
be null and void and of no effect whatsoever.

8. Counterparts. This Waiver may be executed in two or more counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.

9. Governing Law. This Waiver shall be governed by and construed under the laws
of the State of California as applied to agreements among California residents
entered into and to be performed entirely within California.

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

 

 

KALOBIOS PHARMACEUTICALS, INC.

  By:  

/s/ David Pritchard

  Name:   David Pritchard   Title:   Chief Executive Officer

 

Address:

 

260 East Grand Avenue

South San Francisco, CA 94080

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

/s/ David Pritchard

David Pritchard

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

/s/ Geoffrey Yarranton

Geoffrey Yarranton

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

MPM BIOVENTURES III, L.P. By:  

MPM BioVentures III GP, L.P.,

its General Partner

By:  

MPM BioVentures III LLC,

its General Partner

  By:  

/s/ Dennis Henner

Name:   Dennis Henner Title:   Series A Member MPM BIOVENTURES III-QP, L.P. By:
 

MPM BioVentures III GP, L.P.,

its General Partner

By:  

MPM BioVentures III LLC,

its General Partner

By:

 

/s/ Dennis Henner

Name:

  Dennis Henner

Title:

  Series A Member MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG   By:  

MPM BioVentures III GP, L.P., in its

capacity as the Managing Limited Partner

By:  

MPM BioVentures III LLC,

its General Partner

By:

 

/s/ Dennis Henner

Name:

  Dennis Henner

Title:

  Series A Member

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

MPM BIOVENTURES III PARALLEL FUND, L.P. By:   MPM BioVentures III GP, L.P., its
General Partner By:   MPM BioVentures III LLC,its General Partner

 

By:  

/s/ Dennis Henner

Name:   Dennis Henner Title:   Series A Member

 

MPM ASSET MANAGEMENT INVESTORS 2005 BVIII LLC By:  

/s/ Dennis Henner

Name:   Dennis Henner Title:   Manager

 

MPM BIOVENTURES STRATEGIC FUND, L.P. By:   MPM BioVentures III GP, L.P., its
General Partner By:   MPM BioVentures III LLC, its General Partner

 

By:  

/s/ Dennis Henner

Name:   Dennis Henner Title:   Series A Member

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

SOFINNOVA VENTURE PARTNERS V, LP By:   Sofinnova Management V 2005, LLC Its
General Partner By:  

/s/ James I. Healy

  James I. Healy, Managing Director

 

SOFINNOVA VENTURE AFFILIATES V, LP By:   Sofinnova Management V, LLC Its General
Partner By:  

/s/ James I. Healy

  James I. Healy, Managing Director

 

SOFINNOVA VENTURE PRINCIPALS V, LP By:   Sofinnova Management V, LLC Its General
Partner By:  

/s/ James I. Healy

  James I. Healy, Managing Director

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

ALLOY PARTNERS 2000, L.P. ALLOY VENTURES 2000, L.P. ALLOY CORPORATE 2000, L.P.
ALLOY INVESTORS 2000, L.P.

 

By:

  Alloy Ventures 2000, LLC,

its General Partner

 

/s/ Tony Di Bona

Managing Member of

Alloy Ventures 2000, LLC

 

ALLOY ANNEX I, L.P.

By:

 

Alloy Annex I, LLC

its General Partner

/s/ Tony Di Bona

Managing Member of

Alloy Annex I, LLC

 

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

5AM VENTURES LLC By:  

/s/ Andrew Schwab

Name:  

Andrew Schwab

Title:  

Managing Partner

5AM CO-INVESTORS LLC By:  

/s/ Andrew Schwab

Name:  

Andrew Schwab

Title:  

Managing Partner

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

Signed for and on behalf of GBS Venture Partners Limited (ABN 54 072 515 247) in
its capacity as trustee of GBS BioVentures II

/s/ Brigitte Smith

   

/s/ Susan Wolf

Director    

Company Secretary

Brigitte Smith

   

Susan Wolf

Name     Name Signed for and on behalf of GBS Venture Partners Limited (ABN 54
072 515 247) in its capacity as trustee of the Genesis Fund

/s/ Brigitte Smith

   

/s/ Susan Wolf

Director    

Company Secretary

Brigitte Smith

   

Susan Wolf

Name     Name

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

GENZYME CORPORATION By:  

/s/ David Meeker

Name:  

David P. Meeker

Title:  

President and CEO

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

BAXTER INTERNATIONAL INC. By:  

/s/ Stephanie Shinn

Name:  

Stephanie Shinn

Title:  

Corporate Vice President and
Corporate Secretary

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

FIDELITY MAGELLAN FUND:
FIDELITY MAGELLAN FUND By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

FIDELITY SELECT PORTFOLIOS: BIOTECHNOLOGY PORTFOLIO By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR BIOTECHNOLOGY FUND By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

VARIABLE INSURANCE PRODUCTS
FUND III: BALANCED PORTFOLIO By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

FIDELITY ADVISOR SERIES I:

FIDELITY ADVISOR DIVIDEND GROWTH FUND

By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

 

FIDELITY SECURITIES FUND:

FIDELITY DIVIDEND GROWTH FUND

By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

 

FIDELITY RUTLAND SQUARE TRUST II: STRATEGIC ADVISERS CORE MULTI-MANAGER FUND By:
 

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

 

FIDELITY RUTLAND SQUARE TRUST II: STRATEGIC ADVISERS CORE FUND By:  

/s/ Joseph Zambello

Name:  

Joseph Zambello

Title:  

Deputy Treasurer

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

Mitsubishi UFJ Capital II, Limited partnership by: Mitsubishi UFJ Capital its
General Partner

 

By:

 

/s/ Yoshihiro Hashimoto

Name:

  Yoshihiro Hashimoto, President

Title:

  President

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER

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

 

/s/ Claire N. Baer

Claire N. Baer

 

KALOBIOS PHARMACEUTICALS, INC.

TERMINATION AGREEMENT AND WAIVER