SC TO-T

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Schedule TO

Tender Offer Statement under Section 14(d)(1) or 13(e)(1)

of the Securities Exchange Act of 1934

GENELABS TECHNOLOGIES, INC.

(Name of Subject Company (Issuer))

Gemstone Acquisition Corporation

and

GlaxoSmithKline plc

(Names of Filing Persons (Offerors))

Common Stock, no par value per share

(Title of Class of Securities)

368706206

(CUSIP Number of Class of Securities)

Carol G. Ashe, Esq.

GlaxoSmithKline

One Franklin Plaza (FP 2355)

200 N. 16th Street

Philadelphia, Pennsylvania 19102

(215) 741-4000

(Name, Address and Telephone Numbers of Person Authorized

to Receive Notices and Communications on Behalf of Filing Persons)

Copy to:

Benet J. O’Reilly, Esq.

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

(212) 225-2000

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee**
$57,107,614.50	$2,244.33

*

For purposes of calculating the filing fee pursuant to Rule 0-11(d) only, the transaction valuation was calculated by adding the sum of (a) the offer price of $1.30 per share of common stock, no par value per share, of Genelabs Technologies, Inc. (the “Shares”) multiplied by 43,684,465 shares of common stock issued and outstanding, and (b) the offer price of $1.30 minus $0.69, which is the weighted average exercise price of outstanding in-the-money options to acquire Shares multiplied by 521,000, the number of outstanding in-the-money options.

**

The filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, is calculated by multiplying the Transaction Valuation by .00003930.

o   Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: None	Filing Party: Not applicable
Form or Registration No.: Not applicable	Date Filed: Not applicable

o   Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

þ  third-party tender offer subject to Rule 14d-1.

o  issuer tender offer subject to Rule 13e-4.

o  going-private transaction subject to Rule 13e-3.

o  amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:  o

This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the offer by Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to purchase all outstanding shares of common stock, no par value per share (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 12, 2008 (the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”), which are annexed to and filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively. This Schedule TO is being filed on behalf of Purchaser and GSK.

All information set forth in the Offer to Purchase filed as Exhibit (a)(1)(A) to this Schedule TO is incorporated by reference in answer to Items 1 through 11 in this Schedule TO, except those items as to which information is specifically provided herein. The Agreement and Plan of Merger, dated as of October 29, 2008, by and among Purchaser, SKB and Genelabs, a copy of which is attached as Exhibit (d)(1) hereto, is incorporated herein by reference with respect to Items 4 through 11 of this Schedule TO.

Item 10.   Financial Statements.

Not applicable.

Item 11.   Additional Information.

(a)(5) Not applicable.

Item 12.   Exhibits.

(a)(1)(A)	Offer to Purchase, dated November 12, 2008
(a)(1)(B)	Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9)
(a)(1)(C)	Form of Notice of Guaranteed Delivery
(a)(1)(D)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(F)	Text of press release issued by GSK and Genelabs, dated October 29, 2008 (incorporated by reference to Schedule TO-C filed by GSK with the Securities and Exchange Commission on October 29, 2008)

(a)(1)(G)	Text of press release issued by GSK on November 12, 2008
(a)(1)(H)	Form of summary advertisement, published November 12, 2008
(b)	Not applicable
(d)(1)	Agreement and Plan of Merger, dated as of October 29, 2008, by and among Purchaser, SKB and Genelabs
(d)(2)	Form of Tender and Shareholder Support Agreement, dated as of October 29, 2008, among Purchaser, SKB and certain shareholders of Genelabs
(d)(3)	Confidentiality Agreement, dated as of September 30, 2008, by and between SKB and Genelabs
(g)	Not applicable
(h)	Not applicable

Item 13.   Information Required by Schedule 13E-3.

Not applicable.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

GlaxoSmithKline plc

By:  /s/  Simon M. Bicknell

Name:     Simon M. Bicknell

Title:  Secretary

Gemstone Acquisition Corporation

By:  /s/  Carol G. Ashe

Name:     Carol G. Ashe

Title:  Authorized Signatory

Dated: November 12, 2008

EXHIBIT INDEX

(a)(1)(A)	Offer to Purchase, dated November 12, 2008
(a)(1)(B)	Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9)
(a)(1)(C)	Form of Notice of Guaranteed Delivery
(a)(1)(D)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(F)	Text of press release issued by GSK and Genelabs, dated October 29, 2008 (incorporated by reference to schedule TO-C filed by GSK with the Securities and Exchange Commission on October 29, 2008)
(a)(1)(G)	Text of press release issued by GSK on November 12, 2008
(a)(1)(H)	Form of summary advertisement, published November 12, 2008
(b)	Not applicable
(d)(1)	Agreement and Plan of Merger, dated as of October 29, 2008, by and among Purchaser, SKB and Genelabs
(d)(2)	Form of Tender and Shareholder Support Agreement, dated as of October 29, 2008, among Purchaser, SKB and certain shareholders of Genelabs
(d)(3)	Confidentiality Agreement, dated as of September 30, 2008, by and between SKB and Genelabs
(g)	Not applicable
(h)	Not applicable

EX-99.A.1.A

Exhibit (a)(1)(A)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Genelabs Technologies, Inc.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 10, 2008 UNLESS THE OFFER IS EXTENDED.

Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), is offering to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash (the “Offer Price”), without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”). The Offer is being made in connection with the Agreement and Plan of Merger, dated as of October 29, 2008, among Purchaser, Genelabs and SKB (the “Merger Agreement”), pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation (the “Merger”).

The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and adopted and approved the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the advisability of the Merger Agreement and recommends that the holders of Shares tender their Shares pursuant to the Offer.

There is no financing condition to the Offer. The Offer is subject to various conditions, including the condition that, at the expiration of the Offer, there have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of the then outstanding Shares on a fully diluted basis (as defined herein). If more than 50 percent of the then outstanding Shares and less than 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in this document, either exercise the top-up option described herein or reduce the number of shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding. A summary of the principal terms of the Offer appears on pages (i) through (iii). You should read this entire document carefully before deciding whether to tender your Shares.

The Information Agent for the Offer is:

November 12, 2008

IMPORTANT

If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (a) complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, mail or deliver the Letter of Transmittal (or a manually executed facsimile thereof) and any other required documents to Computershare Inc., the depositary for the Offer (the “Depositary”), and either deliver the certificates for your Shares to the Depositary along with the Letter of Transmittal (or a manually executed facsimile thereof) or tender your Shares by book-entry transfer by following the procedures described in Section 3 — “Procedures for Tendering Shares” of this Offer to Purchase, in each case by the Expiration Date (as defined herein) of the Offer, or (b) request that your broker, dealer, commercial bank, trust company or other nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee you must contact that institution in order to tender your Shares to Purchaser pursuant to the Offer.

If you desire to tender your Shares to Purchaser pursuant to the Offer and the certificates representing your Shares are not immediately available, or you cannot comply in a timely manner with the procedures for tendering your Shares by book-entry transfer, or cannot deliver all required documents to the Depositary by the expiration of the Offer, you may tender your Shares to Purchaser pursuant to the Offer by following the procedures for guaranteed delivery described in Section 3 — “Procedures for Tendering Shares” of this Offer to Purchase.

* * *

Questions and requests for assistance may be directed to the Information Agent at its address and telephone number set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent. You may also contact your broker, dealer, commercial bank or trust company for assistance.

TABLE OF CONTENTS

	Page
SUMMARY TERM SHEET		i
INTRODUCTION		1
THE TENDER OFFER		3
1.  TERMS OF THE OFFER		3
2.  ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES		5
3.  PROCEDURES FOR TENDERING SHARES		6
4.  WITHDRAWAL RIGHTS		8
5.  MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER		9
6.  PRICE RANGE OF SHARES; DIVIDENDS		11
7.  POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING; EXCHANGE ACT REGISTRATION AND MARGIN REGULATIONS		12
8.  CERTAIN INFORMATION CONCERNING GENELABS		13
9.  CERTAIN INFORMATION CONCERNING PURCHASER AND GSK		14
10. BACKGROUND OF THE OFFER; CONTACTS WITH GENELABS		15
11. PURPOSE OF THE OFFER AND PLANS FOR GENELABS; MERGER AGREEMENT		16
12. SOURCE AND AMOUNT OF FUNDS		27
13. CONDITIONS OF THE OFFER		27
14. DIVIDENDS AND DISTRIBUTIONS		29
15. CERTAIN LEGAL MATTERS		29
16. FEES AND EXPENSES		32
17. MISCELLANEOUS		32
SCHEDULE A		A-1
SCHEDULE B		B-1
SCHEDULE C		C-1

SUMMARY TERM SHEET

This summary highlights selected information from this Offer to Purchase and may not contain all of the information that is important to you. You should carefully read this entire Offer to Purchase and the other documents to which this Offer to Purchase refers to fully understand the Offer, the Merger and the related transactions. References to “we,” “us,” or “our,” unless the context otherwise requires, are references to Purchaser (as defined below).

Principal Terms

•  Gemstone Acquisition Corporation (“Purchaser”), a wholly-owned subsidiary of SmithKline Beecham Corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc (“GSK”), is offering to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc. (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash (the “Offer Price”), without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”). The Offer is being made in connection with the Agreement and Plan of Merger, dated as of October 29, 2008, among Purchaser, Genelabs and SKB (the “Merger Agreement”), pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation (the “Merger”).

•  The Offer is the first step in our plan to acquire all of the outstanding Shares, as provided in the Merger Agreement. Following consummation of the Offer, we intend to acquire the remainder of the Shares in the Merger for an amount in cash, without interest and subject to applicable withholding taxes, equal to the Offer Price. No dissenters’ rights are available in connection with the Offer. However, under California law, shareholders who continue to own their Shares at the time of the Merger and fulfill certain other requirements of the California General Corporation Law will have the right to demand and perfect dissenters’ rights in connection with the Merger.

•  Genelabs has granted Purchaser the option (which is exercisable on one or more occasions, in Purchaser’s discretion, after the acceptance by Purchaser of, and payment for, Shares tendered in the Offer), to purchase newly-issued Shares or treasury Shares of Genelabs so as to increase the number of Shares owned by Purchaser, SKB and GSK to either (i) one Share more than 90 percent of the total Shares then outstanding or (ii) if the Offer is amended to reflect to the Revised Minimum Number (as described below), 49.9 percent of the total Shares then outstanding (the “top-up option”), provided, the top-up option may not be exercised for more Shares than are authorized and unissued by Genelabs. The purchase price per Share for Shares under the top-up option would be equal to the Offer Price. The top-up option is subject to certain additional terms and conditions.

•  The initial offering period for the Offer will end at 12:00 midnight, New York City time, on December 10, 2008, unless we extend the Offer. We will announce any decision to extend the Offer in a press release stating the new expiration date no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled expiration of the Offer.

•  See Section 1 — “Terms of the Offer.”

Genelabs Board Recommendation

•  The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and adopted and approved the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the advisability of the Merger Agreement and recommends that the holders of Shares tender their Shares pursuant to the Offer. See “Introduction” and Section 10 — “Background of the Offer; Contacts with Genelabs” below, and Genelabs’ Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission in connection with the Offer, a copy of which (without certain exhibits) is being furnished to shareholders concurrently herewith.

Conditions

•  We are not obligated to purchase any tendered Shares unless, at the expiration of the Offer, there have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of the then outstanding Shares on a “fully diluted basis” (which means, as of any time, the number of Shares outstanding, together with all Shares that are issuable upon exercise of any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, excluding Shares that are issuable upon the exercise of options and warrants that have an exercise price greater than the Offer Price). We refer to this condition as the “Minimum Tender Condition.” As of the date of this Offer to Purchase, GSK, SKB, Purchaser and their wholly-owned subsidiaries own 64,820 Shares.

•  If more than 50 percent of the then outstanding Shares and less then 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in this document, either exercise the top-up option and reduce the number of Shares required to satisfy the Minimum Tender Condition or reduce the number of Shares subject to the Offer to a number that, when added to the number of Shares then owned by GSK, SKB and Purchaser (together with their wholly-owned subsidiaries), would equal to 49.9 percent of the Shares then outstanding (the “Revised Minimum Number”). If the number of Shares subject to the Offer is reduced to the Revised Minimum Number and a greater number of Shares are tendered, we will reduce the amount of Shares we will purchase from you by the same proportion we reduce the amount purchased from all other tendering shareholders. If the subsequent Merger between Purchaser and Genelabs occurs, you will receive the Offer Price as the Merger Consideration, subject to the right of shareholders under California law to demand and perfect dissenters’ rights. See Section 15 — “Certain Legal Matters.”

•  Our obligation to purchase any tendered Shares is subject to the condition that the representations and warranties made by Genelabs in the Merger Agreement are true and correct, subject to the materiality standard provided in the Merger Agreement, and that Genelabs has performed in all material respects its obligations under the Merger Agreement that are to be performed prior to the expiration of the Offer.

•  The Offer is also subject to a number of other important conditions. We can waive these conditions (other than the Minimum Tender Condition) without Genelabs’ consent. See Section 13 — “Conditions of the Offer.”

•  There is no financing condition to the Offer. We do not believe our financial condition is relevant to your decision whether to tender your Shares and accept the Offer because (a) the Offer is being made for all outstanding Shares solely for cash, (b) the Offer is not subject to any financing condition, (c) if we consummate the Offer, we will acquire all remaining Shares for the same cash price in the Merger, and (d) GSK has, and will arrange for Purchaser to have, sufficient funds to purchase all Shares validly tendered and not properly withdrawn in the Offer and to acquire the remaining outstanding Shares in the Merger.

Procedures for Tendering Shares

•  If you wish to accept the Offer and:

•  You are a record holder (i.e., a share certificate has been issued to you and registered in your name), you must deliver the share certificate(s) representing your Shares (or follow the procedures described in this Offer to Purchase for book-entry transfer), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by the Letter of Transmittal, to the Depositary. These materials must reach the Depositary before the Offer expires. Detailed instructions are contained in the Letter of Transmittal and in Section 3 — “Procedures for Tendering Shares;”

•  You are a record holder, but your share certificate is not available or you cannot deliver it to the Depositary before the Offer expires, you may be able to obtain three additional trading days to tender your Shares

ii

using the enclosed Notice of Guaranteed Delivery. See Section 3 — “Procedures for Tendering Shares” for more information; or

•  You hold your Shares through a broker or a bank, you should promptly contact your broker or bank and give instructions that your Shares be tendered.

Withdrawal Rights

•  You have the right to, and can, withdraw Shares that you previously tendered at any time until the Offer has expired and, if we have not by January 10, 2009 agreed to accept your Shares for payment, you can withdraw them at any time after such time until we accept your Shares for payment. See Sections 1 and 4 — “Terms of the Offer” and “Withdrawal Rights.”

•  To withdraw Shares that you previously tendered, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the Depositary at a time when you have the right to withdraw your Shares. If you tendered your Shares through your broker or bank, you must instruct the broker or bank to arrange for the withdrawal of your Shares. You will not be able to withdraw Shares tendered during any subsequent offering period that we may elect to establish after we have accepted for payment and paid for Shares tendered in the Offer. See Sections 1 and 4 — “Terms of the Offer” and “Withdrawal Rights.”

Recent Genelabs Trading Prices; Subsequent Trading

•  On October 29, 2008, the last trading day before GSK and Genelabs announced the signing of the Merger Agreement, the closing price of the Shares reported on The NASDAQ Capital Market was $0.23 per Share.

•  The Offer Price of $1.30 per Share represents a premium of 465 percent to Genelabs’ closing stock price on October 29, 2008.

•  On November 11, 2008, the last trading day before Purchaser commenced the Offer, the closing price of the Shares reported on The NASDAQ Capital Market was $1.26 per Share.

•  We advise you to obtain a recent quotation for Shares in deciding whether to tender your Shares in the Offer. See Section 6 — “Price Range of Shares; Dividends.”

U.S. Federal Income Tax Treatment

•  If you are a U.S. taxpayer, your receipt of cash for Shares in the Offer or in the Merger will be a taxable transaction for U.S. federal income tax purposes. You will generally recognize gain or loss in an amount equal to the difference between (a) the cash you receive in the Offer or the Merger and (b) your adjusted tax basis in the Shares you sell in the Offer or exchange in the Merger. That gain or loss will be capital gain or loss if the Shares are a capital asset in your hands, and will be long-term capital gain or loss if the Shares have been held for more than one year at the time of the exchange of your Shares for cash. You are urged to consult your own tax advisor as to the particular tax consequences of the Offer and the Merger to you, including the tax consequences under state, local, foreign and other tax laws. See Section 5 — “Material United States Federal Income Tax Consequences of the Offer and the Merger.”

Further Information

•  For further information, you can call MacKenzie Partners, Inc., the Information Agent for the Offer, at (212) 929-5500 (call collect) or (800) 322-2885 (toll free), or you can email the Information Agent at tenderoffer@mackenziepartners.com. See the back cover page of this Offer to Purchase.

iii

To All Holders of Shares of Common Stock of

Genelabs Technologies, Inc.:

INTRODUCTION

Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), hereby offers to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash (the “Offer Price”), without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).

If your Shares are registered in your name and you tender directly to the Depositary (as defined below) you will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser. If you hold your Shares through a broker or bank you should check with your broker or bank as to whether they charge any service fees or commissions. However, if you do not complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal, or a Form W-8BEN or other Form W-8, as applicable, you may be subject to a required backup federal income tax withholding of 28 percent of the gross proceeds payable to you. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against your U.S. federal income tax liability. See Section 5 — “Material United States Federal Income Tax Consequences of the Offer and the Merger.” Purchaser will pay all charges and expenses of Computershare, Inc. (the “Depositary”) and MacKenzie Partners, Inc. (the “Information Agent”).

The Offer is not subject to any financing condition. The Offer is subject to the conditions, among others, that (a) at the expiration of the Offer there shall have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of then outstanding Shares, on a fully diluted basis (the “Minimum Tender Condition”), and (b) subject to certain exceptions, no change, effect, event or occurrence that has, or would reasonably be expected to have, a material adverse effect on the business, condition (financial or otherwise), operations or results of operations of Genelabs shall have occurred after the date of the Merger Agreement. The Offer is also subject to certain other terms and conditions. See Section 13 — “Conditions of the Offer.”

In the event that more than 50 percent of the then outstanding Shares and less then 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in this document, either exercise the top-up option and reduce the number of shares required to satisfy the Minimum Tender Condition or reduce the number of Shares subject to the Offer to a number that, when added to the number of Shares then owned by GSK, SKB and Purchaser (together with their wholly-owned subsidiaries), would equal to 49.9 percent of the Shares then outstanding (the “Revised Minimum Number”). If the number of Shares subject to the Offer is reduced to the Revised Minimum Number and a greater number of Shares are tendered, we will reduce the amount of Shares we will purchase from you by the same proportion we reduce the amount purchased from all other tendering shareholders. If the subsequent Merger between Purchaser and Genelabs occurs, you will receive the Offer Price as the Merger Consideration, subject to the right of shareholders under California law to demand and perfect dissenters’ rights. See Section 15 — “Certain Legal Matters.”

The Offer will expire at 12:00 midnight, New York City time, on Wednesday, December 10, 2008 unless extended. See Sections 1, 13 and 15 — “Terms of the Offer,” “Conditions of the Offer” and “Certain Legal Matters.”

The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and approved and adopted the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the

advisability of the Merger Agreement and recommends that the holders of Shares tender their Shares pursuant to the Offer.

For factors considered by the board of directors of Genelabs, see Genelabs’ Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) filed with the Securities and Exchange Commission (the “SEC”) in connection with the Offer, a copy of which (without certain exhibits) is being furnished to shareholders concurrently herewith.

At a meeting of the Genelabs board of directors on October 29, 2008, Cowen and Company, LLC (“Cowen”) rendered its oral opinion, subsequently confirmed in writing, to the Genelabs board of directors that, as of the date of its opinion, and based upon and subject to the assumptions, qualifications and limitations set forth in its opinion, the consideration to be received in the Offer and Merger (taken together) by the holders of Shares, other than GSK and its affiliates, was fair, from a financial point of view, to such holders. The full text of the written opinion of Cowen, dated October 29, 2008, which sets forth, among other things, the assumptions made, procedures followed, matters considered, limitations and qualifications on the review undertaken in connection with the opinion, is included in Annex II to the Schedule 14D-9.

The Offer is being made pursuant to the Merger Agreement, pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, the Merger will be effected. At the effective time of the Merger (the “Effective Time”), each outstanding Share (other than Shares held in the treasury of Genelabs or owned by GSK or any wholly-owned subsidiary of GSK or Genelabs or held by shareholders who properly demand and perfect dissenters’ rights under California law) will by virtue of the Merger, and without action by the holder thereof, be canceled and converted into the right to receive an amount in cash, without interest and subject to applicable withholding taxes, equal to the Offer Price (the “Merger Consideration”), payable to the holder thereof upon surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in Section 11 — “Purpose of the Offer and Plans for Genelabs; Merger Agreement.” Section 5 — “Material United States Federal Income Tax Consequences of the Offer and the Merger” below describes the principal U.S. federal income tax consequences of the sale of Shares in the Offer and the Merger.

Consummation of the Merger is conditioned upon, among other things, the approval and adoption of the Merger Agreement by the requisite vote of the shareholders of Genelabs, if required by the California General Corporation Law (the “CGCL”). The CGCL provides that, if a corporation owns at least 90 percent of the outstanding shares of each class of a subsidiary corporation, the corporation holding such stock may merge such subsidiary into itself, or itself into such subsidiary, without any action or vote on the part of the board of directors or the shareholders of such other corporation (a “short-form merger”). Pursuant to the Merger Agreement, in the event that, following completion of the Offer, Purchaser (together with SKB and SKB’s wholly-owned subsidiaries) owns at least 90 percent of the outstanding Shares, including Shares acquired through any exercise of the top-up option, SKB will effect a short-form merger of Purchaser into Genelabs in accordance with the CGCL as soon as reasonably practicable. If, pursuant to the Offer, the top-up option or otherwise, Purchaser does not acquire Shares that, taken together with Shares owned by GSK, SKB and their wholly-owned subsidiaries, represent at least 90 percent of the Shares outstanding on a fully diluted basis as of any scheduled expiration date of the Offer, and Purchaser amends the Offer to reduce the number of shares subject to the Offer to the Revised Minimum Number, then Purchaser, together with GSK, SKB and their wholly-owned subsidiaries, would own upon consummation of the Offer 49.9 percent of the Shares then outstanding, and would thereafter seek the approval of the Merger Agreement and the Merger by an affirmative vote of a majority of the outstanding Shares. Under such circumstances, a significantly longer period of time will be required to effect the Merger. See Section 15 — “Certain Legal Matters.”

No dissenters’ rights are available in connection with the Offer. However, under the CGCL, shareholders who continue to own their Shares at the time of the Merger and fulfill certain other requirements of the CGCL will have the right to demand and perfect dissenters’ rights in connection with the Merger. See Section 15 — “Certain Legal Matters.”

This Offer to Purchase and the related Letter of Transmittal, and Genelabs’ Schedule 14D-9, contain important information and each such document should be read carefully and in its entirety before any decision is made with respect to the Offer.

2

THE TENDER OFFER

1.   Terms of the Offer

Upon the terms and subject to the prior satisfaction or waiver of the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), we will accept for payment and pay for all Shares validly tendered and not properly withdrawn by the Expiration Date in accordance with the procedures set forth in Section 4 — “Withdrawal Rights.” The term “Expiration Date” means 12:00 midnight, New York City time, on Wednesday, December 10, 2008, unless Purchaser has extended the initial offering period of the Offer, in which event the term “Expiration Date” shall mean the latest time and date at which the offering period of the Offer, as so extended by Purchaser, will expire.

The Offer is conditioned upon the satisfaction of the Minimum Tender Condition and the other conditions described in Section 13 — “Conditions of the Offer.” Purchaser may terminate the Offer without purchasing any Shares if certain events described in Section 13 occur.

We expressly reserve the right (but are not obligated), at any time or from time to time, to waive or otherwise modify or amend the terms and conditions of the Offer in any respect. However, pursuant to the Merger Agreement, we have agreed that we will not, without the prior written consent of Genelabs, decrease the Offer Price or change the form of consideration payable in the Offer, or except as required or permitted in the Merger Agreement (a) decrease the number of Shares sought pursuant to the Offer, (b) amend or waive the Minimum Tender Condition, (c) add to the conditions to the Offer described in Section 13 — “Conditions of the Offer,” (d) modify those conditions in a manner that is adverse to the holders of Shares, or (e) extend the Expiration Date of the Offer.

Upon the terms and subject to the conditions of the Offer, promptly following the Expiration Date, we will be required to accept for payment and pay for any Shares validly tendered and not withdrawn that are accepted for payment. We may, in our sole discretion and without Genelabs’ consent, (a) extend the Offer for one or more periods of time up to 10 business days per extension if, at the time the Offer is scheduled to expire, any of the offer conditions are not satisfied, (b) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or The Nasdaq Stock Market applicable to the Offer, or (c) elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Purchaser may increase the Offer Price or extend the Offer to the extent required by law in connection with such increase.

We have agreed under the Merger Agreement to extend the Offer for one or more periods determined by us of up to 10 business days per extension if, at any scheduled expiration of the Offer, any of the conditions to the Offer have not been satisfied or waived by us, except that we are not required to (unless required by applicable law or regulation of The Nasdaq Stock Market), but may be entitled to, extend the Offer under certain circumstances, including if, at the time the Offer is scheduled to expire:

•  the offer condition set forth in subparagraph (a) of paragraph 1 of Section 13 — “Conditions of the Offer” is not satisfied but all other conditions to the Offer are satisfied or waived;

•  the offer condition set forth in subparagraph (a) of paragraph 2 of Section 13 — “Conditions of the Offer” is neither satisfied nor waived (other than by reason of a judgment, injunction or order that is not final or that remains subject to appeal); or

•  the offer condition set forth in subparagraph (d) of paragraph 2 of Section 13 — “Conditions of the Offer” is neither satisfied nor waived and the breach or failure to perform or comply or to be true and correct that caused such non-satisfaction is not capable of being cured within 10 days after receipt by Genelabs of notice of such breach or failure.

3

Further, if the Minimum Tender Condition is not satisfied on any scheduled expiration date of the Offer, Purchaser may, without the consent of Genelabs, take any of the following actions:

•  extend the Offer as described above;

•  reduce the Minimum Tender Condition to that number of Shares equal to the number of shares (the “Option Exercise Minimum Number”) that when added to the maximum number of shares issuable in the top-up option equals one share more than 90 percent of the outstanding shares on a fully diluted basis; or

•  amend the Offer to reduce to number of Shares subject to the Offer to the Revised Minimum Number and, subject to the prior satisfaction or waiver of the other offer conditions, purchase, on a pro rata basis, the number of Shares comprising the Revised Minimum Number.

In addition, if at any scheduled expiration of the Offer occurring prior to December 24, 2008, the Minimum Tender Condition is not satisfied, but all other conditions to the Offer have been are satisfied or waived, then, at the request of the Genelabs, Purchaser shall extend the Offer on one or more occasions for periods determined by Purchaser of up to 10 business days per extension. If, as of any scheduled expiration of the Offer that is after December 24, 2008, (a) the number of Shares tendered pursuant to the Offer and not withdrawn as of such scheduled expiration date, taken together with the number of Shares then owned by GSK, SKB, Purchaser and any other subsidiary of GSK, constitutes a majority of the Shares then outstanding, (b) all conditions to the Offer other than the Minimum Tender Condition have been satisfied or waived by Purchaser and (c) the Shares tendered pursuant to the Offer have not been accepted for payment by Purchaser, then Purchaser shall be required to either exercise the top-up option or amend the Offer to reduce the number of Shares subject to the Offer to the Revised Minimum Number such that the Offer will expire not later than the tenth business day following such scheduled expiration date, it being understood that Purchaser shall be required to exercise the top-up option only if such exercise would, when combined with the number of Shares then tendered pursuant to the Offer and not withdrawn, result in Purchaser holding one share more than 90 percent of the Shares outstanding on a fully diluted basis.

In any event, we are not required to extend the Offer beyond February 26, 2009 or at any time when SKB, Purchaser or Genelabs would be permitted to terminate and terminates the Merger Agreement. See Sections 1 and 13 — “Terms of the Offer” and “Conditions of the Offer.”

There can be no assurance that we will exercise our right to extend the Offer or that we will be required under the Merger Agreement to extend the Offer. During any extension of the initial offering period, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to withdrawal rights. See Section 4 — “Withdrawal Rights.”

If, subject to the terms of the Merger Agreement, we make a material change in the terms of the Offer or the information concerning the Offer, or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d), 14d-6(c) and l4e-1 under the Exchange Act or otherwise. The minimum period during which a tender offer must remain open following material changes in the terms of the tender offer or the information concerning the tender offer, other than a change in the consideration offered or a change in the percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. With respect to a change in the consideration offered or a change in the percentage of securities sought, a tender offer generally must remain open for a minimum of 10 business days following such change to allow for adequate disclosure to shareholders.

We expressly reserve the right, in our sole discretion, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC, to not accept for payment any Shares if, at the expiration of the Offer, any of the conditions to the Offer set forth in Section 13 — “Conditions of the Offer” have not been satisfied or upon the occurrence of any of the events set forth in Section 13. Under certain circumstances, we may terminate the Merger Agreement and the Offer.

We expressly reserve the right, in our sole discretion, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC, to delay acceptance of Shares and to delay payment for Shares pending receipt of any governmental regulatory approvals specified in Section 15, without prejudice to our rights set forth in Section 13 — “Conditions of the Offer.” See Sections 13 and 15 — “Conditions of the Offer”

4

and “Certain Legal Matters.” The reservation by us of the right to delay the acceptance of or payment for Shares is subject to the provisions of Rule 14e-1(c) under the Exchange Act, which requires us to pay the consideration offered or to return Shares deposited by or on behalf of tendering shareholders promptly after the termination or withdrawal of the Offer.

Any extension or amendment of the Offer, waiver of a condition of the Offer, delay in acceptance for payment or payment or termination of the Offer will be followed, as promptly as practicable, by public announcement thereof, such announcement in the case of an extension to be issued not later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rules 14d-4(d), 14d-6(c) and l4e-1(d) under the Exchange Act. Without limiting our obligation under such rules or the manner in which we may choose to make any public announcement, we currently intend to make announcements by issuing a press release to the Dow Jones News Service (or such other national media outlet or outlets we it deem prudent) and making any appropriate filing with the SEC.

Pursuant to Rule 14d-11 under the Exchange Act and subject to the Merger Agreement, we may provide a subsequent offering period upon expiration of the initial offering period of the Offer on the Expiration Date. A subsequent offering period would be an additional period of time of between 3 business days and 20 business days, beginning no later than 9:00 a.m., New York City time, on the next business day following the expiration of the initial offering period of the Offer on the Expiration Date, during which shareholders may tender Shares not tendered in the Offer. A subsequent offering period, if one is provided, is not an extension of the Offer, which already will have been completed. During a subsequent offering period, tendering shareholders will not have withdrawal rights, and Purchaser will promptly purchase and pay for any Shares tendered during the subsequent offering period at the same price paid in the Offer. Purchaser does not currently intend to provide any subsequent offering period.

Genelabs has agreed to provide us with its list of shareholders and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Genelabs’ shareholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to beneficial owners of Shares.

For purposes of this Offer to Purchase, “business day” means any day on which the principal offices of the SEC in Washington, DC are open to accept filings or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in New York City, and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

2.   Acceptance for Payment and Payment for Shares

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment, and will pay for, all Shares validly tendered and not properly withdrawn at the Expiration Date promptly after the later of (a) the Expiration Date and (b) the satisfaction or waiver of the conditions to the Offer set forth in Section 13 — “Conditions of the Offer.” In addition, subject to the terms and conditions of the Merger Agreement and the applicable rules of the SEC, we reserve the right to delay acceptance for payment of, or payment for, Shares, pending receipt of any regulatory or governmental approvals specified in Section 15 — “Certain Legal Matters.”

In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates representing such Shares or confirmation of the book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3 — “Procedures for Tendering Shares,” (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 below) in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. See Section 3 — “Procedures for Tendering Shares.”

5

For purposes of the Offer, Purchaser will be deemed to have accepted for payment and thereby purchased Shares validly tendered and not properly withdrawn if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering shareholders for purposes of receiving payments from Purchaser and transmitting such payments to the tendering shareholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned (or new certificates for the Shares not tendered will be sent), without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at DTC pursuant to the procedures set forth in Section 3 — “Procedures for Tendering Shares,” such Shares will be credited to an account maintained with DTC) promptly following expiration or termination of the Offer.

If, prior to the Expiration Date, Purchaser shall increase the consideration offered to holders of Shares pursuant to the Offer, such increased consideration will be paid to holders of all Shares that are purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration.

Purchaser reserves the right, subject to the provisions of the Merger Agreement, to transfer or assign in whole or in part, from time to time, to one or more wholly-owned subsidiaries of GSK, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. Under the Merger Agreement, SKB may assign any of its rights to any wholly-owned subsidiary of SKB, but no such assignment will relieve SKB from its obligations under the Merger Agreement.

3.   Procedures for Tendering Shares

Valid Tender of Shares.  Except as set forth below, to validly tender Shares pursuant to the Offer, (a) a properly completed and duly executed Letter of Transmittal (or a manually executed facsimile thereof) in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, or an Agent’s Message (as defined below) in connection with a book-entry delivery of Shares, and any other documents required by the Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date and either (x) certificates representing Shares tendered must be delivered to the Depositary or (y) such Shares must be properly delivered pursuant to the procedures for book-entry transfer described below and a confirmation of such delivery received by the Depositary (which confirmation must include an Agent’s Message if the tendering shareholder has not delivered a Letter of Transmittal), in each case, prior to the Expiration Date, or (b) the tendering shareholder must comply with the guaranteed delivery procedures set forth below. The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation (as defined below), which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant.

Book-Entry Transfer.  The Depositary will establish an account with respect to the Shares at DTC for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in DTC’s systems may make a book-entry transfer of Shares by causing DTC to transfer such Shares into the Depositary’s account in accordance with DTC’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Date, or the tendering shareholder must comply with the guaranteed delivery procedures described below. The confirmation of a

6

book-entry transfer of Shares into the Depositary’s account at DTC as described above is referred to herein as a “Book-Entry Confirmation.”

Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary.

Signature Guarantees and Stock Powers.  Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (which term includes most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on a Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this section, includes any participant in any of DTC’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered owner has not completed the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered owner of the certificates surrendered, then the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1 and 5 of the Letter of Transmittal.

If certificates representing Shares are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or facsimile) must accompany each delivery of certificates.

Guaranteed Delivery.  A shareholder who desires to tender Shares pursuant to the Offer and whose certificates for Shares are not immediately available, or who cannot comply with the procedure for book-entry transfer on a timely basis, or who cannot deliver all required documents to the Depositary prior to the Expiration Date, may tender such Shares by satisfying all of the requirements set forth below:

•  such tender is made by or through an Eligible Institution;

•  a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser, is received by the Depositary (as provided below) prior to the Expiration Date; and

•  the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to all such Shares), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal), and any other required documents, are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A “trading day” is any day on which The NASDAQ Capital Market is open for business.

The Notice of Guaranteed Delivery may be transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.

The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering shareholder. Delivery of all such documents will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If such delivery is by mail, it is recommended that all such documents be sent by properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery.

Other Requirements.  Notwithstanding any provision hereof, Purchaser will pay for Shares pursuant to the Offer only after timely receipt by the Depositary of (a) certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the

7

Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid by Purchaser on the purchase price of Shares, regardless of any extension of the Offer or any delay in making such payment.

Binding Agreement.  The acceptance for payment by Purchaser of Shares tendered pursuant to one of the procedures described above will constitute a binding agreement between the tendering shareholder and Purchaser upon the terms and subject to the conditions of the Offer.

Appointment as Proxy.  By executing and delivering a Letter of Transmittal as set forth above (or, in the case of a book-entry transfer, by delivering an Agent’s Message in lieu of a Letter of Transmittal), the tendering shareholder irrevocably appoints designees of Purchaser as such shareholder’s proxies, each with full power of substitution, to the full extent of such shareholder’s rights with respect to the Shares tendered by such shareholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of the Merger Agreement. All such proxies and powers of attorney will be considered coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser accepts for payment Shares tendered by such shareholder as provided herein. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such shareholder will be revoked, and no subsequent powers of attorney, proxies or consents may be given (and, if given, will not be deemed effective). Purchaser’s designees will, with respect to the Shares or other securities and rights for which the appointment is effective, be empowered to exercise all voting and other rights of such shareholder as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the shareholders of Genelabs, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser’s payment for such Shares Purchaser must be able to exercise full voting, consent and other rights to the extent permitted under applicable law with respect to such Shares and other securities, including voting at any meeting of shareholders or executing a written consent concerning any matter.

Determination of Validity.  All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by Purchaser in its sole and absolute discretion, which determination will be final and binding. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of Purchaser, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular shareholder whether or not similar defects or irregularities are waived in the case of any other shareholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of GSK, SKB, Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Instructions thereto and any other documents related to the Offer) will be final and binding.

4.   Withdrawal Rights

Except as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. A shareholder may withdraw Shares tendered pursuant to the Offer at any time on or prior to the Expiration Date and, unless and until Purchaser has previously accepted them for payment, such Shares may also be withdrawn at any time after January 10, 2009.

For a withdrawal of Shares to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the record holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of any Eligible Institution. If Shares have

8

been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 — “Procedures for Tendering Shares,” any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Shares. If certificates representing the Shares have been delivered or otherwise identified to the Depositary, the name of the registered owner and the serial numbers shown on such certificates must also be furnished to the Depositary prior to the physical release of such certificates.

All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, which determination shall be final and binding. No withdrawal of Shares shall be deemed to have been properly made until all defects and irregularities have been cured or waived. None of GSK, SKB, Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures for tendering shares described in Section 3 — “Procedures for Tendering Shares” at any time prior to the Expiration Date.

If Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept for payment, Shares pursuant to the Offer for any reason, then, without prejudice to Purchaser’s rights under this Offer, the Depositary may nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering shareholders exercise withdrawal rights as described in this Section 4 before the Expiration Date or at any time after January 10, 2009 unless theretofore accepted for payment as provided herein.

In the event Purchaser provides a subsequent offering period following the Offer, no withdrawal rights will apply to Shares tendered during such subsequent offering period or to Shares tendered in the Offer and accepted for payment.

5.   Material United States Federal Income Tax Consequences of the Offer and the Merger

The following is a summary of the material U.S. federal income tax consequences to holders of Shares upon the tender of Shares for cash pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger. This summary does not purport to be a comprehensive description of all of the tax consequences that may be relevant to a decision to dispose of Shares in the Offer or the Merger, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of investors or that are generally assumed to be known by investors. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, administrative rulings and court decisions, all as in effect as of the date hereof and all of which are subject to differing interpretations and/or change at any time (possibly with retroactive effect). In addition, this summary is not a complete description of all the tax consequences of the Offer and the Merger and, in particular, may not address U.S. federal income tax considerations to holders of Shares subject to special treatment under U.S. federal income tax law (including, for example, financial institutions, dealers in securities or currencies, traders that mark to market, holders who hold their Shares as part of a hedge, straddle or conversion transaction, insurance companies, tax-exempt entities and holders who obtained their Shares by exercising options or warrants). In addition, this summary does not discuss any consequences to holders of options or warrants to purchase Shares or any aspect of state, local or foreign tax law that may be applicable to any holder of Shares, or any U.S. federal tax considerations other than U.S. federal income tax considerations. This summary assumes that holders own Shares as capital assets.

We urge holders of Shares to consult their own tax advisors with respect to the specific tax consequences to them in connection with the Offer and the Merger in light of their own particular circumstances, including the tax consequences under state, local, foreign and other tax laws.

U.S. Holders

Except as otherwise set forth below, the following discussion is limited to the U.S. federal income tax consequences relevant to a beneficial owner of Shares that is a citizen or resident of the United States, a domestic corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes), any estate (other than a foreign estate), and any trust if (i) a court within the United States is able to exercise primary

9

supervision over the administration of the trust, and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust (a “U.S. Holder”).

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such holders should consult their own tax advisors regarding the tax consequences of exchanging the Shares pursuant to the Offer or pursuant to the Merger.

Payments with Respect to Shares

The exchange of Shares for cash pursuant to the Offer or pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes, and a U.S. Holder who receives cash for Shares pursuant to the Offer or pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Shares. Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such U.S. Holder’s holding period for the Shares is more than one year at the time of the exchange of such holder’s Shares for cash. Long-term capital gains recognized by an individual holder generally are subject to tax at a lower rate than short-term capital gains or ordinary income. There are limitations on the deductibility of capital losses.

Backup Withholding Tax and Information Reporting

Payments made with respect to Shares exchanged for cash in the Offer or the Merger will be subject to information reporting and U.S. federal backup withholding tax (at a rate of 28 percent) unless the U.S. Holder (i) furnishes an accurate tax identification number or otherwise complies with applicable U.S. information reporting or certification requirements (typically, by completing and signing a substitute Form W-9, which will be included with the Letter of Transmittal to be returned to the Depositary) or (ii) is a corporation or other exempt recipient and, when required, demonstrates such fact. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. Holder’s United States federal income tax liability, if any, provided that you furnish the required information to the Internal Revenue Service in a timely manner.

Non-U.S. Holders

The following is a summary of certain U.S. federal income tax consequences that will apply to you if you are a Non-U.S. Holder of Shares. The term “Non-U.S. Holder” means a beneficial owner, other than a partnership, of a Share that is not a U.S. Holder.

Non-U.S. Holders should consult their own tax advisors to determine the specific U.S. federal, state, local and foreign tax consequences that may be relevant to them.

Payments with Respect to Shares

In general, a Non-U.S. Holder’s gain or loss from the exchange of Shares for cash pursuant to the Offer or the Merger will be determined in the same manner as that of a U.S. Holder. However, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain recognized unless:

(a) the gain on Shares, if any, is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States (and, if certain income tax treaties apply, is attributable to the Non-U.S. Holder’s permanent establishment in the United States) (in which event (i) the Non-U.S. Holder will be subject to U.S. federal income tax as described under “U.S. Holders,” but such Non-U.S. Holder should provide a Form W-8ECI instead of a Form W-9, and (ii) if the Non-U.S. Holder is a corporation, it may be subject to branch profits tax on such gain at a 30 percent rate (or such lower rate as may be specified under an applicable income tax treaty));

(b) the Non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year and certain other conditions are met (in such event the Non-U.S. Holder will be subject to tax at a flat rate of 30 percent (or such lower rate as may be specified under an applicable income tax treaty) on the gain

10

from the exchange of the Shares net of applicable U.S. losses from sales or exchanges of other capital assets recognized during the year); or

(c) the Non-U.S. Holder is an individual subject to tax pursuant to U.S. tax rules applicable to certain expatriates.

Backup Withholding Tax and Information Reporting

In general, if you are a Non-U.S. Holder you will not be subject to backup withholding and information reporting with respect to a payment made with respect to Shares exchanged for cash in the Offer or the Merger if you have provided the Depositary with an IRS Form W-8BEN (or a Form W-8ECI if your gain is effectively connected with the conduct of a U.S. trade or business). If shares are held through a foreign partnership or other flow-through entity, certain documentation requirements also apply to the partnership or other flow-through entity. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a Non-U.S. Holder’s U.S. federal income tax liability, if any, provided that you furnish the required information to the Internal Revenue Service in a timely manner.

6.   Price Range of Shares; Dividends

According to Genelabs Annual Report on Form 10-K for the fiscal year ended December 31, 2007, (the “Form 10-K”) the Shares are traded on The NASDAQ Capital Market under the symbol “GNLB.” The following table sets forth, for the calendar quarters indicated, the high and low sales prices per Share on The NASDAQ Capital Market as reported in the Form 10-K with respect to the periods indicated and as reported by published financial sources with respect to periods occurring in 2008:

Fiscal Year	High		Low
2006:
First Quarter	$	2.30	$	1.73
Second Quarter	$	2.55	$	0.70
Third Quarter	$	1.67	$	1.01
Fourth Quarter	$	1.89	$	1.31
2007:
First Quarter	$	2.11	$	1.26
Second Quarter	$	2.67	$	1.61
Third Quarter	$	2.40	$	1.74
Fourth Quarter	$	2.10	$	1.18
2008:
First Quarter	$	1.54	$	0.70
Second Quarter	$	1.01	$	0.57
Third Quarter	$	0.87	$	0.40
Fourth Quarter (through November 11, 2008)	$	1.27	$	0.21

On October 29, 2008, the last full trading day prior to the public announcement of the terms of the Offer and the Merger, the reported closing sales price per Share on The NASDAQ Capital Market was $0.23 per Share. On November 11, 2008, the last full trading day prior to the commencement of the Offer, the reported closing sales price per Share on The NASDAQ Capital Market was $1.26 per Share. Genelabs has never paid dividends. Under the terms of the Merger Agreement, Genelabs is not permitted to declare or pay dividends with respect to the Shares without the prior written consent of GSK. See Section 14 — “Dividends and Distributions.” Shareholders are urged to obtain a current market quotation for the Shares.

11

7.   Possible Effects of the Offer on the Market for the Shares; Nasdaq Listing; Exchange Act Registration and Margin Regulations

As set forth in Section 11 — “Purpose of the Offer and Plans for Genelabs; The Merger — The Merger,” following the purchase of Shares pursuant to the Offer, on the terms and subject to the conditions set forth in the Merger Agreement, SKB will seek the approval of the Merger Agreement and the Merger, pursuant to which all Shares we do not own will be canceled and converted into the right to receive from Purchaser the Merger Consideration, and in any event without interest and subject to applicable withholding taxes. However, even if the Merger is not consummated, during the period after the Purchase Time and prior to consummation of the Merger, our purchase of Shares in the Offer may have material effects on the market for the Shares, Nasdaq listing and Exchange Act registration of the Shares and the eligibility of the Shares as collateral for margin loans. These potential effects are summarized below.

Possible Effects of the Offer on the Market for the Shares.  The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. The purchase of Shares pursuant to the Offer can also be expected to reduce the number of holders of Shares. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer Price.

Nasdaq Listing.  On October 16, 2008, pursuant to Issuer Alert #2008-005 (the “Alert”), The NASDAQ Stock Market, LLC (“Nasdaq”) suspended enforcement of its rules requiring a minimum market value of publicly held shares and its rules requiring a minimum $1.00 closing bid price. According to the Alert, these rules will be reinstated on Monday, January 19, 2009. Thereafter, depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued listing on The NASDAQ Capital Market. According to the published guidelines of Nasdaq, Nasdaq would consider disqualifying the Shares for listing on The NASDAQ Capital Market if, among other possible grounds, (a) the number of publicly held Shares falls below 500,000, (b) the total number of beneficial holders of round lots of Shares falls below 300, (c) the market value of publicly held Shares over a 30 consecutive business day period is less than $1 million, (d) there are fewer than two active and registered market makers in the Shares over a 10 consecutive business day period, (e) the bid price for the Shares over a 30 consecutive business day period is less than $1.00, or (f) (i) Genelabs has shareholders’ equity of less than $2.5 million, (ii) the market value of Genelabs’ listed securities is less than $35 million over a 10 consecutive business day period, and (iii) Genelabs net income from continuing operations is less than $500,000 for the most recently completed fiscal year and two of the last three most recently completed fiscal years. Shares held by officers or directors of Genelabs, or by any beneficial owner of more than 10 percent of the Shares, will not be considered as being publicly held for this purpose. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares are either no longer eligible for The NASDAQ Capital Market, the market for Shares will be adversely affected.

If Nasdaq were to delist the Shares, it is possible that the Shares would continue to trade on other securities exchanges or in the over-the-counter market and that price or other quotations for the Shares would be reported by other sources. The extent of the public market for such Shares and the availability of such quotations would depend, however, upon such factors as the number of shareholders and the aggregate market value of such securities remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act as described below, and other factors. Trading in the Shares will cease upon consummation of the Merger if trading has not ceased earlier as discussed above.

Exchange Act Registration.  The Shares are currently registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be terminated by Genelabs upon application to the SEC if the outstanding Shares are not listed on a “national securities exchange” and if there are fewer than 300 holders of record of Shares.

Termination of registration of the Shares under the Exchange Act would reduce the information required to be furnished by Genelabs to its shareholders and to the SEC and would make certain provisions of the Exchange Act (such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement or information statement in connection with shareholders’ meetings or actions in lieu of a shareholders’

12

meeting pursuant to Section 14(a) and 14(c) of the Exchange Act and the related requirement of furnishing an annual report to shareholders) no longer applicable with respect to the Shares. In addition, if the Shares are no longer registered under the Exchange Act, the requirements of Rule 13e-3 with respect to “going private” transactions would no longer be applicable to Genelabs. Furthermore, the ability of “affiliates” of Genelabs and persons holding “restricted securities” of Genelabs to dispose of such securities pursuant to Rule 144 under the Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be eligible for continued inclusion on the Federal Reserve Board’s list of “margin securities” or eligible for stock exchange listing or reporting on Nasdaq. Purchaser intends to seek to cause Genelabs to apply for termination of registration of the Shares as soon as possible after consummation of the Offer if the requirements for termination of registration are met.

If registration of the Shares is not terminated prior to the Merger, then the registration of the Shares under the Exchange Act will be terminated following completion of the Merger.

Margin Regulations.  The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System, which has the effect, among other things, of allowing brokers to extend credit using such Shares as collateral. Depending upon factors similar to those described above regarding market quotations, the Shares might no longer constitute “margin securities” for the purposes of the margin regulations, in which event the Shares would be ineligible as collateral for margin loans made by brokers.

8.   Certain Information Concerning Genelabs

The following description of Genelabs and its business has been taken from Genelabs Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and is qualified in its entirety by reference to such report.

Genelabs is a California corporation with its principal executive offices located at 505 Penobscot Drive, Redwood City, California 94063. Genelabs’ telephone number at such principal executive offices is (650) 369-9500.

Genelabs is a biopharmaceutical company engaged in the discovery and development of infectious disease therapies to improve human health. Its primary business objection is to translate research into novel therapeutics for disease areas with significant unmet medical needs. Genelabs current pipeline consists of infectious disease products focused on hepatitis C virus (“HCV”) infection and late-stage clinical assets, including an investigation vaccine for hepatitis E virus (“HEV”) that is being developed by GSK and Prestara (prasterone), an investigational drug for systemic lupus erythematosus (SLE, or lupus).

Available Information.  Genelabs is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the SEC relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Genelabs business, principal physical properties, capital structure, material pending litigation, operating results, financial condition, directors and officers (including their remuneration and stock options granted to them), the principal holders of Genelabs securities, any material interests of such persons in transactions with Genelabs, and other matters is required to be disclosed in proxy statements and periodic reports distributed to Genelabs’ shareholders and filed with the SEC. Such reports, proxy statements and other information should be available for inspection at the public reference room at the SEC’s office at 100 F Street, NE, Washington, DC 20549. Copies may be obtained by mail, upon payment of the SEC’s customary charges, by writing to its principal office at 100 F Street, NE, Washington, DC 20549. Further information on the operation of the SEC’s Public Reference Room in Washington, DC can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet web site that contains reports, proxy statements and other information about issuers, such as Genelabs, who file electronically with the SEC. The address of that site is http://www.sec.gov.

Sources of Information.  Except as otherwise set forth herein, the information concerning Genelabs contained in this Offer to Purchase has been based upon publicly available documents and records on file with the SEC and other public sources. Although we have no knowledge that any such information contains any misstatements or omissions, none of GSK, SKB, Purchaser, or any of their respective affiliates or assigns, the Information Agent or the Depositary assumes responsibility for the accuracy or completeness of the information concerning Genelabs

13

contained in such documents and records or for any failure by Genelabs to disclose events which may have occurred or may affect the significance or accuracy of any such information.

9.   Certain Information Concerning Purchaser and GSK

Purchaser.  Purchaser is a California corporation and, to date, has engaged in no activities other than those incident to its formation and to the Offer and the Merger. Purchaser is a wholly-owned subsidiary of SKB, which is a wholly-owned subsidiary of GSK. The principal executive offices of Purchaser are located at One Franklin Plaza (FP 2355), 200 N. 16th Street, Philadelphia, Pennsylvania 19102, and Purchaser’s telephone number at such principal executive offices is (215) 741-4000.

GSK.  GSK is a public limited company organized under the laws of England and Wales. Its shares are listed on the London Stock Exchange and the New York Stock Exchange. GSK is a major global healthcare group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health-related products. The principal executive offices of GSK are located at 980 Great West Road, Brentford, Middlesex TW8 9GS England, and GSK’s telephone number at such principal executive offices is +44 20 8047 5000.

Additional Information.  The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the members of the board of directors and the executive officers of GSK and the members of the board of directors and the executive officers of Purchaser are set forth in Schedule A to this Offer to Purchase.

None of GSK, Purchaser or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons listed in Schedule A, has during the last five years (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws or a finding of any violation of U.S. federal or state securities laws.

Except as set forth elsewhere in this Offer to Purchase or in Schedule A: (a) none of GSK, Purchaser or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons listed in Schedule A or any associate or majority-owned subsidiary of GSK, Purchaser or any of the persons so listed, beneficially owns or has a right to acquire any Shares or any other equity securities of Genelabs, (b) none of GSK, Purchaser or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons referred to in clause (a) above or any of their executive officers, directors, affiliates or subsidiaries has effected any transaction in Shares or any other equity securities of Genelabs during the past 60 days, (c) none of GSK, Purchaser, their subsidiaries or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons listed in Schedule A, has any agreement, arrangement, or understanding, whether or not legally enforceable, with any other person with respect to any securities of Genelabs (including, but not limited to, any agreement, arrangement, or understanding concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations), (d) in the past two years, there have been no transactions that would require reporting under the rules and regulations of the SEC between any of GSK, Purchaser, their subsidiaries or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons listed in Schedule A, on the one hand, and Genelabs or any of its executive officers, directors or affiliates, on the other hand, and (e) in the past two years, there have been no negotiations, transactions or material contacts between any of GSK, Purchaser, their subsidiaries or, to the knowledge of GSK or Purchaser after reasonable inquiry, any of the persons listed in Schedule A, on the one hand, and Genelabs or any of its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of Genelabs’ securities, an election of Genelabs’ directors or a sale or other transfer of a material amount of assets of Genelabs.

We do not believe our financial condition is relevant to your decision whether to tender your Shares and accept the Offer because (a) the Offer is being made for all outstanding Shares solely for cash, (b) the Offer is not subject to any financing condition, (c) if we consummate the Offer, we will acquire all remaining Shares for the same cash price in the Merger, and (d) GSK has, and will arrange for Purchaser to have, sufficient funds to purchase all Shares

14

validly tendered and not properly withdrawn in the Offer and to acquire the remaining outstanding Shares in the Merger.

10.   Background of the Offer; Contacts with Genelabs

GSK first established a relationship with Genelabs in August 1992, when the parties entered into an agreement with respect to the development of a product candidate for the treatment of HEV. Pursuant to that agreement, Genelabs granted GSK an exclusive worldwide royalty-bearing license to make, use and sell HEV vaccines. Since that time, Genelabs and GSK have collaborated on the development of a vaccine for the treatment of HEV.

In February 2008, representatives of GSK contacted Genelabs concerning GSK’s interest in pursuing a potential licensing arrangement for Genelabs’ HCV technology. Between April and September of 2008, representatives of GSK held various meetings with members of Genelabs’ management and scientific staff to review Genelabs’ HCV technology and discuss a potential licensing arrangement.

On September 19 and 20, 2008, a senior representative of GSK contacted Dr. Irene Chow, Executive Chairman of the Genelabs board of directors and indicated that GSK may be interested in pursuing an acquisition of Genelabs, rather than the licensing agreement.

On September 23, 2008, GSK sent Genelabs a non-binding letter of interest proposing to acquire Genelabs for $1.25 per share in cash (the “September Proposal”). The proposal indicated, among other things, that it was subject to the completion of due diligence and conditioned upon Genelabs negotiating exclusively with GSK for a period of time.

On September 30, 2008, Genelabs and GSK entered into a confidentiality agreement with respect to a proposed transaction between the two companies.

On October 6, 2008, a representative of the Genelabs board of directors informed GSK that the board had met and discussed GSK’s proposal to acquire Genelabs and had agreed to pursue discussions regarding a potential transaction with GSK. Later that day, GSK delivered a proposed exclusivity agreement to Genelabs. Senior representatives of GSK and Genelabs proceeded to discuss the economic terms of the September Proposal and negotiated the terms of the exclusivity agreement. A senior representative of GSK indicated that, assuming the satisfactory conclusion of its diligence investigation, GSK would be prepared to increase its proposed purchase price to $1.30 per share, in part because Genelabs had agreed to enter into exclusive negotiations with GSK until October 31, 2008.

From October 10, 2008 through the signing of the Merger Agreement, GSK conducted an extensive due diligence review of Genelabs and its business, by reviewing documents that had been posted in Genelabs’ electronic data room and conducting due diligence discussions with Genelabs’ management.

On October 18, 2008, GSK circulated to Genelabs a draft merger agreement. During the period between October 20, 2008 through the signing of the Merger Agreement, negotiations regarding the terms of the transaction took place among GSK, Genelabs, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to Genelabs (“Mintz Levin”) and Cleary Gottlieb Steen & Hamilton LLP, counsel to GSK (“Cleary Gottlieb”). The discussions included, but were not limited to, provisions relating to the definition of a material adverse effect permitting termination of the Merger Agreement, non-solicitation commitments, the fiduciary out provisions, a termination fee in the event of certain possible termination events, representations and warranties, and conditions to the offer. The parties held multiple teleconference negotiation sessions and exchanged several drafts of the merger agreement.

On October 26, 2008, Cleary Gottlieb provided to Genelabs, for its review and comment, a draft of the proposed Tender and Shareholder Support Agreement (the “Tender Agreement and Support Agreement”), to be signed by all members of the Genelabs board of directors and all Genelabs executive officers.

On October 28, 2008, a senior representative of GSK and Dr. Chow discussed matters related to the Offer including, the purchase price and certain human resource issues in the Merger Agreement.

15

On October 29, 2008, the GSK Corporate Executive Team approved the transaction with Genelabs, including the Merger Agreement, the Offer and the Merger, and Cleary Gottlieb circulated a final draft of the Merger Agreement.

Also on October 29, 2008, the Genelabs board of directors approved the proposed Merger Agreement, the Offer and the Merger.

The Merger Agreement and the Tender and Support Agreement were signed on the evening of October 29, 2008, and their execution was announced in a joint press release.

Contacts with Genelabs — License Agreement with GSK.  In August 1992, Genelabs entered into a license agreement with GSK (then SmithKline Beecham plc), pursuant to which Genelabs has granted GSK an exclusive worldwide royalty-bearing license to make, use and sell HEV vaccines (the “GSK Agreement”). The GSK Agreement provides that GSK will make certain payments to Genelabs including certain revenue payments, research and development payments and payments for reaching certain research and development goals. Should development efforts result in a marketable product, Genelabs will also receive royalty payments based on GSK’s sales of HEV vaccine products. To date, Genelabs has recognized $6,100,000 in revenue under the GSK Agreement, including a $750,000 milestone payment in November 2004, and a $1,000,000 payment from GSK in 1998 as consideration for an amendment to the GSK Agreement that expanded GSK’s marketing rights. GSK owns 64,820 shares of Genelabs’ common stock, which were issued in connection with the GSK Agreement. The foregoing summary is qualified in its entirety by reference to the GSK Agreement, which is filed with Genelabs’ Schedule 14d-9 as Exhibit (e)(7) and (e)(8).

11.   Purpose of the Offer and Plans for Genelabs; Merger Agreement

Purpose of the Offer and Plans for Genelabs.  The purpose of the Offer and the Merger is for GSK, through SKB and Purchaser, to acquire control of, and the entire equity interest in, Genelabs. Pursuant to the Merger, GSK will acquire all of the capital stock of Genelabs not purchased pursuant to the Offer, the top-up option or otherwise. Shareholders of Genelabs who sell their Shares in the Offer will cease to have any equity interest in Genelabs or any right to participate in its earnings and future growth. If the Merger is consummated, non-tendering shareholders also will no longer have an equity interest in Genelabs. On the other hand, after selling their Shares in the Offer or the subsequent Merger, shareholders of Genelabs will not bear the risk of any decrease in the value of Genelabs.

After the purchase of Shares tendered pursuant to the Offer, SKB is entitled and currently intends to exercise its rights under the Merger Agreement to obtain pro rata representation on, and control of, the board of directors of Genelabs. See “The Merger Agreement — Directors” below.

In accordance with the Merger Agreement, following the time of the purchase of Shares pursuant to the Offer (the time of such purchase, the “Purchase Time”), SKB will acquire the remaining Shares pursuant to the Merger. In the event that a sufficient number of Shares are tendered in the Offer to entitle us to purchase Shares pursuant to the top-up option, we may acquire Shares pursuant to the top-up option.

GSK and Purchaser are conducting a detailed review of Genelabs and its assets, corporate structure, dividend policy, capitalization, operations, properties, policies, management and personnel and will consider what, if any, changes would be desirable in light of the circumstances which exist upon completion of the Offer. GSK and Purchaser will continue to evaluate the business and operations of Genelabs during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such actions as they deem appropriate under the circumstances then existing. Thereafter, GSK intends to review such information as part of a comprehensive review of Genelabs’ business, operations, capitalization and management with a view to optimizing development of Genelabs’ potential in conjunction with GSK’s existing businesses. Possible changes could include changes in Genelabs’ business, corporate structure, charter, bylaws, capitalization, board of directors, management or dividend policy, although, except as disclosed in this Offer to Purchase, GSK and Purchaser have no current plans with respect to any of such matters.

Except as disclosed in this Offer to Purchase, neither Purchaser nor GSK has any present plans or proposals that would result in an extraordinary corporate transaction involving Genelabs, such as a merger, reorganization,

16

liquidation, relocation of operations, or sale or transfer of a material amount of assets, or any material changes in Genelabs’ capitalization, corporate structure, business or composition of its management or board of directors.

The Merger Agreement.  The following is a summary of certain provisions of the Merger Agreement. This summary is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as an exhibit to the Tender Offer Statement on Schedule TO that GSK and Purchaser have filed with the SEC on November 12, 2008 (the “Schedule TO”) and which is incorporated herein by reference. The Merger Agreement may be examined and copies may be obtained in the manner set forth in Section 8 under “Available Information.”

The Offer.  The Merger Agreement provides that Purchaser will commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions to the Offer described in Section 13 — “Conditions of the Offer” (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), Purchaser will accept for payment, and pay for, all Shares validly tendered pursuant to the Offer and not withdrawn by the Expiration Date. Purchaser expressly reserves the right (but is not obligated), at any time or from time to time, to waive or otherwise modify or amend the terms and conditions of the Offer in any respect; provided that, pursuant to the Merger Agreement, Purchaser has agreed that it will not, without the prior written consent of Genelabs, decrease the Offer Price or change the form of consideration payable in the Offer, or except as required or permitted in the Merger Agreement (a) decrease the number of Shares sought pursuant to the Offer, (b) amend or waive the Minimum Tender Condition, (c) add to the conditions to the Offer described in Section 13 — “Conditions of the Offer,” (d) modify those conditions in a manner materially adverse to the holders of Shares, or (e) extend the Expiration Date of the Offer.

Upon the terms and subject to the conditions of the Offer, promptly following the Expiration Date, Purchaser will be required to accept for payment and pay for any Shares validly tendered and not withdrawn that are accepted for payment. Purchaser may, in its sole discretion and without Genelabs’ consent, (a) extend the Offer for one or more periods of time up to 10 business days per extension if, at the time the Offer is scheduled to expire, any of the offer conditions are not satisfied, (b) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or Nasdaq applicable to the Offer, or (c) elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. In addition, Purchaser may increase the Offer Price or extend the Offer to the extent required by law in connection with such increase. See Sections 1 and 13 — “Terms of the Offer” and “Conditions of the Offer.”

Purchaser has agreed under the Merger Agreement to extend the Offer for one or more periods determined by Purchaser of up to 10 business days per extension if, at any scheduled expiration of the Offer, any of the conditions to the Offer have not been satisfied or waived by Purchaser, except that Purchaser is not required (unless required by applicable law or regulation of Nasdaq), but may be entitled, to extend the Offer under certain circumstances, including if, at the time the Offer is scheduled to expire:

•  the offer condition set forth in paragraph 1 of Section 13 — “Conditions of the Offer” is not satisfied but all other conditions to the Offer are satisfied or waived;

•  the offer condition set forth in subparagraph (a) of paragraph 2 of Section 13 — “Conditions of the Offer” is neither satisfied nor waived (other than by reason of a judgment, injunction or order that is not final or that remains subject to appeal); or

•  the offer condition set forth in subparagraph (d) of paragraph 2 of Section 13 — “Conditions of the Offer” is neither satisfied nor waived and the breach or failure to perform or comply or to be true and correct that caused such non-satisfaction is not capable of being cured within 10 days after receipt by Genelabs of notice of such breach or failure.

Further, if the Minimum Tender Condition is not satisfied on any scheduled expiration date of the Offer, Purchaser may, without the consent of Genelabs, take any of the following actions:

•  extend the Offer pursuant to the provisions of the Merger Agreement;

•  reduce the Minimum Tender Condition to the Option Exercise Minimum Number; or

17

•  amend the Offer to reduce to number of Shares subject to the Offer to the Revised Minimum Number and, subject to the prior satisfaction or waiver of the other offer conditions, purchase, on a pro rata basis, the number of Shares comprising the Revised Minimum Number.

In addition, if at any scheduled expiration of the Offer occurring prior to December 24, 2008, the Minimum Tender Condition is not satisfied, but all other conditions to the Offer have been satisfied or waived by Purchaser, then, at the request of the Genelabs, Purchaser shall extend the Offer on one or more occasions for periods determined by Purchaser of up to 10 business days per extension. If, as of any scheduled expiration of the Offer that is after December 24, 2008, (i) the number of Shares tendered pursuant to the Offer and not withdrawn as of such scheduled expiration date, taken together with the number of Shares then owned by GSK, SKB, Purchaser and any other subsidiary of GSK, constitutes a majority of the Shares then outstanding, (ii) all conditions to the Offer other than the Minimum Tender Condition have been satisfied or waived by Purchaser and (iii) the Shares tendered pursuant to the Offer have not been accepted for payment by Purchaser, then Purchaser shall be required to either exercise the top-up option or amend the Offer to reduce the number of Shares subject to the Offer to the Revised Minimum Number such that the Offer will expire not later than the tenth business day following such scheduled expiration date, it being understood that Purchaser shall be required to exercise the top-up option only if such exercise would, when combined with the number of Shares then tendered pursuant to the Offer and not withdrawn, result in Purchaser holding one share more than 90 percent of the Shares outstanding on a fully diluted basis.

In any event, Purchaser is not required to extend the Offer beyond February 26, 2009 or at any time when SKB, Purchaser or Genelabs is permitted to terminate and terminates the Merger Agreement. See Sections 1 and 13 — “Terms of the Offer” and “Conditions of the Offer.”

Recommendation.  Genelabs has represented to us in the Merger Agreement that its board of directors (at a meeting or meetings duly called and held) has unanimously (a) determined that the Merger Agreement, the Offer and the Merger fair to, and in the best interests of, Genelabs and its shareholders, (b) adopted and approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and (c) declared the advisability of the Merger Agreement and resolved to recommend that the Genelabs’ shareholders tender their Shares in the Offer and adopt the Merger Agreement. Genelabs has further represented to us that the Merger Agreement and the transactions contemplated by the Merger Agreement are not subject to any anti-takeover laws.

Directors.  The Merger Agreement provides that, subject to the requirements of Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, after Purchaser has purchased such number of Shares tendered in the Offer as satisfies the offer condition in subparagraph (a) of paragraph 1 of Section 13 , Purchaser has the right to designate a number of directors of Genelabs, rounded up to the next whole number, that is equal to the product of the total number of directors on the Genelabs board and the percentage that the number of Shares purchased bears to the total number of Shares outstanding. Genelabs will, upon request by Purchaser, promptly increase the size of its board of directors or use its reasonable best efforts to secure the resignations of such number of directors as is necessary to provide Purchaser with such level of representation and will cause Purchaser’s designees to be so elected or appointed. Genelabs has also agreed in the Merger Agreement to use its reasonable best efforts to cause individuals designated by Purchaser to constitute the same percentage of each committee of the Genelabs board of directors (and of each board of directors and each committee thereof of each wholly-owned subsidiary of Genelabs) as the percentage of the entire board represented by the individuals designated by Purchaser, to the extent permitted by applicable law, including the Nasdaq rules.

The Merger Agreement further provides that until the Effective Time (i) except as stated in clause (ii) below, any resolution, consent or other action by the Genelabs board of directors will require, in addition to any authorization required under the Genelabs’ articles of incorporation or bylaws, the authorization of a majority of Purchaser’s designees to the Genelabs board of directors and (ii) certain actions of Genelabs may only be authorized by, and will require the authorization of, a majority of the directors of Genelabs who were directors on the date of the Merger Agreement or their successors as appointed by such continuing directors (the “Continuing Directors”) or, if there are no Continuing Directors, by a majority of the independent directors of Genelabs, and will not require any additional approval by the Genelabs board of directors. If there are no Continuing Directors or independent directors of Genelabs, such actions will require only the approval by a majority vote of the Genelabs board of directors.

18

In the event Purchaser’s designees are elected or appointed to the Genelabs board of directors as described above, the Merger Agreement requires that until the Effective Time the Genelabs board of directors shall have at least the number of independent directors as may be required by the Nasdaq rules or the U.S. federal securities laws.

Top-Up Option.  Genelabs has irrevocably granted to Purchaser an option (the “top-up option”), exercisable, on one or more occasions, in Purchaser’s discretion, but only after the acceptance by Purchaser of, and payment for, Shares tendered in the Offer, to purchase (for cash or a note payable) that number (but not less than that number) of Shares as is equal to the lowest number of Shares that, when added to the number of Shares owned directly or indirectly by GSK, SKB or Purchaser at the time of such exercise, will constitute either (i) if the Offer was amended to reflect the Revised Minimum Number, 49.9 percent of the total Shares then outstanding (assuming the issuance of the Shares purchased under the top-up option) or (ii) in all other circumstances one share more than 90 percent of the total Shares then outstanding (assuming the issuance of the Shares purchased under the top-up option). In each case the price per Share payable under the top-up option would be equal to the Offer Price. In no event will the top-up option be exercisable for a number of Shares in excess of Genelabs’ then authorized and unissued Shares (including as authorized and unissued Shares any Shares held in the treasury of Genelabs). In addition, the top-up option may not be exercised if any provision of applicable law or any judgment, injunction, order or decree of any governmental entity prohibits, or requires any action, consent, approval, authorization or permit of, action by, or filing with or notification to, any governmental entity or the Genelabs shareholders in connection with the exercise of the top-up option or the delivery of the Shares to be purchased under the top-up option, if such action, consent, approval, authorization or permit, action, filing or notification has not been obtained or made, as applicable, before such exercise.

The Merger.  The Merger Agreement provides that, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation. SKB, Purchaser and Genelabs have agreed in the Merger Agreement that, unless SKB and Purchaser effect a short-form merger pursuant to California law, Genelabs will hold a special meeting of its shareholders as soon as practicable following the Purchase Time for the purpose of adopting the Merger Agreement. SKB and Purchaser have agreed that, at the special meeting, all of the Shares acquired pursuant to the Offer or otherwise owned by GSK or any of its subsidiaries will be voted in favor of the Merger.

The Merger Agreement further provides that, notwithstanding the foregoing, if following consummation of the Offer, any subsequent offering period, or the exercise of the top-up option, SKB and Purchaser (together with any other subsidiaries of SKB) hold in the aggregate at least 90 percent of the outstanding shares of each class of capital stock of Genelabs, each of SKB, Purchaser and Genelabs will, subject to the satisfaction of the conditions to the Merger, take all necessary and appropriate action to cause the Merger to become effective, as soon as practicable after consummation of the Offer, as a short-form merger without a meeting of the shareholders of Genelabs in accordance with Section 1110 of the CGCL. Notice of a short-form merger pursuant to Section 1110 of the CGCL is set forth in Schedule B to this Offer to Purchase and incorporated herein by reference. If SKB and Purchaser (together with any other subsidiaries of SKB) hold in the aggregate at least 90 percent of the outstanding shares of each class of capital stock of Genelabs, Purchaser will cause the short-form merger to become effective without any further notice to the shareholders of Genelabs.

Charter, Bylaws, Directors, and Officers.  At the Effective Time, the articles of incorporation of Genelabs will be amended and restated in its entirety to read as the articles of incorporation of Purchaser in effect immediately prior to the Effective Time (except that Article I of the amended certificate of incorporation shall read as follows: “The name of the Corporation is Genelabs Technologies, Inc.”). Also at the Effective Time, the bylaws of Genelabs will be amended and restated in their entirety so as to read as the bylaws of Purchaser as in effect immediately prior to the Effective Time, except that such bylaws will be amended to reflect that the name of the surviving corporation will be Genelabs Technologies, Inc. The directors and officers of Purchaser immediately prior to the Effective Time will be the initial directors and officers of the surviving corporation.

Conversion of Shares.  Each Share issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of Genelabs, owned by SKB or any direct or indirect wholly-owned subsidiary of SKB or Genelabs, or held by shareholders who have demanded and perfected dissenters’ rights under California law) will, by virtue of the Merger and without any action on the part of the holder, be converted at the Effective Time into the

19

right to receive from Purchaser the Merger Consideration, payable to such holder upon surrender of the certificate formerly representing such Shares, without interest and less any required withholding taxes. At the Effective Time, each Share held in the treasury of Genelabs and each Share owned by SKB or any wholly-owned subsidiary of SKB or Genelabs will be canceled, and no payment or distribution will be made with respect to such Shares. At the Effective Time, each share of Purchaser’s common stock issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into one share of common stock of the surviving corporation.

Warrants.  All of Genelabs’ outstanding warrants to purchase Shares will expire at the earlier of (1) the purchase by Purchaser of at least 90 percent of the outstanding Shares in the Offer and (2) the Closing of the Merger, unless otherwise provided by the terms of the warrants.

Treatment of Equity Awards.  The Merger Agreement provides that, immediately prior to the Closing, each outstanding and unexercised option to acquire Shares granted under Genelabs’ 1995 Stock Option Plan, Genelabs’ 2001 Stock Option Plan and Genelabs’ 2007 Omnibus Stock Incentive Plan or any other Genelabs stock plan, whether vested or unvested, will automatically be cancelled and will thereafter solely represent the right to receive from Genelabs an amount in cash equal to the product of (i) the number of Shares subject to such option and (ii) the excess, if any, of the Offer Price, without interest, over the exercise price per Share subject to such option, less any required withholding taxes. The Merger Agreement further provides that each option shall not be exercisable during the period commencing upon acceptance by Purchaser of Shares tendered in the Offer and ending on 12 days following (and including) such date. Options, whether vested or unvested as of the Closing, having an exercise price per Share equal to or greater than the Offer Price will, at the Closing, be cancelled without payment of any consideration therefor.

ESPP.  The Merger Agreement also provides that the Genelabs board of directors and its compensation committee will take all actions necessary to (i) terminate all offering periods under Genelabs’ 2001 Employee Stock Purchase Plan (the “ESPP”) as of November 5, 2008 and not commence any further offering periods prior to the Closing, (ii) prohibit any participant in the ESPP from increasing the rate of his or her payroll deductions under the ESPP and (iii) terminate the ESPP prior to or effective as of the Closing.

Representations and Warranties.  In the Merger Agreement, Genelabs has made customary representations and warranties to SKB and Purchaser with respect to, among other matters, its organization and qualification, capitalization, authority, the vote of Genelabs’ shareholders required to approve the Merger, consents and approvals, compliance with law, permits, public filings, financial statements, absence of any Material Adverse Effect (as defined below), litigation, employee benefit plans, labor and employment matters, insurance, properties, tax matters, information to be included in this Offer to Purchase, the Schedule 14D-9 and any other ancillary documents related to the Offer (collectively, the “Offer Documents”) and in any proxy or information statement to be sent to shareholders in connection with the Merger, intellectual property, environmental matters, material contracts, affiliate transactions, opinion of Cowen, brokers’ fees, and inapplicability of state takeover laws. Each of SKB and Purchaser has made customary representations and warranties to Genelabs with respect to, among other matters, organization and qualification, authority, consents and approvals, litigation, information to be included in the Schedule 14D-9, the Offer Documents and Information Statement, brokers’ fees, and financing.

As defined in the Merger Agreement, and for purposes of the Offer, “Material Adverse Effect” means any change, effect, event or occurrence that has a material adverse effect on (a) the business, condition (financial or otherwise), operations or results of operations of Genelabs and its subsidiaries, taken as a whole, or (b) the ability of Genelabs to timely perform its obligations under the Merger Agreement or to timely consummate the transactions contemplated thereby; provided, however, that, in the case of clause (a) only, changes, effects, events or occurrences shall not be deemed to constitute a Material Adverse Effect to the extent resulting from (i) general changes after the date of the Merger Agreement in general economic, financial, regulatory or market conditions or in the industries in which Genelabs operates; (ii) the announcement or pendency of the Merger Agreement or the transactions contemplated thereby, including any adverse effect resulting from any action taken by Genelabs with the prior written consent of SKB or Purchaser or the taking of any action expressly required by the Merger Agreement; (iii) a decrease in the market price of the Shares in and of itself (and not the underlying causes thereof); (iv) acts of war or terrorism (or the escalation of the foregoing); (v) changes in any laws or regulations applicable to Genelabs or

20

applicable accounting regulations or principles or the interpretation thereof; (vi) the fact, in and of itself (and not the underlying causes thereof) that Genelabs or its subsidiaries failed to meet any projections, forecasts, or revenue or earnings predictions; (vii) natural disasters or other force majeure events; and (viii) Genelabs continuing to suffer operating losses in amounts not greater than the losses projected to be suffered by Genelabs, so long as, in the case of clauses (i), (iv), (v) and (vii), such changes or events do not have a disproportionate effect on Genelabs and its subsidiaries, taken as a whole, compared with other companies operating in the industries in which Genelabs and its subsidiaries operate.

The representations and warranties contained in the Merger Agreement have been made by each party to the Merger Agreement solely for the benefit of the other parties, and such representations and warranties should not be relied on by any other person. In addition, such representations and warranties:

•  have been qualified by information set forth in a confidential disclosure schedule exchanged by the parties in connection with signing the Merger Agreement — the information contained in this disclosure schedule modifies, qualifies and creates exceptions to the representations and warranties in the Merger Agreement;

•  will not survive consummation of the Merger and cannot be the basis for any claims under the Merger Agreement by the other party after termination of the Merger Agreement other than claims for willful breach;

•  may be subject to standards of materiality that are different from those that apply under the U.S. federal securities laws;

•  may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the Merger Agreement if those statements turn out to be inaccurate; and

•  were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement.

Covenants

Conduct of Business.  The Merger Agreement obligates Genelabs, from the date of the Merger Agreement to the earlier of the time when designees of SKB first constitute at least a majority of the board of directors of Genelabs and the Effective Time (such earlier time, the “Control Time”), to conduct its operations according to its ordinary and usual course of business consistent with past practice, and to use its reasonable best efforts to preserve intact its business organization. The Merger Agreement also contains specific restrictive covenants as to certain activities of Genelabs prior to the Control Time which provide that Genelabs will not take certain actions without the prior written consent of SKB including, among other things and subject to certain exceptions and materiality thresholds, amending its articles of incorporation or bylaws, issuing or selling its securities or granting options, declaring or paying any dividends, reclassifying or redeeming its securities, making material acquisitions or dispositions, entering into, terminating or amending any material contracts, authorizing or making any capital expenditures, incurring or guaranteeing indebtedness for borrowed money, making any loans or investments, entering into, amending or terminating any employment, severance or similar agreements, increasing compensation or adopting new employee benefit plans, accelerating the vesting or payment of compensation under any employee benefit plan, changing accounting principles, making material tax elections inconsistent with those made in prior periods or entering into tax settlements, settling litigation or claims, failing to keep insurance policies in force, or agreeing to take any of the foregoing actions.

No Solicitation.  In the Merger Agreement, Genelabs has agreed not to, and to cause its subsidiaries and officers, directors, employees, representatives and agents not to, directly or indirectly, until the earlier of the termination of the Merger Agreement and the Closing: (a) initiate, solicit or encourage (including by way of providing non-public information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, any Acquisition Proposal (as defined below) or to engage in any discussions or negotiations with respect to, or otherwise participate in, or facilitate any such discussions; (b) approve or recommend, or publicly propose to approve or recommend, an Acquisition Proposal or enter into any agreement relating to an Acquisition Proposal (other than certain confidentiality agreements) or enter into any agreement requiring Genelabs to abandon, terminate or fail to consummate the transactions contemplated

21

in the Merger Agreement; or (c) withdraw, modify or qualify, in a manner adverse to SKB or Purchaser, the recommendation of the board of directors of Genelabs with respect to the transactions contemplated by the Merger Agreement (a “Change of Board Recommendation”). Genelabs further agreed to terminate any solicitation, encouragement, discussion, or negotiation with any persons with respect to any Acquisition Proposal conducted by it, its subsidiaries or its representatives prior to the date of the Merger Agreement and to request (or, to the extent it is contractually permitted to do so, require) the return or destruction of all confidential information provided by or on behalf of Genelabs to such persons.

Notwithstanding the foregoing, Genelabs may furnish information and participate in discussions or negotiations with any person making a written, bona fide Acquisition Proposal that provides for per-Share consideration that is greater than the Offer Price after the date of the Merger Agreement and before the Purchase Time, if the following conditions are met: (a) a breach by Genelabs of its obligations described under “No Solicitation” has not contributed to the making of the Acquisition Proposal; (b) the Genelabs board of directors determines in good faith, after consultation with its financial advisors and outside counsel, that such Acquisition Proposal is reasonably likely to result in a Superior Proposal (as defined below) and (c) after consultation with its outside counsel, the Genelabs board of directors determines in good faith that failure to take such action would be inconsistent with its fiduciary duties to the shareholders of Genelabs under applicable law. However, Genelabs may not disclose any non-public information to any such person unless Genelabs has, or first enters into, a confidentiality agreement with such person no less favorable to Genelabs than the Confidentiality Agreement (as defined below under “Confidentiality Agreement”). Genelabs has further agreed to promptly (and in any event within 24 hours) provide to SKB, any non-public information provided to any such person that was not previously provided to SKB.

The Merger Agreement requires Genelabs to notify SKB within 24 hours of the receipt of (i) any Acquisition Proposal or indication of interest in making an Acquisition Proposal, (ii) any request for non-public information relating to Genelabs or its subsidiaries (other than requests for information in the ordinary course of business and unrelated to an Acquisition Proposal), or (iii) any inquiry or request for discussion or negotiations regarding any Acquisition Proposal. Genelabs also must provide SKB promptly with the identity of the person making the proposal, indication, request or inquiry, a copy of such Acquisition Proposal and, where such Acquisition Proposal is not in writing, a description of the material terms thereof. The Merger Agreement also requires Genelabs to keep SKB reasonably informed on a current basis (and, in any event, within 24 hours after the occurrence of any material changes, developments, discussions or negotiations) of the status of any Acquisition Proposal, indication, inquiry or request and any material developments, discussions or negotiations. In addition, Genelabs has agreed to use its reasonable best efforts to enforce the provisions of any standstill or confidentiality agreement to which it or any of its subsidiaries is a party and not to terminate, waive or modify any provision of, or grant permission or any request under, any such agreement.

The Merger Agreement provides that, except as described below, Genelabs may not (a) approve or recommend (or publicly propose to approve or recommend) an Acquisition Proposal, (b) enter into any merger agreement, letter of intent, agreement in principle or similar agreement relating to an Acquisition Proposal, or (c) exempt any person (other than SKB and its affiliates) from the provisions on “control share acquisitions” contained in any takeover law or otherwise cause such restrictions not to apply.

Notwithstanding the provisions described in the immediately preceding paragraph, the Genelabs board of directors may effect a Change of Board Recommendation if (a) Genelabs receives a written, bona fide Acquisition Proposal from a third party that is not in violation of such third party’s contractual obligations to Genelabs, (b) a breach by Genelabs of its obligations under “No Solicitation” has not contributed to the making of such Acquisition Proposal, (c) the Genelabs board of directors concludes in good faith, after consultation with outside counsel and its financial advisors, that such Acquisition Proposal constitutes a Superior Proposal, after taking into account any adjustments to the terms and conditions of the Merger Agreement that may be offered by SKB as described in clause (f) below, (d) Genelabs has not breached its obligations described under “No Solicitation,” (e) Genelabs has provided at least five business days’ prior written notice (the “Notice Period”) of its intention to approve or recommend or accept the Superior Proposal and a copy of such Superior Proposal, (f) during the Notice Period, Genelabs negotiates in good faith with SKB to make such adjustments in the terms and conditions of the Merger Agreement so that the Superior Proposal ceases to constitute a Superior Proposal (provided that, in the event of any material revisions to the terms of the Superior Proposal after the start of the Notice Period, Genelabs must deliver a

22

new written notice to SKB, and the Notice Period will be deemed to re-commence on the date of such new notice), and (g) following any negotiation described in the immediately preceding clause, such Acquisition Proposal, as modified, continues to constitute a Superior Proposal.

In addition, Genelabs may terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal if all of the conditions described in clauses (a), (b), (c), (d), (e), (f) and (g) of the immediately preceding paragraph are satisfied and, substantially concurrently with such termination, Genelabs pays the Expense Reimbursement and Termination Fee (as described under “Fees and Expenses” below) and enters into a definitive agreement with respect to the Superior Proposal.

Under the Merger Agreement: “Acquisition Proposal” means any offer or proposal, or any indication of interest in making an offer or proposal, made or renewed by a person or group at any time after the date of the Merger Agreement which is structured to permit such person or group to acquire beneficial ownership of at least 10 percent of the assets of, equity interest in, or businesses of, Genelabs and its subsidiaries, taken as a whole, pursuant to a merger, consolidation or other business combination, sale of Shares of capital stock, sale of assets, tender offer or exchange offer or similar transaction, including any single or multi-step transaction or series of related transactions, in each case other than the Merger; and “Superior Proposal” means any bona fide Acquisition Proposal (except the references in the definition thereof to “10 percent” shall be replaced by “100 percent”) made in writing after the date of the Merger Agreement that (x) includes per-Share consideration that is greater than the Offer Price (including, only if the per-Share consideration is not all cash, a determination by the Genelabs board of directors in good faith, on the advice of Cowen, as financial advisor, to such effect) and is otherwise on terms that the Genelabs board of directors has determined in its good faith judgment (after consultation with its financial advisor and outside counsel and after taking into account such legal, financial, regulatory and other aspects of the proposal, including the financing terms thereof, as the board of directors deems appropriate in the exercise of its fiduciary duties) is superior from a financial point of view to the Merger Agreement, and (y) which the Genelabs board of directors has determined in good faith (after consultation with its financial advisor and outside counsel and after taking into account all legal, financial, regulatory and other aspects of the proposal) is reasonably capable of being consummated within a reasonable period of time.

Employee Matters.  In the Merger Agreement, SKB and Purchaser have agreed with Genelabs that from the Effective Time to the first anniversary of the Closing SKB will cause the surviving corporation to maintain for the individuals employed by Genelabs at the Effective Time (“Current Employees”) compensation and benefits provided under employee benefit plans of SKB that are at least as favorable in the aggregate to the compensation and benefits maintained for and provided to Current Employees as a group immediately prior to the Effective Time (excluding equity-based compensation).

Services rendered by Current Employees to Genelabs prior to the Effective Time will be taken into account by SKB and the surviving corporation in the same manner as such services were taken into account by Genelabs, for vesting and eligibility purposes, including for accrual purposes with respect only to vacation and severance, under employee benefit plans of SKB and the surviving corporation.

The Merger Agreement further provides that the foregoing obligations shall not prevent the amendment or termination of any employee benefit plan of Genelabs or limit the right of SKB, the surviving corporation or any of their subsidiaries to terminate the employment of any Current Employees, and that the applicable provisions of the Merger Agreement are not intended to confer on any person other than the parties to the Merger Agreement any rights or remedies.

Indemnification and Insurance.  In the Merger Agreement, SKB and Purchaser have agreed that until the six year anniversary date of the Effective Time the articles of incorporation and bylaws of the surviving corporation in the Merger will contain provisions no less favorable with respect to indemnification of the (as of or prior to the Control Time) former directors, officers and employees of Genelabs than those in effect as of the date of the Merger Agreement.

The Merger Agreement also provides that, from and after the Effective Time, the surviving corporation shall indemnify each person who was as of or prior to the Effective Time either an officer or director of Genelabs against all claims, liabilities, judgments and inquiries, and reasonable fees, costs and expenses, incurred in connection with

23

any proceeding arising out of or pertaining to the fact that such person is or was an officer, director, employee, fiduciary or agent of Genelabs or any of its subsidiaries, to the fullest extent the surviving corporation is permitted to do so under applicable law and its articles of incorporation or bylaws as in effect on the date of the Merger Agreement. In the event of any such proceeding, each such indemnified person will be entitled to advancement of expenses incurred in the defense of the proceeding from the surviving corporation to the same extent such persons had the right to advancement of expenses from Genelabs as of the date of the Merger Agreement pursuant to Genelabs articles of incorporation and by laws.

The Merger Agreement further provides that Genelabs shall purchase by the Effective Time tail policies to the current directors’ and officers’ liability insurance policies as in effect on the date of the Merger Agreement at least as protective to such directors and officers as those of Genelabs’ directors’ and officers’ liability insurance policies as of the date of the Merger Agreement. Under the terms of the Merger Agreement, such insurance coverage is required to be maintained only to the extent that the coverage can be maintained at an aggregate cost of not greater than 300 percent of the current annual premium for Genelabs directors’ and officers’ liability insurance policies.

Reasonable Best Efforts.  The Merger Agreement provides that, subject to its terms and conditions, each of Genelabs, Purchaser and SKB will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement. However, this obligation does not require SKB or Purchaser to keep the Offer open beyond the Expiration Date. Pursuant to the Merger Agreement, the parties will, to the extent required, make filings under the any applicable antitrust laws or investment laws relating to foreign ownership and take other actions necessary to obtain any consents, approvals or clearances required in connection with the transactions contemplated by the Merger Agreement.

In the event that any proceeding is instituted challenging any transaction contemplated by the Agreement, each of SKB, Purchaser and Genelabs is required by the Merger Agreement to use its reasonable best efforts to contest such action and have lifted any judgment or order that prevents or restricts the consummation of the transactions.

Takeover Laws.  Genelabs has agreed to take, upon the request of SKB or Purchaser, all reasonable steps to exclude the applicability of, or to assist in any challenge by SKB or Purchaser to the validity, or applicability to the Offer, the Merger or any other transaction contemplated by the Merger Agreement of, any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other anti-takeover laws.

Notification of Certain Matters.  Genelabs has agreed to give prompt notice to SKB, and SKB has agreed to give prompt notice to Genelabs, upon obtaining knowledge of the occurrence or non-occurrence of any event which is reasonably likely (i) to cause any representation or warranty of such party contained in the Merger Agreement to be untrue or inaccurate or (ii) to result in the failure of such party to comply with or satisfy any covenant, condition or agreement, including any condition to the Offer. Genelabs has agreed to promptly advise SKB of any material change in Genelabs’ or any of its subsidiaries’ condition, properties, assets, liabilities, prospects or results of operations.

Approval of Compensation Actions.  The Merger Agreement provides that, prior to the Purchase Time, the compensation committee of the Genelabs board of directors shall take all such actions as may be required to approve, as an employment compensation, severance or other employee benefit arrangement in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto, any and all compensation actions taken after January 1, 2007 and prior to the Purchase Time that have not already been so approved.

Conditions to Consummation of the Merger.  Pursuant to the Merger Agreement, the respective obligations of SKB, Purchaser and Genelabs to consummate the Merger are subject to the satisfaction or waiver, where permissible, at or prior to the Effective Time, of the following conditions: (a) unless the Merger is consummated pursuant to Section 1110 of the CGCL as a short-form merger, the Merger Agreement shall have been adopted by the affirmative vote of holders of at least a majority of the outstanding Shares, (b) no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint preventing the consummation of the Merger or any other transaction contemplated by the Merger Agreement shall be in effect, and no statute, regulation, order or injunction shall have been enacted or enforced by any governmental entity that prohibits or

24

makes illegal the Offer, the Merger or any other transaction contemplated by the Merger Agreement, and (c) Purchaser shall have accepted for purchase Shares validly tendered (and not withdrawn) pursuant to the Offer.

Termination.  The Merger Agreement provides that it may be terminated, and the Offer and Merger may be abandoned:

(a) at any time prior to the Effective Time, by mutual written consent of SKB and Genelabs;

(b) at any time prior to the Effective Time, by SKB or Genelabs, if any governmental entity issues an order, decree or ruling or takes any other action prohibiting the Offer or the Merger, and such order, decree, ruling or other action has become final and non-appealable;

(c) at any time prior to the Purchase Time, by Genelabs if (i) Purchaser fails to commence the Offer in violation of the Merger Agreement, (ii) the close of business on February 26, 2009 has occurred and Purchaser has not accepted for payment and paid for Shares pursuant to the Offer, (iii) the Offer expires or is terminated without Purchaser having purchased any Shares pursuant to the Offer, (iv) Purchaser fails to accept for payment and to purchase validly tendered Shares pursuant to the Offer in violation of the terms of the Merger Agreement or (v) Purchaser or SKB shall have breached or failed to comply in any material respect with any of its obligations, covenants, or agreements contained in the Merger Agreement, which breach or failure is not capable of being or has not been cured within 30 days following receipt by SKB or Purchaser of written notice of such breach or failure; provided, that Genelabs may not terminate the Merger Agreement if any of the circumstances described in clause (ii) or (iii) of this subparagraph (c) directly or indirectly resulted from or was caused by Genelabs’ failure to perform in any material respect any of its obligations under the Merger Agreement or the failure of the condition to the Offer described in subparagraph (d) of paragraph 2 of Section 13 — “Conditions to the Offer” to be satisfied;

(d) at any time prior to the Purchase Time, by Genelabs, if all of the following conditions are satisfied: (i) Genelabs has not breached its obligations described under “No Solicitation,” (ii) Genelabs has received a written, bona fide Acquisition Proposal from a third party that is not in violation of such third party’s contractual obligations to Genelabs, (iii) a breach by Genelabs of its obligations under “No Solicitation” has not contributed to the making of such Acquisition Proposal, (iv) the Genelabs board of directors concludes in good faith, after consultation with outside counsel and its financial advisors, that such Acquisition Proposal constitutes a Superior Proposal, after taking into account any adjustments to the terms and conditions of the Merger Agreement that may be offered by SKB as described in clause (vi) below, (v) Genelabs has provided at least five business days’ prior written notice of its intention to accept the Superior Proposal and a copy of such Superior Proposal, (vi) during the Notice Period, Genelabs negotiates in good faith with SKB to make such adjustments in the terms and conditions of the Merger Agreement so that the Superior Proposal ceases to constitute a Superior Proposal (provided that, in the event of any material revisions to the terms of the Superior Proposal after the start of the Notice Period, Genelabs must deliver a new written notice to SKB, and the Notice Period will be deemed to re-commence on the date of such new notice), (vii) following any negotiation described in the immediately preceding clause, such Acquisition Proposal, as modified, continues to constitute a Superior Proposal and (viii) substantially concurrently with such termination, Genelabs pays the Expense Reimbursement and Termination Fee (as described under “Fees and Expenses” below) and enters into a definitive agreement with respect to the Superior Proposal;

(e) at any time prior to the Purchase Time, by SKB, if, due to an occurrence or circumstance that would result in a failure of any of the conditions to the Offer described in Section 13 — “Conditions to the Offer” to be satisfied at any scheduled expiration of the Offer, (i) Purchaser shall not have commenced the Offer within the time required by the Merger Agreement, (ii) the Offer (as it may be extended from time to time) expires or is terminated without Purchaser having purchased any Shares pursuant to the Offer, or (iii) the close of business on February 26, 2009 has occurred and Purchaser has not accepted Shares for payment pursuant to the Offer; provided, that SKB shall not have the right to terminate the Merger Agreement pursuant to this subparagraph (e) if the failure of any of the offer conditions to be satisfied or the failure of SKB to have accepted for payment Shares pursuant to the Offer directly or indirectly resulted from or was caused by SKB’s or Purchaser’s failure to perform any of its obligations under the Agreement; provided, further, that if the sole unsatisfied offer condition results from Genelabs’ breach or failure to comply in any material respect with any of its obligations,

25

covenants or agreements under the Merger Agreement or the failure of Genelabs’ representations and warranties to be true and correct under the relevant materiality standards provided in the Merger Agreement, then SKB may terminate prior to February 26, 2009 only if the breach or failure to perform or comply or to be true and correct is not capable of being cured within 10 days following notice to Genelabs or, if capable of being cured within that period, has not been so cured (it being understood that any intentional breach by Genelabs of its obligations described under “No Solicitation” shall be deemed incapable of cure); or

(f) at any time prior to the Purchase Time, by SKB if (i) the board of directors of Genelabs withdraws, modifies or qualifies, in a manner adverse to SKB or Purchaser, its recommendation with respect to the transactions contemplated by the Merger Agreement, or (ii) Genelabs intentionally breaches any of its obligations described under “No Solicitation.”

Fees and Expenses.  Except as described below with respect to the Expense Reimbursement and Termination Fee, each party will bear its own expenses in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer, other than expenses incurred in connection with the mailing of the Offer Documents, the Schedule 14D-9 and any information statement relating to the Merger, which will be shared equally between SKB and Genelabs.

In the event that the Merger Agreement is terminated under the circumstances described in subparagraph (d) or subparagraph (f) under “Termination” above, Genelabs has agreed to reimburse SKB’s and Purchaser’s reasonable out-of-pocket costs and expenses not to exceed $500,000 in the aggregate, incurred in connection with the transactions contemplated hereby and pay SKB a termination fee of $3,000,000 (the “Expense Reimbursement and Termination Fee”). Genelabs has also agreed to pay SKB the Expense Reimbursement and Termination Fee if the Merger Agreement is terminated under the circumstances described in subparagraph (c)(ii) under “Termination” (unless Purchaser’s failure to purchase Shares pursuant to the Offer directly and materially resulted from or was caused by SKB’s or Purchaser’s failure to perform, in any material respect, any of their respective obligations under the Merger Agreement) and (i) at any time on or after the date of the Merger Agreement and prior to such termination a third party has made an Acquisition Proposal (whether or not conditional) to the Genelabs board of directors or Genelabs or has publicly announced an Acquisition Proposal and, in each case, not irrevocably withdrawn such Acquisition Proposal or announcement, or any third party has publicly announced an intention (whether or not conditional) to make an Acquisition Proposal which intention has not been irrevocably withdrawn, and (ii) any transaction specified in the definition of “Acquisition Proposal” is consummated with such third party or any other third party within 12 months after the date of such termination or pursuant to any agreement for an Acquisition Proposal entered into within 12 months after the date of such termination (or any amendment or substitute agreement). Genelabs has also agreed to pay SKB the Expense Reimbursement and Termination Fee in the event that (1) the Merger Agreement is terminated under the circumstances described in subparagraph (e) under “Termination” above as a result of (x) Genelabs’ breach or failure to comply in any material respect with any of its obligations, covenants or agreements under the Merger Agreement or (y) the failure of the condition to the Offer described paragraph 1 of Section 13 — “Conditions to the Offer” to be satisfied in connection with which SKB has terminated the Merger Agreement, and (2) at any time on or after the date of the Merger Agreement and before such termination, a third party has made an Acquisition Proposal (whether conditional or not) to the Genelabs board of directors or to Genelabs or has publicly announced an Acquisition Proposal or such announcement, or such third party has publicly announced an intention (whether conditional or not) to make an Acquisition Proposal, which intention has not been irrevocably withdrawn, and (3) any transaction specified in the definition of “Acquisition Proposal” is consummated with such third party or any other third party within 12 months after the date of such termination or pursuant to any agreement for an Acquisition Proposal entered into within 12 months after the date of such termination (or any amendment or substitute agreement).

Amendment.  The Merger Agreement may be amended by the parties at any time before the Effective Time (subject, in the case of Genelabs to certain actions requiring the approval of the Continuing Directors as described under “Directors” above), whether before or after approval of the Merger Agreement by the shareholders of Genelabs, but (a) after Purchaser purchases Shares pursuant to the Offer, no amendment may be made that decreases the Merger Consideration, and (b) after approval of the Merger Agreement by the Genelabs shareholders, no amendment may be made which by law or stock exchange rule requires the further approval of the Genelabs shareholders without such approval.

26

Waiver.  At any time prior to the Effective Time, any party to the Merger Agreement (subject, in the case of Genelabs, to certain actions requiring the approval of the Continuing Directors, as described under “Directors” above) may extend the time for performance for any of the acts of the other parties, waive any inaccuracies in the representations and warranties contained in the Merger Agreement, and, subject to the requirements of applicable law, waive compliance by the other parties with any of the agreements or conditions contained in the Merger Agreement, except that the Minimum Tender Condition may be waived by Purchaser only as provided in the Merger Agreement or with the prior written consent of Genelabs.

Confidentiality Agreement.  Prior to entering into the Merger Agreement, Genelabs and SKB entered into a confidentiality agreement on September 30, 2008 (the “Confidentiality Agreement”). As a condition to being furnished confidential information of the other party, in the Confidentiality Agreement, SKB agreed, among other things, to keep such confidential information confidential and to use it only for specified purposes. The foregoing summary is qualified in its entirety by reference to the complete text of the Confidentiality Agreement, which is filed as Exhibit (d)(3) to the Schedule TO and is incorporated herein by reference.

Tender and Support Agreement.  SKB, Purchaser and certain of Genelabs’ executive officers and directors, consisting of Leslie J. Browne, Ph.D., Irene A. Chow, Ph.D., Frederick W. Driscoll, Ronald C. Griffith, Ph.D., H. H. Haight, Alan Y. Kwan, Matthew J. Pfeffer, and Roy J. Wu, entered into a Tender and Shareholder Support Agreement, dated as of October 29, 2008 (the “Tender and Support Agreement”), in their capacity as shareholders of Genelabs. The outstanding Shares subject to the Tender and Support Agreement represented, as of October 29, 2008, approximately 1.1 percent of the total outstanding Shares. Pursuant to the Tender and Support Agreement, such executive officers and directors agreed, among other things, subject to the termination of the Tender and Support Agreement (a) to tender in the Offer (and not to withdraw) all Shares beneficially owned or thereafter acquired by them, (b) to vote such Shares in support of the Merger in the event shareholder approval is required to consummate the Merger and against any competing transaction, (c) to appoint the SKB as their proxy to vote such shares in connection with the Merger Agreement, and (d) not to otherwise transfer any of their Shares. In addition, each such officer and director has granted SKB an option to acquire such Shares at the Offer Price in the event that Purchaser acquires Shares in the Offer but the Shares subject to the Tender and Support Agreement are not tendered or are withdrawn from the Offer. The Tender and Support Agreement will terminate upon the earliest of (x) the termination of the Merger Agreement, (y) the Effective Time, and (z) any amendment of the Merger Agreement or the Offer that decreases the Offer Price below $1.30 without the consent of such director or officer.

12.   Source and Amount of Funds

GSK, the parent company of Purchaser, will (or will cause SKB to) provide Purchaser with sufficient funds to pay for all Shares accepted for payment in the Offer or to be acquired in the Merger. GSK estimates that the total amount of funds necessary to purchase all outstanding shares of Genelabs pursuant to the Offer and the Merger and to pay customary fees and expenses in connection with the Offer and the Merger and the related transactions will be approximately $57 million, which will be used to pay shareholders of Genelabs and holders of Genelabs’ other equity-based interests. GSK expects to fund all these payments through a loan from GSK to Purchaser, which GSK will provide from cash on hand and/or cash generated from general corporate activities, including the issuance of commercial paper in the ordinary course of business. The Offer is not conditioned upon any financing arrangements.

13.   Conditions of the Offer

1. Notwithstanding any other provision of the Offer or the Merger Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered in connection with the Offer and may terminate or, subject to the terms of the Merger Agreement, amend the Offer, unless, immediately prior to the Expiration Date:

(a) there shall have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then owned beneficially by GSK, SKB and Purchaser

27

(together with their wholly-owned subsidiaries), equals (x) the Minimum Tender Condition, (y) if applicable, the Option Exercise Minimum Number or (z) if applicable, the Revised Minimum Number; and

(b) any approvals, consents or waiting periods required in respect of the transactions contemplated by the Merger Agreement under any applicable antitrust laws shall have been obtained or shall have expired or been terminated.

2. Additionally, notwithstanding any other provision of the Offer or the Merger Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered in connection with the Offer and may terminate or, subject to the terms of the Merger Agreement, amend the Offer if any of the following conditions exist:

(a) there shall have been any law, decree, judgment, order or injunction, promulgated, enacted, entered, enforced, issued or amended by any governmental entity that would, or is reasonably likely, directly or indirectly, to: (i) restrain, enjoin or otherwise prohibit the making or consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement; (ii) impose material limitations on the ability of SKB, Purchaser or any of their respective subsidiaries or affiliates to acquire or hold, transfer or dispose of, or effectively to exercise all rights of ownership of, some or all of the Shares, including the right to vote the Shares purchased by Purchaser pursuant to the Offer on an equal basis with all other Shares on all matters properly presented to the shareholders of Genelabs; or (iii) require, or condition any approval on, the divestiture by SKB, Purchaser or any of their respective subsidiaries or affiliates of any Shares, or require Purchaser, SKB, Genelabs, or any of their respective subsidiaries or affiliates to take, or condition any approval on, any action that (x) limits such party’s right to terminate the Merger Agreement or (y) obligates such party to (A) to limit in any manner whatsoever or not to exercise any rights of ownership of any securities (including the Shares), or to divest, dispose of or hold separate any securities or all or a portion of their respective businesses, assets or properties or of the business, assets or properties of Genelabs or (B) to limit in any manner whatsoever the ability of such entities to conduct, own, operate or control any of their respective businesses, assets or properties or of the businesses, properties or assets of the Genelabs and its subsidiaries;

(b) there shall be pending or threatened (and such threat shall not have been withdrawn), any action, proceeding or counterclaim by or before any governmental entity challenging any of the making or consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement or seeking, directly or indirectly, to result in any of the consequences referred to in clauses (i) through (iii) of subparagraph (a) of this paragraph;

(c) any change, effect, event or occurrence shall have occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(d) (i) Genelabs shall have breached or failed to comply in any material respect with any of its obligations, covenants, or agreements under the Merger Agreement, or (ii) any representation or warranty of Genelabs contained in the Merger Agreement shall not be true and correct; provided, that, for purposes of this clause (d): (A) all such representations and warranties (other than certain portions of the representations and warranties regarding compliance with SEC filings, financial statements and no Material Adverse Effect) shall be interpreted without giving effect to the words “materially” or “material” or to any qualification based on such terms or based on the defined term “Material Adverse Effect”; (B) any such representation or warranty contained in Section 4.1(b) of the Merger Agreement (relating to subsidiaries of Genelabs) or Section 4.3 of the Merger Agreement (relating to capitalization) shall be deemed untrue if it shall fail to be true and correct in all but de minimis respects and certain portions of the representations and warranties regarding compliance with SEC filings, financial statements and no Material Adverse Effect shall be deemed untrue if it shall fail to be true and correct in all respects; and (C) any such representation or warranty (other than any representation or warranty referred to in clause (B) above) shall be deemed untrue if such representation or warranty shall fail to be true and correct in all respects except where the fact, circumstance, change or event giving rise to any such failure of all such representations and warranties to be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, in each case at any scheduled

28

expiration of the Offer (except for any representation or warranty that is expressly made as of a specified date, in which case as of such specified date); or

(e) the Merger Agreement shall have been terminated pursuant to its terms or shall have been amended pursuant to its terms to provide for such termination or amendment of the Offer;

which, in the reasonable judgment of SKB or Purchaser, in any case, makes it inadvisable to proceed with the Offer or with acceptance for payment or payment for Shares.

The foregoing conditions are for the benefit of SKB and Purchaser and, regardless of the circumstances, may be asserted by SKB or Purchaser in whole or in part at any applicable time or from time to time prior to the Expiration Date, except that the conditions relating to receipt of any approvals from any governmental entity may be asserted at any time prior to payment of the Offer Price for Shares, and all conditions (other than the Minimum Tender Condition, which may be waived only in the circumstances described in Section 1 — “Terms of the Offer”) may be waived by SKB or Purchaser in its discretion, in whole or in part, at any applicable time or from time to time, in each case subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC. The failure of SKB or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.

14.   Dividends and Distributions

The Merger Agreement provides that, from the date of the Merger Agreement to the Effective Time, Genelabs shall not, and shall not permit any of its subsidiaries to, without the prior consent of SKB, declare, set aside, make or pay any dividends or any other distribution (whether in cash, stock, property or otherwise) with respect to any of its capital stock. See Section 11 — “Purpose of the Offer and Plans for Genelabs; Merger Agreement — The Merger Agreement — Covenants.”

15.   Certain Legal Matters

General.  Except as otherwise set forth in this Offer to Purchase, based on GSK’s and Purchaser’s review of Genelabs’ publicly available SEC filings and other information regarding Genelabs, GSK and Purchaser are not aware of any licenses or other regulatory permits which appear to be material to the business of Genelabs and which might be adversely affected by the acquisition of Shares by Purchaser, SKB or GSK pursuant to the Offer or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the acquisition or ownership of Shares by Purchaser, SKB or GSK pursuant to the Offer. In addition, GSK and Purchaser are not aware of any filings, approvals or other actions by or with any governmental authority or administrative or regulatory agency that would be required for GSK’s, SKB’s and Purchaser’s acquisition or ownership of the Shares. Should any such approval or other action be required, GSK and Purchaser currently expect that such approval or action, except as described below under “State Takeover Laws,” would be sought or taken. There can be no assurance that any such approval or action, if needed, would be obtained or, if obtained, that it would be obtained without substantial conditions, and there can be no assurance that, in the event that such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Genelabs’ or GSK’s business or that certain parts of Genelabs’ or GSK’s business might not have to be disposed of or held separately. In such an event, we may not be required to purchase any Shares in the Offer. See Section 13 — “Conditions of the Offer.”

Antitrust Laws.  It is a condition to Purchaser’s obligation to accept for payment and pay for Shares tendered pursuant to the Offer than any required approvals or consents in respect of the transactions contemplated by the Merger Agreement shall have been obtained under any applicable antitrust or other competition laws (“Antitrust Laws”), and that any applicable waiting periods thereunder have expired or been terminated. Purchaser is not aware, and Genelabs has advised Purchaser that it is not aware, of any Antitrust Laws that are applicable to the Offer or the Merger. If any Antitrust Laws are applicable to the Offer or the Merger, Genelabs and Purchaser intend to promptly make any filings required thereunder and, subject to the terms and conditions of the Merger Agreement, take such other actions to enable consummation of the Offer and the Merger.

29

Shareholder Approval.  Genelabs has represented in the Merger Agreement that the execution and delivery of the Merger Agreement by Genelabs and the consummation by Genelabs of the transactions contemplated by the Merger Agreement have been duly and validly authorized by the board of directors of Genelabs, and that no other corporate proceedings on the part of Genelabs are necessary to authorize the Merger Agreement or to consummate the transactions so contemplated, other than the adoption of the Merger Agreement by the holders of at least a majority of the outstanding Shares prior to the consummation of the Merger. As described below, such approval is not required if the Merger is consummated pursuant to the short-form merger provisions of the CGCL. According to Genelabs’ articles of incorporation, the Shares are the only outstanding securities of Genelabs that entitle the holders thereof to voting rights. If Purchaser acquires the Revised Minimum Number of Shares, Purchaser will be able to effect the Merger with the approval of a de minimus number of remaining outstanding Shares.

Short-Form Merger.  The CGCL provides that if a parent company owns at least 90 percent of each class of stock of a subsidiary, the parent company can effect a short-form merger with that subsidiary without the action of the other shareholders of the subsidiary. Accordingly, if as a result of the Offer, the top-up option or otherwise, Purchaser directly or indirectly owns at least 90 percent of the Shares, SKB could, and (subject to the satisfaction or waiver of the conditions to its obligations to effect the Merger contained in the Merger Agreement) is obligated under the Merger Agreement to effect the Merger without prior notice to, or any action by, any other shareholder of Genelabs if permitted to do so under the CGCL. Even if SKB and Purchaser do not own 90 percent of the outstanding Shares following consummation of the Offer, SKB and Purchaser could seek to purchase additional Shares in the open market, from Genelabs or otherwise in order to reach the 90 percent threshold and effect a short-form merger. The consideration per Share paid for any Shares so acquired, other than Shares acquired pursuant to the top-up option, may be greater or less than that paid in the Offer.

Notice of a short-form merger pursuant to Section 1110 of the CGCL is set forth in Schedule B to this Offer to Purchase and incorporated herein by reference. If SKB and Purchaser (together with any other subsidiaries of SKB) hold in the aggregate at least 90 percent of the outstanding shares of each class of capital stock of Genelabs, Purchaser will cause the short-form merger to become effective without any further notice to the shareholders of Genelabs.

California Corporate Law.  Genelabs is incorporated under the laws of the State of California. Section 1203 of the CGCL provides that if a tender offer is made to some or all of a corporation’s shareholders by an “interested party,” an affirmative opinion in writing as to the fairness of the consideration to the shareholders of such corporation is required to be delivered to the shareholders at the time that the tender offer is first made in writing to the shareholders and in the event a third party proposal (a “Proposal”) to acquire the same corporation is made to the corporation or its shareholders at least ten days prior to the date for the acceptance of the shares tendered to the “interested party,” the shareholders of the corporation shall be informed of such Proposal, forwarded copies of any written materials provided by the person making the Proposal and given a reasonable period of time (ten days from the date of notice or publication of the Proposal) to withdraw any tender in favor of the “interested party” tender offer. However, if the tender offer is commenced by publication and tender offer materials are subsequently mailed or otherwise distributed to the shareholders, the opinion may be omitted in the publication if the opinion is included in the materials distributed to the shareholders. For purposes of Section 1203, the term “interested party” includes, among other things, a person who is a party to the transaction and (a) directly or indirectly controls the corporation that is the subject of the tender offer or proposal, (b) is, or is directly or indirectly controlled by, an officer or director of the subject corporation or (c) is an entity in which a material financial interest is held by any director or executive officer of the subject corporation. While none of Genelabs, SKB or Purchaser believes that the Offer constitutes a transaction that falls within the provisions of Section 1203, an independent financial advisor, Cowen, has been retained by Genelabs to provide a fairness opinion with respect to the Offer and has provided such opinion to the Genelabs board of directors.

Under Sections 1101 and 1101.1 of the CGCL, the Merger Consideration paid to the shareholders of Genelabs may not be cash if Purchaser or SKB owns directly or indirectly more than 50 percent but less than 90 percent of the then outstanding Shares, unless either all the shareholders of Genelabs consent or the Commissioner of Corporations of the State of California approves, after a hearing, the terms and conditions of the Merger and the fairness thereof.

30

State Takeover Laws.  A number of states have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, shareholders, principal executive offices or principal places of business therein. To the extent that certain provisions of certain of these state takeover statutes purport to apply to the Offer or the Merger, Purchaser believes that such laws conflict with federal law and constitute an unconstitutional burden on interstate commerce.

Dissenters’ Rights.  Holders of Shares do not have dissenters’ appraisal rights in connection with the Offer. However, if the Merger is consummated following the completion of the Offer, each holder of Shares who fully complies with and meets all the requirements of the provisions of Chapter 13 of the CGCL, which is set forth in Schedule C to this Offer to Purchase and incorporated herein by reference, (“Qualifying Shareholders”) may have the right to require Genelabs to purchase the holder’s Shares for cash at “fair market value.” A Qualifying Shareholder will be entitled to exercise these dissenters’ rights under the CGCL only if (a) the holders of 5% or more of the outstanding Shares properly file demands for payment of the fair market value or (b) if the Shares held by such holder are subject to any restriction on transfer imposed by Genelabs or by any law or regulation (“Restricted Shares”). Accordingly, if any holder of Restricted Shares or the holders of 5% or more of the Shares properly file demands for payment in compliance with Chapter 13 of the CGCL, all other Qualifying Shareholders will be entitled to require Genelabs to purchase their Shares for cash at their fair market value if the Merger is consummated. If the holders of less than 5% of the Shares properly file demands for payment in compliance with Chapter 13 of the CGCL and one or more shareholder of Restricted Shares properly files such a demand, only such holder or holders of Restricted Shares shall be entitled to require Genelabs to purchase their Shares as described in the preceding sentence. In addition, if immediately prior to the effective time of the Merger, the Shares are not listed on a national securities exchange certified by the California Commissioner of Corporations or not listed on the National Market System of the NASDAQ Stock Market, holders of Shares may exercise dissenters’ appraisal rights as to any or all of their Shares entitled to such rights. If the Merger is not consummated, no Qualifying Shareholder will be entitled to have Genelabs purchase such holder’s Shares under Chapter 13 of the CGCL.

Under the CGCL, the “fair market value” of the Shares may be one agreed to by Genelabs and the Qualifying Shareholders or judicially determined, depending on the circumstances. The “fair market value” is determined as of the day before the first announcement of the terms of the proposed Merger, excluding any appreciation or depreciation as a result of the Merger and subject to adjustments. The value so determined could be more or less than the Offer Price. Moreover, a damages remedy or injunctive relief may be available if the Merger is found to be the product of procedural unfairness, including fraud, misrepresentation or other misconduct.

If a shareholder and Genelabs do not agree on whether that shareholder is a Qualifying Shareholder, or if a Qualifying Shareholder and Genelabs fail to agree on the fair market value of Shares and neither Genelabs nor the Qualifying Shareholder files a complaint or intervenes in a pending action within six months after Genelabs mails the notice of a short-form merger pursuant to Section 1110 of the CGCL set forth in Schedule B or, if applicable, the required notice that shareholders have approved the Merger, that shareholder does not have (or will cease to have) rights as a dissenting shareholder. After a shareholder files a demand to exercise dissenters’ rights, that shareholder may not withdraw the demand without Genelabs consent.

The foregoing discussion of the rights of Qualifying Shareholders does not purport to be a complete statement of the procedures to be followed by shareholders desiring to exercise any available dissenters’ appraisal rights and is qualified in its entirety by reference to Chapter 13 of the CGCL, a copy of which is attached hereto as Schedule C.

Dissenters’ rights cannot be exercised at this time. The information set forth above is for informational purposes only with respect to alternatives available to shareholders if the merger is completed. Shareholders who will be entitled to dissenters’ rights in connection with the Merger will receive additional information concerning dissenters’ rights and the procedures to be followed in connection therewith before such shareholders have to take any action relating thereto.

Shareholders who sell shares prior to the effective time of the Merger will not be entitled to exercise dissenters’ rights with respect thereto but, rather, will receive the Offer Price.

“Going Private” Transactions.  Rule 13e-3 under the Exchange Act is applicable to certain “going private” transactions and may under certain circumstances be applicable to the Merger. However, Rule 13e-3 will be inapplicable if (a) the Shares are deregistered under the Exchange Act prior to the Merger or another business

31

combination or (b) the Merger or other business combination is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share in the Merger or other business combination is at least equal to the amount paid per Share in the Offer. Neither GSK nor Purchaser believes that Rule 13e-3 will be applicable to the Merger.

Litigation Related to the Offer and Merger.  On November 4, 2008, a putative shareholder class action lawsuit was filed against Genelabs, members of the Genelabs Board of Directors and GSK in the Superior Court of California, County of San Mateo. The action, styled Lanre Rotimi Rollover IRA v. Genelabs Technologies, Inc., et al., alleges, among other things, that the members of the Genelabs Board of Directors violated their fiduciary duties by failing to maximize value for Genelabs’ shareholders when negotiating and entering into the Merger Agreement. The complaint alleges that GSK aided and abetted those purported breaches. Plaintiff seeks, among other things, to enjoin the acquisition of Genelabs by Purchaser or, in the alternative, to rescind the acquisition should it occur before the lawsuit is resolved.

Purchaser believes the allegations of the plaintiff’s complaint are entirely without merit and the defendants intend to vigorously defend this action. Even a meritless lawsuit, however, may carry with it the potential to delay consummation of the transactions contemplated by the Merger Agreement, including the Offer and the Merger.

16.   Fees and Expenses

Purchaser has retained the Depositary and the Information Agent in connection with the Offer. Each of the Depositary and the Information Agent will receive customary compensation, reimbursement for reasonable out-of-pocket expenses, and indemnification against certain liabilities in connection with the Offer, including liabilities under the federal securities laws.

As part of the services included in such retention, the Information Agent may contact holders of Shares by personal interview, mail, electronic mail, telephone, telex, telegraph and other methods of electronic communication and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer materials to beneficial holders of Shares.

Except as set forth above, Purchaser will not pay any fees or commissions to any broker or dealer or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will upon request be reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers.

17.   Miscellaneous

We are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, we will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will we accept tenders from or on behalf of, the holders of Shares in that state.

Purchaser and GSK have filed with the SEC the Schedule TO (including exhibits) in accordance with the Exchange Act, furnishing certain additional information with respect to the Offer and may file amendments thereto. The Schedule TO and any amendments thereto, including exhibits, may be examined and copies may be obtained from the SEC in the manner set forth in Section 8 under “Available Information.”

No person has been authorized to give any information or make any representation on behalf of GSK or Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. Neither delivery of this Offer to Purchase nor any purchase pursuant to the Offer will, under any circumstances, create any implication that there has been no change in the affairs of GSK, Purchaser, Genelabs or any of their respective subsidiaries since the date as of which information is furnished or the date of this Offer to Purchase.

Gemstone Acquisition Corporation

November 12, 2008

32

SCHEDULE A

INFORMATION CONCERNING MEMBERS OF THE BOARDS OF DIRECTORS AND
THE EXECUTIVE OFFICERS OF GSK AND PURCHASER

GSK

Set forth below are the name, business address and current principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each director and executive officer of GSK. Except as otherwise noted, positions specified are positions with GSK.

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Board of Directors
Andrew Witty	980 Great West Road Brentford Middlesex, England TW8 9GS	Chief Executive Officer since May 21, 2008; prior thereto, CEO designate from October 2007; prior thereto, President, Pharmaceuticals Europe from January 2003; Non-Executive Director of the UK’s Office for Strategic Co-ordination of Health Research; serves on the Imperial College Commercialisation Advisory Board; member of the Health Innovation Council and INSEAD UK Council.	British
Julian Heslop	980 Great West Road Brentford Middlesex, England TW8 9GS	Chief Financial Officer since April 2005; prior thereto, Senior Vice President, Operations Controller from January 2001.	British
Dr. Moncef Slaoui	709 Swedeland Road King of Prussia, PA 19406	Chairman, Research and Development since June 2006; prior thereto, Senior Vice President, Worldwide Business Development — R&D from May 2003; prior thereto, Senior Vice President, Business & New Product Development from March 2001.	Belgian/Moroccan

A-1

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Sir Christopher Gent	980 Great West Road Brentford Middlesex, England TW8 9GS	Non-Executive Chairman for GSK since January 2005, member of Board of Directors since June 2004; prior thereto, Chief Executive Officer of Vodafone Group plc from 1997 to 2003; Non-Executive Director of Lehman Brothers Holdings, Inc. since 2003 and Ferrari SpA since April 2006; a Senior Adviser at Bain & Co; member of the Advisory Board of Reform; and a member of KPMG’s Chairman’s Advisory Group.	British
Lawrence Culp	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. President and Chief Executive Officer of Danaher Corporation since 2001.	USA
Professor Sir Roy Anderson	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Professor of Infectious Disease Epidemiology in the Faculty of Medicine, Imperial College, London; prior thereto, the Chief Scientific Adviser at the Ministry of Defence in the United Kingdom until 30 September 2007; appointed as Rector of Imperial College, London in July 2008.	British
Dr. Stephanie Burns	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Chairman, President and Chief Executive Officer of Dow Corning; Board Member of the American Chemical Society and The Conference Board; serves on the Executive Committee of the Society of Chemical Industry, America Section; serves on the Board of Directors of the American Chemistry Society and the Society for Women’s Health Research.	USA

A-2

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Sir Crispin Davis	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Chief Executive of Reed Elsevier PLC since 1999.	British
Tom de Swaan	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Member of the Supervisory Board of Van Lanschot NV; member of the governing board of the Dutch Central Bank and Chairman of the Basel committee on banking supervision; Non-Executive Director of the UK Financial Services Authority; member of the board of the Institute of International Finance; was a member of the managing board and Chief Financial Officer of ABN AMRO from 1999 to January 2006	Dutch
Sir Deryck Maughan	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Managing Director of Kohlberg Kravis Roberts and Co. (KKR) and Chairman of KKR Asia since October 2005; Non-Executive Director of BlackRock, Inc. and Thomson Reuters; Non-Executive Director of Reuters Group PLC from September 2005 until April 2008; Vice Chairman of Citigroup from 1998 to 2004.	British
Dr. Daniel Podolsky	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. President of the University of Texas Southwestern Medical Center; Chief Academic Officer of Partners HealthCare System; Chairman of the Board & Scientific Co-Founder of the GI Company; Director of Antibe Therapeutics, Inc.; Formerly Mallinkrodt Professor of Medicine and Chief of Gastroenterology at Massachusetts General Hospital and Harvard Medical School.	USA

A-3

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Sir Ian Prosser	980 Great West Road Brentford Middlesex, England TW8 9GS	Senior Independent Non-Executive Director. Non-Executive Deputy Chairman of BP plc since 1999; Non-Executive Director of Sara Lee Corporation since 2004; serves on CBI President’s Committee; Chairman of the Navy, Army and Air Force Institutes (NAAFI) and prior thereto, Chairman of Intercontinental Hotels Group plc (retired in 2003).	British
Dr. Ronaldo Schmitz	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director. Non-Executive Director of Legal and General Group plc since 2000; serves on the Boards of Directors of Rohm and Haas Company since 1992 and Cabot Corporation since 2001; member of the Supervisory Board of SICK AG.	German
Sir Robert Wilson	980 Great West Road Brentford Middlesex, England TW8 9GS	Independent Non-Executive Director; Non-Executive Chairman of BG Group plc since 2004 and the Economist Group since 2003; Executive Chairman of Rio Tinto plc from 1997 to 2003.	British
Executive Officers
Andrew Witty	980 Great West Road Brentford Middlesex, England TW8 9GS	Chief Executive Officer since May 21, 2008; prior thereto, CEO Designate from October 2007; prior thereto, President, Pharmaceuticals Europe from January 2003.	British
Julian Heslop	980 Great West Road Brentford Middlesex, England TW8 9GS	Chief Financial Officer since April 2005; prior thereto, Senior Vice President, Operations Controller from January 2001.	British

A-4

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Daniel Troy	One Franklin Plaza Philadelphia, PA 19102	Senior Vice President & General Counsel since September 2008; prior thereto, a Partner at the Washington law firm Sidley Austin LLP; prior thereto, Chief Counsel for the FDA.	USA
Bill Louv	One Franklin Plaza Philadelphia, PA 19102	Senior Vice President, Information Technology and Chief Information Officer since January 2007; prior thereto, Senior Vice President, Information Technology for Research & Development, GlaxoSmithKline.	USA
John Clarke	One Franklin Plaza Philadelphia, PA 19102	President Consumer Healthcare since January 2006; prior thereto, President, Futures Group, Consumer Healthcare from January 2004; prior thereto, President, Consumer Healthcare Europe from 1998 to 2003.	New Zealand
Marc Dunoyer	GSK Building 6-15, Sendagaya 4 chome, Shibuya-ku Tokyo 151-8566	President, Asia Pacific/Japan since May 2008; prior thereto, President Pharmaceuticals Japan from March 2003.	French
Abbas Hussain	980 Great West Road Brentford Middlesex, England TW8 9GS	President, Emerging Markets since June 2008; prior thereto, President, Europe for Eli Lilly and Company.	British
Duncan Learmouth	980 Great West Road Brentford Middlesex, England TW8 9GS	Senior Vice President, Corporate Communications and Community Partnerships since July 2006; prior thereto, Vice President, Global Investor Relations & Competitive Excellence from February 2006; prior thereto, Vice President, Global Investor Relations from June 2005; prior thereto, Vice President, Investor Relations from November 2001.	British

A-5

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Daniel Phelan	One Franklin Plaza Philadelphia, PA 19102	Chief of Staff since May 2008; prior thereto, Senior Vice President, Human Resources from January 2001.	USA
David Pulman	Five Moore Drive PO Box 13398 Research Triangle Park North Carolina 27709	President, Global Manufacturing & Supply since December 2002.	British
Dr. Moncef Slaoui	709 Swedeland Road King of Prussia, PA 19406	Chairman, Research and Development since June 2006; prior thereto, Senior Vice President, Worldwide Business Development — R&D from May 2003.	Belgian/Moroccan
David Redfern	980 Great West Road Brentford Middlesex, England TW8 9GS	Chief Strategy Officer since May 2008; prior thereto, Senior Vice President, Northern Europe.	British
Eddie Gray	980 Great West Road Brentford Middlesex, England TW8 9GS	President, Pharmaceuticals Europe since January 2008; prior thereto, Senior Vice President and General Manager, Pharmaceuticals UK.	British
Simon Bicknell	980 Great West Road Brentford Middlesex, England TW8 9GS	Senior Vice President, Company Secretary since January 2001 and Corporate Compliance Officer since April 2006.	British
Claire Thomas	980 Great West Road Brentford Middlesex, England TW8 9GS	Senior Vice President, Human Resources since May 2008; prior thereto, Senior Vice President, Human Resources, Pharmaceuticals International.	British
Jean Stéphenne	Rue de l’Institut 89 B-1330 Rixensart Belgium	President and General Manager, Biologicals since 1998.	Belgium

A-6

PURCHASER

Set forth below are the name, business address and current principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each director and executive officer of Purchaser. Except as otherwise noted, positions specified are positions with SKB.

		Principal Occupation or
Name	Business Address	Employment	Citizenship
Board of Directors
Carol Ashe	One Franklin Plaza Philadelphia, PA 19102	Vice President, Legal Operations-Corporate Functions-US since April 2008; prior thereto, Vice President and Associate General Counsel since January 2001.	USA
Executive Officers
Carol Ashe	One Franklin Plaza Philadelphia, PA 19102	Vice President, Legal Operations-Corporate Functions-US since April 2008; prior thereto, Vice President and Associate General Counsel since January 2001.	USA

A-7

SCHEDULE B

NOTICE OF SHORT-FORM MERGER

This notice is being furnished to holders of the outstanding shares of capital stock of Genelabs pursuant to Section 1110 of the CGCL.

1. If the Minimum Tender Condition and the other conditions to the Offer are satisfied as of the expiration date and the Offer is consummated, Purchaser will be the owner of at least 90% of the outstanding shares of each class of Genelabs capital stock. Under such circumstances, Purchaser anticipates that it will effect a short-form merger of Purchaser with and into Genelabs pursuant to Section 1110 of the CGCL (the “Short-Form Merger”) as soon as practicable following consummation of the Offer. Under such circumstances, the Short-Form Merger will become effective on or after December 11, 2008.

2. The following resolution was adopted by the Boards of Directors of Purchaser and by holders of all of the outstanding shares of capital stock of Purchaser on October 29, 2008:

RESOLVED, that, pursuant to Section 1110 of the California General Corporation Law, the Board hereby adopts and approves (i) the Merger, (ii) the assumption of all liabilities of Purchaser by Genelabs as a result of the Merger, (iii) the receipt by the holder of each share of Genelabs common stock (other than shares held in the treasury of Genelabs or owned by GSK or any direct or indirect wholly-owned subsidiary of GSK or Genelabs or held by shareholders who properly demand and perfect dissenters’ rights under California law) in the Merger of $1.30 in cash, and (iv) the conversion as a result of the Merger of each share of common stock of Purchaser into one share of Genelabs common stock in the Merger.

3. A copy of Sections 1300 through 1304 of the CGCL is set forth below.

§ 1300. Reorganization or short-form merger; dissenting shares; corporate purchase at fair market value; definitions

(a) If the approval of the outstanding shares (Section 152) of a corporation is required for a reorganization under subdivisions (a) and (b) or subdivision (e) or (f) of Section 1201, each shareholder of the corporation entitled to vote on the transaction and each shareholder of a subsidiary corporation in a short-form merger may, by complying with this chapter, require the corporation in which the shareholder holds shares to purchase for cash at their fair market value the shares owned by the shareholder which are dissenting shares as defined in subdivision (b). The fair market value shall be determined as of the day before the first announcement of the terms of the proposed reorganization or short-form merger, excluding any appreciation or depreciation in consequence of the proposed action, but adjusted for any stock split, reverse stock split, or share dividend which becomes effective thereafter.

(b) As used in this chapter, “dissenting shares” means shares which come within all of the following descriptions:

(1) Which were not immediately prior to the reorganization or short-form merger either (A) listed on any national securities exchange certified by the Commissioner of Corporations under subdivision (o) of Section 25100 or (B) listed on the National Market System of the NASDAQ Stock Market, and the notice of meeting of shareholders to act upon the reorganization summarizes this section and Sections 1301, 1302, 1303 and 1304; provided, however, that this provision does not apply to any shares with respect to which there exists any restriction on transfer imposed by the corporation or by any law or regulation; and provided, further, that this provision does not apply to any class of shares described in subparagraph (A) or (B) if demands for payment are filed with respect to 5 percent or more of the outstanding shares of that class.

(2) Which were outstanding on the date for the determination of shareholders entitled to vote on the reorganization and (A) were not voted in favor of the reorganization or, (B) if described in subparagraph (A) or (B) of paragraph (1) (without regard to the provisos in that paragraph), were voted against the reorganization, or which were held of record on the effective date of a short-form merger; provided, however, that subparagraph (A) rather than subparagraph (B) of this paragraph applies in any case where the approval required by Section 1201 is sought by written consent rather than at a meeting.

B-1

(3) Which the dissenting shareholder has demanded that the corporation purchase at their fair market value, in accordance with Section 1301.

(4) Which the dissenting shareholder has submitted for endorsement, in accordance with Section 1302.

(c) As used in this chapter, “dissenting shareholder” means the recordholder of dissenting shares and includes a transferee of record.

§1301. Notice to holders of dissenting shares in reorganizations; demand for purchase; time; contents

(a) If, in the case of a reorganization, any shareholders of a corporation have a right under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, to require the corporation to purchase their shares for cash, that corporation shall mail to each such shareholder a notice of the approval of the reorganization by its outstanding shares (Section 152) within 10 days after the date of that approval, accompanied by a copy of Sections 1300, 1302, 1303, and 1304 and this section, a statement of the price determined by the corporation to represent the fair market value of the dissenting shares, and a brief description of the procedure to be followed if the shareholder desires to exercise the shareholder’s right under those sections. The statement of price constitutes an offer by the corporation to purchase at the price stated any dissenting shares as defined in subdivision (b) of Section 1300, unless they lose their status as dissenting shares under Section 1309.

(b) Any shareholder who has a right to require the corporation to purchase the shareholder’s shares for cash under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who desires the corporation to purchase shares shall make written demand upon the corporation for the purchase of those shares and payment to the shareholder in cash of their fair market value. The demand is not effective for any purpose unless it is received by the corporation or any transfer agent thereof (1) in the case of shares described in clause (A) or (B) of paragraph (1) of subdivision (b) of Section 1300 (without regard to the provisos in that paragraph), not later than the date of the shareholders’ meeting to vote upon the reorganization, or (2) in any other case within 30 days after the date on which the notice of the approval by the outstanding shares pursuant to subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

(c) The demand shall state the number and class of the shares held of record by the shareholder which the shareholder demands that the corporation purchase and shall contain a statement of what that shareholder claims to be the fair market value of those shares as of the day before the announcement of the proposed reorganization or short-form merger. The statement of fair market value constitutes an offer by the shareholder to sell the shares at that price.

§1302. Submission of share certificates for endorsement; uncertificated securities

Within 30 days after the date on which notice of the approval by the outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, the shareholder shall submit to the corporation at its principal office or at the office of any transfer agent thereof, (a) if the shares are certificated securities, the shareholder’s certificates representing any shares which the shareholder demands that the corporation purchase, to be stamped or endorsed with a statement that the shares are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed or (b) if the shares are uncertificated securities, written notice of the number of shares which the shareholder demands that the corporation purchase. Upon subsequent transfers of the dissenting shares on the books of the corporation, the new certificates, initial transaction statement, and other written statements issued therefor shall bear a like statement, together with the name of the original dissenting holder of the shares.

§1303. Payment of agreed price with interest; agreement fixing fair market value; filing; time of payment

(a) If the corporation and the shareholder agree that the shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder is entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Any agreements fixing the fair market value of any dissenting shares as between the corporation and the holders thereof shall be filed with the secretary of the corporation.

(b) Subject to the provisions of Section 1306, payment of the fair market value of dissenting shares shall be made within 30 days after the amount thereof has been agreed or within 30 days after any statutory or contractual conditions to the reorganization are satisfied, whichever is later, and in the case of certificated securities, subject to surrender of the certificates therefor, unless provided otherwise by agreement.

B-2

§1304. Action to determine whether shares are dissenting shares or fair market value; limitation; joinder; consolidation; determination of issues; appointment of appraisers

(a) If the corporation denies that the shares are dissenting shares, or the corporation and the shareholder fail to agree upon the fair market value of the shares, then the shareholder demanding purchase of such shares as dissenting shares or any interested corporation, within six months after the date on which notice of the approval by the outstanding shares (Section 152) or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but not thereafter, may file a complaint in the superior court of the proper county praying the court to determine whether the shares are dissenting shares or the fair market value of the dissenting shares or both or may intervene in any action pending on such a complaint.

(b) Two or more dissenting shareholders may join as plaintiffs or be joined as defendants in any such action and two or more such actions may be consolidated.

(c) On the trial of the action, the court shall determine the issues. If the status of the shares as dissenting shares is in issue, the court shall first determine that issue. If the fair market value of the dissenting shares is in issue, the court shall determine, or shall appoint one or more impartial appraisers to determine, the fair market value of the shares.

4. The price determined by Genelabs to represent the fair market value of the dissenting shares is $1.30 per share.

5. A brief description of the procedure to be followed if a shareholder desires to exercise his or her rights under Sections 1300 through 1304 of the CGCL is set forth below.

1. Any shareholder who has a right to require Genelabs to purchase the shareholder’s shares for cash under Section 1300 of the CGCL, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who desires Genelabs to purchase such shares must make a written demand upon Genelabs for the purchase of such shares and payment to the shareholder in cash of their fair market value.

2. Such demand should be sent to the Secretary of Genelabs at 505 Penobscot Drive, Redwood City, California 94063.

3. The demand is not effective for any purpose unless it is received by the Secretary of Genelabs or any transfer agent thereof by December 13, 2008, which is the 31st day after this notice was mailed to shareholders.

4. The demand must state the number and class of the shares held of record by the shareholder which the shareholder demands that Genelabs purchase and must contain a statement of what such shareholder claims to be the fair market value of those shares as of the day before the announcement of the Short-Form Merger. The statement of fair market value constitutes an offer by the shareholder to sell the shares at such price.

B-3

SCHEDULE C

CALIFORNIA CORPORATIONS CODE
CHAPTER 13
DISSENTERS’ RIGHTS
(SECTIONS 1300-1313)

§1300. Reorganization or short-form merger; dissenting shares; corporate purchase at fair market value; definitions

(a) If the approval of the outstanding shares (Section 152) of a corporation is required for a reorganization under subdivisions (a) and (b) or subdivision (e) or (f) of Section 1201, each shareholder of the corporation entitled to vote on the transaction and each shareholder of a subsidiary corporation in a short-form merger may, by complying with this chapter, require the corporation in which the shareholder holds shares to purchase for cash at their fair market value the shares owned by the shareholder which are dissenting shares as defined in subdivision (b). The fair market value shall be determined as of the day before the first announcement of the terms of the proposed reorganization or short-form merger, excluding any appreciation or depreciation in consequence of the proposed action, but adjusted for any stock split, reverse stock split, or share dividend which becomes effective thereafter.

(b) As used in this chapter, “dissenting shares” means shares which come within all of the following descriptions:

(1) Which were not immediately prior to the reorganization or short-form merger either (A) listed on any national securities exchange certified by the Commissioner of Corporations under subdivision (o) of Section 25100 or (B) listed on the National Market System of the NASDAQ Stock Market, and the notice of meeting of shareholders to act upon the reorganization summarizes this section and Sections 1301, 1302, 1303 and 1304; provided, however, that this provision does not apply to any shares with respect to which there exists any restriction on transfer imposed by the corporation or by any law or regulation; and provided, further, that this provision does not apply to any class of shares described in subparagraph (A) or (B) if demands for payment are filed with respect to 5 percent or more of the outstanding shares of that class.

(2) Which were outstanding on the date for the determination of shareholders entitled to vote on the reorganization and (A) were not voted in favor of the reorganization or, (B) if described in subparagraph (A) or (B) of paragraph (1) (without regard to the provisos in that paragraph), were voted against the reorganization, or which were held of record on the effective date of a short-form merger; provided, however, that subparagraph (A) rather than subparagraph (B) of this paragraph applies in any case where the approval required by Section 1201 is sought by written consent rather than at a meeting.

(3) Which the dissenting shareholder has demanded that the corporation purchase at their fair market value, in accordance with Section 1301.

(4) Which the dissenting shareholder has submitted for endorsement, in accordance with Section 1302.

(c) As used in this chapter, “dissenting shareholder” means the recordholder of dissenting shares and includes a transferee of record.

§1301. Notice to holders of dissenting shares in reorganizations; demand for purchase; time; contents

(a) If, in the case of a reorganization, any shareholders of a corporation have a right under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, to require the corporation to purchase their shares for cash, that corporation shall mail to each such shareholder a notice of the approval of the reorganization by its outstanding shares (Section 152) within 10 days after the date of that approval, accompanied by a copy of Sections 1300, 1302, 1303, and 1304 and this section, a statement of the price determined by the corporation to represent the fair market value of the dissenting shares, and a brief description of the procedure to be followed if the shareholder desires to exercise the shareholder’s right under those sections. The statement of price constitutes an offer by the corporation to purchase at the price stated any dissenting shares as defined in subdivision (b) of Section 1300, unless they lose their status as dissenting shares under Section 1309.

C-1

(b) Any shareholder who has a right to require the corporation to purchase the shareholder’s shares for cash under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who desires the corporation to purchase shares shall make written demand upon the corporation for the purchase of those shares and payment to the shareholder in cash of their fair market value. The demand is not effective for any purpose unless it is received by the corporation or any transfer agent thereof (1) in the case of shares described in clause (A) or (B) of paragraph (1) of subdivision (b) of Section 1300 (without regard to the provisos in that paragraph), not later than the date of the shareholders’ meeting to vote upon the reorganization, or (2) in any other case within 30 days after the date on which the notice of the approval by the outstanding shares pursuant to subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

(c) The demand shall state the number and class of the shares held of record by the shareholder which the shareholder demands that the corporation purchase and shall contain a statement of what that shareholder claims to be the fair market value of those shares as of the day before the announcement of the proposed reorganization or short-form merger. The statement of fair market value constitutes an offer by the shareholder to sell the shares at that price.

§1302. Submission of share certificates for endorsement; uncertificated securities

Within 30 days after the date on which notice of the approval by the outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, the shareholder shall submit to the corporation at its principal office or at the office of any transfer agent thereof, (a) if the shares are certificated securities, the shareholder’s certificates representing any shares which the shareholder demands that the corporation purchase, to be stamped or endorsed with a statement that the shares are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed or (b) if the shares are uncertificated securities, written notice of the number of shares which the shareholder demands that the corporation purchase. Upon subsequent transfers of the dissenting shares on the books of the corporation, the new certificates, initial transaction statement, and other written statements issued therefor shall bear a like statement, together with the name of the original dissenting holder of the shares.

§1303. Payment of agreed price with interest; agreement fixing fair market value; filing; time of payment

(a) If the corporation and the shareholder agree that the shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder is entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Any agreements fixing the fair market value of any dissenting shares as between the corporation and the holders thereof shall be filed with the secretary of the corporation.

(b) Subject to the provisions of Section 1306, payment of the fair market value of dissenting shares shall be made within 30 days after the amount thereof has been agreed or within 30 days after any statutory or contractual conditions to the reorganization are satisfied, whichever is later, and in the case of certificated securities, subject to surrender of the certificates therefor, unless provided otherwise by agreement.

§1304. Action to determine whether shares are dissenting shares or fair market value; limitation; joinder; consolidation; determination of issues; appointment of appraisers

(a) If the corporation denies that the shares are dissenting shares, or the corporation and the shareholder fail to agree upon the fair market value of the shares, then the shareholder demanding purchase of such shares as dissenting shares or any interested corporation, within six months after the date on which notice of the approval by the outstanding shares (Section 152) or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but not thereafter, may file a complaint in the superior court of the proper county praying the court to determine whether the shares are dissenting shares or the fair market value of the dissenting shares or both or may intervene in any action pending on such a complaint.

(b) Two or more dissenting shareholders may join as plaintiffs or be joined as defendants in any such action and two or more such actions may be consolidated.

C-2

(c) On the trial of the action, the court shall determine the issues. If the status of the shares as dissenting shares is in issue, the court shall first determine that issue. If the fair market value of the dissenting shares is in issue, the court shall determine, or shall appoint one or more impartial appraisers to determine, the fair market value of the shares.

§1305. Report of appraisers; confirmation; determination by court; judgment; payment; appeal; costs

(a) If the court appoints an appraiser or appraisers, they shall proceed forthwith to determine the fair market value per share. Within the time fixed by the court, the appraisers, or a majority of them, shall make and file a report in the office of the clerk of the court. Thereupon, on the motion of any party, the report shall be submitted to the court and considered on such evidence as the court considers relevant. If the court finds the report reasonable, the court may confirm it.

(b) If a majority of the appraisers appointed fail to make and file a report within 10 days from the date of their appointment or within such further time as may be allowed by the court or the report is not confirmed by the court, the court shall determine the fair market value of the dissenting shares.

(c) Subject to the provisions of Section 1306, judgment shall be rendered against the corporation for payment of an amount equal to the fair market value of each dissenting share multiplied by the number of dissenting shares which any dissenting shareholder who is a party, or who has intervened, is entitled to require the corporation to purchase, with interest thereon at the legal rate from the date on which judgment was entered.

(d) Any such judgment shall be payable forthwith with respect to uncertificated securities and, with respect to certificated securities, only upon the endorsement and delivery to the corporation of the certificates for the shares described in the judgment. Any party may appeal from the judgment.

(e) The costs of the action, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable, but, if the appraisal exceeds the price offered by the corporation, the corporation shall pay the costs (including in the discretion of the court attorneys’ fees, fees of expert witnesses and interest at the legal rate on judgments from the date of compliance with Sections 1300, 1301 and 1302 if the value awarded by the court for the shares is more than 125 percent of the price offered by the corporation under subdivision (a) of Section 1301).

§1306. Prevention of immediate payment; status as creditors; interest

To the extent that the provisions of Chapter 5 prevent the payment to any holders of dissenting shares of their fair market value, they shall become creditors of the corporation for the amount thereof together with interest at the legal rate on judgments until the date of payment, but subordinate to all other creditors in any liquidation proceeding, such debt to be payable when permissible under the provisions of Chapter 5.

§1307. Dividends on dissenting shares

Cash dividends declared and paid by the corporation upon the dissenting shares after the date of approval of the reorganization by the outstanding shares (Section 152) and prior to payment for the shares by the corporation shall be credited against the total amount to be paid by the corporation therefor.

§1308. Rights of dissenting shareholders pending valuation; withdrawal of demand for payment

Except as expressly limited in this chapter, holders of dissenting shares continue to have all the rights and privileges incident to their shares, until the fair market value of their shares is agreed upon or determined. A dissenting shareholder may not withdraw a demand for payment unless the corporation consents thereto.

C-3

§1309. Termination of dissenting share and shareholder status

Dissenting shares lose their status as dissenting shares and the holders thereof cease to be dissenting shareholders and cease to be entitled to require the corporation to purchase their shares upon the happening of any of the following:

(a) The corporation abandons the reorganization. Upon abandonment of the reorganization, the corporation shall pay on demand to any dissenting shareholder who has initiated proceedings in good faith under this chapter all necessary expenses incurred in such proceedings and reasonable attorneys’ fees.

(b) The shares are transferred prior to their submission for endorsement in accordance with Section 1302 or are surrendered for conversion into shares of another class in accordance with the articles.

(c) The dissenting shareholder and the corporation do not agree upon the status of the shares as dissenting shares or upon the purchase price of the shares, and neither files a complaint or intervenes in a pending action as provided in Section 1304, within six months after the date on which notice of the approval by the outstanding shares or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

(d) The dissenting shareholder, with the consent of the corporation, withdraws the shareholder’s demand for purchase of the dissenting shares.

§1310. Suspension of right to compensation or valuation proceedings; litigation of shareholders’ approval

If litigation is instituted to test the sufficiency or regularity of the votes of the shareholders in authorizing a reorganization, any proceedings under Sections 1304 and 1305 shall be suspended until final determination of such litigation.

§1311. Exempt shares

This chapter, except Section 1312, does not apply to classes of shares whose terms and provisions specifically set forth the amount to be paid in respect to such shares in the event of a reorganization or merger.

§1312. Right of dissenting shareholder to attack, set aside or rescind merger or reorganization; restraining order or injunction; conditions

(a) No shareholder of a corporation who has a right under this chapter to demand payment of cash for the shares held by the shareholder shall have any right at law or in equity to attack the validity of the reorganization or short-form merger, or to have the reorganization or short-form merger set aside or rescinded, except in an action to test whether the number of shares required to authorize or approve the reorganization have been legally voted in favor thereof; but any holder of shares of a class whose terms and provisions specifically set forth the amount to be paid in respect to them in the event of a reorganization or short-form merger is entitled to payment in accordance with those terms and provisions or, if the principal terms of the reorganization are approved pursuant to subdivision (b) of Section 1202, is entitled to payment in accordance with the terms and provisions of the approved reorganization.

(b) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, subdivision (a) shall not apply to any shareholder of such party who has not demanded payment of cash for such shareholder’s shares pursuant to this chapter; but if the shareholder institutes any action to attack the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, the shareholder shall not thereafter have any right to demand payment of cash for the shareholder’s shares pursuant to this chapter. The court in any action attacking the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded shall not restrain or enjoin the consummation of the transaction except upon 10 days’ prior notice to the corporation and upon a determination by the court that clearly no other remedy will adequately protect the complaining shareholder or the class of shareholders of which such shareholder is a member.

C-4

(c) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, in any action to attack the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, (1) a party to a reorganization or short-form merger which controls another party to the reorganization or short-form merger shall have the burden of proving that the transaction is just and reasonable as to the shareholders of the controlled party, and (2) a person who controls two or more parties to a reorganization shall have the burden of proving that the transaction is just and reasonable as to the shareholders of any party so controlled.

§1313.

A conversion pursuant to Chapter 11.5 (commencing with Section 1150) shall be deemed to constitute a reorganization for purposes of applying the provisions of this chapter, in accordance with and to the extent provided in Section 1159.

C-5

Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for the Shares and any other required documents should be sent or delivered by each shareholder of Genelabs or such shareholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary as follows:

The Depositary for the Offer Is:

By Mail:	By Courier:
Computershare, Inc.	Computershare, Inc.
C/O Voluntary Corporate Actions	C/O Voluntary Corporate Actions
P.O. Box 859208	161 Bay State Drive
Braintree, MA 02185-9208	Braintree, MA 02184

Questions or requests for assistance may be directed to the Information Agent at its address and telephone number set forth below or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser’s expense.

The Information Agent for the Offer is:

105 Madison Avenue

New York, New York 10016

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

EX-99.A.1.B

Exhibit (a)(1)(B)

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Letter of Transmittal

To Tender Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

Pursuant to the Offer to Purchase dated November 12, 2008

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 10, 2008 UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer Is:

By Mail:	By Courier:
Computershare, Inc.	Computershare, Inc.
C/O Voluntary Corporate Actions	C/O Voluntary Corporate Actions
P.O. Box 859208	161 Bay State Drive
Braintree, MA 02185-9208	Braintree, MA 02184

DESCRIPTION OF SHARES TENDERED
Name(s) and Address(es) of Registered Owner(s)
(If blank, please fill in exactly as	Shares Tendered
name(s) appear(s) on share certificate(s))	(Attach additional list if necessary)
		Total Number
	Shares	of Shares
	Certificate	Represented By	Number of Shares
	Number(s)*	Shares Certificate(s)*	Tendered**
	Total Shares
* Need not be completed by book-entry shareholders.
** Unless otherwise indicated, it will be assumed that all shares of common stock, no par value, of Genelabs represented by certificates described above are being tendered hereby. See Instruction 4.

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND, IF YOU ARE A U.S. HOLDER, COMPLETE THE SUBSTITUTE FORM W-9 ACCOMPANYING THIS LETTER OF TRANSMITTAL. IF YOU ARE A NON U.S.-HOLDER, YOU MUST OBTAIN AND COMPLETE AN IRS FORM W-8BEN OR OTHER IRS FORM W-8, AS APPLICABLE.

PLEASE READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.

IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER OFFERING DOCUMENTS, YOU SHOULD CONTACT THE INFORMATION AGENT, MACKENZIE PARTNERS, INC., AT (212) 929-5500 OR (800) 322-2885.

You have received this Letter of Transmittal in connection with the offer of Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the tendering shareholder in cash, without interest thereon and less any required withholding taxes, as described in the Offer to Purchase, dated November 12, 2008.

You should use this Letter of Transmittal to deliver to Computershare, Inc. (the “Depositary”) Shares represented by share certificates for tender. If you are delivering your Shares by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company (“DTC”), you may use this Letter of Transmittal or you may use an Agent’s Message (as defined in Instruction 2 below). In this document, shareholders who deliver certificates representing their Shares are referred to as “Certificate Shareholders.” Shareholders who deliver their Shares through book-entry transfer are referred to as “Book-Entry Shareholders.”

If certificates for your Shares are not immediately available or you cannot deliver your certificates and all other required documents to the Depositary on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase), or you cannot comply with the book-entry transfer procedures on a timely basis, you may nevertheless tender your Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to DTC will not constitute delivery to the Depositary.

o  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

Name of Tendering Institution:

DTC Participant Number:

Transaction Code Number:

o  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.

Name(s) of Registered Owner(s):

Window Ticket Number (if any) or DTC Participant Number:

Date of Execution of Notice of Guaranteed Delivery:

Name of Institution which Guaranteed Delivery:

NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

2

Ladies and Gentlemen:

The undersigned hereby tenders to Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), the above-described shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), pursuant to the Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, on the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and this Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”). The undersigned understands that Purchaser reserves the right to transfer or assign, from time to time, in whole or in part, to one or more of its affiliates, the right to purchase the Shares tendered herewith.

On the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), subject to, and effective upon, acceptance for payment and payment for the Shares validly tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser, all right, title and interest in and to all of the Shares being tendered hereby and any and all cash dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such Shares on or after October 29, 2008 (collectively, “Distributions”). In addition, the undersigned hereby irrevocably appoints Computershare, Inc. (the “Depositary”) the true and lawful agent and attorney-in-fact and proxy of the undersigned with respect to such Shares and any Distributions with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to the fullest extent of such shareholder’s rights with respect to such Shares and any Distributions (a) to deliver certificates representing Shares (the “Share Certificates”) and any Distributions, or transfer of ownership of such Shares and any Distributions on the account books maintained by DTC, together, in either such case, with all accompanying evidence of transfer and authenticity, to or upon the order of Purchaser, (b) to present such Shares and any Distributions for transfer on the books of Genelabs, and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and any Distributions, all in accordance with the terms and subject to the conditions of the Offer.

The undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to the full extent of such shareholder’s rights with respect to the Shares tendered hereby which have been accepted for payment and with respect to any Distributions. The designees of Purchaser will, with respect to the Shares and any associated Distributions for which the appointment is effective, be empowered to exercise all voting and any other rights of such shareholder, as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of Genelabs’ shareholders, by written consent in lieu of any such meeting or otherwise. This proxy and power of attorney shall be irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser accepts the Shares tendered with this Letter of Transmittal for payment pursuant to the Offer. Upon the effectiveness of such appointment, without further action, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares and any associated Distributions will be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights, to the extent permitted under applicable law, with respect to such Shares and any associated Distributions, including voting at any meeting of shareholders or executing a written consent concerning any matter.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares and any Distributions tendered hereby and, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares or the Share Certificate(s) have been endorsed to the undersigned in blank or the undersigned is a participant in DTC whose name appears on a security position listing participant as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares and any Distributions tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of any such

3

Distributions and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser in its sole discretion.

It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until the Share Certificate(s) owned by the undersigned are received by the Depositary at the address set forth above, together with such additional documents as the Depositary may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary. It is understood that the method of delivery of the Shares, the Share Certificate(s) and all other required documents (including delivery through DTC) is at the option and risk of the undersigned and that the risk of loss of such Shares, Share Certificate(s) and other documents shall pass only after the Depositary has actually received the Shares or Share Certificate(s) (including, in the case of a book-entry transfer, by Book-Entry Confirmation (as defined below)).

All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that the acceptance for payment by Purchaser of Shares tendered pursuant to one of the procedures described in Section 3 of the Offer to Purchase will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer.

Unless otherwise indicated herein under “Special Payment Instructions,” please issue the check for the purchase price in the name(s) of, and/or return any Share Certificates representing Shares not tendered or accepted for payment to, the registered owner(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price and/or return any Share Certificates representing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered owner(s) appearing under “Description of Shares Tendered.” In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or issue any Share Certificates representing Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such Share Certificates (and any accompanying documents, as appropriate) to, the person or persons so indicated. The undersigned recognizes that Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered owner thereof if Purchaser does not accept for payment any of the Shares so tendered.

4

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be issued in the name of someone other than the undersigned.

Issue: o  Check and/or o  Share Certificates to:

Name:

(Please Print)

Address:

(Include Zip Code)

(Tax Identification or Social Security Number)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled “Description of Shares Tendered” above.

Deliver: o  Check and/or o  Share Certificates to:

Name:

(Please Print)

Address:

(Include Zip Code)

5

IMPORTANT — SIGN HERE

(U.S. Holders Please Also Complete the Substitute Form W-9 Below)

(Non-U.S. Holders Please Obtain and Complete IRS Form W-8BEN or Other Applicable IRS Form W-8)

(Signature(s) of Shareholder(s))

Dated: ­ ­, 200  

(Must be signed by registered owner(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered owner(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.)

Name(s)

(Please Print)

Capacity (full title)

Address

(Include Zip Code)

Area Code and Telephone Number:

Tax Identification or Social Security No.:

GUARANTEE OF SIGNATURE(S)
(For use by Eligible Institutions only; see Instructions 1 and 5)

Name of Firm:

Address:

(Include Zip Code)

Authorized Signature:

Name:

(Please Type or Print)

Area Code and Telephone Number:

Dated: ­ ­, 200  

Place medallion guarantee in space below:

6

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1.

Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this document, includes any participant in DTC whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith and such registered owner has not completed the box titled “Special Payment Instructions” or the box titled “Special Delivery Instructions” on this Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5.

2.

Delivery of Letter of Transmittal and Certificates or Book-Entry Confirmations. This Letter of Transmittal is to be completed by shareholders either if Share Certificates are to be forwarded herewith or, unless an Agent’s Message is utilized, if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. A manually executed facsimile of this document may be used in lieu of the original. Share Certificates representing all physically tendered Shares, or confirmation of any book-entry transfer into the Depositary’s account at DTC of Shares tendered by book-entry transfer (“Book-Entry Confirmation”), as well as this Letter of Transmittal properly completed and duly executed with any required signature guarantees, unless an Agent’s Message in the case of a book-entry transfer is utilized, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). Please do not send your Share Certificates directly to Purchaser, GSK or Genelabs.

Shareholders whose Share Certificates are not immediately available or who cannot deliver all other required documents to the Depositary on or prior to the Expiration Date or who cannot comply with the procedures for book-entry transfer on a timely basis, may nevertheless tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by Purchaser must be received by the Depositary prior to the Expiration Date, and (c) Share Certificates representing all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to such Shares), as well as a Letter of Transmittal (or facsimile thereof), properly completed and duly executed with any required signature guarantees (unless, in the case of a book-entry transfer, an Agent’s Message is utilized), and all other documents required by this Letter of Transmittal, must be received by the Depositary within three (3) NASDAQ Capital Market trading days after the date of execution of such Notice of Guaranteed Delivery.

A properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery of Share Certificates to the Depositary.

The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant.

The method of delivery of the Shares, this Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering shareholder. Delivery of all such documents will be deemed made and risk of loss of the Share Certificates shall pass only when actually received by the Depositary (including, in the case of a Book-Entry Transfer, by Book-Entry Confirmation). If such delivery is by mail, it is recommended that all such documents be sent by properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery.

7

No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering shareholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment.

All questions as to validity, form and eligibility of the surrender of any Share Certificate hereunder will be determined by Purchaser (which may delegate power in whole or in part to the Depositary) and such determination shall be final and binding. Purchaser reserves the right to waive any irregularities or defects in the surrender of any Shares or Share Certificate(s). A surrender will not be deemed to have been made until all irregularities have been cured or waived. Purchaser and the Depositary shall make reasonable efforts to notify any person of any defect in any Letter of Transmittal submitted to the Depositary.

3.	Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed.
4.	Partial Tenders (Applicable to Certificate Shareholders Only). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the column titled “Number of Shares Tendered” in the box titled “Description of Shares Tendered.” In such cases, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) but not tendered will be sent to the registered owner, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.
5.	Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered owner(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration or any other change whatsoever.

If any Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If any tendered Shares are registered in the names of different holder(s), it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of such Shares.

If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to Purchaser of their authority so to act must be submitted.

If this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to, or Share Certificates representing Shares not tendered or accepted for payment are to be issued in the name of, a person other than the registered owner(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Share(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the Share Certificate(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.

6.  Transfer Taxes. Purchaser will pay any transfer taxes with respect to the transfer and sale of Shares to it or to its order pursuant to the Offer (for the avoidance of doubt, transfer taxes do not include United States federal income or backup withholding taxes). If, however, payment of the purchase price is to be made to, or (in the circumstances permitted hereby) if Share Certificates not tendered or accepted for payment are to be registered in the name of, any person other than the registered owner(s), or if tendered Share Certificates are registered in the name of any person other than the person signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered owner(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted.

8

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates listed in this Letter of Transmittal.

7.	Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or Share Certificates representing Shares not tendered or accepted for payment are to be issued or returned to, a person other than the signer(s) of this Letter of Transmittal or if a check and/or such certificates are to be mailed to a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown in the box titled “Description of Shares Tendered” above, the appropriate boxes on this Letter of Transmittal should be completed.
8.	Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Information Agent at its address and telephone number set forth below or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser’s expense.
9.	Backup Withholding. In order to avoid U.S. federal “backup withholding” at a rate of 28 percent with respect to cash received in exchange for Shares pursuant to the Offer, a shareholder submitting Shares must (a) provide the Depositary with a properly completed Substitute Form W-9, included in this Letter of Transmittal, indicating an exemption from backup withholding and sign such form under penalties of perjury or (b) provide the Depositary with a properly completed IRS Form W-8BEN or other applicable IRS Form W-8, and sign such form under penalties of perjury. IRS Form W-8BEN and other IRS Forms W-8 are available from the Depositary or from the Internal Revenue Service web site, at http://www.irs.gov. Please see “Important Tax Information” below.
10.	Lost, Destroyed, Mutilated or Stolen Share Certificates. If any Share Certificate has been lost, destroyed, mutilated or stolen, the shareholder should promptly notify Genelabs’ stock transfer agent, Mellon Investor Services LLC, at (877) 265-2584. The shareholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen Share Certificates have been followed.
11.	Waiver of Conditions. Subject to the terms and conditions of the Merger Agreement (as defined in the Offer to Purchase) and the applicable rules and regulations of the Securities and Exchange Commission, the conditions of the Offer (other than the Minimum Tender Condition, as defined in the Offer to Purchase) may be waived by Purchaser in whole or in part at any time and from time to time in its sole discretion.

IMPORTANT: This Letter of Transmittal (or a manually executed facsimile copy thereof) or an Agent’s Message, together with Share Certificate(s) or Book-Entry Confirmation or a properly completed and duly executed Notice of Guaranteed Delivery and all other required documents must be received by the Depositary on or prior to the Expiration Date.

9

IMPORTANT TAX INFORMATION

For purposes of this summary, a “U.S. holder” means a citizen or resident of the United States, a domestic partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes), a domestic corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes), any estate (other than a foreign estate), and any trust if — (a) a court within the United States is able to exercise primary supervision over the administration of the trust, and (b) one or more United States persons have the authority to control all substantial decisions of the trust.

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such holders should consult their own tax advisors regarding the tax consequences of exchanging the Shares pursuant to the Offer.

A “non-U.S. holder” for purposes of this summary means a beneficial owner of Shares that is not a U.S. holder.

Under United States federal income tax laws, as described in more detail hereunder, we are generally required to report any cash payment made to a holder of Shares surrendered in the Offer to such holder and to the United States Internal Revenue Service (“IRS”) and we may be required to “backup withhold” 28 percent of any such payment.

To avoid such backup withholding, a U.S. holder whose Shares are submitted herewith should provide the Depositary a properly completed Substitute Form W-9, which is attached hereto, signed under penalties of perjury, including such holder’s correct Taxpayer Identification Number (“TIN”) (generally, such holder’s social security or employer identification number) and certifying that the holder is not subject to backup withholding. A U.S. holder of Shares is required to give the Depositary the correct TIN of the record owner of the Shares being submitted for payment in connection herewith. If the Shares are registered in more than one name or are not registered in the name of the actual owner, please consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the holder does not have a TIN, the holder should write “Applied For” in the space provided for the TIN and the Depositary will retain the backup withholding tax amount until such holder provides the Depositary with its certified TIN. If the holder does not provide the Depositary with a certified TIN within 60 days, the Depositary must backup withhold 28 percent of all cash payments made to the holder.

Certain holders (including, among others, corporations and non-U.S. holders) are exempt from these backup withholding and reporting requirements. Exempt persons who are U.S. holders are not subject to backup withholding and should indicate their exempt status on the Substitute Form W-9 by entering their correct TIN, marking the appropriate box and signing and dating the Substitute Form W-9 in the space provided.

A non-U.S. holder should submit to the Depositary the appropriate version of an IRS Form W-8, properly completed, including certification of such holder’s foreign status, and signed under penalty of perjury. IRS Form W-8BEN is the version of IRS Form W-8 most likely to apply to foreign persons claiming exemption from backup withholding. Non-U.S. holders should carefully read the instructions to IRS Form W-8BEN and, if applicable, complete the required information, sign and date the IRS Form W-8BEN and return the form to the Depositary with the completed Letter of Transmittal. In certain cases, IRS Form W-8BEN may not be the proper IRS form to be completed and returned, depending on the status of the foreign person claiming exemption from backup withholding. If you are a non-U.S. holder, you must complete and return the appropriate version of IRS Form W-8. IRS Form W-8BEN and other IRS Forms W-8 are available from the Depositary or from the IRS web site, at http://www.irs.gov.

If the Depositary is not provided with a properly completed Substitute Form W-9 or an IRS Form W-8BEN or other applicable IRS Form W-8, the holder may be subject to a $50 penalty imposed by the IRS. In addition, the Depositary may be required to withhold 28 percent of any cash payment made to the holder with respect to Shares submitted in connection herewith as backup withholding. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against the holder’s United States federal income tax liability, if any, provided that the holder furnishes the required information to the IRS in a timely manner.

Please consult your accountant or tax advisor for further guidance regarding the completion of Substitute Form W-9, IRS Form W-8BEN, or another version of IRS Form W-8 to claim exemption from backup withholding, or contact the Depositary.

10

TO BE COMPLETED BY ALL TENDERING U.S. HOLDERS
(See Instruction 9)
PAYOR: Computershare, Inc.

SUBSTITUTE  Form W-9 Department of the Treasury Internal Revenue Service	Name:­ ­ Address:­ ­ Check appropriate box:
	Individual/Sole Proprietor o	Corporation o
	Partnership o	Other (specify) o
		Exempt from Backup Withholding o

	Part I. Please provide your taxpayer identification number in the space at right. If awaiting TIN, write “Applied For” in space at right and complete the Certificate of Awaiting Taxpayer Identification Number below.	SSN: Or EIN:
Request for Taxpayer Identification Number (TIN) and Certification	Part II. For Payees exempt from backup Identification Number on Substitute Form W-9 withholding, see the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” and complete as instructed therein.
	Part III. CERTIFICATION Under penalties of perjury, I certify that:
	(1) The number shown on this form is my correct Taxpayer Identification Number (or, as indicated, I am waiting for a number to be issued to me);
	(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
	(3) I am a U.S. person (including a U.S. resident alien).
	Certification Instructions — You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because you have failed to report all interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2).
Signature:­ ­  Date:­ ­, 200 ­ ­

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED
FOR” IN PART I
OF THIS SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, notwithstanding the information I provided in Part III of the Substitute Form W-9 (and the fact that I have completed this Certificate of Awaiting Taxpayer Identification Number), 28 percent of all payments made to me pursuant to the Offer shall be retained until I provide a Tax Identification Number to the Payor and that, if I do not provide my Taxpayer Identification Number within sixty (60) days, such retained amounts shall be remitted to the IRS as backup withholding.

Signature: ­ ­  Date:­ ­, 200­ ­

NOTE:  Failure to complete and return this form may result in backup withholding of 28 percent of any payments made to you pursuant to the Offer. Please review the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional details.

11

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU) TO GIVE THE PAYOR — Social security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payor.

		Give the name and
		SOCIAL SECURITY
For this type of account:		number of —
1.	An individual’s account	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	(a) The usual revocable savings trust (grantor is also trustee)	The grantor-trustee(1)
	(b) So-called trust account that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship account or single-owner LLC	The owner(3)

		Give the name and
		EMPLOYER IDENTIFICATION
For this type of account:		number of —
6.	A valid trust, estate or pension trust	The legal entity(4)
7.	Corporate account or LLC electing corporate status on IRS Form 8832	The corporation
8.	Partnership account (or multiple-member LLC) held in the name of the business	The partnership
9.	Association, club or other tax-exempt organization account	The organization
10.	A broker or registered nominee	The broker or nominee
11.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1)	List first and circle the name of the person whose number you furnish. If only one person has a social security number, that person’s number must be furnished.
(2)	Circle the minor’s name and furnish the minor’s social security number.
(3)	Show the name of the owner. You must show your individual name, but you may also enter your business or “doing business as” name. Either your social security number or employer identification number (if you have one) may be used.
(4)	List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

NOTE:   If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

12

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

Obtaining a Number

If you do not have a taxpayer identification number (“TIN”) you should apply for one immediately. You may obtain Form SS-5, Application for a Social Security Card, at the local office of the Social Security Administration or get this form online at www.socialsecurity.gov. You may obtain Form SS-4, Application for IRS Individual Taxpayer identification Number, from the Internal Revenue Service (“IRS”) by calling 1-800-TAX-FORM (1-800-829-3676) or from the IRS website at www.irs.gov. If you do not have a TIN, write “Applied For” in the space for the TIN.

Payees Exempt from Backup Withholding

Payees specifically exempted from backup withholding on all dividend and interest payments and on broker transactions include the following:

  •  A corporation.

  •  A financial institution.

  •  An organization exempt from tax under Section 501(a), or an individual retirement account, or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2).

  •  The United States or any agency or instrumentality thereof.

  •  A state, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof.

  •  An international organization or any agency or instrumentality thereof.

  •  A dealer in securities or commodities required to register in the United States, the District of Columbia or a possession of the United States.

  •  A real estate investment trust.

  •  A common trust fund operated by a bank under Section 584(a).

  •  An entity registered at all times during the tax year under the Investment Company Act of 1940.

  •  A foreign central bank of issue.

  Certain other payees may be exempt from either dividend and interest payments or broker transactions. You should consult your tax advisor to determine whether you might be exempt from backup withholding. Exempt payees described above should file the Substitute Form W-9 to avoid possible erroneous backup withholding. Complete the Substitute Form W-9 as follows:

  ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ACROSS THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN THE FORM TO THE PAYOR.

  IF YOU ARE A NONRESIDENT ALIEN OR FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, GIVE THE PAYOR THE APPROPRIATE COMPLETED IRS FORM W-8.

Private Act Notice — Section 6109 requires you to provide your correct taxpayer identification number to payors who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payors must be given numbers whether or not recipients are required to file tax returns. Payors must generally withhold 28% of taxable interest, dividend and certain other payments to a payee who does not furnish a TIN to a payor. Certain penalties may also apply.

Penalties

(1) Penalty for failure to Furnish Taxpayer Identification Number — If you fail to furnish your correct taxpayer identification number to a payor, you are subject to a penalty of $50 for each such failure, unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information with Respect to Withholding — If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information — Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
ADVISOR OR THE INTERNAL REVENUE SERVICE.

13

The Depositary for the Offer Is:

By Mail:	By Courier:
Computershare, Inc.	Computershare, Inc.
C/O Voluntary Corporate Actions	C/O Voluntary Corporate Actions
P.O. Box 859208	161 Bay State Drive
Braintree, MA 02185-9208	Braintree, MA 02184

Any questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its telephone number and location listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

November 12, 2008

EX-99.A.1.C

Exhibit (a)(1)(C)

Notice of Guaranteed Delivery

for

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

Do not use for signature guarantees

This form of notice of guaranteed delivery, or a form substantially equivalent to this form, must be used to accept the Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”) of Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, as described in the Offer to Purchase dated November 12, 2008 and the related Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”), if certificates for Shares and all other required documents cannot be delivered to Computershare, Inc. (the “Depositary”) on or prior to the Expiration Date (as defined below), if the procedure for delivery by book-entry transfer cannot be completed prior to the Expiration Date, or if time will not permit all required documents to reach the Depositary prior to the Expiration Date.

The term “Expiration Date” has the meaning set forth in Section 1 of the Offer to Purchase. Such form may be delivered by hand or transmitted via facsimile or mailed to the Depositary and must include a guarantee by an Eligible Institution (as defined below). See Section 3 of the Offer to Purchase.

The Depositary for the Offer Is:

By Mail:	By Courier:
Computershare, Inc.	Computershare, Inc.
C/O Voluntary Corporate Actions	C/O Voluntary Corporate Actions
P.O. Box 859208	161 Bay State Drive
Braintree, MA 02185-9208	Braintree, MA 02184

By Facsimile Transmission:

(for Eligible Institutions only)

(781) 930-4942

Confirm Facsimile Transmission

By Telephone Only

(781) 930-4900

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.

The guarantee on the back cover page must be completed.

2

Ladies and Gentlemen:

The undersigned hereby tenders to Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”), and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the “Offer”), receipt of which is hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

Number of Shares Tendered: ­ ­	Name(s) of Record Owner(s): ­ ­
Share Certificate Numbers (if available):
	(Please Type or Print)
If Shares will be delivered by book-entry transfer:	Address(es): ­ ­
Name of Tendering Institution:­ ­	(Including Zip Code)
DTC Participant Number:­ ­	Area Code and Telephone Number:
Transaction Code Number:­ ­
Date: ­ ­ , 200	Signature(s):

GUARANTEE

(Not to be used for signature guarantee)

     The undersigned, a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Incorporated, including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”), hereby guarantees that either the certificates representing the Shares tendered hereby, in proper form for transfer, or timely confirmation of a book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (pursuant to the procedures set forth in Section 3 of the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase)) and any other documents required by the Letter of Transmittal, will be received by the Depositary at one of its addresses set forth above within three (3) NASDAQ Capital Market trading days after the date of execution hereof.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal, Share Certificates and/or any other required documents to the Depositary within the time period shown above. Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm: 

Address: 

(Including Zip Code)

Area Code and

Telephone Number: 

Authorized Signature: 

Name: 

(Please Type or Print)

Title: 

Dated: ­ ­ , 200  

NOTE:  DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES ARE TO BE DELIVERED WITH THE LETTER OF TRANSMITTAL.

EX-99.A.1.D

Exhibit (a)(1)(D)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,

NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 10, 2008 UNLESS THE OFFER IS EXTENDED.

November 12, 2008

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:

We have been engaged by Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to act as Information Agent in connection with Purchaser’s offer to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”) enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.

The Offer is not subject to any financing condition. The Offer is subject to other conditions, including the condition that, at the expiration of the Offer, there have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of the then outstanding Shares on a “fully diluted basis” (which means, as of any time, the number of Shares outstanding, together with all Shares that are issuable upon exercise of any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, excluding shares that are issuable upon the exercise of options and warrants that have an exercise price greater than the Offer Price). If more than 50 percent of the then outstanding Shares and less than 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in the Offer to Purchase, either exercise the top-up option (as defined in the Offer to Purchase) or reduce the number of shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding. The Offer is also subject to certain other terms and conditions. See Section 13 of the Offer to Purchase — “Conditions of the Offer.”

The initial offering period of the Offer and withdrawal rights will expire at the Expiration Date (as defined in Section 1 of the Offer to Purchase).

Enclosed herewith are the following documents:

1. Offer to Purchase, dated November 12, 2008;

2. Notice of Guaranteed Delivery;

3. A letter to shareholders of Genelabs from the President and Chief Executive Officer of Genelabs, accompanied by Genelabs’ Solicitation/Recommendation Statement on Schedule 14D-9; and

4. A printed letter that may be sent to your clients for whose accounts you hold Shares in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer.

The Offer is being made pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 29, 2008, among Purchaser, SKB and Genelabs, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation (the “Merger”), and each outstanding Share (other than Shares held in the treasury of Genelabs or owned by GSK or any direct or indirect wholly-owned subsidiary of GSK or Genelabs or held by shareholders who continue to own their Shares at the time of the Merger and fulfill certain other requirements of the California General Corporation Law to demand and perfect dissenters’ rights in connection with the Merger) will by virtue of the Merger, and without any action by the holder thereof, be canceled and converted into the right to receive an amount in cash equal to the per Share price paid pursuant to the Offer, without interest and subject to applicable withholding taxes, payable to the holder thereof upon surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in the Offer to Purchase.

The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and adopted and approved the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the advisability of the Merger Agreement and recommends that the holders of Shares tender their Shares pursuant to the Offer.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will be deemed to have accepted for payment, and will pay for, all Shares validly tendered and not properly withdrawn by the Expiration Date if and when Purchaser gives oral or written notice to Computershare, Inc. (the “Depositary”) of Purchaser’s acceptance of the tenders of such Shares for payment pursuant to the Offer. Payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares pursuant to the procedures set forth in the Offer to Purchase, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

Purchaser is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, Purchaser will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Purchaser cannot comply with the state statute, Purchaser will not make the Offer to, nor will Purchaser accept tenders from or on behalf of, the holders of Shares in that state.

In order to tender Shares pursuant to the Offer, a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message (in the case of any book-entry transfer), and any other documents required by the Letter of Transmittal, should be sent to and timely received by the Depositary, and either certificates representing the tendered Shares should be delivered or such Shares must be delivered to the Depositary pursuant to the procedures for book-entry transfers, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase.

Neither GSK nor Purchaser will pay any fees or commissions to any broker or dealer or other person (other than the Information Agent and the Depositary as described in the Offer to Purchase) in connection with the solicitation of tenders of

2

Shares pursuant to the Offer. You will be reimbursed upon request for customary mailing and handling expenses incurred by you in forwarding the enclosed offering materials to your clients.

Your prompt action is requested. We urge you to contact your clients as promptly as possible. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Wednesday, December 10, 2008, unless the Offer is extended.

If holders of Shares wish to tender their Shares, but it is impracticable for them to deliver their certificates representing tendered Shares or other required documents or to complete the procedures for delivery by book-entry transfer prior to the Expiration Date, a tender may be effected by following the guaranteed delivery procedures specified in the Offer to Purchase and the Letter of Transmittal.

Questions and requests for assistance or for additional copies of the enclosed materials may be directed to the Information Agent at the address and telephone number set forth below and in the Offer to Purchase. Additional copies of the enclosed materials will be furnished at Purchaser’s expense.

Very truly yours,

MacKenzie Partners, Inc.

3

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY PERSON THE AGENT OF GSK, SKB, PURCHASER, GENELABS, THE INFORMATION AGENT, THE DEPOSITARY OR ANY OF THEIR AFFILIATES, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.

The Information Agent for the Offer is:

105 Madison Avenue

New York, New York 10016

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

4

EX-99.A.1.E

Exhibit (a)(1)(E)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,

NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 10, 2008 UNLESS THE OFFER IS EXTENDED.

November 12, 2008

To Our Clients:

Enclosed for your information is an Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”), and the related Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”), relating to the offer by Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is a letter to shareholders of Genelabs from the President and Chief Executive Officer of Genelabs, accompanied by Genelabs’ Solicitation/Recommendation Statement on Schedule 14D-9.

We are the holder of record of Shares held by us for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish to tender any or all of the Shares held by us for your account, pursuant to the terms and conditions set forth in the Offer.

Your attention is directed to the following:

1. The offer price is $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions of the Offer.

2. The Offer is being made for all outstanding Shares. As described below, under certain circumstances, Purchaser may reduce the number of Shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding.

3. The Offer is being made pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 29, 2008, among Purchaser, Genelabs and SKB, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation (the “Merger”), and each outstanding Share (other than Shares held in the treasury of Genelabs or owned by GSK or any direct or indirect wholly-owned subsidiary of GSK or Genelabs or held by shareholders who

continue to own their Shares at the time of the Merger and fulfill certain other requirements of the California General Corporation Law to demand and perfect dissenters’ rights in connection with the Merger) will by virtue of the Merger, and without action by the holder thereof, be canceled and converted into the right to receive an amount in cash equal to the per Share price paid pursuant to the Offer, without interest and subject to applicable withholding taxes, payable to the holder thereof upon surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in the Offer to Purchase.

4. The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and adopted and approved the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the advisability of the Merger Agreement and recommends that the holders of Shares tender their Shares pursuant to the Offer.

5. The Offer is not subject to any financing condition. The Offer is subject to other conditions, including the condition that, at the expiration of the Offer, there have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of the then outstanding Shares on a fully diluted basis (which means, as of any time, the number of Shares outstanding, together with all Shares that are issuable upon exercise of any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, excluding shares that are issuable upon the exercise of options and warrants that have an exercise price greater than the Offer Price). If more than 50 percent of the then outstanding Shares and less than 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in the Offer to Purchase, either exercise the top-up option (as defined in the Offer to Purchase) or reduce the number of shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding. The Offer is also subject to certain other terms and conditions. See Section 13 of the Offer to Purchase — “Conditions of the Offer.”

6. The initial offering period of the Offer and withdrawal rights will expire at the Expiration Date (as defined in Section 1 of the Offer to Purchase).

7. Any transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise provided in Instruction 6 of the Letter of Transmittal.

If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing and returning to us in the enclosed envelope the instruction form set forth on the reverse. Please forward your instructions to us in ample time to permit us to submit a tender on your behalf prior to the Expiration Date. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form set forth on the reverse.

Payment for Shares will be in all cases made only after such Shares are accepted by Purchaser for payment pursuant to the Offer and the timely receipt by Computershare, Inc. (the “Depositary”), of (a) certificates for such Shares or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

Purchaser is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, Purchaser will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Purchaser cannot comply with the state statute, Purchaser will not make the Offer to, nor will Purchaser accept tenders from or on behalf of, the holders of Shares in that state. In any jurisdiction where the securities, “blue sky” or other laws require the Offer to be made by a licensed broker or dealer, Purchaser will endeavor to make arrangements to have the Offer made on its behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

2

Instructions with Respect to the

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated November 12, 2008 (the “Offer to Purchase”), and the related Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”), in connection with the offer by Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), to purchase for cash all of the outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and conditions set forth in the Offer.

This will instruct you to tender the number of Shares indicated on the reverse (or if no number is indicated on the reverse, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer.

The undersigned understands and acknowledges that all questions as to validity, form and eligibility of the surrender of any certificate representing Shares submitted on my behalf to the Depositary will be determined by Purchaser (which may delegate power in whole or in part to the Depositary) and such determination shall be final and binding.

Dated:          , 200 

Number of Shares to Be Tendered:            Shares*

                                          Sign Below

Account Number: ­ ­	Signature(s): ­ ­
Dated: ­ ­, 200

Please Type or Print Name(s)

Please Type or Print Address(es) Here

Area Code and Telephone Number

Taxpayer Identification or Social Security Number(s)

*  Unless otherwise indicated, you are deemed to have instructed us to tender all Shares held by us for your account.

Please return this form to the brokerage firm or other nominee maintaining your account.

2

EX-99.A.1.G

Exhibit (a)(1)(G)

GLAXOSMITHKLINE COMMENCES TENDER OFFER
TO ACQUIRE GENELABS TECHNOLOGIES, INC.

London, UK — 12 November 2008 — GlaxoSmithKline [LSE/NYSE: GSK] announced today that Gemstone Acquisition Corporation, a wholly-owned subsidiary of GSK, is commencing a cash tender offer to purchase all outstanding shares of common stock of Genelabs Technologies, Inc. [Nasdaq: GNLB], for $1.30 in cash without interest and less any required withholding taxes. The tender offer is being made pursuant to a previously announced Agreement and Plan of Merger dated October 29, 2008 among Genelabs, Gemstone and SmithKline Beecham Corporation, a wholly-owned subsidiary of GSK.

The Genelabs board of directors has unanimously determined that the tender offer and the merger are fair to, and in the best interests of, Genelabs and the shareholders of Genelabs and adopted and approved the merger agreement, the tender offer and the merger. The Genelabs board of directors unanimously declared the advisability of the merger agreement and recommends that Genelabs’ shareholders tender their shares pursuant to the tender offer.

The tender offer will expire at 12:00 midnight EST on Wednesday, December 10, 2008, unless extended in accordance with the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission (SEC). The offer is subject to various conditions, including the acquisition by GSK of 90 percent of the outstanding shares of Genelabs’ common stock on a fully diluted basis.

GSK today will file with the SEC a tender offer statement on Schedule TO setting forth in detail the terms of the tender offer. Genelabs today will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 setting forth in detail, among other things, the recommendation of Genelabs’ board of directors that Genelabs’ shareholders accept the tender offer and tender their shares pursuant to the tender offer. Questions and requests for assistance may be directed to the Information Agent for the offer, MacKenzie Partners, Inc., at (212) 929-5500 or (800) 322-2885 (toll free).

About GlaxoSmithKline plc

GlaxoSmithKline plc — one of the world’s leading research-based pharmaceutical and healthcare companies — is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For company information including a copy of this announcement and details of the company’s updated product development pipeline, visit GSK at www.gsk.com.

About Genelabs

Genelabs is a biopharmaceutical company focused on the discovery and development of novel compounds for infectious diseases. In addition to a late-stage drug candidate for hepatitis E partnered with GlaxoSmithKline, the company is advancing multiple partnered and proprietary compounds designed to selectively inhibit replication of the hepatitis C virus. For more information, please visit www.genelabs.com.

Cowen and Company was the exclusive financial advisor to Genelabs in this transaction.

###

This announcement and the description contained herein is neither an offer to purchase nor a solicitation of an offer to sell shares of Genelabs. GSK and Gemstone Acquisition Corporation are filing with the SEC a tender offer statement on Schedule TO containing an offer to purchase, forms of letters of transmittal and other documents relating to the tender offer, and Genelabs is filing with the SEC a solicitation/recommendation statement on Schedule 14D-9, with respect to the tender offer. GSK, Gemstone Acquisition Corporation and Genelabs are mailing these documents to the shareholders of Genelabs. These documents contain important information about the tender offer and shareholders of Genelabs are urged to read them carefully. Shareholders of Genelabs will be able to obtain a free copy of these documents (when they become available) and other documents filed by Genelabs or GSK with the SEC at the website maintained by the SEC at www.sec.gov. In addition, shareholders will be able to obtain a free copy of these documents (when they become available) from Genelabs by contacting Genelabs at 505 Penobscot Drive, Redwood City, California 94063.

Enquiries:

UK Media enquiries:
Philip Thomson	(020) 8047 5502
Claire Brough	(020) 8047 5502
Alice Hunt	(020) 8047 5502
Gwenan White	(020) 8047 5502
US Media enquiries:
Nancy Pekarek	(919) 483 2839
Mary Anne Rhyne	(919) 483 2839
Sarah Alspach	(215) 751 7709
Melinda Stubbee	(919) 483 2510
European Analyst/Investor enquiries:
David Mawdsley	(020) 8047 5564
Sally Ferguson	(020) 8047 5543
Gary Davies	(020) 8047 5503
US Analyst/ Investor enquiries:
Tom Curry	(215) 751 5419
Registered in England & Wales:
No. 3888792
Registered Office:
980 Great West Road
Brentford, Middlesex

TW8 9GS

2

EX-99.A.1.H

Exhibit (a)(1)(H)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated November 12, 2008, and the related Letter of Transmittal and any amendments or supplements thereto. Purchaser (as defined below) is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, Purchaser will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Purchaser cannot comply with the state statute, Purchaser will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state. Except as set forth above, the Offer is being made to all holders of Shares. In any jurisdiction where the securities, “blue sky” or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

Notice of Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

GENELABS TECHNOLOGIES, INC.

at

$1.30 Net Per Share

by

Gemstone Acquisition Corporation

a wholly-owned subsidiary of

GlaxoSmithKline plc

     Gemstone Acquisition Corporation, a California corporation (“Purchaser”) and a wholly-owned subsidiary of SmithKline Beecham Corporation, a Pennsylvania corporation (“SKB”) and a wholly-owned subsidiary of GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), is offering to purchase all outstanding shares of common stock, no par value (the “Shares”), of Genelabs Technologies, Inc., a California corporation (“Genelabs”), at a price of $1.30 per Share, net to the seller in cash (the “Offer Price”) without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 12, 2008, and in the related Letter of Transmittal (which, together with the Offer to Purchase, as amended or supplemented from time to time, collectively constitute the “Offer”). Tendering shareholders who have Shares registered in their names and who tender directly to Computershare, Inc. (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Shareholders who hold their Shares through a broker or bank should consult with such institution as to whether it charges any service fees or commissions.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 10, 2008, UNLESS THE OFFER IS EXTENDED.

     The Offer is not subject to any financing condition. The Offer is subject to other conditions, including the condition that, at the expiration of the Offer, there have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then beneficially owned by GSK, SKB, Purchaser and their wholly-owned subsidiaries, constitutes at least 90 percent of the total number of the then outstanding Shares on a “fully diluted basis” (which means, as of any time, the number of Shares outstanding, together with all Shares that are issuable upon exercise of any then outstanding warrants, options, benefit plans, or obligations or securities convertible or exchangeable into Shares or otherwise, excluding Shares that are issuable upon the exercise of options and warrants that have an exercise price greater than the Offer Price). This condition is referred to as the “Minimum Tender Condition.” If more than 50 percent of the then outstanding Shares and less than 90 percent of the Shares then outstanding on a fully diluted basis are tendered pursuant to the Offer and not withdrawn, Purchaser may, under certain circumstances described in the Offer to Purchase, either exercise the top-up option (as defined in the Offer to Purchase) and reduce the number of Shares required to satisfy the Minimum Tender Condition or reduce the number of shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding. The Offer is also subject to certain other terms and conditions. See Section 13 of the Offer to Purchase—“Conditions of the Offer.”

     The purpose of the Offer is for GSK, through Purchaser, to acquire control of, and the entire equity interest in, Genelabs. Following the consummation of the Offer, Purchaser intends to effect the Merger (as defined below).

     The Offer is being made pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 29, 2008, among Purchaser, SKB and Genelabs, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Genelabs and Genelabs will be the surviving corporation (the “Merger”), and each outstanding Share (other than Shares held in the treasury of Genelabs or owned by GSK or any wholly-owned subsidiary of GSK or Genelabs or held by shareholders who continue to own their Shares at the time of the Merger and fulfill certain other requirements of the California General Corporation Law to demand and perfect dissenters’ rights) will, by virtue of the Merger and without any action by the holder thereof, be canceled and converted into the right to receive an amount in cash equal to the per Share price paid pursuant to the Offer, without interest and subject to applicable withholding taxes, payable to the holder thereof upon surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in the Offer to Purchase.

     The Genelabs board of directors has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, Genelabs and the holders of Shares and adopted and approved the Merger Agreement, the Offer and the Merger. The Genelabs board of directors unanimously declared the advisability of the Merger Agreement and

2

recommends that the holders of Shares and tender their Shares pursuant to the Offer.

     Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission (the “Commission”), Purchaser reserves the right, at any time or from time to time, to waive or otherwise modify or amend the terms and conditions of the Offer in any respect; provided that, pursuant to the Merger Agreement, Purchaser has agreed that it will not, without the prior written consent of Genelabs, amend or waive the Minimum Tender Condition, provided that, Purchaser may, under certain circumstances described in the Offer to Purchase, either exercise the top-up option and reduce the number of Shares required to satisfy the Minimum Tender Condition or reduce the number of shares subject to the Offer to a number equal to 49.9 percent of the Shares then outstanding. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Commission, Purchaser reserves the right to, and under certain circumstances Genelabs may require Purchaser to, extend the Offer, as described in Section 1 of the Offer to Purchase. Pursuant to Rule 14d-11 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and subject to the provisions of the Merger Agreement, Purchaser may elect to provide a subsequent offering period of between three and twenty business days upon expiration of the Offer. Purchaser does not currently intend to provide any subsequent offering period.

     Any extension of the Offer, waiver, amendment of the Offer, delay in acceptance for payment or payment or termination of the Offer will be followed, as promptly as practicable, by public announcement thereof, such announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date (as defined in Section 1 of the Offer to Purchase).

     For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn if and when Purchaser gives oral or written notice to the Depositary of Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering shareholders for the purpose of receiving payments from Purchaser and transmitting such payments to the tendering shareholders. Under no circumstances will interest be paid on the purchase price for Shares, regardless of any extension of the Offer or any delay in making payment for Shares.

     In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares or timely confirmation of the book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal.

3

     Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders are irrevocable, except that, unless Purchaser has previously accepted them for payment, Shares tendered may also be withdrawn at any time after January 10, 2009. For a withdrawal of Shares to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the record holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to Purchase), unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Shares and must otherwise comply with DTC’s procedures. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers shown on such certificates must also be furnished to the Depositary as aforesaid prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, which determination shall be final and binding. No withdrawal of Shares shall be deemed to have been properly made until all defects and irregularities have been cured or waived. None of GSK, SKB, Purchaser, the Depositary, the Information Agent (listed below), or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures for tendering Shares described in Section 3 of the Offer to Purchase at any time prior to the Expiration Date.

     The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

     The Offer to Purchase and related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Genelabs’ shareholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

     The receipt of cash as payment for the Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. Holders of Shares are urged to consult with their own tax advisors as to the particular tax consequences of the Offer and the Merger to them.

     The Offer to Purchase and the related Letter of Transmittal and Genelabs’ Solicitation/Recommendation Statement on Schedule 14D-9 filed with the

4

Commission in connection with the Offer contain important information and these documents should be read carefully and in their entirety before any decision is made with respect to the Offer.

     Questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchaser’s expense. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

November 12, 2008

EX-99.D.1

Exhibit (d)(1)

Execution Copy

AGREEMENT AND PLAN OF MERGER

among

SMITHKLINE BEECHAM CORPORATION,

GEMSTONE ACQUISITION CORPORATION

and

GENELABS TECHNOLOGIES, INC.

Dated as of October 29, 2008

1 

TABLE OF CONTENTS

	Page
ARTICLE I
THE OFFER
Section 1.1. The Offer		2
Section 1.2. Company Consent; Schedule 14D-9		5
Section 1.3. Shareholder Lists		5
Section 1.4. Directors		6
Section 1.5. Top-Up Option		7
ARTICLE II
THE MERGER
Section 2.1. The Merger		8
Section 2.2. Closing; Effective Time		8
Section 2.3. Effects of the Merger		9
Section 2.4. Articles of Incorporation; Bylaws		9
Section 2.5. Directors and Officers		9
Section 2.6. Special Meeting		9
Section 2.7. Merger Without Meeting of Shareholders		9
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
Section 3.1. Conversion of Securities		10
Section 3.2. Treatment of Equity Awards and ESPP		10
Section 3.3. Dissenting Shares		11
Section 3.4. Surrender of Shares		12
Section 3.5. Withholding Taxes		13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1. Organization and Qualification; Subsidiaries		13
Section 4.2. Articles of Incorporation and Bylaws		14
Section 4.3. Capitalization		14
Section 4.4. Authority		16
Section 4.5. No Conflict; Required Filings and Consents		16
Section 4.6. Compliance		17
Section 4.7. SEC Filings; Financial Statements		19
Section 4.8. Absence of Certain Changes or Events		21
Section 4.9. Absence of Litigation		22
Section 4.10. Employee Benefit Plans		22
Section 4.11. Labor and Employment Matters		24
Section 4.12. Insurance		25
Section 4.13. Properties		25

i

TABLE OF CONTENTS
(continued)

	Page
Section 4.14. Tax Matters		26
Section 4.15. Schedule 14D-9; Offer Documents; Information Statement		28
Section 4.16. Intellectual Property		29
Section 4.17. Environmental Matters		31
Section 4.18. Contracts		33
Section 4.19. Affiliate Transactions		34
Section 4.20. Opinion of Financial Advisor		34
Section 4.21. Brokers; Certain Fees		35
Section 4.22. Takeover Laws		35
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 5.1. Organization		35
Section 5.2. Authority		35
Section 5.3. No Conflict; Required Filings and Consents		36
Section 5.4. Absence of Litigation		37
Section 5.5. Offer Documents; Schedule 14D-9; Information Statement		37
Section 5.6. Brokers		37
Section 5.7. Financing		37
ARTICLE VI
COVENANTS
Section 6.1. Conduct of Business of the Company Pending the Merger		38
Section 6.2. Access to Information; Confidentiality		40
Section 6.3. Acquisition Proposals		41
Section 6.4. Employment and Employee Benefits Matters		44
Section 6.5. Directors’ and Officers’ Indemnification and Insurance		45
Section 6.6. Further Action; Efforts		46
Section 6.7. Takeover Laws		48
Section 6.8. Information Statement		48
Section 6.9. Subsequent Filings; Certain Information		49
Section 6.10. Public Announcements		49
Section 6.11. Notification		49
Section 6.12. Approval of Compensation Actions		50
Section 6.13. Dispositions		50
Section 6.14. Subsidiaries		50
ARTICLE VII
CONDITIONS OF MERGER
Section 7.1. Conditions to Obligation of Each Party to Effect the Merger		50

ii

TABLE OF CONTENTS
(continued)

	Page
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1. Termination by Mutual Agreement		51
Section 8.2. Termination by Either Parent or the Company		51
Section 8.3. Termination by the Company		51
Section 8.4. Termination by Parent		52
Section 8.5. Effect of Termination		52
Section 8.6. Expenses		54
Section 8.7. Amendment		54
Section 8.8. Waiver		54
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. Non-Survival of Representations, Warranties, Covenants and Agreements		54
Section 9.2. Notices		55
Section 9.3. Certain Definitions		56
Section 9.4. Severability		57
Section 9.5. Entire Agreement; Assignment		57
Section 9.6. Parties in Interest		57
Section 9.7. Governing Law		57
Section 9.8. Headings		57
Section 9.9. Counterparts		57
Section 9.10. Specific Performance; Jurisdiction		57
Section 9.11. Interpretation		58
Section 9.12. No Other Representations or Warranties		58
INDEX OF DEFINED TERMS
Acquisition Proposal		44
Affiliate		56
Agreement		1
Agreement of Merger		8
Alternative Acquisition Agreement		43
Antitrust Laws		17
Articles of Incorporation		14
Balance Sheet		21
beneficial owner		56
beneficially owned		56
Business Day		56
Bylaws		14
California WARN Act		25
Capitalization Date		15
Certificates		12
CGCL		8
Change of Board Recommendation		41
Closing		8
Closing Date		8
Code		23
Company		1
Company Board		1
Company Board Recommendation		16
Company Disclosure Schedule		13
Company Employees		22
Company Plans		22

iii

TABLE OF CONTENTS
(continued)

	Page
Company Registered Intellectual Property		29
Company Requisite Vote		16
Company Securities		15
Company Stock Plans		10
Compensation Actions		22
Confidentiality Agreement		6
Continuing Directors		7
Contract		17
control		56
Control Time		38
controlled		56
controlled by		56
Copyrights		29
Current Employees		44
Demand Notice		11
Dissenting Shares		11
DOJ		47
Effective Time		8
employee benefit plan		22
Environmental Claim		32
Environmental Laws		32
Environmental Permits		32
ERISA		22
ERISA Affiliate		23
ESPP		11
Exchange Act		2
Expiration Date	Exhibit A
FDA		17
Financial Advisor		34
Financial Statements		19
FTC		47
Fully Diluted Shares		56
GAAP		56
Governmental Entity		17
GSK		3
Indemnified Parties		45
Indemnified Party		45
Independent Directors		7
Information Statement		28
Initial Expiration Date		2
Intellectual Property		29
Inventions		29
IRS		23
knowledge		56
Law		16
Licensed-In Agreement		33
Licensed-In Intellectual Property		33
Liens		15
Material Adverse Effect		14
Material Contract		34
Materials of Environmental Concern		32
Merger		1
Merger Agreement	Exhibit A
Merger Consideration		10
Minimum Tender Condition	Exhibit A
Nasdaq		2
Notice Period		43
Offer		1
Offer Conditions		2
Offer Documents		4
Offer Price		1
Option		10
Option Exercise Minimum Number		3
Outside Date		51
Owned Intellectual Property		29
owns beneficially		56
Parent		1
Parent Disclosure Schedule		35
Patents		29
Paying Agent		12
Permits		17
Permitted Liens		26
Person		56
Preferred Stock		14
Proceeding		22
Purchase Time		9
Purchaser		1
Purchaser Material Adverse Effect		35
Release		32
Restricted Shares		56
Revised Minimum Number		4
Schedule 14D-9		5
Schedule TO		4
SEC		2
SEC Reports		19
Securities Act		8
Shares		1
Special Meeting		9

v

TABLE OF CONTENTS
(continued)

	Page
Subsidiary		56
Subsidiary Securities		15
Superior Proposal		44
Surviving Corporation		8
Takeover Laws		35
Tax		27
Tender Agreement		1
Top-Up Option		7
Top-Up Shares		7
Trade Secrets		29
Trademarks		29
under common control with		56
USRPHC		27
WARN Act		25
Warrant		15

v

AGREEMENT AND PLAN OF MERGER

          AGREEMENT AND PLAN OF MERGER, dated as of October 29, 2008 (this “Agreement”), among SmithKline Beecham Corporation, a Pennsylvania corporation (“Parent”), Gemstone Acquisition Corporation, a California corporation and wholly-owned Subsidiary of Parent (“Purchaser”), and Genelabs Technologies, Inc., a California corporation (the “Company”).

          WHEREAS, Parent and the Board of Directors of each of Purchaser and the Company has approved the acquisition of the Company by Parent on the terms and conditions set forth in this Agreement;

          WHEREAS, on the terms and subject to the conditions set forth herein, Purchaser has agreed to commence a tender offer (the “Offer”) to purchase all outstanding shares of common stock, no par value, of the Company (the “Shares”), at a price of $1.30 per Share, net to the seller in cash (such price, or any higher price as may be paid in the Offer in accordance with this Agreement, the “Offer Price”), without interest;

          WHEREAS, following consummation of the Offer, on the terms and subject to the conditions set forth herein, Purchaser shall merge with and into the Company (the “Merger”) and each Share that is issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company or owned by Parent or any direct or indirect wholly-owned Subsidiary of Parent or the Company immediately prior to the Effective Time, which will be canceled with no consideration paid in exchange therefor, and other than Dissenting Shares) will be canceled and converted into the right to receive cash in an amount equal to the Offer Price, all upon the terms and conditions set forth herein;

          WHEREAS, the Board of Directors of the Company (the “Company Board”) has, on the terms and subject to the conditions set forth herein, unanimously (i) determined that the transactions contemplated by this Agreement are fair to, and in the best interests of, the shareholders of the Company, (ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with applicable Law, and (iii) determined to recommend that the Company’s shareholders accept the Offer and tender their Shares to Purchaser and, to the extent applicable, approve this Agreement;

          WHEREAS, the Board of Directors of Purchaser has, on the terms and subject to the conditions set forth herein, unanimously approved and declared advisable this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and Parent or a wholly-owned Subsidiary of Parent (in each case, in its capacity as the sole shareholder of Purchaser) has approved this Agreement;

          WHEREAS, as an inducement to and condition of Parent’s willingness to enter into this Agreement, the persons listed in Annex 1(a) have entered into tender and support agreements (the “Tender Agreements”), the form of which is attached as Annex 1(b), immediately prior to the execution and delivery of this Agreement; and

          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Purchaser and the Company hereby agree as follows:

ARTICLE I

THE OFFER

          SECTION 1.1. The Offer. (a) (i) Provided that this Agreement shall not have been terminated in accordance with Article VIII and that none of the events set forth in Paragraph (2) of Exhibit A hereto shall exist or have occurred and be continuing, Purchaser shall, and Parent shall cause Purchaser to, use reasonable best efforts to commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) prior to the fifth (5^th) Business Day after the date hereof (but in no event later than the tenth (10^th) Business Day after the date hereof, provided that the Company shall be prepared to disseminate to its shareholders its Schedule 14d-9 and Schedule 14f-1 within such time period) the Offer to purchase all outstanding Shares at the Offer Price. The obligations of Purchaser (and of Parent to cause Purchaser) to accept for payment and to pay for any Shares tendered pursuant to the Offer shall be subject only to the satisfaction or waiver of those conditions set forth in Exhibit A hereto (the “Offer Conditions”). The initial expiration date (the “Initial Expiration Date”) of the Offer shall be the twentieth (20^th) Business Day following (and including the day of) the commencement of the Offer. Purchaser expressly reserves the right (but shall not be obligated) at any time or from time to time in its sole discretion to waive any Offer Condition or modify or amend the terms of the Offer, except that, without the prior written consent of the Company, Purchaser shall not decrease the Offer Price or change the form of the consideration payable in the Offer, or, except pursuant to Section 1.1(b), (A) decrease the number of Shares sought pursuant to the Offer, (B) amend or waive the Minimum Tender Condition (as defined in Exhibit A), (C) add to the conditions set forth on Exhibit A, (D) modify the conditions set forth on Exhibit A in a manner that is adverse to the holders of Shares or (E) extend the expiration date of the Offer except as required or permitted by Section 1.1(a)(ii) or (iii).

          (ii) Subject to the terms and conditions of this Agreement and to the satisfaction or waiver by Purchaser of the Offer Conditions as of the time of any scheduled expiration of the Offer, Purchaser shall, and Parent shall cause Purchaser to, accept for payment and pay for Shares validly tendered and not withdrawn pursuant to the Offer as soon as practicable after such scheduled expiration and Purchaser shall, and Parent shall cause Purchaser to, immediately accept and promptly pay for all Shares as they are validly tendered during any subsequent offer period. Purchaser may, in its sole discretion and without the consent of the Company, (A) extend the Offer for one or more periods of time of up to ten (10) Business Days per extension if at any scheduled expiration of the Offer any of the Offer Conditions are not satisfied, (B) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the “SEC”) or the staff thereof or The Nasdaq Stock Market (“Nasdaq”) applicable to the Offer, or (C) elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. The Offer Price may be increased, and the Offer may be extended to the extent required by Law in

2

connection with such increase in the Offer Price, in each case without the consent of the Company.

          (iii) Subject to the terms and conditions of this Agreement, Purchaser shall extend the Offer on one or more occasions for periods determined by Purchaser of up to ten (10) Business Days per extension if, at any scheduled expiration of the Offer, any of the Offer Conditions has not been satisfied or waived; provided, that if, at any scheduled expiration of the Offer, any of the circumstances described in the following clauses (A), (B) or (C) exists, Purchaser shall not be obligated to extend the Offer unless required by applicable Law or any applicable rule or regulation of Nasdaq (but shall be entitled to extend the Offer to the extent permitted by clause (ii) above): (A) the Offer Condition set forth in Paragraph 1(a) of Exhibit A is not satisfied, but all other Offer Conditions are satisfied or waived; (B) the Offer Condition set forth in Paragraph 2(a) of Exhibit A is neither satisfied nor waived (other than by reason of a judgment, injunction or order that is not final or remains subject to appeal); or (C) the Offer Condition set forth in Paragraph 2(d) of Exhibit A is not satisfied or waived and the breach or failure to perform or comply or to be true and correct that caused such non-satisfaction is not capable of being cured within ten (10) days after receipt by the Company of notice of such breach or failure (it being understood that a failure to comply with Section 6.3 shall not be deemed capable of being cured) or, if capable of being cured within such period, has not been cured within such period; and provided, further, that in no circumstance shall Purchaser be required to extend the Offer (1) beyond the Outside Date or (2) at any time that Parent or Purchaser is permitted to terminate this Agreement pursuant to Article VIII.

          (b) Notwithstanding anything to the contrary set forth herein, if, at the end of the initial expiration of the Offer or any extension thereof permitted or required pursuant to Sections 1.1(a)(ii) and 1.1(a)(iii), the Minimum Tender Condition is not satisfied but the number of Shares then validly tendered in the Offer and not properly withdrawn, taken together with the number of Shares, if any, then owned beneficially by GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales (“GSK”), Parent and Purchaser (together with their wholly-owned Subsidiaries), constitutes a majority of the Shares then outstanding, then, Purchaser may, in its discretion, without the consent of the Company and subject to any right of Parent or Purchaser to terminate this Agreement pursuant to the terms hereof:

     (i) extend the Offer pursuant to Section 1.1(a)(ii);

     (ii) in contemplation of the exercise of the Top-Up Option, reduce the Minimum Tender Condition to that number of Shares equal to the number of Shares (the “Option Exercise Minimum Number”) that when added to the maximum number of Top-Up Shares issuable in compliance with the terms of Section 1.5 (as certified in writing by the Company), equals one share more than ninety percent (90%) of the Fully Diluted Shares; or

     (iii) amend the Offer to reduce the number of Shares subject to the Offer to a number of shares that when added to the number of Shares then owned by GSK, Parent and Purchaser (together with their wholly-owned Subsidiaries), would equal forty-nine and nine-tenths percent (49.9%) of the Shares then outstanding (the “Revised Minimum

3

Number”) and reduce the Minimum Tender Condition to that number of Shares equal to the Revised Minimum Number and, subject to the prior satisfaction or waiver of the other Offer Conditions, purchase, on a pro rata basis, the number of Shares comprising the Revised Minimum Number. Notwithstanding any other provision of this Agreement, in the event that Purchaser amends the Offer and purchases a number of Shares equal to the Revised Minimum Number, then without the prior written consent of Purchaser, at any time prior to the termination of this Agreement, the Company shall take no action whatsoever (including, without limitation, the redemption of any Shares) that would have the effect of increasing the percentage ownership of Shares by GSK, Parent and Purchaser (together with their wholly-owned Subsidiaries) in excess of the Revised Minimum Number.

          (c) If, at any scheduled expiration of the Offer occurring prior to the tenth (10^th) Business Day after the Initial Expiration Date, the Offer Condition set forth in Paragraph 1(a) of Exhibit A is not satisfied, but all other Offer Conditions are satisfied or waived, then, notwithstanding Section 1.1(a)(iii), at the request of the Company, Purchaser shall extend the Offer on one or more occasions for periods determined by Purchaser of up to ten (10) Business Days per extension. If, as of any scheduled expiration of the Offer that is at least ten (10) Business Days after the Initial Expiration Date, (i) the number of Shares tendered pursuant to the Offer and not withdrawn as of such scheduled expiration date, taken together with the number of Shares then owned by GSK, Parent, Purchaser and any other Subsidiary of GSK constitutes a majority of the Shares then outstanding, (ii) all Offer Conditions other than the condition set forth in Paragraph 1(a) of Exhibit A are satisfied or waived and (iii) the Shares tendered pursuant to the Offer have not been accepted for payment by Purchaser, then Purchaser shall be required to take either the actions contemplated by Section 1.1(b)(ii) or the actions contemplated by Section 1.1(b)(iii) such that the Offer will expire not later than the tenth (10^th) Business Day following such scheduled expiration date, it being understood that Purchaser shall be required to take the actions described in Section 1.1(b)(ii) only if the exercise of the Top-Up Option would, when combined with the number of Shares then tendered pursuant to the Offer and not withdrawn, result in Purchaser holding one share more than ninety percent (90%) of the Fully Diluted Shares.

          On the date of commencement of the Offer, Parent and Purchaser shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (collectively with all amendments and supplements thereto, the “Schedule TO”) with respect to the Offer which shall contain the offer to purchase and related letter of transmittal and summary advertisement and other ancillary Offer documents and instruments pursuant to which the Offer will be made (collectively with any supplements or amendments thereto, the “Offer Documents”). The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to their filing with the SEC. Parent and Purchaser agree (i) to provide the Company with, and to consult with the Company regarding, any comments that may be received from the SEC or its staff with respect to the Offer Documents promptly after receipt thereof and prior to responding thereto and (ii) to provide the Company with any comments or responses thereto. If at any time prior to the Closing, any information relating to the Offer, the Merger, the Company, Parent, Purchaser or any of their respective Affiliates, directors or officers, should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Offer Documents, so that the Offer Documents shall not contain any untrue statement of a

4

material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party which discovers such information shall promptly notify the other party, and an appropriate amendment or supplement describing such information shall be filed with the SEC and disseminated to the shareholders of the Company, as and to the extent required by applicable Law. In the event that Parent or Purchaser receives any comments from the SEC or its staff with respect to the Offer Documents, each shall use its commercially reasonable efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein. Parent shall provide or cause to be provided to Purchaser on a timely basis the funds necessary to purchase any Shares that Purchaser becomes obligated to purchase pursuant to the Offer.

          SECTION 1.2. Company Consent; Schedule 14D-9. (a) The Company hereby approves of and consents to the Offer.

          (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto, the “Schedule 14D-9”) containing, subject to Section 6.3(d), the recommendations of the Company Board described in Section 4.4(b). The Company hereby consents to the inclusion of the recommendations of the Company Board described in Section 4.4(b) in the Offer Documents and to the inclusion of a copy of the Schedule 14D-9 with the Offer Documents mailed or furnished to the Company’s shareholders. Parent and Purchaser shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 prior to its filing with the SEC. The Company agrees to (i) provide Parent and Purchaser with, and to consult with Parent and Purchaser regarding, any comments that may be received from the SEC or its staff with respect to the Schedule 14D-9 promptly upon receipt thereof and prior to responding thereto, and (ii) provide Parent and Purchaser with any comments or responses thereto. If, at any time prior to the expiration of the Offer, any information relating to the Offer, the Merger, the Company, Parent, Purchaser or any of their respective Affiliates, directors or officers should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Schedule 14D-9 such that the Schedule 14D-9 would not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party which discovers such information shall promptly notify the other party, and an appropriate amendment or supplement describing such information shall be filed with the SEC and disseminated to the shareholders of the Company, as and to the extent required by applicable Law. In the event that the Company receives any comments from the SEC or its staff with respect to the Schedule 14D-9, it shall use its commercially reasonable efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein.

          SECTION 1.3. Shareholder Lists. In connection with the Offer, the Company shall cause its transfer agent to, promptly (but in any event within two (2) Business Days after the date hereof), furnish Parent and Purchaser with mailing labels, security position listings and any available listing or computer file containing the names and addresses of the record holders of the Shares as of the latest practicable date and shall furnish Parent and Purchaser with such information and assistance (including periodic updates of such information) as Parent or

5

Purchaser or their agents may reasonably request in communicating the Offer to the record and beneficial holders of the Shares. Subject to the requirements of applicable Law, and except for such actions as are reasonably necessary to disseminate the Offer Documents and otherwise to perform its obligations hereunder, each of Parent and Purchaser shall hold all information and documents provided to it under this Section 1.3 in confidence in accordance with the Confidentiality Agreement, dated as of September 30, 2008, as amended, by and between the Company and Parent (the “Confidentiality Agreement”), and shall use such information and documents only in connection with the Offer and the Merger.

          SECTION 1.4. Directors. (a) Promptly upon the acceptance by Purchaser of, and payment for, such number of Shares tendered in the Offer as satisfies the Offer Condition set forth in Paragraph 1(a) of Exhibit A and from time to time thereafter, Purchaser shall be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board as will give Purchaser representation on the Company Board equal to the product of (x) the total number of directors on the Company Board (after giving effect to any increase in the number of directors pursuant to this Section 1.4) and (y) the percentage that such number of Shares so purchased bears to the total number of Shares outstanding, and the Company shall, upon request by Purchaser, promptly increase the size of the Company Board or use its reasonable best efforts to secure the resignations of such number of directors as is necessary to provide Purchaser with such level of representation and shall cause Purchaser’s designees to be so elected or appointed. The Company shall also use its reasonable best efforts to cause individuals designated by Purchaser to constitute the same percentage of each committee of the Company Board (and of each board of directors and each committee thereof of each wholly-owned Subsidiary of the Company) as the percentage of the entire Company Board represented by individuals designated by Purchaser, to the extent permitted by applicable Law, including the Nasdaq rules. The Company’s obligations to appoint designees to the Company Board shall be subject to Section 14(f) of the Exchange Act. At the request of Purchaser, the Company shall take all actions necessary to effect any such election or appointment of Purchaser’s designees, including mailing to its shareholders the information required by Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder which, unless Purchaser otherwise elects, shall be so mailed together with the Schedule 14D-9. Parent and Purchaser will supply to the Company all information with respect to themselves and their respective officers, directors and Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder.

          (b) Following the election or appointment of Purchaser’s designees to the Company Board pursuant to Section 1.4(a) and prior to the Effective Time, (i) except as provided in clause (ii) below, any resolution, consent or other action by the Company Board will require, in addition to any authorization required under the Company’s articles of incorporation or bylaws, the authorization of a majority of Purchaser’s designees to the Company Board and (ii) any amendment or termination of this Agreement requiring action by the Company Board, any extension of time for the performance of any of the obligations or other acts of Parent or Purchaser under this Agreement, any waiver of compliance with any of the agreements or conditions under this Agreement that are for the benefit of the Company, any exercise of the Company’s rights or remedies under this Agreement, and any amendment to the Company’s articles of incorporation and bylaws may only be authorized by, and will require the authorization of, a majority of the directors of the Company then in office who are directors of the Company on the date hereof or their successors as appointed by such continuing directors

6

(the “Continuing Directors”); provided, however, that if there shall be no Continuing Directors as a result of such individuals’ deaths, disabilities, resignations or refusal to serve, then the actions described in clause (ii) may be effected by majority vote of the Independent Directors, or, if no Independent Directors are then in office, by a majority vote of the Company Board.

          (c) In the event that Parent’s designees are elected or appointed to the Company Board pursuant to Section 1.4(a), until the Effective Time, (i) the Company Board shall have at least such number of directors as may be required by the Nasdaq rules or the federal securities Laws who are considered independent directors within the meaning of such rules and Laws (“Independent Directors”) and (ii) each committee of the Company Board that is required (or a majority of which is required) by the Nasdaq rules or the federal securities Laws to be composed solely of Independent Directors shall be so composed; provided, however, that in such event, if the number of Independent Directors shall be reduced below the number of directors as may be required by such rules or Laws for any reason whatsoever, the remaining Independent Director(s) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of this Agreement or, if no other Independent Director then remains, the other directors shall designate such number of directors as may be required by the Nasdaq rules and the federal securities Laws, to fill such vacancies who shall not be shareholders or Affiliates of Parent or Purchaser, and such Persons shall be deemed to be Independent Directors for purposes of this Agreement.

          SECTION 1.5. Top-Up Option. (a) The Company hereby irrevocably grants to Purchaser an option (the “Top-Up Option”), exercisable, on one or more occasions, in Purchaser’s discretion, but only after the acceptance by Purchaser of, and payment for, Shares tendered in the Offer, to purchase (for cash or a note payable) that number (but not less than that number) of Shares (the “Top-Up Shares”) as is equal to the lowest number of Shares that, when added to the number of Shares owned by GSK, Parent or Purchaser at the time of such exercise, shall constitute (i) if the Offer was amended to reflect the Revised Minimum Number, forty-nine and nine-tenths percent (49.9%) of the total Shares then outstanding (assuming the issuance of the Top-Up Shares) or (ii) in all other circumstances, one share more than ninety percent (90%) of the total Shares then outstanding (assuming the issuance of the Top-Up Shares), in each case at a price per Share equal to the Offer Price; provided, however, that (x) in no event shall the Top-Up Option be exercisable for a number of Shares in excess of the Company’s then authorized and unissued Shares (including as authorized and unissued Shares, for purposes of this Section 1.5, any Shares held in the treasury of the Company), and (y) the Top-Up Option may not be exercised if any provision of applicable Law or any judgment, injunction, order or decree of any Governmental Entity shall prohibit, or require any action, consent, approval, authorization or permit of, action by, or filing with or notification to, any Governmental Entity or the Company’s shareholders in connection with the exercise of the Top-Up Option or the delivery of the Top-Up Shares in respect of such exercise, which action, consent, approval, authorization or permit, action, filing or notification has not theretofore been obtained or made, as applicable. Upon Purchaser’s request, the Company shall cause its transfer agent to certify in writing to Purchaser the number of Shares issued and outstanding immediately prior to the exercise of the Top-Up Option.

          (b) Any certificates evidencing Top-Up Shares may include any legends required by applicable securities laws.

7

          (c) Parent and Purchaser understand that the Shares that Purchaser may acquire upon exercise of the Top-Up Option will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Parent and Purchaser represent and warrant to the Company that Purchaser is, and will be upon exercise of the Top-Up Option, an “accredited investor” (as defined in Rule 501 of Regulation D promulgated under the Securities Act). Purchaser agrees that the Top-Up Option and the Top-Up Shares to be acquired upon exercise thereof are being and will be acquired for the purpose of investment and not with a view to or for resale in connection with any distribution thereof within the meaning of the Securities Act.

          (d) In the event that Purchaser wishes to exercise the Top-Up Option, it shall deliver to the Company a notice setting forth (i) the number of Top-Up Shares that it intends to purchase pursuant to the Top-Up Option, (ii) the manner in which it intends to pay the applicable exercise price and (iii) the place and time at which the closing of the purchase of the Top-Up Shares by Purchaser is to take place. At the closing of the purchase of the Top-Up Shares, Purchaser shall cause to be delivered to the Company the consideration required to be delivered in exchange for such Top-Up Shares, and the Company shall cause to be issued to Purchaser a certificate representing such shares.

ARTICLE II

THE MERGER

          SECTION 2.1. The Merger. Upon the terms and subject to the conditions of this Agreement and in accordance with the California General Corporation Law (“CGCL”), at the Effective Time, Purchaser shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Purchaser shall cease and the Company shall continue as the surviving corporation of the Merger (the “Surviving Corporation”).

          SECTION 2.2. Closing; Effective Time. Subject to the provisions of Article VII, the closing of the Merger (the “Closing”) shall take place at the offices of Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York, as soon as practicable, but in no event later than the second (2^nd) Business Day, after the satisfaction or waiver of the conditions set forth in Article VII (excluding conditions that, by their terms, cannot be satisfied until the Closing, but subject to the satisfaction or waiver of such conditions at the Closing), or at such other place or on such other date as Parent and the Company may mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date”. At the Closing, the parties hereto shall cause the Merger to be consummated by filing an agreement of merger or certificate of ownership (in either case, the “Agreement of Merger”) with the Secretary of State of the State of California, in such form as required by, and executed in accordance with, the relevant provisions of the CGCL (the date and time of the filing of the Agreement of Merger with the Secretary of State of the State of California, or such later time as is specified in the Agreement of Merger and as is agreed to by the parties hereto, being hereinafter referred to as the “Effective Time”) and shall make all other filings or recordings required under the CGCL in connection with the Merger.

8

          SECTION 2.3. Effects of the Merger. The Merger shall have the effects set forth herein and in the applicable provisions of the CGCL. Without limiting the generality of the foregoing and subject thereto, at the Effective Time, all the property, rights, privileges, immunities, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation and all debts, liabilities and duties of the Company and Purchaser shall become the debts, liabilities and duties of the Surviving Corporation.

          SECTION 2.4. Articles of Incorporation; Bylaws. (a)  At the Effective Time, the articles of incorporation of the Company shall, by virtue of the Merger, be amended and restated in its entirety to read as the articles of incorporation of Purchaser in effect immediately prior to the Effective Time (except that Article I thereof shall read as follows: “The name of the Corporation is Genelabs Technologies, Inc.”) and, as so amended, shall be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with its terms and as provided by law.

          (b) At the Effective Time, and without any further action on the part of the Company and Purchaser, the bylaws of the Company shall be amended and restated in their entirety so as to read as the bylaws of Purchaser as in effect immediately prior to the Effective Time (except that such bylaws shall be amended to reflect that the name of the Surviving Corporation shall be Genelabs Technologies, Inc), and, as so amended, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with their terms and the articles of incorporation of the Surviving Corporation and as provided by law.

          SECTION 2.5. Directors and Officers. The directors and officers of Purchaser immediately prior to the Effective Time shall be the directors and officers, respectively, of the Surviving Corporation, in each case until the earlier of his or her resignation or removal or until his or her successors are duly elected and qualified.

          SECTION 2.6. Special Meeting. Unless the Merger is consummated in accordance with Section 1110 of the CGCL as contemplated by Section 2.7, and subject to applicable Law, the Company, acting through its Board of Directors, shall, in accordance with applicable Law, duly call, give notice of, convene and hold a special meeting (the “Special Meeting”) of its shareholders as soon as practicable following the purchase of the Shares pursuant to the Offer (the “Purchase Time”) for the purpose of voting upon the approval of this Agreement and include in the Information Statement the Company Board Recommendation. Parent and Purchaser each agree that, at the Special Meeting, all of the Shares acquired pursuant to the Offer or otherwise owned by Parent or any of its respective Subsidiaries will be voted in favor of the Merger.

          SECTION 2.7. Merger Without Meeting of Shareholders. If, following the Offer and any subsequent offering period or the exercise of the Top-Up Option, Parent and Purchaser (together with any other direct or indirect wholly-owned Subsidiary of Parent), shall hold in the aggregate at least ninety percent (90%) of the outstanding shares of each class of capital stock of the Company, each of Parent, Purchaser and the Company shall (subject to Section 7.1) take all necessary and appropriate action to cause the Merger to become effective, as soon as practicable after the consummation of the Offer, without a meeting of shareholders of the Company, in accordance with Section 1110 of the CGCL.

9

ARTICLE III

EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS

          SECTION 3.1. Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the following securities, the following shall occur:

          (a) each Share issued and outstanding immediately prior to the Effective Time (other than any Shares to be canceled pursuant to Section 3.1(b) and any Dissenting Shares) shall be converted into the right to receive the Offer Price in cash, without interest (the “Merger Consideration”), payable to the holder thereof upon surrender of such Shares in the manner provided in Section 3.5, less any required withholding Taxes;

          (b) each Share held in the treasury of the Company and each Share owned by Parent or any direct or indirect wholly-owned Subsidiary of Parent or the Company immediately prior to the Effective Time shall be canceled and retired without any conversion thereof, and no payment or distribution shall be made with respect thereto; and

          (c) each share of common stock of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation.

          SECTION 3.2. Treatment of Equity Awards and ESPP. (a) Substantially concurrently with the approval of this Agreement by the Company Board, the Compensation Committee of the Company Board has taken all actions so that (i) each option to acquire Shares granted under the Genelabs Technologies, Inc. 1995 Stock Option Plan, Genelabs Technologies, Inc. 2001 Stock Option Plan and Genelabs Technologies, Inc. 2007 Omnibus Stock Incentive Plan, or any other Company stock plan (the “Company Stock Plans” and each such option, an “Option”), that is outstanding and unexercised, whether vested or unvested immediately prior to the Closing shall, by virtue of the occurrence of the Closing and without any action on the part of Purchaser, the Company or the holder thereof, be cancelled and shall solely represent the right to receive from the Purchaser in exchange, at the Closing or as soon as practicable thereafter, an amount in cash equal to the product of (y) the number of Shares subject to such Option and (z) the excess, if any, of the Offer Price, without interest, over the exercise price per Share subject to such Option, less any required withholding Taxes; and (ii) that each Option that is outstanding and unexercised, whether vested or unvested, shall be amended such that each such Option shall not be exercisable during the period commencing upon acceptance by Purchaser of Shares tendered in the Offer and ending on twelve days following (and including) such date.

          (b) For the avoidance of doubt, pursuant to such action of the Compensation Committee of the Company Board described in clause (a)(i), if the exercise price per Share of an Option, whether vested or unvested as of the Closing, is equal to or greater than the Offer Price, then by virtue of the occurrence of the Closing and without any action on the part of Purchaser, the Company or the holder thereof, the Option will be cancelled without payment of any consideration to the holder.

10

          (c) Substantially concurrently with the approval of this Agreement, the Compensation Committee of the Company Board or the Company Board has taken any and all actions with respect to the Company’s 2001 Employee Stock Purchase Plan (the “ESPP”) as are necessary to provide that: (i) all offering periods under the ESPP shall be terminated on November 5, 2008 and no further offering periods will commence prior to the Closing, (ii) after the date hereof, no participant in the ESPP shall be entitled to increase the rate of his or her payroll deductions into his or her account under the ESPP and (iii) the ESPP will terminate, prior to or effective immediately as of the Closing.

          (d) The Company Stock Plans shall terminate as of Closing, and any and all rights under any provisions in any other plan, program or arrangement, including any Company Plan, providing for the issuance or grant of any other interest in respect of the capital stock of the Company (other than the ESPP, which is addressed in Section 3.2(c), and the right to receive the payment contemplated by Section 3.2(a)) shall be canceled as of the Closing.

          (e) The Company shall take any actions reasonably necessary to effectuate the provisions of this Section 3.2; it being understood that the intention of the parties is that immediately following the Purchase Time no holder of any Option or Restricted Share or any participant in any Company Plan or other employee benefit arrangement of the Company shall have any right thereunder to acquire any capital stock (including any “phantom” stock or stock appreciation rights) of the Company, the Surviving Corporation or any of their Subsidiaries pursuant to such Company Plan or other arrangement. Any notice which the Company shall deliver to the holders of Options or Restricted Shares or the participants in any other Company Plan setting forth such holders’ rights pursuant to this Agreement shall be reasonably acceptable to Parent.

          SECTION 3.3. Dissenting Shares. (a)  Notwithstanding anything in this Agreement to the contrary, Shares that are issued and outstanding immediately prior to the Effective Time and which are held by holders of Shares that have made written demand upon the Company for the purchase of such Shares and payment to the holders in cash of the “fair market value” of such Shares (the “Demand Notice”) and perfected their rights in accordance with Chapter 13 of the CGCL (the “Dissenting Shares”) shall not be converted into the right to receive the Merger Consideration, and the holders thereof shall be entitled to only such rights as are granted by Chapter 13 of the CGCL; provided, however, that if any such holder shall fail to perfect or shall effectively waive, withdraw or lose such holder’s rights under Chapter 13 of the CGCL, such holder’s Shares shall not constitute Dissenting Shares and instead shall thereupon be deemed to have been converted, at the Effective Time, into the right to receive the Merger Consideration, as set forth in Section 3.1 of this Agreement, without any interest thereon.

          (b) The Company shall give Parent (i) prompt notice of any Demand Notice received by the Company, withdrawals thereof and any other instruments served pursuant to Chapter 13 of the CGCL and received by the Company, and (ii) the opportunity to direct all negotiations and proceedings with respect to the exercise of any rights of the holder of Dissenting Shares under Chapter 13 of the CGCL. The Company shall not, except with the prior written consent of Parent or as otherwise required by applicable Law, make any payment with respect to any such exercise of any such rights of the holder of Dissenting Shares under Chapter 13 of the CGCL or offer to settle or settle any such rights.

11

          SECTION 3.4. Surrender of Shares. (a)  From time to time after the Effective Time, Parent shall deposit (or cause to be deposited) with a bank or trust company designated by Parent and reasonably acceptable to the Company (the “Paying Agent”) sufficient funds to timely make, and shall cause the Paying Agent to timely make, all payments pursuant to Section 3.5(b). Such funds may be invested by the Paying Agent as directed by Parent; provided, that such investments shall be in short-term obligations of the United States of America with maturities of no more than thirty (30) days or guaranteed by the United States of America and backed by the full faith and credit of the United States of America or in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively. Any interest or income produced by such investments will be payable to the Surviving Corporation or Parent, as Parent directs.

          (b) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each record holder, as of the Effective Time, of an outstanding certificate or certificates which immediately prior to the Effective Time represented Shares (the “Certificates”), a form of letter of transmittal (which shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Certificates for payment of the Merger Consideration therefor. Upon surrender to the Paying Agent of a Certificate, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each Share formerly represented by such Certificate, and such Certificate shall then be canceled. No interest shall be paid or accrued for the benefit of holders of the Certificates on the Merger Consideration payable in respect of the Certificates. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the Person requesting such payment shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such Tax either has been paid or is not applicable. Until surrendered as contemplated by this Section 3.5(b), each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the applicable Merger Consideration as contemplated by this Article III.

          (c) At any time following the date that is six (6) months after the Effective Time, Parent shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) which have been made available to the Paying Agent and which have not been disbursed to holders of Certificates and thereafter such holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates. The Surviving Corporation shall pay all charges and expenses, including those of the Paying Agent, in connection with the exchange of Shares for the Merger Consideration.

12

          (d) After the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Shares that were outstanding prior to the Effective Time. After the Effective Time, Certificates presented to the Surviving Corporation for transfer shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth in, this Article III.

          (e) In the event that any Certificate shall have been lost, stolen or destroyed, upon the holder’s compliance with the replacement requirements established by the Paying Agent, including the posting by the holder of a bond in customary amount as indemnity against any claim that may be made against it with respect to the Certificate, the Paying Agent will deliver in exchange for the lost, stolen or destroyed Certificate the applicable Merger Consideration payable in respect of the Shares represented by such Certificate pursuant to this Article III.

          SECTION 3.5. Withholding Taxes. Notwithstanding anything in this Agreement to the contrary, Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to the Offer, the Merger or otherwise pursuant to this Agreement any amount as may be required to be deducted and withheld with respect to the making of such payment under applicable Tax Laws. To the extent that amounts are so withheld by the Paying Agent, the Surviving Corporation or Parent, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares or other Person in respect of which such deduction and withholding was made by the Paying Agent, the Surviving Corporation or Parent, as the case may be.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as set forth in the correspondingly numbered Section of the disclosure schedule delivered by the Company to Parent and Purchaser prior to the execution of this Agreement (the “Company Disclosure Schedule”) (provided, however, that (x) a matter disclosed with respect to one representation or warranty shall also be deemed to be disclosed with respect to each other representation or warranty to which the matter disclosed reasonably relates, but only to the extent such relationship is reasonably apparent on the face of the disclosure contained in the Company Disclosure Schedule with respect to such matter, and (y) any reference in the Company Disclosure Schedule to any SEC Report shall not be deemed to include any disclosures to the extent they do not relate to historical or existing facts, events, changes, effects, developments, conditions or occurrences, or are cautionary and forward-looking in nature), the Company hereby represents and warrants to Parent and Purchaser as follows:

          SECTION 4.1. Organization and Qualification; Subsidiaries. (a) The Company and each of its Subsidiaries is a duly organized and validly existing corporation or other entity in good standing (where applicable) under the Laws of its jurisdiction of incorporation or organization, with all corporate or other entity power and authority to own its properties and conduct its business as currently conducted and is duly qualified and in good standing as a foreign corporation or entity authorized to do business in each of the jurisdictions in which the

13

character of the properties owned or held under lease by it or the nature of the business transacted by it makes such qualification necessary, except as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. “Material Adverse Effect” means any change, effect, event or occurrence that has a material adverse effect on (i) the business, condition (financial or otherwise), operations or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) the ability of the Company to timely perform its obligations under this Agreement or to timely consummate the transactions contemplated hereby; provided, however, that, in the case of clause (i) only, changes, effects, events or occurrences shall not be deemed to constitute a Material Adverse Effect to the extent resulting from (1) general changes after the date hereof in general economic, financial, regulatory or market conditions or in the industries in which the Company operates; (2) the announcement or pendency of this Agreement or the transactions contemplated hereby, including any adverse effect resulting from any action taken by the Company with the prior written consent of Parent or Purchaser or the taking of any action expressly required by this Agreement; (3) a decrease in the market price of the Shares in and of itself (and not the underlying causes thereof); (4) acts of war or terrorism (or the escalation of the foregoing); (5) changes in any Laws or regulations applicable to the Company or applicable accounting regulations or principles or the interpretation thereof; (6) the fact, in and of itself (and not the underlying causes thereof) that the Company or its Subsidiaries failed to meet any projections, forecasts, or revenue or earnings predictions; (7) natural disasters or other force majeure events; and (8) the Company’s continuing to suffer operating losses in amounts not greater than the losses projected to be suffered by the Company in projections set forth in Section 4.1(a) of the Company Disclosure Schedule, in and of itself, so long as, in the case of clauses (1), (4), (5) and (7), such changes or events do not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, compared with other companies operating in the industries in which the Company and its Subsidiaries operate.

          (b) Section 4.1(b) of the Company Disclosure Schedule sets forth a list of each Subsidiary of the Company. The Company, alone or together with one or more of its Subsidiaries, is the record and beneficial owner of all the equity interests of each Subsidiary of the Company, free and clear of any Lien, including any limitation or restriction on the right to vote, pledge or sell or otherwise dispose of such equity interests. Neither the Company nor any of its Subsidiaries owns, directly or indirectly, beneficially or of record, any interest in any Person other than the Company’s Subsidiaries.

          SECTION 4.2. Articles of Incorporation and Bylaws. The Company has heretofore made available to Parent true, correct and complete copies of the articles of incorporation and bylaws of the Company as currently in effect, including all amendments thereto (respectively, the “Articles of Incorporation” and “Bylaws”) and of the articles of incorporation and bylaws (or similar governing documents) as currently in effect for each Subsidiary of the Company. The Articles of Incorporation and the Bylaws are in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation of any provisions of its Articles of Incorporation or Bylaws.

          SECTION 4.3. Capitalization. (a) The authorized capital stock of the Company consists of (i) 125,000,000 Shares, and (ii) 4,990,000 shares of preferred stock, no par value (the “Preferred Stock”).

14

          (b) As of the close of business on October 24, 2008 (the “Capitalization Date”): (i) 43,684,465 Shares were issued and outstanding, all of which were validly issued, fully paid and nonassessable and were issued free of preemptive rights; (ii) an aggregate of 5,979,421 Shares were reserved for issuance upon or otherwise deliverable in connection with the grant of equity-based awards or the exercise of outstanding Options issued pursuant to the Company Stock Plans; (iii) 361,726 Shares were reserved for issuance upon or otherwise deliverable pursuant to the terms of the ESPP; (iv) no shares of Preferred Stock were outstanding; (v) no Shares and no shares of Preferred Stock were held in the treasury of the Company; and (vi) 7,626,131 Shares were deliverable upon the exercise of the Company’s outstanding warrants (the “Warrants”). From the close of business on the Capitalization Date through the date of this Agreement, no options or other rights to acquire Shares or shares of Preferred Stock have been granted and no Shares or shares of Preferred Stock have been issued or sold from treasury, except for Shares issued pursuant to the exercise of Options or the Warrants in accordance with their terms. Section 4.3(b) of the Company Disclosure Schedule sets forth, as of the Capitalization Date, with respect to each Option, or other equity-based award outstanding under any Company Plan, and each Warrant, the number of Shares issuable thereunder and the expiration date and exercise or conversion price relating thereto.

          (c) Except as set forth in clauses (a) and (b) of this Section 4.3 (including Shares described therein as reserved for issuance upon the exercise of Options and the Warrants) and for the Company’s obligations under this Agreement, (i) there are not outstanding or authorized any (A) shares of capital stock or other voting securities of the Company, (B) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, or (C) options or other rights to acquire from the Company, or any obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company (collectively, “Company Securities”); (ii) there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any Company Securities; and (iii) there are no other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to any Company Securities to which the Company is a party.

          (d) All outstanding Warrants will expire at the earlier of (i) the Purchase Time (assuming no reduction to the Minimum Tender Condition) and (ii) the Closing.

          (e) The outstanding shares of capital stock or other equity interests of each of the Company’s Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares of capital stock or other equity interests are owned beneficially and of record by the Company or another Subsidiary of the Company, free and clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights, charges or other encumbrances of any nature whatsoever (“Liens”) other than Permitted Liens. There are not outstanding or authorized any (i) securities of any Subsidiary of the Company convertible into or exchangeable for shares of capital stock or voting securities of any Subsidiary of the Company or (ii) options or other rights to acquire from any Subsidiary of the Company, or any obligation of any Subsidiary of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any Subsidiary of the Company (collectively, “Subsidiary Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Subsidiary Securities, and

15

there are no other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to any Subsidiary Securities to which the Company or any of its Subsidiaries is a party.

          SECTION 4.4. Authority. (a) The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to the approval of this Agreement by the Company’s shareholders to the extent required by applicable Law, to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceeding on the part of the Company is necessary to authorize this Agreement or to consummate the transactions so contemplated (other than approval of this Agreement by the holders of at least a majority of the outstanding Shares entitled to vote, if required (the “Company Requisite Vote”), and the filing with the Secretary of State of the State of California of the Agreement of Merger as required by the CGCL). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof by Parent and Purchaser, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing.

          (b) The Company Board (at a meeting or meetings duly called and held) has unanimously: (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are advisable and fair to and in the best interests of, the Company and its shareholders; (ii) adopted and approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with applicable Law; (iii) directed that this Agreement be submitted to the shareholders of the Company for approval (unless the Merger is consummated in accordance with Section 1110 of the CGCL as contemplated by Section 2.7); and (iv) resolved to recommend acceptance of the Offer and approval of this Agreement by the shareholders of the Company (the “Company Board Recommendation”), which actions and resolutions have not, as of the date hereof, been subsequently rescinded, modified or withdrawn in any way.

          SECTION 4.5. No Conflict; Required Filings and Consents. (a)  The execution, delivery and performance of this Agreement by the Company, the consummation of the Offer, and, subject to the approval of this Agreement by the Company’s shareholders to the extent required by applicable Law, the consummation by the Company of the Merger and the other transactions contemplated hereby, do not and will not, (i) conflict with or violate the Articles of Incorporation or Bylaws of the Company, (ii) assuming that all consents, approvals and authorizations contemplated by clauses (i) through (v) of subsection (b) below have been obtained, and all filings described in such clauses have been made, conflict with or violate any federal, state, local or foreign statute, law, ordinance, rule, regulation, order, judgment, decree or legal requirement (“Law”) or any Nasdaq rule or regulation applicable to the Company or any of its Subsidiaries or by which any of their respective properties are bound, or (iii) (A) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or

16

both would become a default) under, or (B) result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, or (C) result in the creation of any Lien on any of the properties or assets of the Company or any of its Subsidiaries under any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation (each, a “Contract”) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties are bound, except, in the case of clauses (ii) and (iii), for any such conflict, violation, breach, default, loss, right or other occurrence which would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          (b) The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to, any federal, state, local or foreign governmental or regulatory (including stock exchange) authority, agency, court, commission, or any other governmental body (each, a “Governmental Entity”), except for (i) applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder (including the filing of the Information Statement), and state securities, takeover and “blue sky” laws, (ii) the applicable requirements of Nasdaq, (iii) the filing with the Secretary of State of the State of California of the Agreement of Merger as required by the CGCL, (iv) the applicable requirements of federal, state, local or foreign antitrust or other competition Laws (“Antitrust Laws”), and (v) any such consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          SECTION 4.6. Compliance. (a) The Company and each of its Subsidiaries is and at all times has been in compliance in all material respects with all Laws applicable to the Company or any of its Subsidiaries or by which any of their respective properties are bound, including Laws enforced by the U.S. Food and Drug Administration (“FDA”) and comparable foreign Governmental Entities. The Company and its Subsidiaries have all material registrations, applications, licenses, requests for exemptions, permits and other regulatory authorizations (“Permits”) from Governmental Entities required to conduct their respective businesses. The Company and its Subsidiaries are in compliance in all material respects with all such Permits, and, to the knowledge of the Company, any third party that is a manufacturer or contractor for the Company or any of its Subsidiaries has and is in compliance in all material respects with all Permits from the FDA and comparable foreign Governmental Entities insofar as the same are required for or pertain to the manufacture or handling of product components or products for the Company or any of its Subsidiaries.

          (b) Neither the Company nor any Subsidiary of the Company has either voluntarily or involuntarily initiated, conducted, or issued any recall, market withdrawal, safety alert, warning, “dear doctor” letter, investigator notice, or other notice relating to an alleged lack of safety or efficacy of any product or product candidate of the Company or any Subsidiary of the Company.

          (c) All reports, documents, claims and notices required to be filed, maintained, or furnished to the FDA or other comparable Governmental Entity by the Company or any Subsidiary of the Company have been so filed, maintained or furnished, and were

17

complete and correct in all material respects on the date filed (or were corrected in or supplemented by a subsequent filing).

          (d) The Company and each Subsidiary of the Company is in material compliance with all applicable Laws, and have fully and appropriately responded to or addressed issues raised by or complied with, as appropriate, all applicable regulatory or warning letters, notices of adverse findings, and any other letters or notices, issued or administered by the FDA or comparable Governmental Entities. There are no pending or, to the knowledge of the Company, threatened regulatory actions (other than non-material routine or periodic inspections or reviews) against any of the Company, the Company’s Subsidiaries or, with respect to the products of the Company and to the knowledge of the Company, any Person that manufactures or develops the products of the Company or any Subsidiary of the Company or product candidates pursuant to a development, commercialization, manufacturing, supply or other collaboration arrangement with the Company or any of the Company Subsidiaries by the FDA or any comparable Governmental Entity. Neither the Company nor any Subsidiary of the Company has received any written notices from the FDA or comparable Governmental Entity alleging or asserting noncompliance with any applicable Law.

          (e) Each product (or product candidate in clinical trials as of the date hereof) of the Company or any Subsidiary of the Company, to the knowledge of the Company, is and has been developed, tested, manufactured and stored by or on behalf of the Company or any of its Subsidiaries in compliance with FDA requirements, and all applicable similar Laws in foreign jurisdictions, including those requirements relating to “good manufacturing practice,” “good laboratory practice” and “good clinical practice,” as defined by the FDA, and all applicable Law. There have not been any recalls, whether voluntary or otherwise, of products manufactured distributed or sold by or on behalf of the Company or any Subsidiary of the Company.

          (f) None of the Company, the Company’s Subsidiaries or, to the knowledge of the Company, any of their respective employees, agents or subcontractors, has been convicted of any crime or engaged in any conduct which could result in debarment or disqualification by the FDA or any comparable Governmental Entity, and there are no proceedings pending or, to the knowledge of the Company, threatened that reasonably might be expected to result in criminal liability or debarment or disqualification by the FDA or any comparable Governmental Entity.

          (g) To the knowledge of the Company, there are no “serious adverse drug experiences” (as such term is defined in 21 C.F.R. 312.32) associated with clinical trials of the products or product candidates of the Company or any Subsidiary of the Company, whether conducted by the Company, any Subsidiary of the Company or any other Person, that have not been reported to the FDA and comparable Governmental Entities in accordance with applicable Law.

          (h) All preclinical studies and tests, and clinical trials being conducted by the Company or any Subsidiary of the Company, and, to the knowledge of the Company, being conducted on behalf of the Company or any Subsidiary are being conducted in material compliance with experimental protocols, procedures and controls pursuant to generally accepted scientific standards, “good laboratory practices,” as applicable, and “good clinical practices” as

18

defined by the FDA, and all applicable Law. Neither the Company nor any Subsidiary of the Company has received any written notices from the FDA or any other Governmental Entity requiring the termination, suspension, or material modification of any clinical trials conducted by the Company or any Subsidiary of the Company.

          (i) The Company has, prior to the date hereof, provided or made available to Parent all material documents and data relating to the results of all assays, preclinical studies and clinical trials, and any other tests, experiments, analysis or investigations conducted by or on behalf of the Company with respect to each product or product candidate or existing compound of the Company, to the extent such documents and data exist in tangible form and are in the possession of the Company or its Subsidiaries prior to the execution of this Agreement.

          SECTION 4.7. SEC Filings; Financial Statements. (a) The Company has filed or otherwise transmitted all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed or transmitted by it with or to the SEC since January 1, 2006 (such documents filed or otherwise transmitted since January 1, 2006 and prior to the date hereof, the “SEC Reports”). Except to the extent amended or superseded by a subsequent filing with the SEC made prior to the date hereof, as of their respective dates (and if so amended or superseded, then on the date of such subsequent filing), as of their respective dates, each of the SEC Reports complied as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations promulgated thereunder and the Exchange Act and the rules and regulations promulgated thereunder, each as in effect on the date so filed. Except to the extent amended or superseded by a subsequent filing with the SEC made prior to the date hereof, as of their respective dates (and if so amended or superseded, then on the date of such subsequent filing), none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

          (b) The audited and unaudited consolidated financial statements (including the related notes thereto) of the Company included (or incorporated by reference) in the SEC Reports (the “Financial Statements”), as amended or supplemented prior to the date of this Agreement, have been prepared in accordance with GAAP in all material respects applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects in conformity with GAAP the consolidated financial position of the Company and its consolidated Subsidiaries at the respective dates thereof and the consolidated statements of operations, cash flows and changes in shareholders’ equity for the periods indicated therein (subject, in the case of unaudited financial statements, to normal and recurring year-end audit adjustments which are not, individually or in the aggregate, material in amount or significance, in each case as permitted by GAAP and the applicable rules and regulations promulgated by the SEC).

          (c) The records, systems, controls, data and information of the Company and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or its accountants (including all means of access thereto and therefrom), except for any nonexclusive ownership and nondirect control that

19

has not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the system of internal accounting controls described below in this Section 4.7(c). The Company has implemented and maintains a system of internal control over financial reporting (as required by Rule 13a-15(a) under the Exchange Act) that is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external purposes in accordance with GAAP, and to the knowledge of the Company, such system of internal control over financial reporting is effective. The Company (i) has implemented and maintains disclosure controls and procedures (as required by Rule 13a-15(a) of the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time frames specified by the SEC’s rules and forms (and such disclosure controls and procedures are effective), and (ii) has disclosed, based on its most recent evaluation of its system of internal control over financial reporting prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Company’s Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of its internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that would reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. Prior to the date hereof, a true, correct and complete summary of any such disclosures made by management to the Company’s auditors and the audit committee of the Company’s Board of Directors has been provided to Parent and is set forth as Section 4.7(c) of the Company Disclosure Schedule.

          (d) Since January 1, 2006, (i) neither the Company or any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Company Board or any committee thereof or, to the knowledge of the Company, to any director or officer of the Company or any of its Subsidiaries.

          (e) To the knowledge of the Company, no employee of the Company or any of its Subsidiaries has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable Law of the type described in Section 806 of the Sarbanes-Oxley Act by the Company or any of its Subsidiaries. Neither the Company or any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, contractor, subcontractor or agent of the Company or any of its Subsidiaries has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company or any of its

20

Subsidiaries in the terms and conditions of employment because of any lawful act of such employee described in Section 806 of the Sarbanes-Oxley Act.

          (f) Neither the Company nor any of its Subsidiaries has any liabilities of any nature, whether accrued, absolute, fixed, contingent or otherwise, known or unknown, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP, that would, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, other than liabilities (i) as and to the extent reflected or reserved against on the Balance Sheet or in the notes thereto, (ii) incurred in the ordinary course of business consistent with past practice since June 30, 2008, or (iii) arising from contractual obligations to be performed after the date hereof under Contracts set forth in Section 4.18 of the Company Disclosure Schedule or other Contracts not required to be listed therein (but excluding any obligations or liabilities that arise in connection with any Contract as a result of any breach or default at or prior to the Purchase Time under such Contract). The “Balance Sheet” means the consolidated balance sheet of the Company dated as of June 30, 2008 included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 filed with the SEC prior to the date hereof.

          SECTION 4.8. Absence of Certain Changes or Events.

          (a) Since June 30, 2008, the Company and its Subsidiaries have conducted their business only in the ordinary course consistent with past practice, and neither the Company nor any of its Subsidiaries has taken any action since June 30, 2008 that, if taken after the date of this Agreement without the prior written consent of Parent, would constitute a breach of Section 6.1.

          (b) Since June 30, 2008, there has not been (and there is not) any change, condition, event or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          (c) The Compensation Committee of the Company Board is (and at all times since January 1, 2006 was, and at all times from the date of this Agreement to the first date on which the Purchaser’s designees constitute a majority of the Company Board pursuant to Section 1.4 will be) composed solely of Independent Directors. Since September 20, 2008, neither the Company nor any of its Subsidiaries has done any of the following except as has been approved, as an employment compensation, severance or other employee benefit arrangement, by the Compensation Committee of the Company Board (and, to the extent any of the following was so approved after the date of the first discussion of a possible tender offer or merger by the Company with Parent or one of its Affiliates, the Compensation Committee of the Company Board was, at the time of each such approval, aware of the status of such potential tender offer or merger) in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto: (i) any granting by the Company or any of its Subsidiaries to any present or former director, officer or employee of any increase in compensation or benefits in any form or of the right to receive any severance or termination compensation or benefit, or any approval, amendment or modification of any such grant; or (ii) any entry by the Company or any of its Subsidiaries into any employment, consulting, indemnification, termination, change of control, non-competition or severance agreement or arrangement with any present or former director,

21

officer or employee, or any approval, amendment or modification of any such agreement or arrangement; or (iii) any approval, amendment to or adoption of any Company Plan (the matters described in foregoing clauses (i), (ii) and (iii), collectively, “Compensation Actions”).

          SECTION 4.9. Absence of Litigation. (a) There is no claim, action, suit, proceeding, arbitration, mediation or investigation by or before any Governmental Entity (each, a “Proceeding”) pending or, to the knowledge of the Company, threatened against or relating to the Company or any of its Subsidiaries or any of its or their properties or assets, other than any such Proceeding that (i) does not involve an amount in controversy in excess of $50,000, (ii) does not seek injunctive or other non-monetary relief, and (iii) would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Except as would not have or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, neither the Company or any of its Subsidiaries nor any of their respective properties or assets is subject to any outstanding order, writ, injunction or decree. No Proceeding disclosed in Section 4.9(a) of the Company Disclosure Schedule has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          (b) Section 4.9(b) of the Company Disclosure Schedule sets forth an accurate and complete list of each Proceeding resolved or settled since January 1, 2004 and prior to the date of this Agreement and requiring payment by the Company or any of its Subsidiaries in excess of $50,000 or involving the imposition on the Company or any of its Subsidiaries of injunctive or other non-monetary relief.

          (c) No officer or director of the Company or any of its Subsidiaries is a defendant in any Proceeding in connection with his or her status as an officer or director of the Company or any of its Subsidiaries, and to the knowledge of the Company, no such Proceeding is threatened.

          SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of the Company Disclosure Schedule contains a true and complete list of each material “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and each other employment, bonus, vacation, stock option, stock purchase, restricted stock or other equity-based, incentive, deferred compensation, profit sharing, savings, retirement, retiree medical or life insurance, supplemental retirement, severance, fringe benefit, retention, change of control or other benefit plans, programs, agreements, contracts, policies or arrangements (other than de minimis arrangements) contributed to, sponsored or maintained by the Company as of the date hereof for the benefit of any current, former or retired employee, officer, consultant, independent contractor or director of the Company (collectively, the “Company Employees”) or to which the Company is a party or with respect to which the Company has or would reasonably be expected to have any liability (such plans, programs, policies, agreements and arrangements, including the Company Stock Plans and the ESPP, collectively, “Company Plans”).

          (b) With respect to each Company Plan, the Company has made available to Parent a current, accurate and complete copy thereof (or, if a plan is not written, a written description thereof) and, to the extent applicable, (i) any related trust agreement or other funding instrument, (ii) the most recent determination or opinion letter received from the Internal

22

Revenue Service (the “IRS”) for each Company Plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) the most recent summary plan description and any summaries of any material modification of such Company Plan, (iv) any material participant communications made since October 1, 2007, and (v) for the most recent year (A) the Form 5500 and attached schedules, (B) audited financial statements, and (C) actuarial valuation reports, if any.

          (c) Each Company Plan has been established and administered in all material respects in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code, and other applicable laws, rules and regulations. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Company Plan. All contributions, premiums and other payments required to be made with respect to each Company Plan have been made on or before their due dates under applicable Law and the terms of such Company Plan.

          (d) Neither the Company or any of its Subsidiaries nor any other Person that, together with the Company or any of its Subsidiaries, is or was treated as a single employer under Section 414(b), (c), (m) or (o) of the Code (each, together with the Company, an “ERISA Affiliate”), is now contributing to or has any liability to, or has at any time within the past six (6) years (and in the case of any such other Person, only during the period within the past six (6) years that such other Person was an ERISA Affiliate) contributed to or had any liability to (i) a pension plan (within the meaning of Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of ERISA; (ii) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA); or (iii) a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which an ERISA Affiliate would reasonably be expected to incur liability under Section 4063 or 4064 of ERISA.

          (e) No Proceedings (other than routine claims for benefits in the ordinary course) are pending or, to the knowledge of the Company, threatened with respect to any Company Plan.

          (f) Neither the Company or any of its Subsidiaries nor any ERISA Affiliate has incurred any liability under Title IV of ERISA that has not been satisfied in full and, to the knowledge of the Company, no condition exists that presents a risk to the Company of incurring any such liability other than liability for premiums due the Pension Benefit Guaranty Corporation.

          (g) No Company Plan provides post-termination welfare benefits, and neither the Company nor any of its Subsidiaries has any obligation to provide any post-termination welfare benefits, in each case, other than health care continuation as required by Section 4980B of the Code, ERISA or similar Law of any state or foreign jurisdiction.

          (h) Each Company Plan which is intended to be qualified under Section 401(a) of the Code is so qualified and has received a favorable determination letter or is a prototype plan with a favorable opinion letter from the IRS and, to the knowledge of the Company, no circumstances exist which would materially and adversely affect such favorable

23

determination. Each outstanding Option is a stock right that is exempt from the provisions of section 409A of the Code.

          (i) Neither the execution by the Company of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or upon occurrence of any additional or subsequent events), other than as set forth in Section 3.2 of this Agreement (i) constitute an event under any Company Plan or any trust or loan related to any of those plans or agreements that will or may result in any payment, acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Company Employee, (ii) result in the triggering or imposition of any restrictions or limitations on the right of the Company to amend or terminate any Company Plan or (iii) result in the failure of any amount to be deductible by reason of Section 280G of the Code.

          (j) All Options and other equity-based awards under Company Plans (i) have been granted in material compliance with the terms of the applicable Company Plans, with applicable Laws, and with the applicable provisions of the Company’s articles of incorporation and bylaws as in effect at the time of the applicable grant, and (ii) are accurately disclosed as required by applicable Law in (x) the SEC Reports and the Financial Statements and (y) the Tax returns of the Company.

          (k) The actions of the Compensation Committee or the Company Board referred to in Sections 3.2(a) and 3.2(d) are valid and binding in accordance with the Company Plans.

          SECTION 4.11. Labor and Employment Matters. (a) Neither the Company nor any of its Subsidiaries is a party to or is bound by any collective bargaining agreement or any labor union contract, nor, to the knowledge of the Company, are there any employees of the Company or any of its Subsidiaries represented by a works’ council or a labor organization, nor, to the knowledge of the Company, are there any activities or proceedings of any labor union to organize any employees of the Company or any of its Subsidiaries or compel the Company or any of its Subsidiaries to bargain with any labor union or labor organization. There is no pending or, to the knowledge of the Company, threatened labor strike, walkout, work stoppage, or lockout with respect to employees of the Company or any of its Subsidiaries. No grievance or arbitration demand or proceeding, or unfair labor practice charge or proceeding, whether or not filed pursuant to a collective bargaining agreement, has been filed, is pending or, to the knowledge of the Company, has been threatened against the Company or any of its Subsidiaries that could reasonably be expected to result in any material liability to the Company or any of its Subsidiaries.

          (b) To the knowledge of the Company, the Company and its Subsidiaries are in compliance in all material respects with all applicable Laws relating to labor and employment, including Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, notification, and employee terminations. Except as would not result in any material liability to the Company or any of its Subsidiaries, there are no complaints, lawsuits, arbitrations, administrative proceedings, or other Proceedings pending or, to the knowledge of the Company, threatened

24

against the Company or any of its Subsidiaries brought by or on behalf of any applicant for employment, any current or former employee, any person alleging to be a current or former employee, any class of the foregoing, or any Governmental Entity, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.

          (c) With respect of any person who provides personal services to the Company or any of its Subsidiaries, (i) the Company has classified each such service provider as either an “employee” or an “independent contractor” and has had a reasonable basis for each such determination; (ii) such classification has been consistent among service providers who provide similar services and are otherwise similarly situated; (iii) no person who is classified, or was classified, as an independent contractor has been classified as an employee of the Company or any of its Subsidiaries at any time; (iv) all Company tax returns have been filed on a basis consistent with such classification; (v) such classifications have complied in all material respects with all applicable Laws; (vi) all such persons have been properly treated under all Company Plans; and (vii) there are no complaints, actions, claims or proceedings pending, or to the knowledge of the Company, threatened to be brought, by any such person or any governmental body to reclassify any such person.

          (d) In the three (3) years prior to the date hereof, neither the Company nor any of its Subsidiaries have effectuated (i) a “plant closing” (as defined in the Worker Adjustment and Retraining Notification Act (the “WARN Act”), the California Worker Adjustment and Retraining Notification requirements set forth in California Labor Code Section 1400-1408 (the “California WARN Act” ) or any similar Law) or (ii) a “mass layoff” (as defined in the WARN Act, the California WARN Act or any similar Law).

          SECTION 4.12. Insurance. The Company and its Subsidiaries are covered by valid and currently effective insurance policies issued in favor of the Company and its Subsidiaries that, to the knowledge of the Company, are customary and adequate for companies of similar size in the industries and locales in which the Company and its Subsidiaries operate. Section 4.12 of the Company Disclosure Schedule sets forth, as of the date hereof, a true, correct and complete list of all material insurance policies issued in favor of the Company or any of its Subsidiaries, or pursuant to which the Company or any of its Subsidiaries is a named insured or otherwise a beneficiary, as well as any historic incurrence-based policies still in force. With respect to each such insurance policy, (i) the policy is in full force and effect and all premiums due thereon have been paid, (ii) neither the Company nor any of its Subsidiaries is in breach or default in any material respect, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action which with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification of, any such policy, and (iii) to the knowledge of the Company, no insurer on any such policy has been declared insolvent or placed in receivership, conservatorship or liquidation, and no notice of cancellation or termination has been received with respect to any such policy.

          SECTION 4.13. Properties. Except as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company or any of its Subsidiaries: (a) has good title to all tangible personal property reflected in the Balance Sheet as

25

being owned by the Company or one of its Subsidiaries or acquired after the date thereof (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business consistent with past practice), free and clear of all Liens, except (i) statutory Liens for current Taxes or other governmental charges not yet due and payable, (ii) Liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, (iii) other statutory liens securing payments not yet due, (iv) purchase money Liens and Liens securing rental payments under capital lease arrangements, (v) such imperfections or irregularities of title, claims, liens, charges, security interests, easements, covenants and other restrictions or encumbrances as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, and (vi) mortgages, or deeds of trust, security interests or other encumbrances on title related to indebtedness reflected on the financial statements included in the Financial Statements (collectively, the “Permitted Liens”); and (b) is the lessee of all leasehold estates reflected in the latest Financial Statements or acquired after the date thereof (except for leases that have expired by their terms since the date thereof or been assigned, terminated or otherwise disposed of in the ordinary course of business) and is in possession of the properties purported to be leased thereunder, and each such lease is valid without material default thereunder by the lessee or, to the knowledge of the Company, the lessor. The Company does not own any real property.

          SECTION 4.14. Tax Matters. (a) Except as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (i) the Company has timely filed or caused to be filed all returns and reports relating to Taxes required to be filed by applicable Laws with respect to the Company or any of its Subsidiaries or any of their income, properties or operations, (ii) all such returns are true, correct and complete and accurately set forth all items required to be reflected or included in such returns by applicable Laws, and (iii) the Company has timely paid or caused to be paid all Taxes attributable to the Company or any of its Subsidiaries that were due and payable.

          (b) The Company has made adequate provisions in accordance with GAAP, appropriately and consistently applied, in the Financial Statements for the payment of all Taxes for which the Company or any of its Subsidiaries may be liable for the periods covered thereby that were not yet due and payable as of the dates thereof, regardless of whether the liability for such Taxes is disputed.

          (c) All federal, state, local and foreign Tax returns of the Company and its Subsidiaries have been audited and settled, or are closed to assessment, for all years through December 31, 2003. There is no claim or assessment pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries for any alleged deficiency in Taxes, and to the knowledge of the Company there is no outstanding audit or investigation with respect to any liability of the Company or any of its Subsidiaries for Taxes. There are no agreements in effect to extend the period of limitations for the assessment or collection of any Tax for which the Company or any of its Subsidiaries may be liable, and no closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof, or any similar provision of state or local Law. No claim that remains unresolved has been made by any authority in a jurisdiction where the Company or any of its Subsidiaries has not filed Tax returns that the Company or such Subsidiary is or may be subject to taxation by that jurisdiction.

26

          (d) The Company and its Subsidiaries have withheld from payments to their employees, independent contractors, creditors, shareholders and any other applicable Person (and timely paid and reported to the appropriate taxing authority) proper and accurate amounts in compliance in all material respects with all Tax withholding provisions of applicable Laws (including income, social security, and employment Tax withholding for all types of compensation and withholding of Tax on dividends, interest, and royalties and similar income earned by nonresident aliens and foreign corporations).

          (e) There is no obligation of the Company or any of its Subsidiaries to contribute to the payment of any Tax or any portion of a Tax (or any amount calculated with reference to any portion of a Tax) of any Person other than the Company, including under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as transferee or successor, by contract, intercompany account system or otherwise. There are no Liens with respect to Taxes (other than Taxes not yet due and payable) on any of the assets or properties of the Company or any of its Subsidiaries.

          (f) Neither the Company nor any of its Subsidiaries has agreed to make, or is required to make, or has applied for, any adjustment under Section 481(a) of the Code or similar provision of state, local or foreign Law by reason of a change in accounting method or otherwise.

          (g) None of the Company, any of its Subsidiaries or any predecessors of the Company or any of its Subsidiaries by merger or consolidation has since January 1, 2007 been a party to a transaction intended to qualify under Section 355 of the Code.

          (h) Neither the Company nor any of its Subsidiaries is, or will be at the Closing (after giving effect to the completion of the merger and the other transactions undertaken in connection with this Agreement), a United States Real Property Holding Corporation (“USRPHC”) within the meaning of Section 897 of the Code.

          (i) The Company and its Subsidiaries have maintained the books and records required to be maintained pursuant to Section 6001 of the Code and the rules and regulations thereunder, and comparable Laws of the countries, states, counties, provinces, localities and other political divisions wherein it is required to file Tax returns and other reports relating to Taxes. The Company and its Subsidiaries have recorded and accounted for all intercompany transactions and transfers among the Company and each of its Subsidiaries in accordance in all material respects with applicable Law, and such transactions were at arm’s length.

          (j) Neither the Company nor any of its Subsidiaries participate or have “participated” in any “reportable transaction” or “listed transaction” or “tax shelters” within the meaning of the Code requiring the Company or any of its Subsidiaries to file, register, prepare, and produce, or maintain any disclosure, report, list, or any other statement or document under Sections 6011, 6111 or 6112 of the Code and the Treasury regulations thereunder.

          (k) For purposes of this Agreement, “Tax” means all taxes, charges, fees, levies, imposts, duties, and other assessments, including any income, alternative minimum or add-on tax, estimated, gross income, gross receipts, sales, use, transfer, transactions, intangibles, ad valorem, value-added, escheat, franchise, registration, title, license, capital, paid-up capital,

27

profits, withholding, employee withholding, payroll, worker’s compensation, unemployment insurance, social security, employment, excise, severance, stamp, transfer occupation, premium, recording, real property, personal property, federal highway use, commercial rent, environmental (including taxes under Section 59A of the Code) or windfall profit tax, custom, duty or other tax, fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties, related liabilities, fines or additions to tax that may become payable in respect thereof imposed by any country, any state, county, provincial or local government or subdivision or agency thereof.

          SECTION 4.15. Schedule 14D-9; Offer Documents; Information Statement. (a) None of the information supplied or to be supplied by or on behalf of the Company or any Affiliate of the Company for inclusion in the Offer Documents will, at the time such documents are filed with the SEC, at the time they are mailed to shareholders of the Company, and at the time any amendment or supplement thereto is filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D–9 will not, at the time it is filed with the SEC, at the time it is mailed to shareholders of the Company, and at the time any amendment or supplement thereto is filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, no representation or warranty is made by the Company with respect to information supplied in writing by or on behalf of Parent, Purchaser or any Affiliate of Parent or Purchaser which is included in the Offer Documents or the Schedule 14D-9. The Schedule 14D–9 will, at the time it is filed with the SEC, at the time it is mailed to the shareholders of the Company, and at the time any amendment or supplement thereto is filed with the SEC, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC thereunder.

          (b) The letter to shareholders, notice of meeting and information statement or proxy statement and form of proxy, as the case may be, that may be provided to shareholders of the Company in connection with the Merger (including any amendments or supplements) and any schedules required to be filed with the SEC in connection therewith (collectively, the “Information Statement”) will not, at the time the Information Statement is first mailed to shareholders of the Company, at the time any amendment or supplement thereto is filed with the SEC, and at the time of the Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company with respect to information supplied in writing by Parent, Purchaser or any Affiliate of Parent or Purchaser which is included in the Information Statement. The Information Statement will, at the time the Information Statement is first mailed to shareholders of the Company, at the time of the Special Meeting, and at the time any amendment or supplement thereto is filed with the SEC, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.

28

          SECTION 4.16. Intellectual Property. (a) As used herein, “Intellectual Property” means, collectively, all United States and foreign (i) trademarks, service marks, Internet domain names, trade dress, all applications and registrations for the foregoing, and all goodwill associated therewith and symbolized thereby (collectively, the “Trademarks”); (ii) inventions and discoveries, whether or not patentable, and invention disclosures (collectively, the “Inventions”); (iii) patents, registrations, and applications therefor, including divisionals, provisionals, continuations and continuations-in-part applications, and including extensions, reexaminations and reissues (collectively, the “Patents”); (iv) trade secrets, confidential information and know-how, including processes, methods, schematics, business methods, formulae, drawings, prototypes, models and designs (collectively, the “Trade Secrets”); and (v) software, copyrighted works and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof (collectively, the “Copyrights”). “Owned Intellectual Property” means all Intellectual Property owned by the Company or any of its Subsidiaries. It being understood that, with respect to Patents issued or applied for in the United States, the term “owned” refers only to Intellectual Property assigned to the Company.

          (b) The Company or one of its Subsidiaries owns or possesses legally enforceable rights to use, in each case free and clear of any and all Liens except for Permitted Liens, covenants and restrictions (except, in the case of licenses, the interests of the licensing party and the terms and conditions of such licenses), all Intellectual Property necessary to conduct the business of the Company and its Subsidiaries as currently conducted. As to this subsection (b), the phrase “legally enforceable rights to use” shall mean that the Company has no knowledge that such rights cannot be legally enforced in a competent jurisdiction.

          (c) Section 4.16(c) of the Company Disclosure Schedule sets forth (i) a list of all U.S. and foreign Patents owned by the Company or any of its Subsidiaries; (ii) a list of all U.S. and foreign registered and material unregistered Trademarks (other than Internet domain names) owned by the Company or any of its Subsidiaries; (iii) a list of all Internet domain names owned by the Company or any of its Subsidiaries; (iv) a list of all registered Copyrights owned (in whole or in part) by the Company or any of its Subsidiaries; and (v) any other material Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Entity that is Owned Intellectual Property (collectively, the “Company Registered Intellectual Property”), and in each case identifies the name of the owner of such Company Registered Intellectual Property, and as applicable, the registration number and issue or registration date or application number and filing date and the relevant filing jurisdiction.

          (d) Each item of Company Registered Intellectual Property was validly issued, is subsisting and has not expired or been cancelled or abandoned, and all documents, recordations, certificates and fees (including filing, examination and maintenance fees) in connection with such Company Registered Intellectual Property required to be filed or paid on or before the Purchase Time have been filed or paid with the relevant patent, copyright, trademark or other authorities in the United States or other jurisdictions, as the case may be. With respect to the Owned Intellectual Property, to the knowledge of the Company, there have been no material misrepresentations to the United States Patent and Trademark Office or other applicable Governmental Entity nor, to the knowledge of the Company, has there been any concealment of any material information to the United States Patent and Trademark Office or other applicable

29

Governmental Entity. Neither the Company nor any of its Subsidiaries has received any written notice or claim (or to the knowledge of the Company, oral notice or claim), challenging the Company’s or any of its Subsidiaries’ complete and exclusive ownership of the Owned Intellectual Property, or the Company’s or any of its Subsidiaries’ entitlement to use the Licensed-In Intellectual Property or suggesting that any other Person has any claim of legal or beneficial ownership with respect to the Owned Intellectual Property or (other than the licensor’s interest) with respect to the Licensed-In Intellectual Property and, to the knowledge of the Company, there is no valid basis for any such claim. As of the date hereof, to the knowledge of the Company, no third party is infringing, violating or misappropriating any of the Owned Intellectual Property rights of the Company or any of its Subsidiaries. There is no claim asserted, threatened or planned to be asserted by the Company or any of its Subsidiaries that (i) any third party has infringed, misappropriated or otherwise violated any Intellectual Property rights of the Company or any of its Subsidiaries; or (ii) a third party’s owned or claimed Intellectual Property interferes with, infringes, dilutes or otherwise harms any Intellectual Property rights of the Company or any of its Subsidiaries.

          (e) The Company has taken reasonable measures to protect the proprietary nature of the Owned Intellectual Property. Without limiting the generality of the foregoing, the Company and its Subsidiaries has always enforced and continues to enforce a policy of requiring each director, officer, employee, consultant and independent contractor to execute proprietary information, confidentiality and assignment agreements substantially in the Company’s standard forms that assign to the Company all rights to any Intellectual Property relating to the Company’s or its Subsidiaries’ business that is developed by the employees, consultants or contractors, as applicable there has been no failure to obtain execution of any such agreement from any director, officer, employee, consultant or independent contractor, and, except under nondisclosure or confidentiality agreements, or in connection with the release or distribution of products of the Company or any of its Subsidiaries, to the knowledge of the Company there has been no disclosure by the Company or any of its Subsidiaries of its confidential information or Trade Secrets. To the knowledge of the Company, other than in the ordinary course of business, no material Trade Secret of the Company or any of its Subsidiaries has been disclosed or authorized to be disclosed to any third party not subject to confidentiality obligations to the Company or any of its Subsidiaries and no party to a nondisclosure agreement with the Company or any of its Subsidiaries is in material breach or default thereof.

          (f) To the Company’s knowledge, neither the Company nor any of its Subsidiaries is or has been infringing, diluting, using without authorization or misappropriating, and none of the Company, any of its Subsidiaries, any of their respective products or the conduct of their business is or has been infringing, diluting, using without authorization or misappropriating any Intellectual Property of any third party. Neither the Company nor any of its Subsidiaries has received any written claim or notice alleging any such infringement, violation, dilution, use or misappropriation.

          (g) To the Company’s knowledge, no Owned Intellectual Property used in the business of the Company and its Subsidiaries was developed using any facilities or resources of institutes of higher learning or under any Contracts with any Governmental Entity. To the knowledge of the Company, none of the activities of the employees of the Company or any of its Subsidiaries violates any Contract, arrangement or fiduciary duty which any such employee has

30

with a former employer, and no such former employer has asserted in writing to the Company or any of its Subsidiaries any such violation. Section 4.16(g) of the Company Disclosure Schedule sets forth an accurate and complete list of any report or other analysis prepared by or on behalf of the Company or any of its Subsidiaries regarding any of the matters described in the preceding sentences of this clause (g), and each such report or other analysis has been made available to Parent prior to the date of this Agreement.

          (h) To the Company’s knowledge, neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that reasonably could be expected to result in the abandonment, cancellation, forfeiture, relinquishment, invalidation or unenforceability of any material Owned Intellectual Property (including failure to disclose any known material prior art in connection with the prosecution of patent applications with respect to any such Patent) nor, to the knowledge of the Company, has any licensor (or the Company or any of its Subsidiaries, to the extent it has the right or obligation under such license to do so) under the Licensed-In Agreements taken or failed to take any such action in respect to the Intellectual Property licensed thereunder. Without limiting the generality of the foregoing, the Company and its Subsidiaries has taken reasonable measures to document and protect Inventions on a current basis such as, without limitation, by requiring its employees to keep current laboratory notebooks in the ordinary course of business, and the Company and its Subsidiaries review such laboratory notebooks on a regular basis for possible patents, registrations, and applications therefor.

          (i) The Company is not aware of any Inventions that are not the subject of Company Registered Intellectual Property.

          SECTION 4.17. Environmental Matters. (a)  The Company and each of its Subsidiaries are and have been in compliance in all material respects with all applicable Environmental Laws, and the Company and each of its Subsidiaries possess or have taken appropriate steps to obtain and are and have been in compliance in all material respects with all material Environmental Permits required under such Environmental Laws with respect to the business or operations of the Company. All material Environmental Permits held by the Company or any of its Subsidiaries are in full force and effect, and all applications, notices or other documents have been timely filed or other appropriate steps taken to effect timely renewal, issuance or reissuance of such Environmental Permits. To the knowledge of the Company, all material Environmental Permits are expected to be issued or reissued on a timely basis on such terms and conditions as are reasonably expected to enable the Company and its Subsidiaries to continue to conduct its operations in a manner substantially similar to the manner in which such operations are presently conducted.

          (b) Neither the Company nor any of its Subsidiaries has received any written notice of any material Environmental Claim, and, to the knowledge of the Company, no material Environmental Claim is pending or threatened against the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has expressly assumed liability of any other Person for any Environmental Claim. Neither the Company nor any of its Subsidiaries has any material obligation or liability by Contract relating to or arising under Environmental Law.

31

          (c) To the knowledge of the Company, neither the Company or any of its Subsidiaries has managed, used, stored, or disposed of Materials of Environmental Concern on, at or beneath any properties currently or previously leased, operated or used by the Company or any of its Subsidiaries, and no Materials of Environmental Concern are present at such properties, except in material compliance with applicable Environmental Laws and in a manner that does not require investigation or remediation pursuant to applicable Environmental Laws.

          (d) Neither the Company nor any of its Subsidiaries has received any written notification alleging that it is liable for, or request for information pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act or similar state statute concerning, any Release or threatened Release of Materials of Environmental Concern at any location except, with respect to any such notification or request for information concerning any such Release or threatened Release, to the extent such matter has been resolved with the appropriate Governmental Entity or otherwise. Neither the Company nor any of its Subsidiaries has received any written claim, notice or complaint of any Proceeding relating to material noncompliance with Environmental Laws or any other liabilities or obligations arising from Materials of Environmental Concern or pursuant to Environmental Laws, and to the knowledge of the Company no such Proceeding has been threatened.

          (e) For purposes of this Agreement, the following terms shall have the meanings assigned below:

“Environmental Claim” means any claim, cause of action, investigation or notice by any Person or any Governmental Entity alleging potential liability (including potential liability for investigatory costs, cleanup or remediation costs, governmental or third party response costs, natural resource damages, property damage, personal injuries, or fines or penalties) based on or resulting from (i) the presence or Release of any Materials of Environmental Concern at any location, whether or not owned or operated by the Company or any of its Subsidiaries, or (ii) any violation of any Environmental Law.

“Environmental Laws” means all foreign, federal, state, or local statutes, regulations, ordinances, codes, decrees, judgments, decisions, orders or other formally promulgated requirements of Governmental Entities relating to (i) protection of the environment, natural resources or the quality of the ambient air, soil, surface water or groundwater or (ii) Materials of Environmental Concern, in effect as of the date of this Agreement.

“Environmental Permits” means all permits, licenses, registrations, and other authorizations of Governmental Entities required under applicable Environmental Laws.

“Materials of Environmental Concern” means any pollutant, contaminant, constituent, chemical, petroleum or any petroleum products, asbestos or asbestos-containing material, polychlorinated biphenyls, lead paint, insecticide, fungicide, rodenticide, pesticide, any hazardous, industrial or solid waste, and any toxic, radioactive or hazardous substance, material, or agent, which is identified by or is subject to any Environmental Law.

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor

32

environment, or into or out of any property, including movement through air, soil, surface water, groundwater or property.

          SECTION 4.18. Contracts. (a) Section 4.18 of the Company Disclosure Schedule lists, and the Company has made available to Parent true, correct and complete copies of, all Contracts (in each case, determined as of the date hereof) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties or assets is bound and which are currently in effect or under which the Company or any of its Subsidiaries has any continuing rights or obligations:

     (i) that would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act or disclosed by the Company on a Current Report on Form 8-K;

     (ii) relating to the research, development, clinical trial, supply, manufacture, marketing or co-promotion of, or collaboration with respect to, any product or product candidate of the Company or any of its Subsidiaries;

     (iii) that is a license, sublicense or other Contract pursuant to which the Company or any of its Subsidiaries is authorized to use any third party Intellectual Property that is material to the business of the Company, excluding generally commercially available, off-the-shelf software programs (the “Licensed-In Intellectual Property” and such license, sublicense or other Contract, a “Licensed-In Agreement”);

     (iv) that is a license, sublicense or other Contract pursuant to which any third party (A) is authorized to use Owned Intellectual Property that is material to the business of the Company and its Subsidiaries or (B) has obtained and continues to have exclusive rights in Owned Intellectual Property that is material to the business of the Company and its Subsidiaries;

     (v) involving the (y) payment or (z) receipt of royalties or other amounts calculated based upon the revenues or income of the Company or any of its Subsidiaries or income or revenues related to any product or business activity of the Company or any of its Subsidiaries;

     (vi) that contains covenants that restrict the ability of the Company or any of its Subsidiaries (or which, following the consummation of the Merger, could restrict the ability of the Surviving Corporation or any of its Affiliates) to compete with any Person or in any business, geographic area or distribution or sales channel, or to sell, supply or distribute any service or product, except for any such Contract that may be canceled without penalty by the Company or its Subsidiaries upon notice of sixty (60) days or less;

     (vii) relating to the formation, creation, operation, management or control of any partnership or joint venture or pursuant to which the Company or any of its Subsidiaries has an obligation (contingent or otherwise) to make an investment in or extension of credit to any Person;

33

     (viii) that involves or relates to (A) indebtedness for borrowed money or the deferred purchase price of goods or services and having an outstanding principal amount in excess of $50,000 or (B) any exchange traded, over-the-counter or other swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument or contract;

     (ix) under which payments are reasonably anticipated by the Company and its Subsidiaries, as of the date hereof, to be made by or to the Company and its Subsidiaries during the twelve (12) month period ending on September 30, 2009 in excess of $50,000;

     (x) with respect to any acquisition or disposition of any Person or business or material portion thereof pursuant to which the Company or any of its Subsidiaries has continuing indemnification, “earn-out” or other contingent payment obligations, in each case that could result in payments in excess of $50,000; or

     (xi) that would prevent, materially delay or materially impede the Company’s ability to consummate the Offer, the Merger or the other transactions contemplated by this Agreement.

Each such Contract described in clauses (i) through (xi) is referred to herein as a “Material Contract.”

          (b) Except as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each Material Contract is valid and binding on the Company or one of its Subsidiaries and, to the knowledge of the Company, each other party thereto and is in full force and effect, and the Company and its Subsidiaries have performed and complied with all obligations required to be performed or complied with by it under each Material Contract. There is no default under any Material Contract by the Company or any of its Subsidiaries or, to the knowledge of the Company, by any other party, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by the Company or any of its Subsidiaries, or to the knowledge of the Company, by any other party, except in any such case for defaults as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          SECTION 4.19. Affiliate Transactions. No executive officer or director of the Company or any of its Subsidiaries and, to the knowledge of the Company, no Person currently owning five percent (5%) or more of the Shares, is a party to any Contract with or binding upon the Company or any of its Subsidiaries or any of their respective properties or assets or has any interest in any property owned by the Company or has engaged in any transaction with any of the foregoing within the last twelve (12) months, in each case, that is of a type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act that has not been so disclosed.

          SECTION 4.20. Opinion of Financial Advisor. Prior to the execution of this Agreement, Cowen and Company, LLC (the “Financial Advisor”) has delivered to the Company Board its written opinion, dated as of the date hereof, to the effect that, as of such date and based upon and subject to the matters set forth therein, the consideration to be received by holders of

34

Shares in the Offer and the Merger is fair, from a financial point of view, to such holders. Prior to the execution of this Agreement, a true, correct and complete copy of such opinion was delivered to Parent.

          SECTION 4.21. Brokers; Certain Fees. No broker, finder or investment banker is or will be entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of the Company or any of its Subsidiaries, except as provided in the letter agreement between the Company and the Financial Advisor dated May 1, 2008, a complete and correct copy of which was delivered to Parent prior to the date of this Agreement.

          SECTION 4.22. Takeover Laws. No “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover Law or regulation (collectively, “Takeover Laws”) of any jurisdiction is applicable to the Company, the Shares, this Agreement or the transactions contemplated hereby.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER

          Except as set forth in the correspondingly numbered Section of the disclosure schedule delivered by Parent and Purchaser to the Company prior to the execution of this Agreement (the “Parent Disclosure Schedule”) (provided, however, that a matter disclosed with respect to one representation or warranty shall also be deemed to disclosed with respect to each other representation or warranty to which the matter disclosed reasonably relates, but only to the extent such relationship is reasonably apparent on the face of the disclosure contained in the Parent Disclosure Schedule with respect to such matter), Parent and Purchaser, jointly and severally, hereby represent and warrant to the Company as follows:

          SECTION 5.1. Organization. Each of Parent and Purchaser is a corporation or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or organized and has the requisite corporate or other entity power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power or authority would not, individually or in the aggregate, have or reasonably be expected to have a Purchaser Material Adverse Effect. Parent owns beneficially and of record all of the outstanding capital stock of Purchaser free and clear of all Liens. Purchaser was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and has engaged in no business activities except as contemplated by this Agreement. “Purchaser Material Adverse Effect” means any change, effect, event or occurrence that has a material adverse effect on the ability of Parent or Purchaser to timely perform their respective obligations under this Agreement or to timely consummate the transactions contemplated hereby.

          SECTION 5.2. Authority. Each of Parent and Purchaser has all necessary corporate or other entity power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The

35

execution, delivery and performance of this Agreement by each of Parent and Purchaser and the consummation by each of Parent and Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary action of Parent and Purchaser, and no other corporate or other entity proceedings on the part of Parent or Purchaser are necessary to authorize this Agreement, to perform their respective obligations hereunder, or to consummate the transactions contemplated hereby (other than the filing with the Secretary of State of the State of California of the Agreement of Merger as required by the CGCL). This Agreement has been duly and validly executed and delivered by Parent and Purchaser and, assuming due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of each of Parent and Purchaser enforceable against each of Parent and Purchaser in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing.

          SECTION 5.3. No Conflict; Required Filings and Consents. (a)  The execution, delivery and performance of this Agreement by Parent and Purchaser, do not and will not (i) conflict with or violate the respective certificates of incorporation or bylaws (or similar governing documents) of Parent or Purchaser, (ii) assuming that all consents, approvals and authorizations contemplated by clauses (i) through (v) of subsection (b) below have been obtained, and all filings described in such clauses have been made, conflict with or violate any Law or any rule or regulation of any stock exchange applicable to Parent or Purchaser or by which either of them or any of their respective properties are bound or (iii) (A) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or (B) result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, or (C) result in the creation of any Lien on any of the properties or assets of Parent or Purchaser under, any Contracts to which Parent, Purchaser or any of their respective Subsidiaries is a party or by which Parent, Purchaser or any of their respective Subsidiaries or any of their respective properties are bound, except, in the case of clauses (ii) and (iii), for any such conflict, violation, breach, default, acceleration, loss, right or other occurrence which would not have or reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

          (b) The execution, delivery and performance of this Agreement by each of Parent and Purchaser and the consummation of the transactions contemplated hereby by each of Parent and Purchaser do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to, any Governmental Entity, except for (i) the applicable requirements, if any, of the Exchange Act and the rules and regulations promulgated thereunder, and state securities, takeover and “blue sky” laws, (ii) the applicable requirements, if any, of the Antitrust Laws, (iii) the applicable requirements of Nasdaq, (iv) the filing with the Secretary of State of the State of California of the Agreement of Merger as required by the CGCL, (v) the applicable requirements of Antitrust Laws and (vi) any such consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not have or reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

36

          SECTION 5.4. Absence of Litigation. There are no Proceedings pending or, to the knowledge of Parent, threatened against Parent or any of its Subsidiaries, other than any such Proceedings that would not have or reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect. As of the date hereof, neither Parent nor any of its Subsidiaries nor any of their respective properties is or are subject to any order, writ, judgment, injunction, decree or award, except for those that would not have or reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

          SECTION 5.5. Offer Documents; Schedule 14D-9; Information Statement. (a) None of the Offer Documents will, at the time such documents are filed with the SEC, at the time they are mailed to the shareholders of the Company, and at the time any amendment or supplement thereto is filed with the SEC, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading, except that no representation is made by Parent or Purchaser with respect to information supplied in writing by or on behalf of the Company or any Affiliate of the Company that is included therein. The Offer Documents will, at the time the Offer Documents are filed with the SEC, at the time they are mailed to the shareholders of the Company, and at the time any amendment or supplement thereto is filed with the SEC, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations promulgated thereunder.

          (b) None of the information supplied in writing by or on behalf of Parent, Purchaser or any Affiliate of Parent or Purchaser for inclusion in the Information Statement or the Schedule 14D-9 (including information with respect to Parent, Purchaser and their respective officers, directors and Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder) will, at the times such documents are filed with the SEC, at the time any amendment or supplement thereto is filed with the SEC and, in the case of the Information Statement, at the time the Information Statement is mailed to shareholders of the Company and at the time of the Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

          SECTION 5.6. Brokers. No broker, finder or investment banker is or will be entitled to any brokerage, finder’s or other fee or commission from the Company in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of Parent or Purchaser.

          SECTION 5.7. Financing. Parent has available sufficient cash, cash equivalents and access to financing to satisfy its obligations to permit Purchaser to purchase and pay for Shares pursuant to the Offer and to consummate the Merger and the other transactions contemplated by this Agreement.

37

ARTICLE VI

COVENANTS

          SECTION 6.1. Conduct of Business of the Company Pending the Merger. Except as expressly required by this Agreement or as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to the earlier of (i) such time as designees of Parent first constitute at least a majority of the Company Board pursuant to Section 1.4(a) and (ii) the Effective Time (such earlier time, the “Control Time”), the Company will conduct its operations according to its ordinary and usual course of business consistent with past practice, and the Company will, and will cause its Subsidiaries to, use their reasonable best efforts to preserve intact their business organization, to protect the Owned Intellectual Property, to retain documents and materials in accordance with the Company’s document retention policy, to keep available the services of their current officers, employees and consultants and to preserve the goodwill of and maintain satisfactory relationships with those Persons having business relationships with the Company and its Subsidiaries. Without limiting the generality of the foregoing and except as expressly required by this Agreement or as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Control Time, without the prior written consent of Parent, the Company will not, and will cause its Subsidiaries not to:

          (a) amend or otherwise change its Articles of Incorporation or Bylaws or any similar governing instruments;

          (b) issue, deliver, sell, pledge, dispose of or encumber any Company Securities or Subsidiary Securities or other rights of any kind to acquire or receive any Company Securities or Subsidiary Securities, including stock appreciation rights, phantom stock or similar instruments (except for the issuance of Shares pursuant to the ESPP or upon the exercise of Options outstanding as of the date of this Agreement or the Warrants);

          (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a wholly-owned Subsidiary of the Company);

          (d) adjust, recapitalize, reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock or other equity interests of the Company or any of its Subsidiaries (other than, prior to the expiration of the offering period for the Offer, the acquisition of Shares tendered by directors, officers, employees or former employees in connection with a cashless exercise of Options or in order to pay Taxes in connection with the exercise of Options, in each case pursuant to the terms of a Company Plan);

          (e) make or offer to make any acquisition, by means of a merger or otherwise, of any business, assets or securities, or any sale, lease, encumbrance or other disposition of any business, assets or securities, in each case other than the acquisition or disposition of inventory, raw materials, equipment and other supplies in the ordinary course of business consistent with past practice;

38

          (f) enter into, amend in any material respect, renew, terminate, or grant any release or relinquishment of any material rights under, any Material Contract (or Contract that would be a Material Contract if entered into prior to the date hereof), including any Warrant;

          (g) authorize or make any capital expenditures except in accordance with the Company’s capital expenditure budget set forth in Section 6.1 of the Company Disclosure Schedule or voluntarily incur any material expense not contemplated by the projections set forth in Section 4.1(a) of the Company Disclosure Schedule;

          (h) incur or modify in any material respect the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans, advances or capital contributions to, or investments in, any other Person (other than any wholly-owned Subsidiary of the Company);

          (i) (i) enter into any new or renew any existing, employment, severance, change of control, indemnification, termination, consulting, incentive award or salary continuation agreements or arrangements with or for the benefit of any present or former officers, directors or employees; (ii) amend or terminate any of the aforementioned agreements or arrangements, except for amendments required to comply with Section 409A of the Code, provided that any such amendments do not materially increase the cost to the Company of such agreements or arrangements; (iii) grant any increases in the compensation, perquisites or benefits to officers, directors, employees and consultants (except for annual pay raises made in the ordinary course of business, consistent with past practice and in accordance with the Company’s normal schedule for such pay raises); (iv) except as provided in Section 3.2, accelerate the vesting or payment of the compensation payable or the benefits provided or to become payable or provided to any of its current or former directors, officers, employees, consultants or service providers, or otherwise pay any amounts not due to any such individual under applicable Law or the terms of any Company Plan, including with respect to severance; or (v) fund or make any contribution to any Company Plan or trust not required to be funded or contributed to;

          (j) except as permitted by the preceding clause (i), establish, adopt, enter into, amend in any material respect (other than as required by applicable Law) or terminate any Company Plan (including any employment, severance, consulting or other individual agreement) except as provided in Section 3.2, or adopt or enter into any other employee benefit plan or arrangement that would be considered a Company Plan if it were in existence on the date of this Agreement;

          (k) make any material change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;

          (l) (i) make, change or rescind any material express or deemed Tax election, (ii) take any position on any Tax return filed on or after the date of this Agreement or adopt any method therein that is materially inconsistent with positions taken or methods used in preparing or filing similar returns in prior periods unless such position or election is required pursuant to a change in applicable Law; (iii) enter into any settlement or compromise of any material Tax

39

liability; (iv) file any amended Tax returns that would result in a material change in Tax liability, taxable income or loss; (v) change any annual Tax accounting period, Tax accounting method, principles or practices used by it except as required by GAAP, (vi) enter into any closing agreement with respect to Taxes, surrender any right or claim to a refund of Taxes or otherwise agree to any adjustment of any Tax attribute; or (vii) consent or request any extension or waiver of a statute of limitation applicable to any Taxes, Tax returns or claims for Taxes;

          (m) compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages not in excess of $50,000 individually or $150,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of its Subsidiaries;

          (n) fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company as are currently in effect;

          (o) agree to take any of the actions described in Sections 6.1(a) through 6.1(n); or

          (p) take or omit to take any action that is reasonably likely to result in any failure of the Company’s representations and warranties contained in this Agreement to be true and correct such that the Offer Condition set forth in Paragraph 2(d)(ii) of Exhibit A would not be satisfied on the then-scheduled Expiration Date.

          SECTION 6.2. Access to Information; Confidentiality. (a)  Subject to the restrictions imposed by any applicable Antitrust Laws, from and after the date of this Agreement until the Control Time, the Company will (i) give Parent and Purchaser and their respective Representatives access to all employees, plants, offices and other facilities and to all books, contracts, commitments and records (including Tax returns and tax accrual workpapers) of the Company and its Subsidiaries and cause the Company’s Representatives to provide access to their work papers and such other information as Parent or Purchaser may reasonably require, (ii) permit Parent and Purchaser to make such inspections as they may reasonably request, (iii) cause its and its Subsidiaries’ officers to furnish Parent and Purchaser with such financial and operating data and other information with respect to the business, properties and personnel of the Company as Parent or Purchaser may from time to time reasonably request, and (iv) furnish promptly to Parent and Purchaser a copy of each report, schedule and other document filed or received by the Company or any of its Subsidiaries during such period pursuant to the requirements of the federal or state securities Laws.

          (b) Information obtained by Parent or Purchaser pursuant to Section 6.2(a) shall be subject to the provisions of the Confidentiality Agreement.

          (c) Nothing in this Section 6.2 shall require the Company to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company would (i) violate any of its respective obligations with respect to confidentiality, provided that

40

the Company shall use its reasonable best efforts to obtain the consent of such third party to such inspection or disclosure and shall disclose or describe such information to the fullest extent possible consistent with such obligations, or (ii) result in a violation of applicable law, including Antitrust Laws.

          (d) No investigation by and of any party or its Representatives shall affect the representations, warranties, covenants, agreements, rights or remedies of the parties set forth herein.

          SECTION 6.3. Acquisition Proposals. (a)  Subject to Section 6.3(b), the Company shall not, and shall cause its Subsidiaries and Representatives not to, directly or indirectly, from the date hereof until the earlier of the termination of this Agreement or the Closing: (i) initiate, solicit or encourage (including by way of providing non-public information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, any Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations, (ii) approve or recommend, or publicly propose to approve or recommend, an Acquisition Proposal or, except for a confidentiality agreement contemplated pursuant to Section 6.3(b), enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement relating to an Acquisition Proposal or enter into any letter of intent, agreement or agreement in principle requiring the Company (whether or not subject to conditions) to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder, (iii) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a manner adverse to Parent or Purchaser, the Company Board Recommendation (a “Change of Board Recommendation”), or (iv) agree or publicly resolve or propose to do any of the actions described in clause (i), (ii) or (iii) of this sentence. The Company shall immediately cease and cause to be terminated any solicitation, encouragement, discussion or negotiation with any Persons conducted heretofore by the Company, its Subsidiaries or any of its Representatives with respect to any Acquisition Proposal and shall promptly request (or, to the extent the Company is contractually permitted to do so, require) the return or destruction of all confidential information provided by or on behalf of the Company or any of its Subsidiaries to any such Person provided in connection with any Acquisition Proposal.

          (b) Notwithstanding anything to the contrary contained in Section 6.3(a), if at any time following the date of this Agreement and prior to the Purchase Time, (i) the Company has received from a third party that is not in violation of such third party’s contractual obligations to the Company a written, bona fide Acquisition Proposal that provides for per-Share consideration that is greater than the Offer Price, (ii) a breach by the Company of this Section 6.3 has not contributed to the making of such Acquisition Proposal, (iii) the Company Board determines in good faith, after consultation with its financial advisors and outside counsel, that such Acquisition Proposal is reasonably likely to result in a Superior Proposal, and (iv) after consultation with its outside counsel, the Company Board determines in good faith that failure to take such action would be inconsistent with its fiduciary duties to the shareholders of the Company under applicable Law, then the Company may, subject to clauses (x) and (y) below, (A) furnish information with respect to the Company and its Subsidiaries to the Person making

41

such Acquisition Proposal, and (B) participate in discussions or negotiations with the Person making such Acquisition Proposal regarding such Acquisition Proposal; provided, that (x) the Company will not, and will not allow its Representatives to, disclose any non-public information to such Person unless the Company has, or first enters into, a confidentiality agreement with such Person no less favorable to the Company than the Confidentiality Agreement, and (y) the Company will promptly (and in any event within 24 hours) provide to Parent any non-public information concerning the Company or its Subsidiaries provided or made available to such other Person which was not previously provided or made available to Parent.

          (c) From and after the date hereof and prior to the Purchase Time, the Company shall promptly (and in any event within 24 hours) notify Parent in the event that the Company or any of its Subsidiaries or Representatives receives (i) any Acquisition Proposal or indication by any Person that it is considering making an Acquisition Proposal, (ii) any request for non-public information relating to the Company or any of its Subsidiaries other than requests for information in the ordinary course of business and unrelated to an Acquisition Proposal, or (iii) any inquiry or request for discussions or negotiations regarding any Acquisition Proposal. The Company shall provide Parent promptly (and in any event within such 24-hour period) with the identity of such Person and a copy of such Acquisition Proposal, indication, inquiry or request (or, where such Acquisition Proposal is not in writing, a description of the material terms and conditions of such Acquisition Proposal, indication, inquiry or request), including any modifications thereto. The Company shall keep Parent reasonably informed (orally and in writing) on a current basis (and in any event no later than 24 hours after the occurrence of any material changes, developments, discussions or negotiations) of the status of any Acquisition Proposal, indication, inquiry or request (including the material terms and conditions thereof and of any material modification thereto), and any material developments, discussions and negotiations, including furnishing copies of any written inquiries, correspondence and draft documentation, and written summaries of any material oral inquiries or discussions. Without limiting the foregoing, the Company shall promptly (and in any event within 24 hours) notify Parent orally and in writing if it determines to begin providing information or to engage in discussions or negotiations concerning an Acquisition Proposal pursuant to Section 6.3(b) and shall in no event begin providing such information or engaging in such discussions or negotiations prior to providing such notice. The Company shall not, and shall cause its Subsidiaries not to, enter into any Contract with any Person subsequent to the date of this Agreement that would restrict the Company’s ability to provide such information to Parent, and neither the Company nor any of its Subsidiaries is currently party to any agreement that prohibits the Company from providing the information described in this Section 6.3(c) to Parent. The Company (i) shall not, and shall cause its Subsidiaries not to, terminate, waive, amend or modify any provision of, or grant permission or request under, any standstill or confidentiality agreement to which it or any of its Subsidiaries is or becomes a party, and (ii) shall, and shall cause its Subsidiaries to, use reasonable best efforts to enforce the provisions of any such agreement.

          (d) Notwithstanding anything in Section 6.3(a) to the contrary, if (i) the Company receives a written, bona fide Acquisition Proposal from a third party that is not in violation of such third party’s contractual obligations to the Company, (ii) a breach by the Company of this Section 6.3 has not contributed to the making of such Acquisition Proposal, and (iii) the Company Board concludes in good faith, after consultation with outside counsel and its financial advisors, such Acquisition Proposal constitutes a Superior Proposal after giving effect

42

to all of the adjustments to the terms of this Agreement which may be offered by Parent including pursuant to clause (C) below, the Company Board may at any time prior to the Purchase Time, if it determines in good faith, after consultation with outside counsel, that failure to take such action would be inconsistent with its fiduciary duties to the shareholders of the Company under applicable Law, (x) effect a Change of Board Recommendation and/or (y) terminate this Agreement to enter into a definitive agreement with respect to such Superior Proposal; provided, however, that the Company shall not terminate this Agreement pursuant to the foregoing clause (y), and any purported termination pursuant to the foregoing clause (y) shall be void and of no force or effect, unless in advance of or substantially concurrently with such termination the Company (1) pays the fee required by Section 8.5 and (2) substantially concurrently with such termination enters into the Alternative Acquisition Agreement; and provided, further, that the Company Board may not effect a Change of Board Recommendation pursuant to the foregoing clause (x) or terminate this Agreement pursuant to the foregoing clause (y) unless (A) the Company shall not have breached this Section 6.3, (B) the Company shall have provided prior written notice to Parent, at least five (5) Business Days in advance (the “Notice Period”), of its intention to take such action with respect to such Superior Proposal, which notice shall specify the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal), and shall have contemporaneously provided a copy of any proposed definitive agreement(s) with respect to such Superior Proposal (the “Alternative Acquisition Agreement”), (C) prior to effecting such Change of Board Recommendation or terminating this Agreement to enter into a definitive agreement with respect to such Superior Proposal, the Company shall, and shall cause its financial and legal advisors to, during the Notice Period, negotiate with Parent in good faith (to the extent Parent desires to negotiate) to make such adjustments in the terms and conditions of this Agreement so that such Acquisition Proposal ceases to constitute a Superior Proposal, and (D) following any negotiation described in the immediately preceding clause (C), such Acquisition Proposal, as modified (provided that the Company shall have complied with the provisions of the immediately following sentence) continues to constitute a Superior Proposal. In the event of any material revisions to the terms of an Acquisition Proposal after the start of the Notice Period, the Company shall be required to deliver a new written notice to Parent and to comply with the requirements of this Section 6.3(d) with respect to such new written notice, and the Notice Period shall be deemed to have re-commenced on the date of such new notice.

          (e) The Company agrees that any violations of the restrictions set forth in this Section 6.3 by any of its Representatives shall be deemed to be a material breach of this Agreement (including this Section 6.3) by the Company.

          (f) Nothing contained in this Section 6.3 shall prohibit the Company Board from taking and disclosing to the shareholders of the Company a position contemplated by Rule 14e-2(a) and Rule 14d-9 promulgated under the Exchange Act; provided, that any disclosure other than (i) a “stop, look and listen” or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act, (ii) an express rejection of any applicable Acquisition Proposal, or (iii) an express reaffirmation of its recommendation to its shareholders in favor of the Offer and the Merger, shall be deemed to be a Change in Board Recommendation (including for purposes of Section 8.4(b)).

43

          (g) The Company shall not take any action to exempt any Person (other than Parent, Purchaser and their respective Affiliates) from the provisions on “control share acquisitions” contained in any Takeover Law or otherwise cause such restrictions not to apply, in each case unless such actions are taken simultaneously with a termination of this Agreement pursuant to Section 8.3(b).

          (h) For purposes of this Agreement, (i) “Acquisition Proposal” means any offer or proposal, or any indication of interest in making an offer or proposal, made or renewed by a Person or group at any time after the date hereof which is structured to permit such Person or group to acquire beneficial ownership of at least ten percent (10%) of the assets of, equity interest in, or businesses of, the Company and its Subsidiaries, taken as a whole, pursuant to a merger, consolidation or other business combination, sale of shares of capital stock, sale of assets, tender offer or exchange offer or similar transaction, including any single or multi-step transaction or series of related transactions, in each case other than the Merger, and (ii) “Superior Proposal” means any bona fide Acquisition Proposal (except the references in the definition thereof to “ten percent (10%)” shall be replaced by “one hundred percent (100%)”) made in writing after the date hereof that (x) includes per-Share consideration that is greater than the Offer Price (including, only if the per-Share consideration is not all cash, a determination by the Board of Directors in good faith, on the advice of the Financial Advisor, to such effect) and is otherwise on terms that the Company Board has determined in its good faith judgment (after consultation with its financial advisor and outside counsel and after taking into account such legal, financial, regulatory and other aspects of the proposal, including the financing terms thereof, as the Board of Directors deems appropriate in the exercise of its fiduciary duties) is superior from a financial point of view to this Agreement, and (y) which the Company Board has determined in good faith (after consultation with its financial advisor and outside counsel and after taking into account all legal, financial, regulatory and other aspects of the proposal) is reasonably capable of being consummated within a reasonable period of time.

          SECTION 6.4. Employment and Employee Benefits Matters. (a)  Parent shall, and shall cause each of its Subsidiaries (including the Surviving Corporation and each of its Subsidiaries), for the period commencing at the Effective Time and ending on the first anniversary of the Closing, to maintain for the individuals employed by the Company at the Effective Time (the “Current Employees”) compensation and benefits provided under employee benefit plans of Parent that are at least as favorable in the aggregate to the compensation and benefits maintained for and provided to Current Employees as a group immediately prior to the Effective Time (excluding, for this purpose, equity-based compensation); provided, however, that nothing in this Section 6.4 shall prevent the amendment or termination of any Company Plan or interfere with the Surviving Corporation’s right or obligation to make such changes as are necessary to conform with applicable Law. Following the date of this Agreement, Parent and Purchaser shall cooperate in developing and communicating to Current Employees a transition plan that will take effect following the Closing Date. Nothing in this Section 6.4 shall limit the right of Parent, the Surviving Corporation or any of their Subsidiaries to terminate the employment of any Current Employee at any time.

          (b) Parent will, and will cause the Surviving Corporation to, cause service rendered by Current Employees of the Company prior to the Effective Time to be taken into account for vesting and eligibility purposes (but not for accrual purposes, except for vacation and

44

severance, if applicable) under employee benefit plans of Parent, the Surviving Corporation and its Subsidiaries, to the same extent as such service was taken into account under the corresponding Company Plans for those purposes. Current Employees will not be subject to any pre-existing condition limitation under any health employee benefit plan of Parent, the Surviving Corporation or its Subsidiaries for any condition for which they would have been entitled to coverage under the corresponding Company Plan in which they participated prior to the Effective Time. Parent will, and will cause the Surviving Corporation and its Subsidiaries, to give such Current Employees credit under such employee benefit plans for co-payments made and deductibles satisfied prior to the Effective Time, and for any positive balance in any flexible spending, health reimbursement or health saving accounts.

          (c) No later than three (3) Business Days prior to its distribution, the Company shall provide Parent and Purchaser with a copy of any communication intended to be made to any of its or its Subsidiaries’ employees relating to the transactions contemplated hereby, and will provide an opportunity for Parent and Purchaser to make reasonable revisions thereto.

          (d) This Section 6.4 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 6.4, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 6.4 or is intended to be, shall constitute or be construed as an amendment to or modification of any employee benefit plan or arrangement of Parent, the Surviving Corporation or any of their Affiliates or limit in any way the right of Company, Parent, the Surviving Corporation or any of their Affiliates to amend, modify or terminate any of its respective employee benefit plans or arrangements.

          SECTION 6.5. Directors’ and Officers’ Indemnification and Insurance. (a)  Parent and Purchaser agree that, until the six year anniversary date of the Effective Time, the Surviving Corporation’s articles of incorporation and bylaws shall contain provisions no less favorable with respect to indemnification of the (as of or prior to the Control Time) former directors, officers and employees of the Company than are currently provided in the Company’s Articles of Incorporation and Bylaws, which provisions shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of any such individuals until the expiration of the statutes of limitations applicable to such matters or unless such amendment, modification or repeal is required by applicable Law in which case Parent agrees, and shall cause the Surviving Corporation, to make such changes to the articles of incorporation and the bylaws as to have the least adverse affect on the rights of the individuals referenced in this Section 6.5.

          (b) Without limiting any additional rights that any Person may have under any agreement or Company Plan described in Section 4.10 of the Company Disclosure Schedule, from and after the Effective Time, the Surviving Corporation shall indemnify, defend and hold harmless each person who was, as of or prior to the Effective Time, either an officer and/or director of the Company (each, together with such person’s heirs, executors or administrators, an “Indemnified Party” and collectively, the “Indemnified Parties”), against all claims, losses, liabilities, damages, judgments, inquiries, fines, amounts paid in settlement and reasonable fees, costs and expenses, including reasonable attorneys’ fees and disbursements, incurred in

45

connection with any proceeding, whether civil, criminal, administrative or investigative, arising out of the fact that the Indemnified Party is or was an officer, director, employee, fiduciary or agent of the Company or any of its Subsidiaries, or of another entity if such service was at the request of the Company, or any action or omission by such person in any such capacity, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent the Surviving Corporation is permitted to do so under applicable law and its articles of incorporation or bylaws as at the date hereof. In the event of any such proceeding, each Indemnified Party will be entitled to advancement of expenses incurred in the defense of the proceeding from the Surviving Corporation to the same extent such Persons have the right to advancement of expenses from the Company as of the date of this Agreement pursuant to the Articles of Incorporation and Bylaws (provided that, to the same extent required pursuant to the Articles of Incorporation and Bylaws, any Person to whom expenses are advanced shall have provided an undertaking to repay such advances if it is finally determined that such Person is not entitled to indemnification).

          (c) The Company shall purchase by the Effective Time tail policies to the current directors’ and officers’ liability insurance policies maintained on the date of this Agreement by the Company, which tail policies (i) shall not have an aggregate premium in excess of 300% of the aggregate annual premium most recently paid by the Company prior to the date hereof to maintain the existing policies (which amount is set forth in Section 6.5 of the Company Disclosure Schedule), (ii) shall be effective for a period from the Effective Time through and including the date six (6) years after the Effective Time with respect to claims arising from facts or events that existed or occurred prior to or at the Effective Time, and (iii) shall contain coverage that is at least as protective to such directors and officers as the coverage provided by such existing policies (complete and accurate copies of which have been made available to Parent); provided, however, that, if equivalent coverage cannot be obtained or can be obtained only by paying an aggregate premium in excess of 300% of such amount, the Company shall only be required to obtain (and the Surviving Corporation shall only be required to maintain) as much tail coverage as can be obtained by paying an aggregate premium equal to 300% of such amount. Parent shall cause such policy to be maintained in full force and effect for its full term, and cause all obligations thereunder to be honored by the Surviving Corporation.

          (d) This Section 6.5 shall survive the consummation of the Merger and is intended to benefit, and shall be enforceable by, any Person or entity referred to in clause (a) of this Section 6.5 (whether or not parties to this Agreement). The indemnification provided for in this Section 6.5 shall not be deemed exclusive of any other rights to which the Indemnified Party is entitled pursuant to Law or any Contract set forth in Section 6.5(d) of the Company Disclosure Schedule. If the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity resulting from such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of the Surviving Corporation shall assume the applicable obligations set forth in this Section 6.5.

          SECTION 6.6. Further Action; Efforts. (a)  Subject to the terms and conditions of this Agreement, prior to the Effective Time, each party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the Offer, the Merger and the

46

other transactions contemplated by this Agreement; provided, that nothing in this Section 6.6 shall require Parent or Purchaser to keep the Offer open beyond the expiration date set forth in the Offer (as it may be extended from time to time). In furtherance and not in limitation of the foregoing, to the extent required under any applicable Antitrust Laws, each party hereto agrees to make any required filings or applications under such Antitrust Laws, as applicable, with respect to the transactions contemplated hereby as promptly as practicable, to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to such Antitrust Laws, as applicable, and to take all other actions necessary, proper or advisable to obtain consents, approvals or authorizations and to cause the expiration or termination of any applicable waiting periods under such Antitrust Laws, as soon as practicable, including by requesting early termination of the waiting period, if provided for in such Antitrust Laws.

          (b) Each of Parent and Purchaser, on the one hand, and the Company, on the other hand, shall, in connection with the efforts referenced in Section 6.6(a) to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement under any Antitrust Law, use its reasonable best efforts to (i) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) keep the other party reasonably informed of any communication received by such party from, or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of the Department of Justice (the “DOJ”) or any other U.S. or foreign Governmental Entity and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby; and (iii) permit the other party to review any communication given by it to, and consult with each other in advance of any meeting or conference with, the FTC, the DOJ or any other Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the FTC, the DOJ or such other applicable Governmental Entity or other Person, give the other party the opportunity to attend and participate in such meetings and conferences.

          (c) In furtherance and not in limitation of the covenants of the parties contained in Sections 6.6(a) and (b), if any objections are asserted with respect to the transactions contemplated hereby under any Antitrust Law or if any suit is instituted (or threatened to be instituted) by the FTC, the DOJ or any other applicable Governmental Entity or any private party challenging any of the transactions contemplated hereby as violative of any Antitrust Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby, each of Parent, Purchaser and the Company shall use its reasonable best efforts to resolve any such objections or suits so as to permit consummation of the transactions contemplated by this Agreement, including in order to resolve such objections or suits which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated hereby.

          (d) In the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by a Governmental Entity or private party challenging the Merger or any other transaction contemplated by this Agreement, or any other agreement contemplated hereby, each of Parent, Purchaser and the Company shall cooperate in all respects

47

with each other and use its respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement.

          (e) Notwithstanding the foregoing or any other provision of this Agreement, (i) nothing in this Section 6.6 shall limit a party’s right to terminate this Agreement pursuant to Section 8.2 and (ii) nothing in this Agreement shall obligate Parent, Purchaser or any of their respective Affiliates to agree (A) to limit in any manner whatsoever or not to exercise any rights of ownership of any securities (including the Shares), or to divest, dispose of or hold separate any securities or all or a portion of their respective businesses, assets or properties or of the business, assets or properties of the Company or (B) to limit in any manner whatsoever the ability of such entities to conduct, own, operate or control any of their respective businesses, assets or properties or of the businesses, properties or assets of the Company and its Subsidiaries.

          (f) Prior to the Purchase Time, the Company shall use its reasonable best efforts to obtain any consents, approvals or waivers of third parties with respect to any Contracts to which the Company or any of its Subsidiaries is a party as may be necessary or appropriate for the consummation of the transactions contemplated hereby or required by the terms of any Contract as a result of the execution, performance or consummation of the transactions contemplated hereby.

          SECTION 6.7. Takeover Laws. The Company shall, upon the request of Parent or Purchaser, (a) take all reasonable steps to exclude the applicability to the Merger or any other transaction contemplated hereby of any Takeover Laws, and (b) assist in any challenge by Parent or Purchaser to the validity, or the applicability to the Offer, the Merger or any other transaction contemplated by this Agreement, of any Takeover Laws.

          SECTION 6.8. Information Statement. Unless the Merger is consummated in accordance with Section 1110 of the CGCL as contemplated by Section 2.7, as soon as practicable after the consummation of the Offer (or, if requested by Parent, prior thereto), the Company shall, subject to the prior review and approval of Parent and Purchaser (which approval shall not be unreasonably withheld) prepare and file with the SEC the Information Statement in preliminary form as required by the Exchange Act and the rules and regulations promulgated thereunder. The Company shall obtain and furnish the information required to be included in the Information Statement, shall provide Parent and Purchaser with, and consult with Parent and Purchaser regarding, any comments that may be received from the SEC or its staff with respect thereto, shall, subject to the prior review and approval of Parent and Purchaser (which approval shall not be unreasonably withheld), respond promptly to any such comments made by the SEC or its staff with respect to the Information Statement, and shall cause the Information Statement in definitive form to be mailed to the Company’s shareholders at the earliest practicable date. If at any time prior to the Closing, any information relating to the Offer, the Merger, the Company, Parent, Purchaser or any of their respective Affiliates, directors or officers, should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Information Statement, so that the Information Statement shall not contain any untrue statement of a material fact or omit to state any material fact required to

48

be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party which discovers such information shall promptly notify the other party, and an appropriate amendment or supplement describing such information shall be filed with the SEC and disseminated to the shareholders of the Company.

          SECTION 6.9. Subsequent Filings; Certain Information. (a) Until the Control Time, the Company shall timely file or furnish with or to the SEC each form, report and other document required to be filed or furnished (as applicable) by the Company under the Exchange Act, and will promptly deliver to Parent copies of each form, report and document filed with the SEC. As of their respective dates, no report filed by the Company with the SEC pursuant to the requirements of the Exchange Act, shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and unaudited interim financial statements of the Company included in such reports, shall be prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto) and shall fairly present, in all material respects, the financial position of the Company and its consolidated Subsidiaries as at the dates thereof and the results of their operations and changes in financial position for the periods then ended, in each case in accordance with GAAP (subject, in the case of unaudited financial statements, to normal and recurring year-end audit adjustments which are not, individually or in the aggregate, material in amount or significance, in each case as permitted by GAAP and the applicable rules and regulations promulgated by the SEC).

          (b) During the period from the date hereof to the Purchase Time, the Company shall provide or make available to Parent all material documents and data relating to the results of all assays, preclinical and clinical trials, and any other tests, experiments, analysis or investigations conducted by or on behalf of the Company with respect to each product or product candidate or existing compound of the Company, to the extent such documents and data exist in tangible form and are in the possession of the Company or its Subsidiaries after the execution of this Agreement.

          SECTION 6.10. Public Announcements. Each of the Company, Parent and Purchaser agrees that no public release or announcement concerning the transactions contemplated hereby shall be issued by any party without the prior consent of the Company and Parent (which consent shall not be unreasonably withheld or delayed), except as such release or announcement may be required by applicable Law or any rule or regulation of Nasdaq or any other stock exchange to which the relevant party is subject or submits, wherever situated, in which case the party required to make the release or announcement shall use its reasonable best efforts to allow each other party reasonable time to comment on such release or announcement in advance of such issuance, it being understood that the final form and content of any such release or announcement, to the extent so required, shall be at the final discretion of the disclosing party.

          SECTION 6.11. Notification. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, upon obtaining knowledge of the occurrence or non-occurrence of any event, which is reasonably likely (i) to cause any representation or warranty of such party contained in this Agreement (disregarding any

49

materiality or Material Adverse Effect qualification contained therein) to be untrue or inaccurate in any material respect if made as of any time at or prior to the Purchase Time or (ii) to result in any material failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied hereunder, including any Offer Condition. The Company will promptly advise Parent in writing of any material change in the Company’s or any of its Subsidiaries’ condition (financial or otherwise), properties, assets, liabilities, prospects or results of operations. The delivery of any notice pursuant to this Section 6.11 shall not cure any breach of any representation or warranty requiring disclosure of such matter or otherwise limit or otherwise affect the rights or remedies available hereunder to any party receiving such notice.

          SECTION 6.12. Approval of Compensation Actions. Prior to the Purchase Time, the Compensation Committee of the Company Board shall take all such actions as may be required to approve, as an employment compensation, severance or other employee benefit arrangement in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto, any and all Compensation Actions taken after January 1, 2007 and prior to the Purchase Time that have not already been so approved.

          SECTION 6.13. Dispositions. Prior to the Purchase Time, Parent and the Company shall take all such actions as may be required (if any) to cause any dispositions of Shares (including derivative securities with respect to Shares) resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in accordance with the SEC staff No-Action Letter dated January 12, 1999 with respect to such subject.

          SECTION 6.14. Subsidiaries. The Company will, in consultation with Purchaser, use its reasonable best efforts to consolidate or merge the Subsidiaries of the Company with the Company prior to the Closing.

ARTICLE VII

CONDITIONS OF MERGER

          SECTION 7.1. Conditions to Obligation of Each Party to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the satisfaction (or waiver by the party entitled to the benefit thereof) at or prior to the Effective Time of each of the following conditions:

          (a) Unless the Merger is consummated pursuant to Section 1110 of the CGCL as contemplated by Section 2.7 of this Agreement, this Agreement shall have been approved by the Company Requisite Vote.

          (b) No order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger or any of the other transactions contemplated by this Agreement shall be in effect. No statute, rule, regulation, order, injunction or decree shall have been enacted, entered,

50

promulgated or enforced by any Governmental Entity that prohibits or makes illegal consummation of the Offer, the Merger or any other transaction contemplated hereby.

          (c) Purchaser shall have accepted for purchase and paid for the Shares validly tendered (and not withdrawn) pursuant to the Offer.

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

          SECTION 8.1. Termination by Mutual Agreement. This Agreement may be terminated and the Offer and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the shareholders of the Company, by mutual written consent of Parent and the Company.

          SECTION 8.2. Termination by Either Parent or the Company. This Agreement may be terminated and the Offer and the Merger may be abandoned by Parent or the Company at any time prior to the Effective Time, notwithstanding approval of this Agreement by the shareholders of the Company, if any court of competent jurisdiction or other Governmental Entity shall have issued a final order, decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting the Offer or the Merger and such order, decree, ruling or other action is or shall have become final and nonappealable.

          SECTION 8.3. Termination by the Company. This Agreement may be terminated and the Merger may be abandoned by the Company at any time prior to the Purchase Time:

          (a) if (i) Purchaser fails to commence the Offer in violation of Section 1.1 hereof, (ii) the close of business on the date that is 120 days after the date of this Agreement (the 120^th day after the date of this Agreement, the “Outside Date”) shall have occurred and Purchaser shall not have accepted for payment and paid for Shares pursuant to the Offer in accordance with the terms thereof on or before such time on the Outside Date, (iii) the Offer shall have expired or been terminated without Purchaser having purchased any Shares pursuant thereto, (iv) Purchaser, in violation of the terms of this Agreement, fails to accept for payment and to purchase validly tendered Shares pursuant to the Offer, or (v) Purchaser or Parent shall have breached or failed to comply in any material respect with any of its obligations, covenants, or agreements under this Agreement, which breach or failure is not capable of being cured within thirty (30) days following receipt by Parent or Purchaser of written notice of such breach or failure or, if such breach or failure is capable of being cured within such period, it has not been cured within such period; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.3(a) if any of the events or circumstances referred to in clause (ii) or (iii) directly or indirectly resulted from or was caused by the Company’s failure to perform in any material respect any of its obligations under this Agreement or the failure of the Offer Condition in Paragraph 2(d) of Exhibit A to this Agreement to be satisfied; or

          (b) in accordance with, and subject to the terms and conditions of, Section 6.3(d)(y).

51

          SECTION 8.4. Termination by Parent. This Agreement may be terminated and the Merger may be abandoned by Parent at any time prior to the Purchase Time, if:

          (a) due to an occurrence or circumstance which would result in a failure of any of the Offer Conditions to be satisfied at any scheduled expiration of the Offer, (i) Purchaser shall not have commenced the Offer within the time required by Section 1.1, (ii) subject to Section 1.1 hereof, the Offer shall have expired or been terminated without Purchaser having purchased any Shares pursuant thereto, or (iii) the Outside Date shall have occurred and Purchaser shall not have accepted for payment Shares pursuant to the Offer on or before the close of business on the Outside Date; provided, that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.4(a) if the failure of any of the Offer Conditions to be satisfied or the failure of Parent to have accepted for payment Shares pursuant to the Offer directly or indirectly resulted from or was caused by Parent’s or Purchaser’s failure to perform any of its obligations under this Agreement; provided, further, that, if the sole unsatisfied Offer Condition is Paragraph 2(d) of Exhibit A to this Agreement, such termination may be effected by Parent prior to the Outside Date only if the breach or failure to perform or comply or to be true and correct is not capable of being cured within ten (10) days following receipt by the Company of written notice of such breach or failure (it being understood that a failure to comply with Section 6.3 shall not be deemed capable of being cured) or, if such breach or failure is capable of being cured within such period, it has not been cured within such period; or

          (b) prior to the Purchase Time, (i) a Change of Board Recommendation shall have been effected, or (ii) the Company shall have intentionally breached Section 6.3.

          SECTION 8.5. Effect of Termination. (a)  Any termination of this Agreement by Parent pursuant to this Article VIII shall also constitute an effective termination by Purchaser.

          (b) Except as provided in Section 8.5(c), in the event of termination of this Agreement and the abandonment of the Merger pursuant to this Article VIII, this Agreement (other than Section 6.2(b) and Articles VIII and IX) shall become void and of no effect with no liability on the part of any party (or of any of its directors, officers, employees, agents, legal and financial advisors or other representatives); provided, however, that no such termination shall relieve any Person of any liability or damages resulting from a knowing or intentional breach of this Agreement.

          (c) In the event that:

     (i) this Agreement is terminated by the Company pursuant to Section 8.3(b) or by Parent pursuant to Section 8.4(b); or

     (ii) this Agreement is terminated by the Company pursuant to Section 8.3(a)(ii) (unless Purchaser’s failure to have accepted for payment and paid for Shares pursuant to the Offer on or before the Outside Date directly and materially resulted from or was directly and materially caused by Parent’s or Purchaser’s failure to perform, in any material respect, any of their respective obligations under this Agreement), and (A) at any time on or after the date hereof and prior to such termination a third party shall have made an Acquisition Proposal (whether or not conditional) to the Company Board or the

52

Company or shall have publicly announced an Acquisition Proposal and, in each case, not irrevocably withdrawn such Acquisition Proposal or announcement, or any third party shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal which intention has not been irrevocably withdrawn, and (B)  any transaction specified in the definition of “Acquisition Proposal” is consummated with such third party or any other third party within twelve (12) months after the date of such termination or pursuant to any agreement for an Acquisition Proposal entered into within twelve (12) months after the date of such termination (or any amendment or substitute agreement); or

     (iii) this Agreement is terminated by Parent pursuant to Section 8.4(a) as a result of either (x) a failure of the Offer Condition set forth in Paragraph 2(d) of Exhibit A to be satisfied, or (y) a failure of the Offer Condition set forth in Paragraph 1(a) of Exhibit A to be satisfied at the expiration of the Offer in connection with which Parent has so terminated this Agreement, and in the case of clause (x) or (y), (A) at any time on or after the date hereof and prior to such termination a third party shall have made an Acquisition Proposal (whether or not conditional) to the Company Board or the Company or shall have publicly announced an Acquisition Proposal and, in each case, not irrevocably withdrawn such Acquisition Proposal or such announcement, or such third party shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal which intention has not been irrevocably withdrawn, and (B)  any transaction specified in the definition of “Acquisition Proposal” is consummated with such third party or any other third party within twelve (12) months after the date of such termination or pursuant to any agreement for an Acquisition Proposal entered into within twelve (12) months after the date of such termination (or any amendment or substitute agreement);

then in any such case, the Company shall (x) reimburse Parent’s and Purchaser’s reasonable out-of-pocket costs and expenses (including fees and expenses of counsel and any fees allocated to Parent pursuant to Section 8.6), not to exceed $500,000 in the aggregate, incurred in connection with this Agreement and the transactions contemplated hereby and (y) pay Parent a termination fee of $3,000,000, in each case by wire transfer of immediately available funds to the account or accounts designated by Parent. Such reimbursement and payment shall be made (1) concurrently with such termination in the case of a termination by the Company pursuant to Section 8.3(b), (2) on the first (1^st) Business Day following the date of such termination in the case of a termination by Parent pursuant to Section 8.4(b), (3) on the first (1^st) Business Day after the first to occur of the events referred to in clause (B) of Section 8.5(c)(ii) in the case of a termination fee payable pursuant to Section 8.5(c)(ii), and (4) on the first (1^st) Business Day after the first to occur of the events referred to in clause (B) of Section 8.5(c)(iii) in the case of a termination fee payable pursuant to Section 8.5(c)(iii). For the avoidance of doubt, the Company shall not be required to pay a termination fee more than once or pursuant to more than one clause of this Section 8.5(c). For purposes of this Section 8.5(c), “Acquisition Proposal” shall have the meaning ascribed thereto in Section 6.3(h) except that references in the definition to “ten percent (10%)” shall be replaced by “fifty percent (50%)”.

        (d) The Company acknowledges that the agreements contained in Section 8.5(c) are an integral part of the transactions contemplated by this Agreement, and that, without

53

these agreements, Parent or Purchaser would not have entered into this Agreement; accordingly, if the Company fails to promptly pay any amount due pursuant to Section 8.5(c), as applicable, and, in order to obtain such payment, Parent commences a suit which results in a judgment in favor of Parent for any amount set forth in this Section 8.5, the Company shall pay any costs and expenses (including attorneys’ fees) in connection with such suit, together with interest from the date of termination of the Agreement on the amounts owed at the prime rate of Citibank N.A. in effect from time to time during such period plus two percent.

          SECTION 8.6. Expenses. Except as otherwise specifically provided herein, each party shall bear its own expenses in connection with this Agreement and the transactions contemplated hereby. Expenses incurred in connection with the printing and mailing of the Information Statement, the Offer Documents and the Schedule 14D-9 and filing fees, if any, related to filings under any applicable Antitrust Law shall be shared equally by Parent and the Company.

          SECTION 8.7. Amendment. This Agreement may be amended by the parties hereto by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time, whether before or after approval of this Agreement by the shareholders of the Company; provided, however, that, (i) after Purchaser purchases any Shares pursuant to the Offer, no amendment shall be made which decreases the Merger Consideration, and (ii) after approval of this Agreement by the shareholders of the Company, no amendment may be made which by Law or any applicable rule or regulation of any stock exchange requires the further approval of the shareholders of the Company without such further approval. This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

          SECTION 8.8. Waiver. At any time prior to the Effective Time, any party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (iii) subject to the requirements of applicable Law, waive compliance by the other parties with any of the agreements or conditions contained herein, except that the Minimum Tender Condition may only be waived as provided herein or by Purchaser with the prior written consent of the Company. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. The failure of any party to assert any rights or remedies shall not constitute a waiver of such rights or remedies.

ARTICLE IX

GENERAL PROVISIONS

          SECTION 9.1. Non-Survival of Representations, Warranties, Covenants and Agreements. None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants and agreements, shall survive the Effective Time, except for (i) those covenants and agreements contained herein that by their terms apply or are to be performed in whole or in part after the Effective Time and (ii) this Article IX.

54

          SECTION 9.2. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) (i) when delivered, if delivered in Person, (ii) when sent, if sent by facsimile or electronic mail, provided that any facsimile or electronic mail sent is promptly confirmed by telephone, (iii) five (5) Business Days after sending, if sent by registered or certified mail (postage prepaid, return receipt requested) and (iv) one (1) Business Day after sending, if sent by overnight delivery, in each case to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) if to Parent or Purchaser:

SmithKline Beecham Corporation
200 N. 16th Street (FP2355)
Philadelphia, PA 19102
Attention: Carol G. Ashe
Facsimile: 215-751-5349
Email: carol.g.ashe@gsk.com

with an additional copy (which shall not constitute notice) to:

Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006
Attention: Benet J. O’Reilly
Facsimile: 212-225-3999
Email: boreilly@cgsh.com

(b) if to the Company:

Genelabs Technologies, Inc.
505 Penobscot Drive
Redwood City, CA 94063
Attention: Fred Driscoll
Facsimile: 650-368-0709
Email: fdriscoll@genelabs.com

with an additional copy (which shall not constitute notice) to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jonathan  L.  Kravetz
Facsimile: 617-542-2241
Email: jlkravetz@mintz.com

55

          SECTION 9.3. Certain Definitions. For purposes of this Agreement, the term:

          (a) “Affiliate” of a Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person;

          (b) “beneficial owner” with respect to any Shares has the meaning ascribed to such term under Rule 13d-3 under the Exchange Act (and the term “beneficially owned” or “owns beneficially” shall have a corresponding meaning);

          (c) “Business Day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized by law to close in New York, New York;

          (d) “control” (including the terms “controlled”, “controlled by” and “under common control with”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of stock, as trustee or executor, by contract or credit arrangement or otherwise;

          (e) “Fully Diluted Shares” means the total number of then outstanding Shares, together with all Shares (if any) which the Company would be required to issue, after giving effect to Section 3.2(a), pursuant to any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, whether or not then exercisable (excluding for this purpose all Options or Warrants with an exercise price greater than the Offer Price);

          (f) “GAAP” means United States generally accepted accounting principles;

          (g) “knowledge” means, with respect to the Company, the actual knowledge of those Persons listed on Section 9.3(g) of the Company Disclosure Schedule and the knowledge that each such Person would have obtained in the prudent discharge of his or her ordinary job responsibilities and, with respect to any other Person, the actual knowledge of any senior executive officer of such Person and the knowledge that each such Person would have obtained in the prudent discharge of his or her ordinary job responsibilities;

          (h) “Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act);

          (i) “Restricted Shares” means any award of Shares that is subject to vesting or other lapse restrictions pursuant to any of the Company Stock Plans; and

          (j) “Subsidiary” of the Company, the Surviving Corporation, Parent or any other Person means any corporation, partnership, joint venture or other legal entity of which the Company, the Surviving Corporation, Parent or such other Person, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly, voting stock or other equity interests having ordinary voting power to elect a majority of the board of directors or other governing body of such corporation or other legal entity.

56

          SECTION 9.4. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, the remaining provisions of this Agreement shall be enforced so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

          SECTION 9.5. Entire Agreement; Assignment. This Agreement (including the Exhibits hereto), the Company Disclosure Schedule, Parent Disclosure Schedule and the Confidentiality Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned by operation of law or otherwise without the prior written consent of each of the other parties, except that Parent may assign all or any of its rights and obligations hereunder to any direct or indirect wholly-owned Subsidiary of Parent; provided, however, that no such assignment shall relieve Parent from any of its obligations hereunder.

          SECTION 9.6. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement except for the rights, benefits and remedies granted to the Indemnified Parties under Section 6.5. For the avoidance of doubt, it is expressly understood and agreed that the provisions of Section 6.4 are statements of intent and no employees or other Person (including any party hereto) shall have any rights or remedies, including rights of enforcement, with respect thereto and no employee or other Person is, is intended to be or shall be deemed to be a third-party beneficiary thereof.

          SECTION 9.7. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (except to the extent that mandatory provisions of the CGCL are applicable), without giving effect to the choice of law principles thereof.

          SECTION 9.8. Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

          SECTION 9.9. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in two or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

          SECTION 9.10. Specific Performance; Jurisdiction. (a) The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York State or federal court located in the Borough of Manhattan, The City of New York, New York, this being in addition to any other remedy to which such party is

57

entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any New York State or federal court located in the Borough of Manhattan, The City of New York, New York in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (iii) agrees that it will not bring any action or proceeding relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a New York State or federal court located in the Borough of Manhattan, The City of New York, New York.

          (b) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS, INCLUDING THE OFFER AND MERGER, CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10(b).

          SECTION 9.11. Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” shall not be exclusive. Whenever used in this Agreement, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

          SECTION 9.12. No Other Representations or Warranties. (a) Except for the representations and warranties contained this Agreement, neither the Company nor any other Person on behalf of the Company or any of its Subsidiaries makes any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries or with respect to any other information provided by the Company or any of its Subsidiaries.

          (b) Except for the representations and warranties contained in this Agreement, none of Parent, Purchaser or any other Person on behalf of Parent or Purchaser makes any other express or implied representation or warranty with respect to Parent or Purchaser or with respect to any other information provided to the Company.

58

[Remainder of Page Left Blank Intentionally]

59

          IN WITNESS WHEREOF, each of Parent, Purchaser and the Company has caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

SMITHKLINE BEECHAM CORPORATION
By:	/s/ Carol G. Ashe
	Name:	Carol G. Ashe
	Title:	Vice President and Secretary
GEMSTONE ACQUISITION CORPORATION
By:	/s/ Carol G. Ashe
	Name:	Carol G. Ashe
	Title:	Chief Executive Officer
GENELABS TECHNOLOGIES, INC.
By:	/s/ Frederick W. Driscoll
	Name:	Frederick W. Driscoll
	Title:	President and Chief Executive Officer

Signature Page to Agreement and Plan of Merger

EXHIBIT A

CONDITIONS TO THE OFFER

     Capitalized terms used in this Exhibit A and not otherwise defined herein shall have the meanings assigned to them in the Agreement to which it is attached (the “Merger Agreement”).

     1. Notwithstanding any other provision of the Offer or the Merger Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered in connection with the Offer and may terminate or, subject to the terms of the Merger Agreement, amend the Offer, unless, immediately prior to the expiration of the offering period for the Offer, as the same may be extended from time to time (the “Expiration Date”):

          (a) there shall have been validly tendered in the Offer and not properly withdrawn that number of Shares which, together with the number of Shares, if any, then owned beneficially by GSK, Parent and Purchaser (together with their wholly-owned Subsidiaries), equals (x) at least 90% of the Fully Diluted Shares (the “Minimum Tender Condition”), (y) if applicable pursuant to Section 1.1(c)(ii) of this Agreement, the Option Exercise Minimum Number or (z) if applicable pursuant to Section 1.1(c)(iii) of this Agreement, the Revised Minimum Number; and

          (b) any approvals, consents or waiting periods required in respect of the transactions contemplated by this Agreement under any applicable Antitrust Laws shall have been obtained or shall have expired or been terminated.

     2. Additionally, notwithstanding any other provision of the Offer or the Merger Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered in connection with the Offer and may terminate or, subject to the terms of the Merger Agreement, amend the Offer if any of the following conditions exist:

     (a) there shall have been any Law, decree, judgment, order or injunction, promulgated, enacted, entered, enforced, issued or amended by any Governmental Entity that would, or is reasonably likely, directly or indirectly, to: (i) restrain, enjoin or otherwise prohibit the making or consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement; (ii) impose material limitations on the ability of Parent, Purchaser or any of their respective Subsidiaries or Affiliates to acquire or hold, transfer or dispose of, or effectively to exercise all rights of ownership of, some or all of the Shares including the right to vote the Shares purchased by Purchaser pursuant to the Offer on an equal basis with all other Shares on all matters properly presented to the shareholders of the Company; or (iii) require, or condition any approval on, the divestiture by Parent, Purchaser or any of their respective Subsidiaries or

A-1

Affiliates of any Shares, or require Purchaser, Parent, the Company, or any of their respective Subsidiaries or Affiliates to take, or condition any approval on, any action referred to in clauses (i) and (ii) of Section 6.6(e) of the Merger Agreement, except as expressly provided therein;

     (b) there shall be pending or threatened (and such threat shall not have been withdrawn), any action, proceeding or counterclaim by or before any Governmental Entity challenging any of the making or consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement or seeking, directly or indirectly, to result in any of the consequences referred to in clauses (i) through (iii) of Paragraph 2(a) above;

     (c) any change, effect, event or occurrence shall have occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

     (d) (i) the Company shall have breached or failed to comply in any material respect with any of its obligations, covenants, or agreements under the Merger Agreement, or (ii) any representation or warranty of the Company contained in the Merger Agreement shall not be true and correct; provided, that, for purposes of this Paragraph 2(d):

     (A) all such representations and warranties (other than the representations and warranties contained in the last sentence of Section 4.7(a), Section 4.7(b), Section 4.8(b), the first two sentences of Section 4.15(a) and the first sentence of Section 4.15(b)) shall be interpreted without giving effect to the words “materially” or “material” or to any qualification based on such terms or based on the defined term “Material Adverse Effect”;

     (B) any such representation or warranty contained in Section 4.1(b) or Section 4.3 shall be deemed untrue if it shall fail to be true and correct in all but de minimis respects, and any such representation or warranty contained in the last sentence of Section 4.7(a), Section 4.7(b), Section 4.8(b), Section 4.8(c), the first two sentences of Section 4.15(a) or the first sentence of Section 4.15(b) shall be deemed untrue if it shall fail to be true and correct in all respects;

     (C) any such representation or warranty (other than any representation or warranty referred to in clause (B) above) shall be deemed untrue if such representation or warranty shall fail to be true and correct in all respects except where the fact, circumstance, change or event giving rise to any such failure of all such representations and warranties to be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

in each case at any scheduled expiration of the Offer (except for any representation or warranty that is expressly made as of a specified date, in which case as of such specified date); or

A-2

     (e) the Merger Agreement shall have been terminated pursuant to its terms or shall have been amended pursuant to its terms to provide for such termination or amendment of the Offer;

which, in the reasonable judgment of Parent or Purchaser, in any case, makes it inadvisable to proceed with the Offer or with acceptance for payment or payment for Shares.

     The conditions set forth in Paragraphs 1 and 2 of this Exhibit A are for the benefit of Parent and Purchaser and, regardless of the circumstances, may be asserted by Parent or Purchaser in whole or in part at any applicable time or from time to time prior to the Expiration Date, except that the conditions relating to receipt of any approvals from any Governmental Entity may be asserted at any time prior to payment of the Offer Price for Shares, and all conditions (except for the Minimum Tender Condition) may be waived by Parent or Purchaser in its discretion in whole or in part at any applicable time or from time to time, in each case subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC. The failure of Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.

A-3

EX-99.D.2

Exhibit (d)(2)

TENDER AND SHAREHOLDER SUPPORT AGREEMENT

          This TENDER AND SHAREHOLDER SUPPORT AGREEMENT (this “Agreement”), dated October ___, 2008, is by and among SmithKline Beecham Corporation, a Pennsylvania corporation (“Parent”), Gemstone Acquisition Corporation, a California corporation and wholly-owned Subsidiary of Parent (“Purchaser”), and certain shareholders of Genelabs Technologies, Inc., a California corporation (the “Company”), set forth on Schedule A hereto (each a “Shareholder” and, collectively the “Shareholders”).

          WHEREAS, Parent, Purchaser and the Company propose to enter into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), which provides, among other things, for Purchaser to commence a tender offer for all of the issued and outstanding shares of Common Stock (as defined below) of the Company (the “Offer”) and the merger of Purchaser with and into the Company, with the Company continuing as the surviving corporation (the “Merger”), upon the terms and subject to the conditions set forth in the Merger Agreement (capitalized terms used herein without definition shall have the respective meanings specified in the Merger Agreement);

          WHEREAS, each Shareholder beneficially owns the number of shares of common stock, no par value, of the Company (the “Common Stock”) set forth opposite the name of such Shareholder on Schedule A hereto (such shares of Common Stock, together with any other shares of capital stock of the Company as to which such Shareholder acquires beneficial ownership after the date hereof and prior to the earlier of the Effective Time and the termination of all of the Shareholder’s obligations under this Agreement, including any shares of Common Stock acquired by means of purchase, dividend or distribution, or issued upon the exercise of any warrants or options, or the conversion of any convertible securities or otherwise, being collectively referred to herein as the “Covered Shares”); and

          WHEREAS, as a condition to the willingness of Parent and Purchaser to enter into the Merger Agreement and as an inducement and in consideration therefor, the Shareholders have agreed to enter into this Agreement;

          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein and in the Merger Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

1

          SECTION 1. Representations and Warranties of the Shareholders. Each Shareholder hereby represents and warrants to Parent and Purchaser, severally and not jointly, and solely as to itself and its Covered Shares, as follows:

               (a) The Shareholder (i) is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of, and has good and marketable title to, the Covered Shares set forth opposite such Shareholder’s name on Schedule A hereto, free and clear of any and all liens, claims, security interests, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances whatsoever on title, transfer, or exercise of any rights of a Shareholder in respect of such Covered Shares (collectively, “Encumbrances”) except for restrictions on transfer under the Securities Act of 1933, as amended, or Encumbrances arising hereunder; (ii) does not own, of record or beneficially, any shares of capital stock of the Company (or rights to acquire any such shares) other than the Covered Shares set forth on Schedule A hereto; and (iii) has the right to vote and dispose of and holds power to issue instructions with respect to the matters set forth in Sections 3, 4, 5 and 6 hereof, power to demand appraisal rights and power to agree to all of the matters set forth in this Agreement with respect to all of such Shareholder’s Covered Shares, with no material limitations, qualifications or restrictions on such rights, subject to applicable federal securities law and the terms of this Agreement.

               (b) In the case of any Shareholder that is a corporation, limited partnership or limited liability company, such Shareholder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or constituted.

               (c) The Shareholder has the legal capacity and all requisite power and authority to execute and deliver this Agreement and to perform the Shareholder’s obligations hereunder and consummate the transactions contemplated hereby. To the extent applicable, the execution, delivery and performance by the Shareholder of this Agreement and the consummation by the Shareholder of the transactions contemplated hereby have been duly and validly authorized by the Shareholder (or its board of directors or similar governing body, as applicable), and no other actions or proceedings on the part of the Shareholder are necessary to authorize the execution and delivery by the Shareholder of this Agreement and the consummation by the Shareholder of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid and binding obligation of the Shareholder enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

2

               (d) Neither the execution and delivery of this Agreement by the Shareholder, the performance by the Shareholder of such Shareholder’s obligations hereunder nor the consummation by the Shareholder of the transactions contemplated hereby will (i) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default under, or conflict with (A) to the extent applicable, any provisions of the organizational documents of the Shareholder or (B) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation of any kind to which such Shareholder is a party or by which such Shareholder’s Covered Shares are bound, except with respect to clause (B) for any such violations, breaches, defaults or conflicts as could not reasonably be expected, either individually or in the aggregate, to materially impair the ability of such Shareholder to perform his or its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis, or (ii) violate, or require any consent, approval, or notice under, any provision of any judgment, order or decree or any federal, state, local or foreign statute, law, ordinance, rule, regulation, order, judgment, decree or legal requirement applicable to such Shareholder or any of such Shareholder’s Covered Shares (other than filings required pursuant to the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder).

          SECTION 2. Representations and Warranties of Parent and Purchaser. Each of Parent and Purchaser hereby, jointly and severally, represents and warrants to the Shareholders as follows:

               (a) Each of Parent and Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and each of Parent and Purchaser has all requisite corporate power and corporate authority to execute and deliver this Agreement and to perform its obligations hereunder and consummate the transactions contemplated hereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement.

               (b) This Agreement has been duly authorized, executed and delivered by each of Parent and Purchaser and constitutes a valid and binding obligation of Parent and Purchaser enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

3

               (c) Neither the execution and delivery of this Agreement by Parent and Purchaser, the performance by Parent and Purchaser of their obligations hereunder nor the consummation by Parent and Purchaser of the transactions contemplated hereby will (i) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default under, or conflict with (A) any provisions of the organizational documents of Parent or Purchaser or (B) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation of any kind to which such Parent or Purchaser is a party or by which Parent or Purchaser or their assets are bound, except with respect to clause (B) for any such violations, breaches, defaults or conflicts as could not reasonably be expected, either individually or in the aggregate, to materially impair the ability of Parent or Purchaser to perform its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis, or (ii) violate, or require any consent, approval, or notice under, any provision of any judgment, order or decree or any federal, state, local or foreign statute, law, ordinance, rule, regulation, order, judgment, decree or legal requirement applicable to Parent or Purchaser or their assets (other than filings required pursuant to Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder).

          SECTION 3. Tender of the Covered Shares. Unless this Agreement shall have been terminated in accordance with its terms, and subject to Section 5, each Shareholder hereby agrees that it shall (i) tender its Covered Shares or cause to be tendered (and deliver any certificates evidencing such Covered Shares or an appropriate affidavit of lost certificate with respect thereto to the extent any of such certificates have been lost, misplaced or destroyed), into the Offer promptly following the date the Offer is commenced, and in any event no later than five (5) Business Days prior to the Initial Expiration Date of the Offer, free and clear of all Encumbrances and (ii) not withdraw or cause to be withdrawn, its Covered Shares from the Offer at any time. If a Shareholder acquires Covered Shares after the date hereof, unless this Agreement shall have been terminated in accordance with its terms, such Shareholder shall (A) tender, or cause to be tendered, such Covered Shares into the Offer on or before the fifth (5^th) Business Day prior to the Initial Expiration Date or, if later, on or before the second (2^nd) Business Day after such acquisition but in any event prior to the Expiration Date, and (B) not withdraw, or cause to be withdrawn, such Covered Shares from the Offer at any time.

          SECTION 4. Option.

               (a) On the terms and subject to the conditions set forth herein, each Shareholder hereby grants to Parent an irrevocable option (the “Option”) to purchase all of the right, title and interest of such Shareholder in and to such Shareholder’s Covered Shares at a

4

price equal to the Offer Price. Parent may exercise an Option in whole, but not in part, if, but only if, (i) Purchaser has acquired shares of Common Stock pursuant to the Offer and (ii) such Shareholder shall have failed to tender into the Offer any Covered Shares or shall have withdrawn the tender of any Covered Shares into the Offer. Parent may exercise an Option at any time within the sixty (60) days following the date when such Option first becomes exercisable.

               (b) In the event that Parent is entitled to and wishes to exercise an Option, Parent shall send a written notice to the relevant Shareholder(s) specifying the place and the date for the closing of such purchase, which date shall be not more than sixty (60) days after the date of such notice; provided that in the event that prior notification to, or approval of, any Governmental Entity is required in connection with the exercise of an Option or there shall be in effect any preliminary or final injunction or other order issued by any Governmental Entity prohibiting the exercise of an Option, the period of time during which the date of the closing may be fixed shall be extended until the tenth (10^th) day following the last date on which all required approvals shall have been obtained, all required waiting periods shall have expired or been terminated and any such prohibition shall have been vacated, terminated or waived.

               (c) At the closing of the purchase of a Shareholder’s Covered Shares pursuant to exercise of an Option, simultaneously with the payment by the Parent of the purchase price for a Shareholder’s Covered Shares, such Shareholder shall deliver, or cause to be delivered, to the Purchaser certificates representing such Covered Shares duly endorsed to the Parent or accompanied by stock powers or other transfer documents duly executed by the Company in blank, together with any necessary stock transfer stamps properly affixed, free and clear of all Encumbrances.

               (d) Parent, Purchaser or the Company, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Section 4 to a holder of Covered Shares such amounts as are required to be withheld under the Code, or any applicable provision of state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Covered Shares in respect of which such deduction and withholding was made.

          SECTION 5. Transfer of the Covered Shares; Other Actions. Prior to the termination of this Agreement, except as otherwise provided herein (including pursuant to Sections 3, 4 or 7 hereof), each Shareholder shall not: (i) transfer, assign, sell, gift-over, pledge or otherwise dispose (whether by sale, merger, consolidation, liquidation, dissolution, dividend,

5

distribution or otherwise) of, or consent to any of the foregoing (“Transfer”), any Covered Shares or any right or interest therein; (ii) enter into any contract, option or other agreement, arrangement or understanding with respect to any Transfer of Covered Shares; (iii) grant any proxy or power-of-attorney with respect to any of the Covered Shares; (iv) deposit any of the Covered Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Covered Shares; or (v) take any other action that would restrict, limit or interfere in any material respect with the performance of such Shareholder’s obligations hereunder or the transactions contemplated hereby. Notwithstanding the foregoing, the preceding sentence shall not prohibit a Transfer of Covered Shares by Shareholder: (A) if Shareholder is an individual, to any member of Shareholder’s immediate family, or to a trust established for the benefit of Shareholder and/or for the benefit of one or more members of Shareholder’s immediate family or established for charitable purposes, or upon the death of Shareholder, or (B) if Shareholder is a partnership, limited liability company or trust, to one or more partners or members of Shareholder or to an affiliated corporation under common control with Shareholder or to any trustee or beneficiary of the trust, provided that any Transfer permitted pursuant to (A) or (B) above shall be permitted only if, as a precondition to such transfer, the transferee of such Covered Shares agrees in writing with Parent and Purchaser to be bound by the terms and conditions of this Agreement.

          SECTION 6. Covenant to Vote; Irrevocable Proxy.

               (a) Prior to termination of this Agreement in accordance with its terms, each Shareholder hereby agrees to vote all Covered Shares as to which the Shareholder has sole or shared voting power (the “Vote Shares”), or to provide a written consent in respect of the Vote Shares, in connection with any meeting of the Shareholders of the Company or any action by written consent in lieu of a meeting of Shareholders of the Company (i) in favor of the Merger (including adoption of the Merger Agreement) and/or (ii) against any action or agreement that would reasonably be expected to impede, delay or interfere with, or prevent, the Merger, including, but not limited to, any other extraordinary corporate transaction, including, a merger, acquisition, sale, consolidation, reorganization or liquidation involving the Company and a third party, or any other Acquisition Proposal proposed by a third party.

               (b) In furtherance of the agreements herein and until the termination of this Agreement in accordance with its terms, each Shareholder hereby irrevocably grants to, and appoints, Parent and any person or persons designated in writing by Parent, and each of them individually, such Shareholder’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Shareholder, to vote all Vote Shares, or grant a consent

6

or approval in respect of such Vote Shares, or execute and deliver a proxy to vote such Vote Shares, (i) in favor of adopting the Merger Agreement and approving the transactions contemplated thereby, including the Merger and (ii) against any Acquisition Proposal proposed by a third party or any other matter referred to in clause (a) of Section 6 hereof.

               (c) Each Shareholder represents and warrants to Parent that any proxies heretofore given by it in respect of Covered Shares are not irrevocable, and that any such proxies are hereby revoked, and agrees to communicate in writing notice of revocation of such proxies to the relevant proxy holders.

               (d) Each Shareholder hereby affirms that the irrevocable proxy set forth in Section 6(b) is given in connection with, and in consideration of, the execution of the Merger Agreement by Parent, and that such irrevocable proxy is given to secure the performance of the duties of such Shareholder under this Agreement. Each Shareholder hereby further affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked. Such Shareholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable in accordance with the provisions of Section 705(e) of the CGCL until the termination of this Agreement in accordance with its terms.

          SECTION 7. Non-Solicitation. Each Shareholder shall not and shall not authorize or permit its representatives to directly or indirectly (i) initiate, solicit or knowingly encourage (including by way of providing non-public information) the submission of any Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise cooperate with or assist or participate in, or knowingly facilitate any such Acquisition Proposal, or (ii) approve or recommend, or publicly propose to approve or recommend, an Acquisition Proposal or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement relating to an Acquisition Proposal or enter into any letter of intent, agreement or agreement in principle requiring the Shareholder (whether or not subject to conditions) to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder.

          SECTION 8. Further Assurances. Each Shareholder shall, upon request of Parent or Purchaser, execute and deliver any additional documents and take such further actions as may reasonably be deemed by Parent or Purchaser to be necessary or desirable to carry out the provisions of this Agreement. Nothing in this Agreement shall require a Shareholder to exercise any option to purchase shares of Common Stock.

7

          SECTION 9. Termination. This Agreement, and all rights and obligations of the parties hereunder shall terminate on the earliest of: (a) the date and time the Merger Agreement is validly terminated in accordance with its terms, (b) the Effective Time and (c) with respect to any Shareholder, such date and time as any amendment or change to the Merger Agreement or the Offer that decreases the Offer Price or changes the form of consideration in the Offer is effected without the consent of such Shareholder. Termination of this Agreement shall not relieve any party from liability for any breach hereof prior to such termination. Section 11 and Section 13 shall survive any termination of this Agreement.

          SECTION 10. Waiver of Dissenter’s Rights. Each Shareholder waives and agrees not to exercise any rights to dissent or similar rights with respect to the Merger or other transactions contemplated by the Merger Agreement that the Shareholder may have with respect to the Shareholder’s Covered Shares pursuant to applicable law.

          SECTION 11. Expenses. All fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses.

          SECTION 12. Stop Transfer Order; Legend. In furtherance of this Agreement, concurrently herewith, each Shareholder shall, and hereby does authorize the Company or its counsel to, notify the Company’s transfer agent that there is a stop transfer order with respect to all of the Covered Shares of such Shareholder (and that this Agreement places limits on the voting and transfer of such Covered Shares). The parties hereto agree that such stop transfer order shall be removed and shall be of no further force and effect upon termination of this Agreement.

          SECTION 13. Shareholder Capacity. It is understood that the Shareholder enters into this Agreement solely in such Shareholder’s capacity as a Shareholder of the Company. Nothing herein shall be construed as preventing a Shareholder, or a director, officer or employee of a Shareholder or Affiliate of a Shareholder, who is an officer or director of the Company, from fulfilling the obligations of such office (including the performance of obligations required by the fiduciary obligations of such Shareholder, or director, officer or employee of a Shareholder or Affiliate of a Shareholder, acting solely in his or her capacity as an officer or director of the Company), but nothing in this Section 13 is intended to modify any of the rights or obligations under the Merger Agreement.

8

          SECTION 14. Miscellaneous.

               (a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by a nationally recognized overnight courier service, such as FedEx (providing proof of delivery), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to any of the Shareholders, at the address set forth opposite the name of such Shareholder on the signature page hereto:

with a copy to:

Genelabs Technologies, Inc.
505 Penobscot Drive
Redwood City, CA 94063
Attention: Fred Driscoll
Facsimile: 650-368-0709

and a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jonathan L. Kravetz
Facsimile: 617-542-2241
Email: jlkravetz@mintz.com

and

          If to Parent or Purchaser, to:

SmithKline Beecham Corporation
200 N. 16th Street (FP2355)
Philadelphia, PA 19102
Attention: Carol G. Ashe
Facsimile: 215-751-5349

9

with a copy to:

Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006
Attention: Benet J. O’Reilly, Esq.
Facsimile: 212-225-3999

               (b) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

               (c) Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in two or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Agreement shall become effective with respect to a Shareholder when a counterpart hereof shall have been signed by each of Parent, Purchaser and such Shareholder and delivered to the other such parties.

               (d) Entire Agreement. This Agreement (together with the Merger Agreement and any other documents and instruments referred to herein and therein) constitutes the entire agreement among the parties with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and thereof.. This Agreement is not intended and does not confer upon any Person other than the parties hereto any rights hereunder.

               (e) Governing Law.

               (i) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof that would result in the application of law of any other state.

               (ii) The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It

10

is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York State or federal court located in the Borough of Manhattan, The City of New York, New York, this being in addition to any other remedy to which such party is entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction in any New York State or federal court located in the Borough of Manhattan, The City of New York, New York in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (iii) agrees that it will not bring any action or proceeding relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a New York State or federal court located in the Borough of Manhattan, The City of New York, New York.

               (iii) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS, INCLUDING THE OFFER AND MERGER, CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14(e)(iii).

               (f) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties except that Parent and

11

Purchaser may assign, in their sole discretion and without the consent of any other party, any or all of their rights, interests and obligations hereunder to each other or to one or more direct or indirect wholly-owned subsidiaries of Parent (each, an “Assignee”). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns, and the provisions of this Agreement are not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

               (g) Severability of Provisions. If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, the remaining provisions of this Agreement shall be enforced so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

               (h) Amendment. No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party.

               (i) Binding Nature. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective successors, legal representatives and assigns.

               (j) Option Exercises. Nothing in this Agreement shall require a Shareholder to exercise any option or warrant to purchase shares of Common Stock of the Company.

               (k) Shareholder Obligations Several and Not Joint. The obligations of each Shareholder hereunder shall be several and not joint and no Shareholder shall be liable for any breach of the terms of this Agreement by any other Shareholder.

[Signature page follows]

12

          IN WITNESS WHEREOF, Parent, Purchaser and the Shareholders have caused this Agreement to be duly executed and delivered as of the date first written above.

SMITHKLINE BEECHAM CORPORATION
By
	Name:
	Title:
GEMSTONE ACQUISITION CORPORATION
By
	Name:
	Title:

SIGNATURE PAGE TO TENDER AND SHAREHOLDER SUPPORT AGREEMENT

[SHAREHOLDER]
By
	Name:
	Title:

SIGNATURE PAGE TO TENDER AND SHAREHOLDER SUPPORT AGREEMENT

SCHEDULE A

Name and Address Covered Shares

A-1

EX-99.D.3

Exhibit (d)(3)
September 30, 2008

GlaxoSmithKline
709 Swedeland Road
King of Prussia, PA 19406

Dear Ladies and Gentlemen:

Re: Confidential Information and Evaluation Material

Cowen and Company, LLC (“Cowen”), is acting on behalf of Genelabs Technologies, Inc. (the “Company”) to explore a possible strategic transaction involving the Company (the “Transaction”). In that connection, SmithKline Beecham Corporation d/b/a GlaxoSmithKline (“GSK”) has requested proprietary and other information concerning the business and affairs of the Company. In consideration of furnishing GSK, its affiliates, directors, officers, employees, consultants, agents, advisors and potential financing sources (including such financing sources’ directors, officers, employees, agents and advisors) (collectively, “Representatives”) such proprietary and other information, GSK agrees to treat, and to cause its Representatives to treat, such information furnished to GSK by or on behalf of the Company or its Representatives, information reflecting the fact that GSK may be contemplating a Transaction and all analyses, compilations, studies and other material containing or reflecting, in whole or in part (but only to the extent so containing, reflecting or based upon), any such information furnished to GSK or its Representatives pursuant to this Letter Agreement (collectively, “Evaluation Material”), as follows:

1. GSK recognizes and acknowledges the confidential nature of the Evaluation Material and the damage that could result to the Company if any Evaluation Material is disclosed to any third party.

2. The term “Evaluation Material” does not include any information which (a) is already lawfully in GSK’s possession prior to the time of disclosure by or on behalf of the Company and was not

1

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 2

acquired directly or indirectly from the Company, (b) has been made public other than by acts by GSK or GSK’s Representatives in breach of their obligations of confidentiality under this Letter Agreement, (c) becomes available to GSK on a nonconfidential basis from a source that is entitled to disclose it on a non-confidential basis, or (d) was developed by or for GSK independently of the disclosure of the Evaluation Material by the Company or its representatives.

3. GSK agrees that the Evaluation Material will be kept confidential and will be used solely for the purpose of evaluating the Transaction and will not be used in any way detrimental to the Company. GSK agrees not to disclose any of the Evaluation Material to any third party, in any manner whatsoever, in whole or in part, without the prior written consent of the Company, except that GSK may disclose the Evaluation Material or portions thereof to GSK’s Representatives who need to know such information (and who agree to use such information solely for the purpose of evaluating the Transaction), which Representatives shall be informed of the confidential nature of the Evaluation Material and shall agree to be bound by this Letter Agreement and not to disclose any of the Evaluation Material to any other party. GSK shall be responsible for any breach of this Letter Agreement by any of GSK’s Representatives. Any information which the Company or any of its Representatives identifies in writing to GSK or any of GSK’s Representatives as having originated from and as being confidential or proprietary of any third party shall be Evaluation Material and shall only be disclosed to GSK in accordance with the confidentiality and non-use undertakings of the Company to such third party with respect thereto as disclosed to GSK in writing. GSK and GSK’s Representatives shall act with respect to any such third-party information in the same manner as the Company has so disclosed that it has undertaken to act, notwithstanding any other provision hereof with respect to Evaluation Material.

2

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 3

4. In the event that GSK or GSK’s Representatives are requested in any proceeding to disclose any Evaluation Material, GSK will give the Company prompt prior notice of such request so that the Company may seek an appropriate protective order or other appropriate remedy and/or waive compliance with the provisions of this Letter Agreement (and if the Company seeks such an order, GSK will provide such cooperation as the Company shall reasonably request). If, in the absence of a protective order, GSK or GSK’s Representatives are nonetheless legally compelled to disclose such Evaluation Material, GSK or GSK’s Representatives, as the case may be, will furnish only that portion of the Evaluation Material which GSK is advised by written opinion of GSK’s counsel is legally required to be disclosed, in which case GSK will not be subject to liability hereunder; provided, however, that GSK gives the Company written notice of the information to be disclosed as far in advance of its disclosure as is practicable and use its reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.

5.

Without the prior written consent of the other party, neither Cowen (including its representatives), the Company (including its representatives) or GSK or any of GSK’s Representatives will disclose to any person (in any release of statement, information, advertisement, press release or publicity matter) the fact that the Evaluation Material has been made available to GSK, that discussions or negotiations are taking place concerning a Transaction involving the Company or any of the terms, conditions or other facts with respect to such Transaction, including the status thereof or the subject matter of this Letter Agreement.

GSK hereby acknowledges that GKS is aware, and that GSK will advise GSK’s Representatives who are informed as to the matters which are the subject of this Letter Agreement, (i) that the United States securities laws prohibit any person who has

3

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 4

received from an issuer material, non-public information concerning the matters which are the subject of this Letter Agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities, and (ii) that GSK is familiar with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder and agree that GSK will neither use nor cause any of GSK’s Representatives to use, any Evaluation Material in contravention of the Exchange Act or such rules and regulations including Rules 10b-5 and 14e-3.

6. GSK understands and agrees that (i) the Company and Cowen shall be free to conduct the process relating to the Transaction as they in their sole discretion shall determine (including, without limitation, conduct of the due diligence process, negotiating with any of the prospective parties and entering into an agreement to effect a Transaction without prior notice to GSK or any other person), (ii) any procedures relating to such Transaction may be changed at any time without notice to GSK or any other person and (iii) GSK shall not have any rights or claims whatsoever against the Company, Cowen or any of their respective directors, officers, stockholders, owners, affiliates or agents arising out of or relating to the Transaction (other than any rights or claims arising out of any definitive written agreement with GSK (a “Definitive Agreement”) in accordance with its terms). GSK agrees that, unless and until a Definitive Agreement has been executed and delivered, neither the Company nor GSK will be under any legal obligation of any kind whatsoever with respect to a Transaction by virtue of this Letter Agreement or any written or oral expression with respect to a Transaction by any of the Company’s or GSK’s affiliates, directors, officers, employees, agents, advisors or other representatives. GSK agrees that, without the prior consent of either Cowen or the Company, all inquiries regarding the

4

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 5

proposed Transaction, requests for additional information and other communications with the Company shall be made to or through Declan Quirke at (646)562-1183 or Neal Karnovsky at (646)562-1152 at Cowen.

7. In the event that the Transaction is not consummated, neither GSK nor GSK’s Representatives shall, without the prior written consent of the Company, use any of the Evaluation Material for any purpose. Upon the Company’s request at any time, GSK will promptly return to the Company all copies of all Evaluation Material furnished to GSK or GSK’s Representatives and will destroy those portions of analyses, compilations, summaries, studies and other material prepared by GSK or GSK Representatives containing in whole or in part any of, the Evaluation Material, except that GSK shall be permitted to retain one (1) copy of the Evaluation Material so that any continuing obligations to the Company may be determined. GSK hereby agrees to promptly certify in a letter to the Company that the return required hereunder and such destruction have been accomplished. If a Transaction is consummated, the Definitive Agreement shall govern GSK’s obligations with respect to the Evaluation Material.

8. GSK understands that, except as and to the extent provided in a Definitive Agreement, when, as and if it is executed and delivered (and subject to the restrictions and conditions specified therein) neither the Company nor any of its representatives (including Cowen) makes any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material and GSK agrees that neither the Company nor any of its representatives shall have any obligation to update any of the Evaluation Material or shall have any liability to GSK or any other party resulting from any use or reliance on the Evaluation Material. To its knowledge, the Company hereby represents to GSK that it has all rights, title

5

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 6

and interest in and to the Evaluation Material and/or it has the right to disclose it to GSK under this Letter Agreement.

9. GSK agrees that for a period of one (1) year from the date hereof neither GSK nor any of GSK’s Representatives will, without the prior written consent of the Company, solicit to employ any person who is at the time, or within the six months prior to such time was, an employee of or a consultant to the Company. GSK also agrees that until the earlier of (a) the consummation of a Transaction between the Company and GSK or (b) one (1) year from the date hereof, neither GSK nor any of GSK’s Representatives will, without the prior written consent of the Company, initiate or maintain contact (except in the ordinary course of business) with any officer, director, employee, consultant, supplier, distributor, broker or customer of the Company for the purposes of obtaining information regarding the Company’s operations, assets, prospects or finances. The restrictions under this section shall (i) not prohibit GSK personnel who have had no access to the Company’s Evaluation Material and are not aware of the existence of this Letter Agreement from making general solicitations of employment not specifically directed to the Company or any employee thereof, and (ii) not prohibit GSK from employing any such person who initiates or responds to such general solicitations for employment, in each case in the ordinary course of business and consistent with past practices. Notwithstanding the above or any other provisions of this Letter Agreement, in the event there is a change of control of the Company, the entirety of this section shall be null and void as of the effective date of such change of control.

10. GSK hereto agrees that money damages may not be a sufficient remedy for any breach of this Letter Agreement by GSK or GSK’s Representatives, and that, in addition to all other remedies, the Company shall be entitled to seek, and a court of competent jurisdiction may grant, specific performance and injunctive or

6

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 7

other equitable relief as a remedy for any such breach, and GSK further agrees to waive, and to use GSK’s best efforts to cause GSK’s Representatives to waive, any requirement for the securing or posting of any bond in connection with any such remedy.

11. This Letter Agreement contains the entire understanding between the parties hereto with respect to the subject matter contained herein and supersedes all prior written or oral communications, negotiations, understandings or agreements of any kind with respect to such subject matter. No failure or delay by the Company or any of its representatives in exercising any right, power or privilege under this Letter Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any right, power or privilege hereunder. No provision of this Letter Agreement may be waived, amended or modified, in whole or in part, nor any consent given, except by way of a writing signed by a duly authorized representatives of both parties, which writing specifically refers to this Letter Agreement and the provision so amended or modified or for which such waiver or consent is given. In the event that any provision of this Letter Agreement shall be deemed invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Letter Agreement shall not in any way be affected or impaired thereby. This Letter Agreement is not intended to be a letter of intent or agreement in principle, or otherwise commit or bind the Company or GSK, to negotiate the terms of the proposed Transaction or to consummate the Transaction contemplated herein.

12. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, applicable to contracts made and to be performed therein, without giving effect contracts made and to be performed therein, without giving effect to its conflicts of laws, principles or rules.

7

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 8

13. To the extent that any Evaluation Material may include materials subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or threatened legal proceedings or governmental investigations, the parties understand and agree that they have a commonality of interest with respect to such matters and it is their mutual desire, intention and understanding that the sharing of such material is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege. All Evaluation Material that is entitled to protection under the attorney-client privilege, work product doctrine, or other applicable privilege shall remain entitled to such protection under such privileges and this Letter Agreement.

14. Except as expressly provided otherwise in this Letter Agreement, the obligations under this Letter Agreement shall expire five (5) years from the date of this Letter Agreement.

15. All communications required to be sent to GSK under this Letter Agreement shall be addressed to Brian McVeigh, Director of M&A Strategy & Transactions, GlaxoSmithKline, 709 Swedeland Road, King of Prussia, PA 19406.

16. This Letter Agreement and any amendment hereto may be executed in counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

8

GlaxoSmithKline Pharmaceuticals
September 26, 2008
Page 9

Please acknowledge GSK’s agreement to the foregoing by countersigning this Letter Agreement in the place provided below and returning it to Cowen.

Very truly yours,

GENELABS TECHNOLOGIES, INC.

By: COWEN AND COMPANY, LLC

        As Agent

By:	/s/ Declan Quirke
Name:		Declan Quirke
Title:		Managing Director

Accepted and Agreed to:

GLAXOSMITHKLINE PHARMACEUTICALS

By:	/s/ Brian P. McVeigh
Name:	Brian P. McVeigh
Title:	Director of M&A Strategy & Transactions

9