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:
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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).
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(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).
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(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.
(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
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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 p
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