Separation Agreement and General Release


Exhibit 10.1
          THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is entered into as of June 15,2006 between Genelabs Technologies, Inc. (the “Company”) and Mumtaz Ahmed, M.D., Ph.D. (“Employee”)(together the “Parties”).
          WHEREAS, the Company and Employee have decided to terminate their employment relationship asof June 15, 2006 (the “Separation Date”) and enter into a consulting relationship pursuant to theterms of the Consulting Agreement between Employee and the Company, dated June 16, 2006 (the“Consulting Agreement”); and
          WHEREAS, the Parties desire to resolve, fully and finally, all matters relating to Employee’semployment with the Company.
          NOW THEREFORE, in consideration of the mutual covenants and agreements set forth hereinafter,and for other good and valuable consideration, the receipt and sufficiency of which is herebyacknowledged, the Company and Employee, each intending to be legally bound, hereby agree asfollows:
          1. SEPARATION. The Parties hereby agree that Employee’s employment with the Company shall endas of the Separation Date.
          2. CONSIDERATION.
               a. In consideration of Employee’s release of all claims and other covenants and agreementscontained herein, the Company shall provide Employee with the following additional benefitspursuant to the Consulting Agreement (the “Consideration”):
                    (i) Continued vesting of all of Employee’s Company stock options during the term of theConsulting Agreement; and
                    (ii) A period of ninety (90) days following the termination of the Consulting Agreement inwhich to exercise Employee’s vested Company stock options.
               b. The Consideration shall become effective on the eighth (8th) day after the datethat Employee delivers this signed Agreement to the Company, conditioned upon Employee notexercising his revocation rights as set forth in Section 5 herein. In the event Employee does notsign or revokes this Agreement pursuant to Section 5 herein, the Consideration shall not beprovided, however, all other provisions of the Consulting Agreement shall remain in full force andeffect.
               c. Employee acknowledges that he has received all unpaid wages, expense reimbursements andaccrued but unused vacation earned through the Separation Date. Employee acknowledges and agreesthat the Consideration is in addition to any sums or benefits otherwise owed to Employee and suchConsideration is provided solely in exchange for the waiver and release of all claims containedherein.



          3. RELEASE. In exchange for the Consideration provided pursuant to Section 2 above, Employeefully releases and forever discharges the Company and its subsidiaries, predecessors, successorsand assigns, specifically including, but not limited to Accelerated Clinical Research Organization,Inc. (“ACRO”), as well as each of their officers, directors, employees and shareholders(collectively, the “Released Parties”), from any and all liability upon any and all claims,charges, complaints, liens, demands, causes of action, obligations or damages, known or unknown,suspected or unsuspected, that Employee had, now has or may hereafter claim to have against theReleased Parties arising out of or relating in any way to: (i) Employee’s hiring by, employmentwith, association with or separation from the Company and/or ACRO or (ii) any event, series ofevents, occurrences, acts or failures relating in any way to any of the Released Parties occurringat any time up to the date of this Agreement (the “Release”). This Release specifically extendsto, without limitation, any claims or causes of action for wrongful termination, breach of anexpress or implied contract, specifically including, but not limited to, the Agreement betweenEmployee and the Company, dated June 13, 2003, concerning change in control benefits, breach of thecovenant of good faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation,defamation, slander, infliction of emotional distress, personal injury, loss of future earnings,and any claims under the California constitution, the United States Constitution and any applicablestate and federal fair employment laws, federal equal employment opportunity laws and federal andstate labor statues and regulations, including, but not limited to, the Civil Rights Act of 1964,as amended, the Age Discrimination in Employment Act, as amended (the “ADEA”), the Older WorkersBenefit Protection Act, as amended, the Fair Labor Standards Act, as amended, the Americans WithDisabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as amended, Section 806 ofthe Sarbanes-Oxley Act, the Worker Adjustment and Retraining Notification Act, as amended, theEmployee Retirement Income Security Act of 1974, as amended, the Family and Medical Leave Act, theCalifornia Fair Employment and Housing Act, as amended, the California Family Rights Act, asamended, the California Labor Code Section 1400 et seq. and the Texas Labor Code; provided,however, that this Release does not extinguish any claims or rights under theIndemnification Agreement between Employee and the Company, dated June 13, 2003.
          4. WAIVER. Employee expressly waives all rights afforded by Section 1542 of the Civil Code ofthe State of California (“Section 1542”) with respect to the Released Parties. Section 1542 statesas follows:
Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full andcomplete release, Employee understands and agrees that this Agreement is intended to include allclaims, if any, which Employee may have and which Employee does not now know or suspect to exist inhis favor against the Released Parties and that this Agreement extinguishes those claims.
          5. REVIEW AND REVOCATION RIGHTS. Employee understands that he is waiving his rights under theADEA and thus:



               a. Employee has been informed and understands and agrees that he has twenty-one (21) calendardays after receipt of this Agreement to consider whether to sign it.
               b. Employee has been informed and understands and agrees that he may change his mind andrevoke this Agreement at any time during the seven (7) calendar days after this Agreement issigned, in which case none of the provisions of this Agreement will have any effect. Employee mayrevoke the Agreement by delivering a written notification of his revocation to: President and ChiefExecutive Officer, Genelabs Technologies, Inc., 1505 Penobscot Drive, Redwood City, CA 94063.
               c. Employee agrees that prior to signing this Agreement, he read and understood each and everyprovision of this Agreement and that he had the opportunity to consult with an attorney of hischoosing regarding the effect of each and every provision of this Agreement.
               d. Employee acknowledges and agrees that he knowingly and voluntarily entered into thisAgreement with complete understanding of all relevant facts, and that he was neither fraudulentlyinduced nor coerced to enter into this Agreement.
          6. REPRESENTATIONS. Employee makes the following representations, each of which is animportant consideration to the Company’s willingness to enter into this Agreement with Employee:
               a. Employee acknowledges that the Company is not entering into this Agreement because itbelieves that Employee has any cognizable legal claim against the Released Parties. If Employeeelects not to sign this Agreement, the fact that this Agreement was offered in the first place willnot be understood as an indication that the Released Parties believed Employee was discriminatedagainst or treated unlawfully in any respect.
               b. Employee is aware that, by signing this Agreement, which includes a release and waiver ofall claims, Employee is giving up any right to sue the Released Parties in court for any claimswhich Employee has or believes to have based upon any event which occurred on or before the datethat this Agreement is signed. Employee also acknowledges that if any charge or complaint is filedby Employee or on Employee’s behalf with an administrative agency, court or in any other forum,Employee will not seek or accept any personal relief in such proceedings.
               c. Employee acknowledges that he has not filed any complaints or charges with any court oradministrative agency against the Released Parties on or prior to the date of signing thisAgreement, which have not been dismissed, closed, withdrawn or otherwise terminated on or prior tothe date of this Agreement.
          7. NON-DISPARAGEMENT OF THE COMPANY. Employee agrees that he shall not, at any time, make,directly or indirectly, any oral or written statements that are disparaging of the Company, theproducts and services it offers or any of its partners, affiliates, successors, assigns, includingany of its present or former officers, directors, partners, agents, or employees.



               a. Employee agrees not to discuss the terms of this Agreement or the circumstances surroundinghis separation from the Company with any person or entity without the written consent of theCompany or its successors, except in the case of his legal and tax advisors, members of hisimmediate family or to the extent required by law.
               b. Employee acknowledges and agrees that he continues to be bound by the terms and conditionsof the Company Employee Invention and Confidentiality Agreement he signed in connection with hisemployment with the Company.
          9. GOVERNING LAW. This Agreement and all rights, duties and remedies hereunder shall begoverned by and construed and enforced in accordance with the laws of the State of California,without reference to its choice of law rules.
          10. SEVERABILITY. Any term or provision of this Agreement that is invalid or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity orunenforceability without rendering invalid or unenforceable the remaining terms and provisions ofthis Agreement or affecting the validity or enforceability of any of the terms or provisions ofthis Agreement in any other jurisdictions. The Parties agree that all rights and obligations ofthe Parties hereunder shall be enforceable to the fullest extent permitted by law.
          11. THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of Employee and theReleased Parties and shall not inure to the benefit of any other third parties.
          12. AMENDMENTS. This Agreement may not be amended or modified other than by a writteninstrument signed by the Company and Employee.
          13. DESCRIPTIVE HEADINGS. The section headings contained herein are for reference purposesonly and shall not in any way affect the meaning or interpretation of this Agreement.
          14. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of whichshall be deemed an original, but all of which shall constitute one and the same instrument.
          15. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and understanding of theParties relating to the subject matter hereof and merges and supersedes all prior discussions,agreements and understandings of every kind and nature between the Parties and neither party shallbe bound by any term or condition other than as expressly set forth or provided for in thisAgreement.



          IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.
/s/ James A.D. Smith
      /s/ Mumtaz Ahmed    
James A.D. Smith
      Mumtaz Ahmed, M.D., Ph.D.    
President & CEO