<PAGE>
   
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25, 2000
    
 
   
                                            REGISTRATION STATEMENT NO. 333-45996
    
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
   
                                AMENDMENT NO. 1
                                       TO
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
    
                            ------------------------
                            HARVARD BIOSCIENCE, INC.
             (Exact Name of Registrant as Specified in its Charter)
 

<TABLE>
<S>                                   <C>                                   <C>
              DELAWARE                                3826                               04-3306140
    (State or Other Jurisdiction          (Primary Standard Industrial                (I.R.S. Employer
 of Incorporation or Organization)        Classification Code Number)               Identification No.)
</TABLE>

 
                         ------------------------------
 
                              84 OCTOBER HILL ROAD
                      HOLLISTON, MASSACHUSETTS 01746-1371
                                 (508) 893-8066
  (Address, including zip code, and telephone number, including area code, of
                    Registrant's principal executive office)
                         ------------------------------
 
                                 CHANE GRAZIANO
                            CHIEF EXECUTIVE OFFICER
                            HARVARD BIOSCIENCE, INC.
                              84 OCTOBER HILL ROAD
                      HOLLISTON, MASSACHUSETTS 01746-1371
                                 (508) 893-8066
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                         ------------------------------
 
                                   COPIES TO:
 

<TABLE>
<S>                                                   <C>
               H. DAVID HENKEN, P.C.                             STANFORD N. GOLDMAN, JR., ESQ.
            GOODWIN, PROCTER & HOAR LLP                               JOHN J. CHENEY, ESQ.
                   EXCHANGE PLACE                     MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
          BOSTON, MASSACHUSETTS 02109-2881                            ONE FINANCIAL CENTER
                  (617) 570-1000                                  BOSTON, MASSACHUSETTS 02111
                                                                        (617) 542-6000
</TABLE>

 
                         ------------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As soon as
practicable after this Registration Statement becomes effective.
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / / ____________
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____________
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / / ____________
                         ------------------------------
 

                        CALCULATION OF REGISTRATION FEE
 
   

<TABLE>
<CAPTION>
        TITLE OF EACH                          PROPOSED MAXIMUM  PROPOSED MAXIMUM    AMOUNT OF
     CLASS OF SECURITIES        AMOUNT TO BE    OFFERING PRICE       AGGREGATE      REGISTRATION
       TO BE REGISTERED         REGISTERED(1)    PER SHARE(2)    OFFERING PRICE(2)     FEE(3)
<S>                             <C>            <C>               <C>                <C>
Common Stock, par value
  $0.01 per share.............    7,359,950         $13.00          $95,679,350       $25,260
</TABLE>

    
 
   
(1) Includes 937,500 shares of Common Stock which the underwriters have the
    option to purchase solely to cover over-allotments, if any.
    
 
   
(2) Estimated solely for purposes of calculating the registration fee in
    accordance with Rule 457(o) under the Securities Act of 1933.
    
 
   
(3) Includes $19,800 paid prior to the initial filing of this registration
    statement and $5,460 being paid in connection with this pre-effective
    amendment.
    
                         ------------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
   
                 SUBJECT TO COMPLETION, DATED OCTOBER 25, 2000
    
 
PROSPECTUS
 
                       [THOMAS WEISEL PARTNERS LLC LOGO]
 
                           [HARVARD BIOSCIENCE LOGO]
 
   
                                6,422,450 SHARES
                                  COMMON STOCK
    
 
--------------------------------------------------------------------------------
 
   
We are selling 6,250,000 shares of our common stock and the selling stockholder
identified in this prospectus is offering an additional 172,450 shares. See
"Principal and Selling Stockholders." We will not receive any of the proceeds
from the sale of shares by the selling stockholder. We have granted the
underwriters a 30-day option to purchase up to an additional 937,500 shares to
cover over-allotments, if any.
    
 
   
This is an initial public offering of our common stock. We currently expect the
initial public offering price to be between $11.00 and $13.00 per share. We have
applied for approval for quotation of our common stock on the Nasdaq National
Market under the symbol "HBIO."
    
--------------------------------------------------------------------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 6.
--------------------------------------------------------------------------------
 

<TABLE>
<CAPTION>
                                                        PER SHARE      TOTAL
<S>                                                     <C>          <C>          <C>
Public offering price                                    $           $
Underwriting discount                                    $           $
Proceeds, before expenses, to us                         $           $
Proceeds, before expenses, to the selling stockholder    $           $
</TABLE>

 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
 
THOMAS WEISEL PARTNERS LLC
 
   
                        DAIN RAUSCHER WESSELS
    
 
                                                ING BARINGS
 
The date of this prospectus is                 , 2000

<PAGE>
EDGAR GRAPHICS DESCRIPTIONS
 
INSIDE FRONT COVER-GATEFOLD
 
    Pages 2 and 3: Gatefold has title "Harvard Bioscience Products and the
Bottlenecks in Post-Genomics Drug Discovery" at the top. Below these words is a
process flow diagram illustrating the drug discovery process and the key
bottlenecks within this process. The diagram begins on the upper left portion of
the gatefold and flows horizontally to the upper right portion of the gatefold.
Below and to the right of the diagram is an orange arrow indicating that orange
portions of the diagram represent bottlenecks in the drug discovery process. The
diagram is initially split into two parallel tracks which merge into a single
track near the middle of the pages as the flow diagram moves to the right. The
upper track of the diagram is titled "Compound Development" and includes a green
arrow titled "Compound Libraries." Below the arrow is a bullet point followed by
the words "Combinatorial Chemistry." The lower track of the diagram is titled
"Target Discovery" and includes two arrows. The first arrow is green and is
titled "Target Identification." Below this arrow is a bullet point followed by
the word "Genomics." The next arrow to the right is orange and is titled "Target
Validation." Below this arrow is a bullet point followed by the word
"Proteomics." Following the "Compound Libraries" arrow on the upper track and
the "Target Validation" arrow on the lower track, the two tracks of the diagram
combine and include green and orange arrows to illustrate the remaining stages
and key bottlenecks in the drug discovery process. The individual arrows from
left to right include an orange arrow titled "Assay Development" followed by a
green arrow titled "High Throughput Screening." These two arrows in the diagram
appear under the title "Primary Screening." To the right of the "High Throughput
Screening" arrow is an orange arrow titled "Lead Optimization" followed by an
orange arrow titled "ADMET Screening." These two arrows in the diagram appear
under the title "Secondary Screening." To the right of the "ADMET Screening"
arrow is a green arrow titled "Clinical Trials," the final arrow in the process
flow diagram.
 
    The lower portion of the gatefold consists of product descriptions. The
lower left portion begins with the words "Protein Purification" with the
following product photos and short descriptions appearing below "Protein
Purification." A drawing of a pipette tip is followed by the words "PrepTip-TM
Coated pipette tips for the purification of protein samples as small as 1ml."
Below this is a photo of spin columns followed by the words "UltraMicro Spin
Columns Loaded spin columns for the purification of protein samples as small as
5ml." Below this is a photo of disposable dialyzers followed by the words
"Disposable Dialyzers For the purification of protein samples as small as 1ml."
Below this are the words "Protein Analysis" with the following product photos
and short descriptions appearing below "Protein Analysis." A photo of a
DNA/RNA/protein calculator followed by the words "GeneQuant Pro-TM
DNA/RNA/Protein calculators." Below this are photos of a purple
spectrophotometer, a yellow spectrophotometer and a green spectrophotometer
followed by the words "UltroSpec-TM Range of spectrophotometers for molecular
biology." Below this is a photo of an amino acid analysis system followed by the
words "Biochrom-TM 20 Amino Acid Analysis System."
 
    The lower right portion begins with the word "Absorption." Below this is a
photo of an absorption measurement chamber followed by the words "NaviCyte-TM
Absorption measurement chambers." Below this is the word "Distribution" with a
photo of an equilibrium dialysis plate and followed by the words "96 Well
Equilibrium Dialysis Plate Equilibrium dialysis plate for serum protein binding
assays." Below this are the words "Metabolism and Elimination" with a photo of
an isolated organ system and followed by the words "Isolated Organ Systems Liver
and kidney systems are used for studying metabolism and elimination." Below this
is the word "Toxicology" with a photo of a desktop computer and the ScanTox
product followed by the words "ScanTox-TM In vitro toxicology assay." Below this
is a photo of an infusion pump followed by the words "PHD 2000 Infusion pump for
toxicology testing."

<PAGE>
                               TABLE OF CONTENTS
 
   

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Prospectus Summary..........................................       1
 
Risk Factors................................................       6
 
Information Regarding Forward-Looking Statements............      14
 
Use of Proceeds.............................................      15
 
Dividend Policy.............................................      15
 
Capitalization..............................................      16
 
Dilution....................................................      17
 
Selected Financial Data.....................................      18
 

Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................      19
 
Business....................................................      27
 
Management..................................................      43
 
Relationships and Related Party Transactions................      50
 
Principal and Selling Stockholders..........................      51
 
Description of Capital Stock................................      53
 
Shares Eligible for Future Sale.............................      57
 
Underwriting................................................      59
 
Legal Matters...............................................      62
 
Experts.....................................................      62
 
Where You Can Find More Information.........................      62
 
Index to Consolidated Financial Statements..................     F-1
</TABLE>

    

<PAGE>

                               PROSPECTUS SUMMARY
 
    THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS"
SECTION.
 
OUR COMPANY
 
   
    We are a global developer, manufacturer and marketer of innovative, enabling
tools used in drug discovery research at pharmaceutical and biotechnology
companies, universities and government laboratories. We sell approximately
10,000 products to more than 5,000 customers in over 60 countries. Our
proprietary products accounted for approximately 82% of our revenues for the
nine months ended September 30, 2000. We have designed our tools to accelerate
the speed and to reduce the cost at which our customers can discover and
commercialize new drugs. By providing research tools, we participate in the
revolutions in genomics, the study of genes, and proteomics, the study of
proteins, without bearing the risks inherent in attempting to discover new
drugs.
    
 
    Since our reorganization in March 1996, we have focused on developing tools
to alleviate two critical bottlenecks in the drug discovery process:
 
    - PROTEIN PURIFICATION, which is the removal of contaminants such as salts,
      buffers, detergents and cellular debris from a protein sample, and
 
    - ADMET SCREENING, which is the testing of the absorption, distribution,
      metabolism, elimination and toxicology properties of drug candidates.
 
   
Our proteomics products are tools that allow researchers to purify and analyze
proteins contained in a sample. Our ADMET screening products are tools that
enable researchers to test drug candidates to determine their absorption,
distribution, metabolism, elimination and toxicology properties prior to
conducting costly clinical trials.
    
 
   
    We market our products primarily through our 1,000 page catalog to
approximately 100,000 researchers worldwide. Our catalog is also available on
our website. We distribute most of our products directly through our operations
in the United States, the United Kingdom, Germany, France and Canada. In
addition to our catalog distribution channel, we have a long-standing
distribution and marketing relationship with Amersham Pharmacia Biotech, or
APBiotech, one of the largest companies in the life sciences industry.
    
 
OUR OPPORTUNITY
 
   
    Drug discovery is a time-consuming and costly process. In the pre-genomics
era, the compound development, primary screening and clinical trials stages were
bottlenecks in this process. The recent successes of genomics, combinatorial
chemistry (the automated production of large numbers of chemical compounds) and
high throughput screening have alleviated the bottlenecks at the compound
development and primary screening stages. However, these bottlenecks have been
replaced by bottlenecks at later stages in the drug discovery process. Our
opportunity lies in alleviating these bottlenecks with products that increase
the productivity and reduce the cost of drug discovery.
    
 
OUR PRODUCTS
 
    We have a broad array of established products for proteomics and ADMET
screening. We believe our products offer drug discovery researchers the most
comprehensive protein purification and
 
                                       1

<PAGE>
ADMET screening solutions. In the past two years, we have expanded our product
base by introducing the following proprietary tools:
 
    PROTEIN PURIFICATION:
 
   
       - specially coated pipette tips, which are small plastic tubes coated on
         the inside with a material that selectively extracts proteins but not
         contaminants,
    
 
   
       - micro spin columns, which are small plastic tubes partially filled with
         a material that selectively extracts proteins but not contaminants, and
    
 
   
       - micro dialyzers, which are small plastic tubes each containing a
         dialysis membrane which allows small molecules to pass through but
         retains large molecules such as proteins.
    
 
    ADMET SCREENING:
 
   
       - NaviCyte diffusion chambers, which measure drug absorption by
         simulating membranes in the human body,
    
 
   
       - small plastic plates with 96 wells, which each contain a dialysis
         membrane that allows small molecules to pass through but retains large
         molecules such as proteins, and
    
 
   
       - ScanTox instruments, which enable toxicology testing without the use of
         animals.
    
 
   
    In protein purification, these new products increase productivity and reduce
cost by avoiding the cumbersome sample handling steps required by current
technology and by being compatible with automated liquid-handling robots. Many
of the products are available in 96 well plate formats. In ADMET screening,
these new products lower cost and increase automation by using molecular,
cellular, tissue and organ based assays to reduce the use of live animals.
    
 
   
    In addition to our proprietary products, we provide a broad selection of
non-proprietary products that are frequently used in conjunction with our
proprietary products. We seek to be a single source for our customers' product
needs in protein purification and ADMET screening.
    
 
OUR STRATEGY
 
    Our goal is to become the leading provider of innovative, enabling
technologies and products for proteomics and ADMET research in the drug
discovery process. Key elements of our strategy are to:
 
    - establish our new proteomics and ADMET screening products as industry
      standards,
 
    - launch a broad range of innovative new tools for drug discovery,
 
    - leverage our existing distribution and marketing channels,
 
    - provide a single source of tools for our customers' research needs in
      proteomics and ADMET screening, and
 
    - acquire complementary technologies.
 
                            ------------------------
 
    We organized our company as a Massachusetts corporation on March 7, 1996 in
connection with our purchase of a portion of the assets of Harvard Apparatus, a
business which, with its predecessors, had been in existence since 1901. We will
be reincorporated by merger in Delaware prior to the closing of this offering.
In connection with the reincorporation, we will change our corporate name from
Harvard Apparatus, Inc. to Harvard Bioscience, Inc. Our principal executive
offices are located at 84 October Hill Road, Holliston, Massachusetts 01746. Our
telephone number at that location is (508) 893-8066 and our Internet address is
www.harvardbioscience.com. The information contained on our website is not part
of this prospectus.
 
                                       2

<PAGE>
   
    We have six wholly-owned subsidiaries, Biochrom Ltd. (United Kingdom),
Harvard Apparatus Limited (United Kingdom), Hugo Sachs Elektronik-Harvard
Apparatus GmbH (Germany), Harvard Apparatus S.A.R.L. (France), Harvard Apparatus
FSC, Inc. (United States) and Ealing Scientific Ltd. (Canada).
    
 
   
    The names Harvard Bioscience and Harvard Apparatus and our logo are names
and trademarks that belong to us. We have the rights to numerous trademarks and
trade names including AmiKa, Biochrom, CPK, GeneQuant, GeneQuantPro, NaviCyte,
NovaSpec, PrepTip, PureTip, ScanTox, Stronghold and UltroSpec. This prospectus
also contains the trademarks and trade names of other entities that are the
property of their respective owners. We have no affiliation with Harvard
University.
    
 
                                  THE OFFERING
 
   

<TABLE>
<S>                                            <C>
Common stock offered by us...................  6,250,000 shares
 
Common stock offered by our president as a
  selling stockholder........................  172,450 shares
 
Common stock outstanding after the
  offering...................................  24,782,422 shares
 
Use of proceeds..............................  For payment of existing debt, redemption of
                                               our series A redeemable preferred stock,
                                               potential acquisitions, working capital and
                                               general corporate purposes.
 
Proposed Nasdaq National Market symbol.......  HBIO
</TABLE>

    
 
   
The above information is based on 18,532,422 shares outstanding as of
October 15, 2000 and excludes:
    
 
   
    - 599,096 shares issuable upon exercise of options then outstanding at a
      weighted average exercise price of $1.00 per share.
    
 
Unless otherwise noted, this prospectus assumes:
 
    - no exercise of the underwriters' over-allotment,
 
   
    - an assumed initial offering price of $12.00 per share,
    
 
   
    - a 19.71-for-1 stock split of our common stock effected in connection with
      this offering,
    
 
    - our reincorporation by merger in Delaware and our related name change
      prior to the closing of this offering,
 
    - the redemption of our outstanding series A redeemable preferred stock upon
      the closing of this offering,
 
   
    - the automatic conversion of our outstanding series B convertible preferred
      stock into 955,935 shares of our common stock upon the closing of this
      offering,
    
 
   
    - the issuance of 8,509,905 shares of our common stock upon exercise of all
      outstanding warrants at a weighted average exercise price of $0.0005 per
      share prior to the closing of this offering, and
    
 
    - the amendment and restatement of our certificate of incorporation in
      connection with this offering.
 
                                       3

<PAGE>
                             SUMMARY FINANCIAL DATA
   

<TABLE>
<CAPTION>
                                                  PREDECESSOR
                                 PREDECESSOR        COMPANY       FOR THE PERIOD
                                   COMPANY      FOR THE PERIOD    FROM INCEPTION
                                 FISCAL YEAR    FROM JANUARY 1,     MARCH 15,
                                    ENDED           1996 TO          1996 TO
                                 DECEMBER 31,      MARCH 14,       DECEMBER 31,
                                     1995            1996              1996
                                 ------------   ---------------   --------------
                                 (UNAUDITED)      (UNAUDITED)
                                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                              <C>            <C>               <C>
STATEMENT OF OPERATIONS DATA:
Net sales......................   $   10,032      $    1,989        $    8,198
Cost of goods sold.............        5,286           1,059             4,080
Stock compensation expense.....           --              --                --
                                  ----------      ----------        ----------
    Gross profit...............        4,746             930             4,118
Other operating expenses.......        4,252             810             3,141
Stock compensation expense.....           --              --                --
                                  ----------      ----------        ----------
    Operating income (loss)....          494             120               977
                                  ----------      ----------        ----------
Other (expense) income:
  Common stock warrant interest
  expense......................           --              --                --
  Interest expense, net........         (472)            (90)             (177)
  Amortization of deferred
  financing costs..............           --              --                --
  Other........................          (62)           (139)               98
                                  ----------      ----------        ----------
    Other expense, net.........         (534)           (229)              (79)
                                  ----------      ----------        ----------
    (Loss) income before income
    taxes......................          (40)           (109)              898
Income taxes...................           85              --               362
                                  ----------      ----------        ----------
    Net (loss) income..........   $     (125)     $     (109)       $      536
Preferred stock dividends......           --              --               (97)
                                  ----------      ----------        ----------
    Net (loss) income available
    to common stockholders.....   $     (125)     $     (109)       $      439
                                  ==========      ==========        ==========
(Loss) income per share:
  Basic........................   $    (0.01)     $    (0.01)       $     0.04
                                  ==========      ==========        ==========
  Diluted......................   $    (0.01)     $    (0.01)       $     0.02
                                  ==========      ==========        ==========
Weighted average common shares:
  Basic........................   10,259,410      10,259,410        10,259,410
                                  ==========      ==========        ==========
  Diluted......................   10,259,410      10,259,410        20,241,145
                                  ==========      ==========        ==========
Pro forma (loss) income per
  share:
  Basic........................
  Diluted......................
Pro forma weighted average
  common shares:
  Basic........................
  Diluted......................
 
<CAPTION>
 
                                                                           NINE MONTHS ENDED
                                    FISCAL YEAR ENDED DECEMBER 31,           SEPTEMBER 30,
                                 ------------------------------------   ------------------------
                                    1997         1998         1999         1999          2000
                                 ----------   ----------   ----------   -----------   ----------
                                                                        (UNAUDITED)
                                       (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                              <C>          <C>          <C>          <C>           <C>
STATEMENT OF OPERATIONS DATA:
Net sales......................  $   11,464   $   12,154   $   26,178    $  18,470    $   22,069
Cost of goods sold.............       5,128        5,351       13,547        9,359        11,462
Stock compensation expense.....          --           --           --           --           151
                                 ----------   ----------   ----------    ---------    ----------
    Gross profit...............       6,336        6,803       12,631        9,111        10,456
Other operating expenses.......       4,217        4,391        8,151        5,862         7,723
Stock compensation expense.....          --           --        3,284          937        13,181
                                 ----------   ----------   ----------    ---------    ----------
    Operating income (loss)....       2,119        2,412        1,196        2,312       (10,448)
                                 ----------   ----------   ----------    ---------    ----------
Other (expense) income:
  Common stock warrant interest
  expense......................        (117)      (1,379)     (29,694)      (7,403)      (70,920)
  Interest expense, net........        (223)        (210)        (657)        (468)         (655)
  Amortization of deferred
  financing costs..............          --           --          (63)         (44)          (56)
  Other........................          10           31          (65)          46          (428)
                                 ----------   ----------   ----------    ---------    ----------
    Other expense, net.........        (330)      (1,558)     (30,479)      (7,869)      (72,059)
                                 ----------   ----------   ----------    ---------    ----------
    (Loss) income before income
    taxes......................       1,789          854      (29,283)      (5,557)      (82,507)
Income taxes...................         682          783          137          649         1,354
                                 ----------   ----------   ----------    ---------    ----------
    Net (loss) income..........  $    1,107   $       71   $  (29,420)   $  (6,206)   $  (83,861)
Preferred stock dividends......        (122)        (122)        (157)        (115)         (123)
                                 ----------   ----------   ----------    ---------    ----------
    Net (loss) income available
    to common stockholders.....  $      985   $      (51)  $  (29,577)   $  (6,321)   $  (83,984)
                                 ==========   ==========   ==========    =========    ==========
(Loss) income per share:
  Basic........................  $     0.13   $    (0.01)  $    (5.28)   $   (1.13)   $   (13.11)
                                 ==========   ==========   ==========    =========    ==========
  Diluted......................  $     0.06   $    (0.01)  $    (5.28)   $   (1.13)   $   (13.11)
                                 ==========   ==========   ==========    =========    ==========
Weighted average common shares:
  Basic........................   7,406,486    5,598,626    5,598,626    5,598,626     6,407,682
                                 ==========   ==========   ==========    =========    ==========
  Diluted......................  17,500,194    5,598,626    5,598,626    5,598,626     6,407,682
                                 ==========   ==========   ==========    =========    ==========
Pro forma (loss) income per
  share:
  Basic........................                            $     0.01                 $    (0.82)
                                                           ==========                 ==========
  Diluted......................                            $     0.01                 $    (0.82)
                                                           ==========                 ==========
Pro forma weighted average
  common shares:
  Basic........................                            14,902,100                 15,873,527
                                                           ==========                 ==========
  Diluted......................                            16,976,735                 15,873,527
                                                           ==========                 ==========
</TABLE>

    
 
   
    Pro forma basic and diluted net (loss) income per share have been calculated
assuming the conversion of all outstanding shares of convertible preferred stock
into common stock and the exercise of all outstanding warrants into common stock
as if they had been converted on the dates of issuance. Accordingly, common
stock warrant interest expense and dividends associated with convertible
preferred shares are excluded from the pro forma per share amounts.
    
 
   
    The financial data presented above for the year ended December 31, 1995 and
for the period from January 1, 1996 to March 14, 1996 represents the financial
data of our predecessor company without any adjustments relating to our purchase
of a portion of its assets.
    
 
                                       4

<PAGE>
 
   

<TABLE>
<CAPTION>
                                                                  AS OF SEPTEMBER 30, 2000
                                                            ------------------------------------
                                                                                      PRO FORMA
                                                             ACTUAL     PRO FORMA    AS ADJUSTED
                                                            --------   -----------   -----------
<S>                                                         <C>        <C>           <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................................  $  2,149     $ 2,154       $68,904
Working capital...........................................     1,025       1,030        67,780
Total assets..............................................    23,236      23,241        89,991
Long-term obligations, net of current portion.............     5,730       5,730         5,730
Preferred stock...........................................     2,500       1,500            --
Common stock warrants.....................................   102,115          --            --
Stockholders' equity (deficit)............................   (97,018)      6,102        74,352
</TABLE>

    
 
   
    The preceding table presents a summary of our balance sheet data as of
September 30, 2000:
    
 
   
    - on an actual basis assuming the filing of an amended and restated
      certificate of incorporation to increase the number of authorized shares
      of common stock,
    
 
   
    - on a pro forma basis to give effect to the conversion of all outstanding
      shares of convertible preferred stock into an aggregate of 955,935 shares
      of common stock, the exercise of all outstanding warrants for an aggregate
      of 8,509,905 shares of common stock upon the closing of this offering and
      the filing of our amended and restated certificate of incorporation prior
      to the effective date of this offering, and
    
 
   
    - on a pro forma as adjusted basis to reflect the sale of 6,250,000 shares
      of common stock by us in this offering at an assumed initial offering
      price of $12.00 per share, after deducting estimated underwriting
      discounts, commissions and offering expense and the redemption of all
      outstanding shares of redeemable preferred stock upon the closing of this
      offering.
    
 
                                       5

<PAGE>

                                  RISK FACTORS
 
    AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE YOU DECIDE TO BUY OUR COMMON
STOCK.
 
IF WE ARE UNABLE TO ACHIEVE AND SUSTAIN MARKET ACCEPTANCE OF OUR NEW PROTEOMICS
AND ADMET SCREENING PRODUCTS ACROSS THEIR BROAD INTENDED RANGE OF APPLICATIONS,
WE WILL NOT GENERATE EXPECTED REVENUE GROWTH.
 
    Our business strategy depends on our successfully developing and
commercializing our new proteomics and ADMET screening technologies to meet our
customers' expanding needs and demands. For example, our recent acquisition of
AmiKa Corporation involved the purchase of the technology that we are using to
develop our 96 well plate for serum protein binding analysis. Market acceptance
of this and other new products will depend on many factors, including the extent
of our marketing efforts and our ability to demonstrate to existing and
potential customers that our technologies are superior to other technologies and
products that are available now or may become available in the future. If our
new products do not gain market acceptance, it could materially adversely affect
our business and future growth prospects.
 
OUR PRODUCTS COMPETE IN MARKETS THAT ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE,
AND THEREFORE ONE OR MORE OF OUR PRODUCTS COULD BE MADE OBSOLETE BY NEW
TECHNOLOGIES.
 
    Because the market for drug discovery tools is characterized by rapid
technological change and frequent new product introductions, our product lines
may be made obsolete unless we are able to continually improve our existing
products and develop new products. To meet the evolving needs of our customers,
we must continually enhance our current and planned products and develop and
introduce new products. However, we may experience difficulties which may delay
or prevent the successful development, introduction and marketing of new
products or product enhancements. In addition, our product lines are based on
complex technologies which are subject to rapid change as new technologies are
developed and introduced in the marketplace. We may have difficulty in keeping
abreast of the rapid changes affecting each of the different markets we serve or
intend to serve. Our failure to develop and introduce products in a timely
manner in response to changing technology, market demands or the requirements of
our customers could cause our product sales to decline, and we could experience
significant losses.
 
    We offer and plan to offer a broad product line and have incurred and expect
to continue to incur substantial expenses for development of new products and
enhanced versions of our existing products. The speed of technological change in
our market may prevent us from being able to successfully market some or all of
our products for the length of time required to recover their often significant
development costs. Failure to recover the development costs of one or more
products or product lines could decrease our profitability or cause us to
experience significant losses.
 
WE HAVE LIMITED EXPERIENCE IN MANUFACTURING SOME OF OUR PRODUCTS WHICH COULD
CAUSE PROBLEMS OR DELAYS RESULTING IN LOST REVENUE.
 
    We have only recently begun to manufacture and therefore currently have
limited manufacturing capacity for some of our products, such as our PrepTip
protein purification pipette tips. If we fail to manufacture and deliver
products in a timely manner, our relationships with our customers could be
seriously harmed, and our revenue could decline. To achieve the production
levels necessary for successful commercialization, we will need to scale-up our
manufacturing facilities and establish automated manufacturing methods and
quality control procedures. We cannot assure you that manufacturing or quality
control problems will not arise as we attempt to scale-up our production or that
we can scale-up manufacturing and quality control in a timely manner or at
commercially
 
                                       6

<PAGE>
reasonable costs. If we are unable to manufacture these products consistently on
a timely basis because of these or other factors, we may not achieve the level
of sales from these products that we otherwise anticipate.
 
IF AMERSHAM PHARMACIA BIOTECH TERMINATES ITS DISTRIBUTION AGREEMENT WITH US OR
FAILS TO PERFORM ITS OBLIGATIONS UNDER OUR DISTRIBUTION AGREEMENT, IT COULD
IMPAIR THE MARKETING AND DISTRIBUTION EFFORTS FOR SOME OF OUR PRODUCTS AND
RESULT IN LOST REVENUES.
 
   
    For the nine months ended September 30, 2000, approximately 39% of our
revenues were generated through an agreement with Amersham Pharmacia Biotech, or
APBiotech, under which APBiotech acts as our primary marketing and distribution
channel for the products of our Biochrom subsidiary. Under the terms of this
agreement, we are restricted from allowing another person or entity to
distribute, market and sell the majority of the products of our Biochrom
subsidiary. We are also restricted from making or promoting sales of the
majority of the products of our Biochrom subsidiary to any person or entity
other than APBiotech or its authorized subdistributors. We have little or no
control over APBiotech's marketing and sales activities or the use of its
resources. APBiotech may fail to purchase sufficient quantities of products from
us or perform appropriate marketing and sales activities. The failure by
APBiotech to perform these activities could materially adversely affect our
business and growth prospects during the term of this agreement. In addition,
our inability to maintain our arrangement with APBiotech for product
distribution, could materially impede the growth of our business and our ability
to generate sufficient revenue. Our agreement with APBiotech may be terminated
early under some circumstances, including in the event of a breach of a material
term by us. In addition, this agreement may be terminated by either party upon
18 months' prior written notice. While we believe our relationship with
APBiotech is good, we cannot guarantee that the contract will be renewed or that
APBiotech will aggressively market our products in the future.
    
 
OUR COMPETITORS AND POTENTIAL COMPETITORS MAY DEVELOP PRODUCTS AND TECHNOLOGIES
THAT ARE MORE EFFECTIVE OR COMMERCIALLY ATTRACTIVE THAN OUR PRODUCTS.
 
    We expect to encounter increased competition from both established and
development-stage companies that continually enter our market. We anticipate
that these competitors will include:
 
    - companies developing and marketing life sciences research tools,
 
    - health care companies that manufacture laboratory-based tests and
      analyzers,
 
    - diagnostic and pharmaceutical companies, and
 
    - companies developing drug discovery technologies.
 
    Currently, our principal competition comes from established companies that
provide products which perform many of the same functions for which we market
our products. Our competitors may develop or market products that are more
effective or commercially attractive than our current or future products. Many
of our competitors have substantially greater financial, operational, marketing
and technical resources than we do. Moreover, these competitors may offer
broader product lines and tactical discounts, and may have greater name
recognition. In addition, we may face competition from new entrants into our
field. We may not have the financial resources, technical expertise or
marketing, distribution or support capabilities to compete successfully in the
future.
 
IF WE ARE UNABLE TO EFFECTIVELY PROTECT OUR INTELLECTUAL PROPERTY, THIRD PARTIES
MAY USE OUR TECHNOLOGY, WHICH WOULD IMPAIR OUR ABILITY TO COMPETE IN OUR
MARKETS.
 
    Our continued success will depend in significant part on our ability to
obtain and maintain meaningful patent protection for our products throughout the
world. Patent law relating to the scope of claims in the technology fields in
which we operate is still evolving. The degree of future protection for
 
                                       7

<PAGE>
our proprietary rights is uncertain. We own ten U.S. patents and have four
patent applications pending in the U.S. We also own numerous U.S. registered
trademarks and trade names and have applications for the registration of
trademarks and trade names pending. We rely on patents to protect a significant
part of our intellectual property and to enhance our competitive position.
However, our presently pending or future patent applications may not issue as
patents, and any patent previously issued to us may be challenged, invalidated,
held unenforceable or circumvented. Furthermore, the claims in patents which
have been issued or which may be issued to us in the future may not be
sufficiently broad to prevent third parties from producing competing products
similar to our products. In addition, the laws of various foreign countries in
which we compete may not protect our intellectual property to the same extent as
do the laws of the United States. If we fail to obtain adequate patent
protection for our proprietary technology, our ability to be commercially
competitive will be materially impaired.
 
    In addition to patent protection, we also rely on protection of trade
secrets, know-how and confidential and proprietary information. To maintain the
confidentiality of trade secrets and proprietary information, we generally seek
to enter into confidentiality agreements with our employees, consultants and
strategic partners upon the commencement of a relationship with us. However, we
may not obtain these agreements in all circumstances. In the event of
unauthorized use or disclosure of this information, these agreements, even if
obtained, may not provide meaningful protection for our trade secrets or other
confidential information. In addition, adequate remedies may not exist in the
event of unauthorized use or disclosure of this information. The loss or
exposure of our trade secrets and other proprietary information would impair our
competitive advantages and could have a material adverse effect on our operating
results, financial condition and future growth prospects.
 
WE MAY BE INVOLVED IN LAWSUITS TO PROTECT OR ENFORCE OUR PATENTS WHICH WOULD BE
EXPENSIVE AND TIME-CONSUMING.
 
   
    In order to protect or enforce our patent rights, we may initiate patent
litigation against third parties. We may also become subject to interference
proceedings conducted in the patent and trademark offices of various countries
to determine the priority of inventions. Several of our products are based on
patents which are closely surrounded by patents held by competitors or potential
competitors. As a result, we believe there is a greater likelihood of a patent
dispute than would be expected if our patents were not closely surrounded by
other patents. The defense and prosecution, if necessary, of intellectual
property suits, interference proceedings and related legal and administrative
proceedings would be costly and divert our technical and management personnel
from their normal responsibilities. We may not prevail in any of these suits. An
adverse determination of any litigation or defense proceedings could put our
patents at risk of being invalidated or interpreted narrowly and could put our
patent applications at risk of not issuing.
    
 
    Furthermore, because of the substantial amount of discovery required in
connection with intellectual property litigation, there is a risk that some of
our confidential information could be compromised by disclosure during this type
of litigation. For example, during the course of this kind of litigation, there
could be public announcements of the results of hearings, motions or other
interim proceedings or developments in the litigation. Securities analysts or
investors may perceive these announcements to be negative, which could cause the
market price of our stock to decline.
 
OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON
OR MISAPPROPRIATING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
 
    We may be sued for infringing on the intellectual property rights of others,
including the patent rights, trademarks and trade names of third parties.
Intellectual property litigation is costly and the outcome is uncertain. If we
do not prevail in any intellectual property litigation, in addition to any
damages we might have to pay, we could be required to stop the infringing
activity, or obtain a license to or design around the intellectual property in
question. If we are unable to obtain a required license
 
                                       8

<PAGE>
on acceptable terms, or are unable to design around any third party patent, we
may be unable to sell some of our products and services, which could result in
reduced revenue.
 
   
    AmiKa Corporation, whose assets we purchased in July 2000, has received and
responded to correspondence from counsel to a third party competitor regarding
the possible infringement by it of a patent and other pending patent
applications held by such third party. Because this competitor has not pursued
this matter since AmiKa's initial reply, we believe that this matter has been
concluded. However, we cannot assure you that this third party competitor will
not assert these or similar claims in the future. We do not currently derive a
significant portion of our revenue from products which depend on the
intellectual property related to this alleged infringement.
    
 
   
CHANGES IN ACCOUNTING FOR GOODWILL AMORTIZATION MAY HAVE A MATERIAL ADVERSE
  AFFECT ON US.
    
 
   
    We currently amortize goodwill purchased in our acquisitions on a straight
line basis ranging from 5 to 15 years. At September 30, 2000, we had unamortized
goodwill of $9.1 million. Any changes in accounting rules under generally
accepted accounting principles that reduce the period over which we may amortize
goodwill may have an adverse effect on our ability to consummate future
acquisitions and our financial results. A shorter goodwill amortization period
would increase annual amortization expense and reduce our net income over the
amortization period.
    
 
WE ARE DEPENDENT UPON OUR LICENSED TECHNOLOGIES AND MAY NEED TO OBTAIN
ADDITIONAL LICENSES IN THE FUTURE TO OFFER OUR PRODUCTS AND REMAIN COMPETITIVE.
 
    We have licensed key components of our technologies from third parties. If
these agreements were to terminate prematurely or if we breach the terms of any
licenses or otherwise fail to maintain our rights to these technologies, we may
lose the right to manufacture or sell our products. In addition, we may need to
obtain licenses to additional technologies in the future in order to keep our
products competitive. If we fail to license or otherwise acquire necessary
technologies, we may not be able to develop new products that we need to remain
competitive.
 
MANY OF OUR CURRENT AND POTENTIAL CUSTOMERS ARE FROM THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRIES AND ARE SUBJECT TO RISKS FACED BY THOSE INDUSTRIES.
 
   
    We derive a substantial portion of our revenues from pharmaceutical and
biotechnology companies. We expect that pharmaceutical and biotechnology
companies will continue to be our major source of revenues for the foreseeable
future. As a result, we are subject to risks and uncertainties that affect the
pharmaceutical and biotechnology industries, such as pricing pressures as
third-party payers continue challenging the pricing of medical products and
services, government regulation, ongoing consolidation and uncertainty of
technological change, and to reductions and delays in research and development
expenditures by companies in these industries. In particular, several proposals
are being contemplated by lawmakers in the United States to extend the federal
Medicare program to include reimbursement for prescription drugs. Many of these
proposals involve negotiating decreases in prescription drug prices or imposing
price controls on prescription drugs. If appropriate reimbursement cannot be
obtained, it could result in our customers purchasing fewer products from us as
they reduce their research and development expenditures.
    
 
    In addition, we are dependent, both directly and indirectly, upon general
health care spending patterns, particularly in the research and development
budgets of the pharmaceutical and biotechnology industries, as well as upon the
financial condition of various governments and government agencies. Many of our
customers, including universities, government research laboratories, private
foundations and other institutions, obtain funding for the purchase of our
products from grants by governments or government agencies. There exists the
risk of a potential decrease in the level of governmental spending allocated to
scientific and medical research which could substantially reduce or even
eliminate
 
                                       9

<PAGE>
these grants. If government funding necessary to purchase our products were to
decrease, our business and results of operations could be materially adversely
affected.
 
OUR BUSINESS IS SUBJECT TO ECONOMIC, POLITICAL AND OTHER RISKS ASSOCIATED WITH
INTERNATIONAL REVENUES AND OPERATIONS.
 
   
    Since we manufacture and sell our products worldwide, our business is
subject to risks associated with doing business internationally. Our revenues
from our non-U.S. operations represented approximately 69% of our total revenues
for the nine months ended September 30, 2000. We anticipate that revenue from
international operations will continue to represent a substantial portion of our
total revenues. In addition, a number of our manufacturing facilities and
suppliers are located outside the United States. Accordingly, our future results
could be harmed by a variety of factors, including:
    
 
   
    - changes in foreign currency exchange rates, which have affected our
      operating results in the past,
    
 
    - changes in a specific country's or region's political or economic
      conditions,
 
    - trade protection measures and import or export licensing requirements or
      other restrictive actions by foreign governments,
 
   
    - potentially negative consequences from changes in tax laws affecting our
      ability to expatriate profits,
    
 
   
    - difficulty in staffing and managing widespread operations, and
    
 
   
    - more stringent labor regulations applicable to our European operations.
    
 
WE MAY LOSE MONEY WHEN WE EXCHANGE FOREIGN CURRENCY RECEIVED FROM INTERNATIONAL
REVENUES INTO U.S. DOLLARS.
 
   
    For the nine months ended September 30, 2000, approximately 69% of our
business was conducted in currencies other than the U.S. dollar, which is our
reporting currency. As a result, currency fluctuations among the U.S. dollar and
the currencies in which we do business have caused and will continue to cause
foreign currency transaction gains and losses. Currently, we attempt to manage
foreign currency risk through the matching of assets and liabilities. In the
future, we may undertake to manage foreign currency risk through additional
hedging methods. We recognize foreign currency gains or losses arising from our
operations in the period incurred. We cannot guarantee that we will be
successful in managing foreign currency risk or in predicting the effects of
exchange rate fluctuations upon our future operating results because of the
number of currencies involved, the variability of currency exposure and the
potential volatility of currency exchange rates.
    
 
IF WE ENGAGE IN ANY ACQUISITION, WE WILL INCUR A VARIETY OF COSTS, AND MAY NEVER
REALIZE THE ANTICIPATED BENEFITS OF THE ACQUISITION.
 
   
    Our business strategy includes the future acquisition of businesses,
technologies, services or products that we believe are a strategic fit with our
business. We currently have no commitments or agreements with respect to any
material acquisitions. If we do undertake any acquisition, the process of
integrating an acquired business, technology, service or product may result in
unforeseen operating difficulties and expenditures and may absorb significant
management attention that would otherwise be available for ongoing development
of our business. Moreover, we may fail to realize the anticipated benefits of
any acquisition. Future acquisitions could reduce your ownership and could cause
us to incur debt, expose us to future liabilities and result in amortization
expenses related to goodwill and other intangible assets.
    
 
                                       10

<PAGE>
IF WE FAIL TO RETAIN OUR KEY PERSONNEL AND HIRE, TRAIN AND RETAIN QUALIFIED
EMPLOYEES, WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY, WHICH COULD RESULT IN
REDUCED REVENUE.
 
   
    Our success is highly dependent on the continued services of key management,
technical and scientific personnel. Our management and other employees may
voluntarily terminate their employment with us at any time upon short notice.
The loss of the services of any member of our senior management team, including
our Chief Executive Officer, Chane Graziano, and our President, David Green, or
any of our technical or scientific staff may significantly delay or prevent the
achievement of product development and other business objectives. We maintain
key person life insurance on Messrs. Graziano and Green. Our future success will
also depend on our ability to identify, recruit and retain additional qualified
scientific, technical and managerial personnel. Competition for qualified
personnel in the technology area is intense, and we operate in several
geographic locations where labor markets are particularly competitive, including
Boston, Massachusetts and London and Cambridge, England, and where demand for
personnel with these skills is extremely high and is likely to remain high. As a
result, competition for qualified personnel is intense, particularly in the
areas of information technology, engineering and science and the process of
hiring suitably qualified personnel is often lengthy. If we are unable to hire
and retain a sufficient number of qualified employees, our ability to conduct
and expand our business could be seriously reduced.
    
 
WE PLAN SIGNIFICANT GROWTH, AND THERE IS A RISK THAT WE WILL NOT BE ABLE TO
MANAGE THIS GROWTH.
 
    Our success will depend on the expansion of our operations. Effective growth
management will place increased demands on our management, operational and
financial resources. To manage our growth, we must expand our facilities,
augment our operational, financial and management systems, and hire and train
additional qualified personnel. Our failure to manage this growth effectively
could impair our ability to generate revenue or could cause our expenses to
increase more rapidly than revenue, resulting in operating losses.
 
   
OUR EXISTING STOCKHOLDERS WILL HAVE SUBSTANTIAL INFLUENCE OVER MATTERS REQUIRING
A STOCKHOLDER VOTE.
    
 
   
    Following the completion of this offering, our current stockholders will
beneficially own or control approximately 74% of the outstanding shares of our
common stock. If all of these stockholders were to vote together as a group,
they would have the ability to elect our board of directors and control the
outcome of stockholder votes, including votes concerning by-law amendments and
possible mergers, corporate control contests and other significant corporate
transactions. In addition, this concentration of ownership may delay or prevent
a change of control of our company at a premium price if these stockholders
oppose it. The interests of these stockholders may not always coincide with our
interests as a company or the interests of other stockholders.
    
 
BECAUSE OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE, OUR STOCK PRICE COULD
EXPERIENCE SUBSTANTIAL DECLINES AND OUR MANAGEMENT'S ATTENTION MAY BE DIVERTED
FROM MORE PRODUCTIVE TASKS.
 
    The market price of our common stock is likely to be volatile and could
decline, perhaps substantially, following this offering in response to various
factors, many of which are beyond our control, including:
 
    - technological innovations by competitors or in competing technologies,
 
    - revenues and operating results failing to meet the expectations of
      securities analysts or investors in any quarter,
 
    - downward revisions in securities analysts' estimates,
 
    - conditions or trends in the biotechnology and pharmaceutical industries,
 
                                       11

<PAGE>
    - announcements by us of significant acquisitions or financings or changes
      in strategic partnerships, and
 
    - a decrease in the demand for our common stock.
 
    In addition, the stock market in general, and the Nasdaq National Market and
the biotechnology industry market in particular, have experienced significant
price and volume fluctuations that at times have been unrelated or
disproportionate to the operating performance of those companies. These broad
market and industry factors may seriously harm the market price of our common
stock, regardless of our operating performance. In the past, securities class
action litigation has often been instituted following periods of volatility in
the market price of a company's securities. A securities class action suit
against us could result in substantial costs, potential liabilities and the
diversion of our management's attention and resources.
 
PROVISIONS OF DELAWARE LAW AND OF OUR CHARTER AND BY-LAWS MAY MAKE A TAKEOVER
MORE DIFFICULT WHICH COULD CAUSE OUR STOCK PRICE TO DECLINE.
 
    Provisions in our certificate of incorporation and by-laws and in the
Delaware corporate law may make it difficult and expensive for a third party to
pursue a tender offer, change in control or takeover attempt which is opposed by
our management and board of directors. Public stockholders who might desire to
participate in such a transaction may not have an opportunity to do so. We also
have a staggered board of directors which makes it difficult for stockholders to
change the composition of the board of directors in any one year. These
anti-takeover provisions could substantially impede the ability of public
stockholders to change our management and board of directors. Such provisions
may also limit the price that investors might be willing to pay for shares of
our common stock in the future.
 
   
FAILURE TO RAISE ADDITIONAL CAPITAL OR GENERATE THE SIGNIFICANT CAPITAL
NECESSARY TO EXPAND OUR OPERATIONS AND INVEST IN NEW PRODUCTS COULD REDUCE OUR
ABILITY TO COMPETE AND RESULT IN LOWER REVENUE.
    
 
    We anticipate that our existing capital resources and the net proceeds from
this offering will enable us to maintain currently planned operations for at
least the next two years. However, we premise this expectation on our current
operating plan, which may change as a result of many factors, including market
acceptance of our new products and future opportunities with collaborators.
Consequently, we may need additional funding sooner than anticipated. Our
inability to raise capital could seriously harm our business and product
development efforts.
 
    If we raise additional funds through the sale of equity or convertible debt
or equity-linked securities, your percentage ownership in the company will be
reduced. In addition, these transactions may dilute the value of our outstanding
stock. We may issue securities that have rights, preferences and privileges
senior to our common stock. If we raise additional funds through collaborations
or licensing arrangements, we may relinquish rights to certain of our
technologies or products, or grant licenses to third parties on terms that are
unfavorable to us. We may be unable to raise additional funds on terms
acceptable to us. If future financing is not available to us or is not available
on terms acceptable to us, we may have to curtail or cease operations.
 
SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE.
 
   
    The market price of our common stock could decline as a result of sales of
shares by our existing stockholders after this offering, or the perception that
such sales will occur. These sales also might make it difficult for us to sell
equity securities in the future at a time and at a price that we deem
appropriate. After this offering, we will have 24,782,422 shares of common stock
outstanding. Of these shares, all of the shares sold in this offering will be
freely tradeable. All of our existing stockholders have executed lock-up
agreements. Those lock-up agreements restrict all of our existing stockholders
from selling, pledging or otherwise disposing of their shares for a period of
180 days after the date of
    
 
                                       12

<PAGE>
   
this prospectus without the prior written consent of Thomas Weisel Partners LLC.
However, Thomas Weisel Partners LLC may, in its sole discretion, release all or
any portion of the common stock from the restrictions of the lock-up agreements.
In addition, after this offering, we also intend to register 1,250,000 shares of
common stock for issuance under our 2000 Stock Option and Incentive Plan and
500,000 shares under our Employee Stock Purchase Plan.
    
 
WE WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THIS OFFERING
AND MAY USE THE PROCEEDS IN A MANNER WITH WHICH YOU DISAGREE.
 
    Our board of directors and our management will have broad discretion over
the use of the net proceeds of this offering. You may disagree with the judgment
of our board of directors and our management regarding the application of the
proceeds of this offering. We intend to use a majority of the proceeds from this
offering for payment of existing debt, redemption of our series A preferred
stock, working capital and general corporate purposes and to fund potential
acquisitions, if any. Because of the number and variability of factors that
determine our use of the net proceeds from this offering, we cannot assure you
that our actual use will not vary substantially from our currently planned uses.
Initially, we intend to invest the net proceeds from this offering in income
producing, investment grade securities.
 
FUTURE ISSUANCE OF OUR PREFERRED STOCK MAY DILUTE THE RIGHTS OF OUR COMMON
STOCKHOLDERS.
 
    Our board of directors has the authority to issue up to 5,000,000 shares of
preferred stock and to determine the price, privileges and other terms of these
shares. The board of directors may exercise this authority without any further
approval of our stockholders. The rights of the holders of common stock may be
adversely affected by the rights of future holders of our preferred stock.
 
YOU WILL NOT RECEIVE CASH DIVIDENDS ON YOUR INVESTMENT IN OUR COMMON STOCK.
 
    We intend to retain all of our earnings to finance the development and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future. Moreover, our ability to declare and pay cash dividends on
our common stock is restricted by covenants in our senior credit facility and in
the indenture governing our senior subordinated notes. As a result, capital
appreciation, if any, of our common stock will be your sole source of gain for
the foreseeable future.
 
AN ACTIVE TRADING MARKET FOR OUR COMMON STOCK MAY NOT DEVELOP.
 
    Prior to this offering, there has been no public market for our common
stock. Although we expect our common stock to be quoted on the Nasdaq National
Market, an active trading market for our shares may not develop or be sustained
following this offering. You may not be able to resell your shares at prices
equal to or greater than the initial public offering price. The initial public
offering price will be determined through negotiations between us and the
underwriters and may not be indicative of the market price for these shares
following this offering. You should read "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price.
 
                                       13

<PAGE>
                INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
 
    This prospectus contains forward-looking statements. The forward-looking
statements are principally contained in the sections on "Prospectus Summary,"
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." These statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performances
or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements.
Forward-looking statements include, but are not limited to:
 
    - our business strategy,
 
    - the market opportunity for our products, including the willingness of our
      customers to expand proteomics and ADMET investments,
 
    - our plans for hiring additional personnel,
 
    - our estimates regarding our capital requirements and our needs for
      additional financing, and
 
    - our plans, objectives, expectations and intentions contained in this
      prospectus that are not historical facts.
 
    In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "intends," "potential" and
similar expressions intended to identify forward-looking statements. These
statements reflect our current views with respect to future events and are based
on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements. We discuss many of these risks in greater detail under the heading
"Risk Factors." Also, these forward-looking statements represent our estimates
and assumptions only as of the date of this prospectus.
 
    You should read this prospectus completely and with the understanding that
our actual future results may be materially different from what we expect. We
may not update these forward-looking statements, even though our situation may
change in the future, unless we have obligations under the Federal securities
laws to update and disclose material developments related to previously
disclosed information. We qualify all of our forward-looking statements by these
cautionary statements.
 
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<PAGE>

                                USE OF PROCEEDS
 
   
    We estimate that the net proceeds we will receive from the sale of 6,250,000
shares of common stock will be approximately $68.3 million, or approximately
$78.7 million if the underwriters fully exercise their over-allotment option, at
the assumed offering price of $12.00 per share, in each case after deducting
estimated underwriting discounts, commissions and offering expenses payable by
us. We will not receive any proceeds from the sale of shares by our president as
a selling stockholder in this offering.
    
 
   
    The principal purposes of this offering are as follows:
    
 
   
    - to permit us to repay approximately $665,000 in subordinated debt and
      $9.6 million under our credit facility,
    
 
   
    - to permit us to redeem our series A redeemable preferred stock at a cost
      of approximately $1.5 million,
    
 
   
    - to provide us with funds to complete potential acquisitions and enhance
      our ability to use our common stock as consideration for potential
      acquisitions,
    
 
   
    - to increase our equity capital and facilitate our future access to public
      equity markets,
    
 
   
    - to increase our working capital, and
    
 
   
    - to increase funds available for general corporate purposes.
    
 
    Except for the payment of existing debt and the redemption of preferred
stock listed above, the use of proceeds has not been specifically identified or
allocated due to the flexible nature of our planning process and the constantly
changing nature of our industry. We will retain broad discretion in the
allocation and use of the net proceeds of this offering. Pending the uses
described above, we intend to invest the remaining net proceeds from this
offering in short-term, investment grade, interest-bearing securities.
 
    Our subordinated debt bears interest at an annual rate of 13.0% and matures
upon the consummation of this offering. All of the subordinated debt will be
retired out of the proceeds of this offering.
 
   
    Our credit facility consists of two term loans and a revolving credit line.
One term loan and the revolving line of credit mature in January 2002. The other
term loan matures in June 2004. The interest rate for the credit facility is
equal to our lender's base rate plus 1.0%. This interest rate was 10.5% at
October 15, 2000. In July 2000, we increased our borrowings under our credit
facility by $2.5 million to finance the acquisition of AmiKa Corporation. All of
our outstanding indebtedness under our credit facility will be repaid out of the
proceeds of this offering.
    
 

                                DIVIDEND POLICY
 
    We have never declared or paid dividends on our common stock in the past and
do not intend to pay dividends on our common stock in the foreseeable future.
Any future determination to pay dividends will be at the discretion of our board
of directors and will depend on our financial condition, results of operations,
capital requirements and other factors the board of directors deems relevant. In
addition, our existing credit facility does not permit us to pay cash dividends,
and any future credit facilities may not permit us to pay cash dividends.
 
                                       15

<PAGE>

                                 CAPITALIZATION
 
   
    The following table describes our capitalization as of September 30, 2000:
    
 
   
    - on an actual basis assuming the filing of an amended certificate of
      incorporation to increase the number of authorized shares of common stock,
    
 
   
    - on a pro forma basis to give effect to the conversion of all outstanding
      shares of convertible preferred stock into an aggregate of 955,935 shares
      of common stock, the exercise of all outstanding warrants for an aggregate
      of 8,509,905 shares of common stock upon the closing of this offering and
      the filing of our amended and restated certificate of incorporation prior
      to the effective date of this offering, and
    
 
   
    - on a pro forma as adjusted basis to reflect the sale of 6,250,000 shares
      of common stock by us in this offering at an assumed initial offering
      price of $12.00 per share, after deducting estimated underwriting
      discounts, commissions and offering expenses payable by us and the
      application of the net proceeds therefrom.
    
 
   

<TABLE>
<CAPTION>
                                                                   AS OF SEPTEMBER 30, 2000
                                                              -----------------------------------
                                                                                       PRO FORMA
                                                               ACTUAL     PRO FORMA   AS ADJUSTED
                                                              ---------   ---------   -----------
                                                               (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                           <C>         <C>         <C>
Series A redeemable preferred stock, par value $0.01 per
  share; 469,300 shares authorized, issued and outstanding,
  actual; 469,300 shares authorized, issued and outstanding,
  pro forma and no shares issued and outstanding pro forma
  as adjusted...............................................  $   1,500   $   1,500    $      --
Series B convertible preferred stock, par value $0.01 per
  share; 48,500 shares authorized, issued and outstanding,
  actual; no shares authorized, issued and outstanding, pro
  forma and pro forma as adjusted...........................      1,000          --           --
                                                              ---------   ---------    ---------
  Total preferred stock.....................................  $   2,500   $   1,500           --
                                                              ---------   ---------    ---------
Common stock warrants.......................................    102,115          --           --
                                                              ---------   ---------    ---------
 
Undesignated preferred stock, par value $0.01 per share;
  82,200 shares authorized, no shares issued and
  outstanding, actual; 5,000,000 shares authorized, no
  shares issued and outstanding, pro forma and pro forma as
  adjusted..................................................         --          --           --
Common stock, par value $0.01 per share; 80,000,000 shares
  authorized, 13,727,365 shares issued and outstanding,
  actual; 80,000,000 shares authorized, 23,193,210 shares
  issued and outstanding pro forma; 80,000,000 shares
  authorized, 29,443,210 shares issued and outstanding, pro
  forma as adjusted.........................................        137         232          294
Additional paid-in capital..................................     18,132     121,157      189,345
Treasury stock..............................................       (668)       (668)        (668)
Notes receivable............................................     (1,548)     (1,548)      (1,548)
Retained earnings (accumulated deficit).....................   (112,358)   (112,358)    (112,358)
Accumulated other comprehensive income (loss)...............       (713)       (713)        (713)
                                                              ---------   ---------    ---------
  Total stockholders' equity................................    (97,018)      6,102       74,352
                                                              ---------   ---------    ---------
    Total capitalization....................................  $   7,597   $   7,602    $  74,352
                                                              =========   =========    =========
</TABLE>

    
 
   
    The above table excludes 598,612 shares of common stock issuable upon
exercise of stock options outstanding as of September 30, 2000 at a weighted
average exercise price of $1.00 per share. The above table also assumes no
exercise of the underwriters' over-allotment option.
    
 
                                       16

<PAGE>
                                    DILUTION
 
   
    Our pro forma net tangible book value as of September 30, 2000, was
approximately $(3.0) million, or $(0.19) per share of common stock. Pro forma
net tangible book value per share represents the amount of our total pro forma
tangible assets less total liabilities divided by the pro forma number of shares
of common stock outstanding. After giving effect to the issuance and sale by us
of 6,250,000 shares of common stock offered by this prospectus at an assumed
initial offering price of $12.00 per share and after deducting estimated
underwriting discounts, commissions and offering expenses payable by us, our pro
forma net tangible book value as of September 30, 2000 would have been $65
million, or $2.63 per share. This represents an immediate increase in the pro
forma net tangible book value of $2.82 per share to existing stockholders and an
immediate dilution of $9.37 per share to new stockholders in this offering
illustrated by the following table:
    
 
   

<TABLE>
<S>                                                         <C>      <C>
Assumed initial public offering price per share...........           $  12.00
 
  Pro forma net tangible book value per share before this
    offering..............................................  $(0.19)
 
  Increase per share attributable to new stockholders.....    2.82
                                                            ------
 
Pro forma net tangible book value per share after the
  offering................................................               2.63
                                                                     --------
 
Dilution per share to new investors.......................           $   9.37
                                                                     ========
</TABLE>

    
 
   
    The following table sets forth on a pro forma basis as of September 30,
2000, the number of shares of common stock purchased from us, the total
consideration paid and the average price per share paid by existing and new
stockholders before deducting underwriting discounts, commissions and offering
expenses payable by us:
    
 
   

<TABLE>
<CAPTION>
                           SHARES PURCHASED          TOTAL CONSIDERATION
                         ---------------------      ----------------------      AVERAGE PRICE
                           NUMBER     PERCENT         AMOUNT      PERCENT         PER SHARE
                         ----------   --------      -----------   --------      -------------
<S>                      <C>          <C>           <C>           <C>           <C>
Existing
  stockholders.........  18,532,422      74.8%      $ 2,558,106      3.3%          $ 0.14
New stockholders.......   6,250,000      25.2        75,000,000     96.7            12.00
                         ----------    ------       -----------    -----
    Total..............  24,782,422     100.0%      $77,558,106    100.0%
                         ==========    ======       ===========    =====
</TABLE>

    
 
   
    The foregoing discussion and tables assume no issuance of shares by us
pursuant to the underwriters' over-allotment option and no exercise of any stock
options outstanding. As of September 30, 2000, there were options outstanding to
purchase a total of approximately 598,612 shares of common stock with a weighted
average exercise price of $1.00 per share. To the extent that any of these
options are exercised, your investment will be further diluted. In addition, we
may grant more options in the future under our stock plans.
    
 
                                       17

<PAGE>
                            SELECTED FINANCIAL DATA
 
   
    You should read the following selected consolidated financial data in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and related
notes included elsewhere in this prospectus. The statement of operations data
for the years ended December 31, 1997, 1998 and 1999 and for the nine-month
period ended September 30, 2000 and the balance sheet data at December 31, 1998
and 1999 and September 30, 2000 are derived from our audited consolidated
financial statements appearing elsewhere in this prospectus. The balance sheet
data at December 31, 1997 and 1996, and the statement of operations data for
the period from March 15, 1996 to December 31, 1996 are derived from our audited
consolidated financial statements not included in this prospectus. The statement
of operations data for the year ended December 31, 1995 and for the period from
January 1, 1996 to March 14, 1996 and the balance sheet data at December 31,
1995 represents data of a predecessor company and are derived from their
unaudited consolidated financial statements not included in this prospectus. The
interim statement of operations data for the nine-month period ended
September 30, 1999 are derived from our unaudited consolidated interim financial
statements appearing elsewhere in this prospectus which, in the opinion of
management, have been prepared on the same basis as the audited consolidated
financial statements and reflect all adjustments necessary for a fair
presentation of that data. The data for the nine-month period ended
September 30, 2000 are not necessarily indicative of results for the year ending
December 31, 2000 or any future period.
    
   

<TABLE>
<CAPTION>
                                                       PREDECESSOR
                                                         COMPANY
                                                     FOR THE PERIOD    FOR THE PERIOD FROM
                                                     FROM JANUARY 1,   INCEPTION MARCH 15,
                               PREDECESSOR COMPANY       1996 TO              1996
                                FISCAL YEAR ENDED       MARCH 14,        TO DECEMBER 31,
                                DECEMBER 31, 1995         1996                1996
                               -------------------   ---------------   -------------------
                                   (UNAUDITED)         (UNAUDITED)
                                     (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                            <C>                   <C>               <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................       $   10,032          $    1,989         $    8,198
Cost of goods sold...........            5,286               1,059              4,080
Stock compensation expense...               --                  --                 --
                                    ----------          ----------         ----------
    Gross profit.............            4,746                 930              4,118
General and administrative
  expense....................            2,435                 487              1,834
Marketing and selling
  expense....................            1,469                 232              1,058
Research and development.....              348                  91                249
Amortization of goodwill.....               --                  --                 --
Stock compensation expense...               --                  --                 --
                                    ----------          ----------         ----------
    Operating income
    (loss)...................              494                 120                977
                                    ----------          ----------         ----------
Other (expense) income:
  Foreign currency (loss)
  gain.......................               23                  (4)               108
  Common stock warrant
  interest expense...........               --                  --                 --
  Interest expense, net......             (472)                (90)              (177)
  Amortization of deferred
  financing costs............               --                  --                 --
  Other......................              (85)               (135)               (10)
                                    ----------          ----------         ----------
    Other expense, net.......             (534)               (229)               (79)
                                    ----------          ----------         ----------
    (Loss) income before
    income taxes.............              (40)               (109)               898
Income taxes.................               85                  --                362
                                    ----------          ----------         ----------
    Net (loss) income........       $     (125)         $     (109)        $      536
Preferred stock dividends....               --                  --                (97)
                                    ----------          ----------         ----------
    Net (loss) income
      available to common
      shareholders...........       $     (125)         $     (109)        $      439
                                    ==========          ==========         ==========
(Loss) income per share:
  Basic......................       $    (0.01)         $    (0.01)        $     0.04
                                    ==========          ==========         ==========
  Diluted....................       $    (0.01)         $    (0.01)        $     0.02
                                    ==========          ==========         ==========
Weighted average common shares:
  Basic......................       10,259,410          10,259,410         10,259,410
                                    ==========          ==========         ==========
  Diluted....................       10,259,410          10,259,410         20,241,145
                                    ==========          ==========         ==========
 
<CAPTION>
 
                                 FISCAL YEAR ENDED DECEMBER 31,     NINE MONTHS ENDED SEPTEMBER 30,
                               ----------------------------------   -------------------------------
                                  1997        1998        1999           1999             2000
                               ----------   ---------   ---------   --------------   --------------
                                                                     (UNAUDITED)
                                         (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                            <C>          <C>         <C>         <C>              <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................  $   11,464   $  12,154   $  26,178     $  18,470        $  22,069
Cost of goods sold...........       5,128       5,351      13,547         9,359           11,462
Stock compensation expense...          --          --          --            --              151
                               ----------   ---------   ---------     ---------        ---------
    Gross profit.............       6,336       6,803      12,631         9,111           10,456
General and administrative
  expense....................       2,338       2,317       4,147         2,927            3,733
Marketing and selling
  expense....................       1,672       1,722       2,448         1,842            2,359
Research and development.....         207         325       1,188           841            1,208
Amortization of goodwill.....          --          27         368           252              423
Stock compensation expense...          --          --       3,284           937           13,181
                               ----------   ---------   ---------     ---------        ---------
    Operating income
    (loss)...................       2,119       2,412       1,196         2,312          (10,448)
                               ----------   ---------   ---------     ---------        ---------
Other (expense) income:
  Foreign currency (loss)
  gain.......................         (96)         21         (48)           61             (456)
  Common stock warrant
  interest expense...........        (117)     (1,379)    (29,694)       (7,403)         (70,920)
  Interest expense, net......        (223)       (210)       (657)         (468)            (655)
  Amortization of deferred
  financing costs............          --          --         (63)          (44)             (56)
  Other......................         106          10         (17)          (15)              28
                               ----------   ---------   ---------     ---------        ---------
    Other expense, net.......        (330)     (1,558)    (30,479)       (7,869)         (72,059)
                               ----------   ---------   ---------     ---------        ---------
    (Loss) income before
    income taxes.............       1,789         854     (29,283)       (5,557)         (82,507)
Income taxes.................         682         783         137           649            1,354
                               ----------   ---------   ---------     ---------        ---------
    Net (loss) income........  $    1,107   $      71   $ (29,420)    $  (6,206)       $ (83,861)
Preferred stock dividends....        (122)       (122)       (157)         (115)            (123)
                               ----------   ---------   ---------     ---------        ---------
    Net (loss) income
      available to common
      shareholders...........  $      985   $     (51)  $ (29,577)    $  (6,321)       $ (83,984)
                               ==========   =========   =========     =========        =========
(Loss) income per share:
  Basic......................  $     0.13   $   (0.01)  $   (5.28)    $   (1.13)       $  (13.11)
                               ==========   =========   =========     =========        =========
  Diluted....................  $     0.06   $   (0.01)  $   (5.28)    $   (1.13)       $  (13.11)
                               ==========   =========   =========     =========        =========
Weighted average common share
  Basic......................   7,406,486   5,598,626   5,598,626     5,598,626        6,407,682
                               ==========   =========   =========     =========        =========
  Diluted....................  17,500,194   5,598,626   5,598,626     5,598,626        6,407,682
                               ==========   =========   =========     =========        =========
</TABLE>

    
 
   

<TABLE>
<CAPTION>
                                                                       AS OF DECEMBER 31,
                                                     -------------------------------------------------------         AS OF
                                                        1995         1996       1997       1998       1999     SEPTEMBER 30, 2000
                                                     -----------   --------   --------   --------   --------   ------------------
                                                     (UNAUDITED)
                                                                                    (IN THOUSANDS)
<S>                                                  <C>           <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Cash and cash equivalents..........................    $ 1,043      $1,088     $  707     $  957    $  2,396        $  2,149
Working capital....................................     (4,910)      1,677      1,698      2,205       3,783           1,025
Total assets.......................................     11,204       6,397      6,161      7,220      20,610          23,236
Long-term obligations, net of current portion......        498       1,112        829        638       5,073           5,730
Preferred stock....................................         --       1,504      1,621      1,500       2,500           2,500
Common stock warrants..............................         --          --         --      1,500      31,194         102,115
Stockholders' equity (deficit).....................      1,203         516        737        678     (25,711)        (97,018)
</TABLE>

    
 
                                       18

<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
    YOU SHOULD READ THE FOLLOWING DISCUSSION IN CONJUNCTION WITH OUR
CONSOLIDATED FINANCIAL STATEMENTS, THE RELATED NOTES AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS.
 
OVERVIEW
 
   
    We are a provider of innovative, enabling tools for drug discovery research
at pharmaceutical and biotechnology companies, universities and government
research laboratories. We focus on two critical bottlenecks in the drug
discovery process, proteomics during the target validation stage of the drug
discovery process and ADMET screening during the secondary screening stage of
the drug discovery process. Our proteomics products consist of tools that allow
our customers to purify and analyze proteins. Our ADMET screening products are
tools that enable our customers to test drug candidates to determine their
absorption, distribution, metabolism, elimination and toxicology properties
prior to conducting costly clinical trials.
    
 
    In providing tools for drug discovery generally, we have established a
significant base business and have achieved brand recognition through our sale
of precision pumps, ventilators and tissue/organ systems. Since our
reorganization in 1996, we have built upon our base business and brand
recognition by adding new technologies within the areas of proteomics and ADMET
screening. Specifically, we have acquired the following product lines,
businesses and technologies:
 
    - In June 1998, we acquired products for cell injection systems from Medical
      Systems Corporation for $1.0 million in cash,
 
    - In March 1999, we acquired Biochrom, which develops and manufactures
      DNA/RNA/protein calculators, spectrophotometers, amino acid analyzers and
      related consumables in the United Kingdom, from Pharmacia Biotech
      (Biochrom) Ltd for $7.0 million in cash,
 
    - In March 1999, we entered into an exclusive license for the technology
      underlying our ScanTox in vitro toxicology testing product for $25,000 in
      cash and ongoing royalties and licensing fee payments,
 
    - In September 1999, we acquired products for intracellular research from
      Clark Electromedical Instruments for $349,000 in cash,
 
    - In November 1999, we acquired our NaviCyte diffusion chamber systems
      product for drug absorption testing from a subsidiary of Trega Biosciences
      for $390,000 in cash and future royalties,
 
    - In November 1999, we acquired substantially all the assets and certain
      liabilities of Hugo Sachs Elektronik, consisting primarily of products for
      organ testing, for $568,000 in cash,
 
   
    - In May 2000, we acquired certain assets of Biotronik, consisting primarily
      of products for amino acid analysis, for $469,000 in cash, and
    
 
   
    - In July 2000, we acquired substantially all the assets of AmiKa
      Corporation consisting of purification tips, spin columns, a 96 well drug
      binding assay and related technology and intellectual property for
      $3.1 million in cash.
    
 
   
    REVENUES.  We generate revenues by selling instruments, devices and
consumables through our catalog, our distributors and our website. Revenue from
catalog sales in any period is a function of time elapsed since the last mailing
of the catalog, the number of catalogs mailed and the number of new items
included in the catalog. Catalog sales tend to increase immediately following a
mailing and level off or decline slightly from the increased level until the
next mailing, which repeats the cycle. For the nine months ended September 30,
2000, approximately 82% of our revenues were derived from
    
 
                                       19

<PAGE>
   
products we manufacture. The remaining 18% of our revenues were derived from
complementary products we distribute in order to provide researchers with a
single source for all equipment needed to conduct a particular experiment.
Approximately one-half of our revenues are derived through catalog sales and
through reference to our website, which is an electronic version of our catalog.
We do not currently have the capability to accept purchase orders through our
website. For the nine months ended September 30, 2000, approximately 69% of our
revenues were derived from sales made by our non-U.S. operations. A majority of
our international sales during this period consisted of sales to Amersham
Pharmacia Biotech, the distributor for our spectrophotometers and amino acid
analyzers. Amersham Pharmacia Biotech distributes these products to customers
around the world from its distribution center in Upsalla, Sweden, including to
many customers located in the United States. As a result, we believe our
international sales would have been less as a percentage of our revenues for the
nine months ended September 30, 2000 than indicated above if we had shipped our
products directly to their end users.
    
 
   
    COST OF GOODS SOLD.  Cost of goods sold includes material, labor and
manufacturing overhead costs, obsolescence charges, packaging costs, warranty
costs, shipping charges and royalties. Our costs of goods sold may vary over
time based on the mix of products sold. We sell products that we manufacture and
products that we purchase from third parties. The products that we purchase from
third parties have lower margins because the profit is effectively shared with
the original manufacturer. For the nine months ended September 30, 2000, our
manufactured products had lower cost of goods sold. We anticipate that our
manufactured products will continue to have a lower cost of goods sold for the
forseeable future.
    
 
    GENERAL AND ADMINISTRATIVE EXPENSE.  General and administrative expense
consists primarily of salaries and other related costs for personnel in
executive, finance, accounting, information technology and human relations
functions. Other costs include facility costs, professional fees for legal and
accounting services, and provision for doubtful accounts.
 
   
    SALES AND MARKETING EXPENSE.  Sales and marketing expense consists primarily
of salaries and related expenses for personnel in sales, marketing and customer
support functions. We also incur costs for trade shows, demonstration equipment,
public relations and marketing materials, consisting primarily of the printing
and distribution of our 1,000 page catalog and the maintenance of our web site.
We may from time to time in the future expand our marketing efforts by employing
additional technical marketing specialists in an effort to increase sales of
selected categories of products in our catalog.
    
 
    RESEARCH AND DEVELOPMENT EXPENSE.  Research and development expense consists
primarily of salaries and related expenses for personnel and capital resources
used to develop and enhance our products. Other research and development expense
includes fees paid to consultants and outside service providers, and material
costs for prototype and test units. We expense research and development costs as
incurred. We believe that significant investment in product development is a
competitive necessity and plan to continue this investment in order to realize
the potential of our new technologies for proteomics and ADMET.
 
   
    STOCK COMPENSATION EXPENSE.  Stock compensation resulting from stock option
grants to our employees represents the difference between the fair market value
and the exercise price of the stock options on the date the stock options were
granted for those options that are considered fixed awards. Stock compensation
expense is also recorded for stock option grants that were considered variable
awards as the number of shares to be acquired by employees was indeterminable at
the date of grant. Deferred compensation on fixed awards is amortized as a
charge to operations over the vesting period of the options. Based on grants in
2000, we incurred deferred compensation of $9.9 million and recognized deferred
compensation expense of $3.3 million for the nine months ended September 30,
2000.
    
 
                                       20

<PAGE>
    Since our reorganization in 1996, we have experienced substantial revenue
growth. In the future we intend to introduce new products for proteomics and
ADMET research that support emerging and potentially large markets. In order to
support the anticipated growth of these new products, we may expand our product
development and sales and marketing activities. In the event we pursue
activities which increase our product development and sales and marketing
expenses, operating results will be adversely affected if revenues do not
increase proportionately. If revenues are below expectations, our business,
operating results and financial condition are likely to be materially and
adversely affected. Net income may be disproportionately affected by a reduction
in revenues as a relatively smaller amount of our expenses vary with changes in
our revenues. As a result, we believe that period-to-period comparisons of our
results of operations are not necessarily meaningful and should not be relied
upon as indications of future performance.
 
   
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
  SEPTEMBER 30, 1999
    
 
   
    REVENUES.  Revenues increased $3.6 million, or 20%, to $22.1 million in 2000
from $18.5 million in 1999. Excluding the impact of changes in foreign currency
exchange rates, revenues based on 1999 rates would have been approximately
$22.8 million in 2000. Approximately $1.1 million of the $3.6 million increase,
or 31%, was attributable to the full period effect of revenues from the
acquisition of our Biochrom subsidiary in March 1999 net of exchange rate
effects of $508,000. The balance of the increase was attributable to
$2.5 million of revenue from product line acquisitions made in the second half
of 1999 partially offset by the cyclical nature of catalog sales.
    
 
   
    COST OF GOODS SOLD.  Cost of goods sold increased $2.1 million, or 23%, to
$11.5 million in 2000 from $9.4 million in 1999. The increase in cost of goods
sold as a percentage of revenues was due to slightly higher cost of goods sold
on acquired product lines and for our Biochrom subsidiary acquired in
March 1999. Our Biochrom subsidiary experiences lower revenues and
correspondingly lower general and administration and sales and marketing
expenses relative to cost of goods sold as a consequence of marketing its
products primarily through a distributor.
    
 
   
    GENERAL AND ADMINISTRATIVE EXPENSE.  General and administrative expense
increased $807,000, or 28%, to $3.7 million in 2000 from $2.9 million in 1999
due primarily to the full period effect of Biochrom as well as increased support
for operations.
    
 
   
    SALES AND MARKETING EXPENSE.  Sales and marketing expense increased
$517,000, or 28%, to $2.4 million in 2000 from $1.8 million in 1999. The
increase was primarily due to expenses of acquisitions as well as the addition
of marketing personnel and additional catalog costs. As a percentage of
revenues, marketing and sales expense was 11% in 2000 and 10% in 1999. This
increasing percentage reflects the addition of marketing personnel to promote
newly acquired technology. In the future we may add employees to expand selected
categories of our catalog as well as to expand the capabilities of our web site
and integrate it into our business planning and processes.
    
 
   
    RESEARCH AND DEVELOPMENT EXPENSE.  Research and development spending
increased $367,000, or 44%, to $1.2 million in 2000 from $841,000 in 1999. The
increase in research and development expense resulted from expenses of
acquisitions, spending on product enhancement and new product development,
primarily on ScanTox in vitro toxicology testing and other core technology. As a
percentage of revenues, research and development expense was 6% in 2000 and 5%
in 1999. This increasing percentage reflects expanded efforts on ADMET testing
products.
    
 
   
    STOCK COMPENSATION EXPENSE.  We recorded $13.3 million of stock compensation
expense in the nine months ended September 30, 2000. In connection with the
grant of stock options to employees in 2000, we recorded deferred compensation
of approximately $3.3 million and will recognize approximately $6.6 million of
additional expense over the remaining vesting life of the options. In addition,
in the third quarter of 2000, we also recorded $10.0 million of stock
compensation expense in
    
 
                                       21

<PAGE>
   
connection with options granted in 1996 and 1999. In 1999, we recorded $937,000
of stock compensation expense related to these 1996 and 1999 option grants.
    
 
   
    AMORTIZATION OF GOODWILL.  Amortization of goodwill was $423,000 in 2000 and
$252,000 in 1999. The increase is the result of amortizing additional goodwill
incurred in connection with our acquisitions in 2000.
    
 
   
    OTHER EXPENSE, NET.  Other expense, net, was $72.1 million in 2000 compared
to $7.9 million in 1999. Other expense, net, included a non-cash charge for
common stock warrant interest expense of $70.9 million in 2000 and $7.4 million
in 1999. This amount represents the difference between the fair value of the
warrant for financial reporting purposes and its exercise price. This liability
represents the right of warrant holders to require us to pay cash equal to the
fair market value of the warrants in exchange for the warrants, or any common
stock from the exercise of the warrants, beginning March 15, 2002. Effective
with this offering, the warrants will be exercised for common stock and the
right to be paid cash will terminate. The liability previously recorded will
become part of common stock and additional-paid-in capital, and no additional
liability will be incurred with respect to these warrants. Net interest expense
increased $186,000, or 40%, to $655,000 in 2000 from $468,000 in 1999. The
increase resulted primarily from higher debt balances in 2000, which were
incurred to finance acquisitions.
    
 
   
    INCOME TAXES.  The Company's effective income tax rates have been
established at 39% for 2000 and 29% for 1999 notwithstanding the impacts for
common stock warrant interest expense and stock compensation expense in excess
of allowable tax benefits on exercise of options, which are not deductible for
income tax purposes. The increase in the rate is principally due to certain
blended higher foreign statutory jurisdiction income tax rates. The effective
income tax rates may change compared to the remainder of each respective
calendar year if operating results differ significantly from the interim
results.
    
 
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
 
   
    REVENUES.  Revenues increased $14.0 million, or 115%, to $26.2 million in
1999 from $12.2 million in 1998. Approximately $12.2 million, or 87%, of the
increase was derived from the March 1999 acquisition of Biochrom. Excluding the
impact of changes in foreign currency exchange rates, revenues based on 1998
rates would have been approximately $26.3 million in 1999. Revenues from our
existing business increased $1.8 million, or 15%, to $14.0 million in 1999 from
$12.2 million in 1998. The increase was attributable to full year revenues of
$570,000 from the products acquired from Medical Systems in June 1998, increased
sales resulting from our expanded direct marketing efforts on traditional
products of $884,000, which included hiring additional marketing staff,
producing a CD-ROM of our catalog, and creating and installing an electronic
version of our catalog on our website, with the balance due to revenues from
product lines acquired in the second half of 1999.
    
 
   
    COST OF GOODS SOLD.  Cost of goods sold increased $8.2 million, or 153%, to
$13.5 million in 1999 from $5.4 million in 1998. As a percentage of revenues,
cost of goods sold increased to 52% in 1999 from 44% in 1998. The increase in
cost of goods sold in 1999 was primarily the result of the acquisition of
Biochrom. The percentage increase was also the result of Biochrom, which
experiences higher costs of goods sold as a percentage of revenues due to the
marketing of its products primarily through a distributor, which receives a
discount to the list price that is calculated to cover the distributor's costs
and profits.
    
 
    GENERAL AND ADMINISTRATIVE EXPENSE.  General and administration expense
increased $5.1 million, or 221%, to $7.4 million in 1999 from $2.3 million in
1998. Biochrom accounted for $1.1 million, or 22%, of the increase. Also in
1999, $3.3 million was recorded as non-cash compensation expense from options
granted in 1996. Excluding the Biochrom acquisition and the compensation
expense, expenses
 
                                       22

<PAGE>
increased $800,000, or 35%, to $3.1 million in 1999 from $2.3 million in 1998.
The increase was due to the need to support expanding operations. As a
percentage of revenues, general and administration expense increased to 28% in
1999 from 19% in 1998.
 
    SALES AND MARKETING EXPENSE.  Sales and marketing expense increased
$727,000, or 42%, to $2.4 million in 1999 from $1.7 million in 1998. Biochrom
accounted for $608,000, or 84%, of the increase. Excluding the Biochrom
acquisition, expenses increased $119,000, or 7%, to $1.8 million in 1999 from
$1.7 million in 1998. The increase was due to expanded direct marketing efforts
and the full year effect of support for the products acquired in June 1998. As a
percentage of revenues, sales and marketing expense decreased to 9% in 1999 from
14% in 1998. The decrease in sales and marketing expense as a percentage of
revenues was primarily due to the acquisition of Biochrom, which has lower sales
and marketing expense because those expenses are primarily borne by its
distributor.
 
    RESEARCH AND DEVELOPMENT EXPENSE.  Research and development spending
increased $863,000 in 1999, or 266%, to $1.2 million from $325,000 in 1998. The
acquisition of Biochrom contributed $577,000 to the increase. The balance of the
increase was spending for development of our newly licensed ScanTox technology
and expansion of our core drug screening products. As a percentage of revenues,
research and development expense increased to 5% in 1999 from 3% in 1998. The
increase in research and development expense as a percentage of revenues was
primarily due to Biochrom, our employment of additional engineers and increased
charges for outside services.
 
   
    AMORTIZATION OF GOODWILL.  Amortization of goodwill was $368,000 in 1999 and
$28,000 in 1998. The increase is the result of amortizing additional goodwill
incurred in connection with our acquisitions in 1999 and the full year effect of
the acquisition of the Medical Systems products in June 1998.
    
 
    OTHER EXPENSE, NET.  Other expense, net was $30.5 million in 1999 compared
to $1.6 million in 1998. Other expense, net, included a non-cash charge for
common stock warrant interest expense of $29.7 million in 1999 and $1.4 million
in 1998. Net interest expense increased $447,000, or 214%, to $656,000 in 1999
from $209,000 in 1999. The increase resulted primarily from higher debt balances
in 1999, which were incurred to finance acquisitions.
 
   
    INCOME TAXES.  The Company's effective income tax rates have been
established at 33% for 1999 and 35% for 1998 notwithstanding the impact for
common stock warrant interest expense which is not deductible for income tax
purposes. The decrease in the rate is principally due to certain lower foreign
statutory jurisdiction income tax rates, specifically the result of the
acquisition of a United Kingdom subsidiary.
    
 
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
 
   
    REVENUES.  Revenues increased $690,000, or 6%, to $12.2 million in 1998,
from $11.5 million in 1997. The increase was due to the introduction of new
products from the acquisition of Medical Systems in June 1998, which accounted
for $510,000 of the increase, as well as growth in sales of existing products,
primarily due to the issuance of two catalog supplements in 1998 compared to one
supplement issued in 1997, and price increases.
    
 
    COST OF GOODS SOLD.  Cost of goods sold increased approximately $224,000, or
4%, to $5.4 million in 1998 from $5.1 million in 1997. As a percentage of
revenues, cost of goods sold decreased to 44% in 1998 from 45% in 1997. The
decrease was due to spreading manufacturing overhead across increased production
relating to the products acquired with the purchase of Medical Systems.
 
    GENERAL AND ADMINISTRATIVE EXPENSE.  General and administrative expense
remained constant at $2.3 million from 1997 to 1998. As a percentage of
revenues, general and administrative expense decreased to 19% in 1998 from 20%
in 1997. The decrease in general and administrative expense as a
 
                                       23

<PAGE>
percentage of revenues was primarily due to spreading general and administrative
costs over a greater revenue base.
 
    SALES AND MARKETING EXPENSE.  Sales and marketing expense increased $49,000,
or 3%, to $1.7 million in 1998 from $1.7 million in 1997. As a percentage of
revenues, sales and marketing expense decreased to 14% in 1998 from 15% in 1997.
The decrease in sales and marketing expense as a percentage of revenues was
primarily due to spreading sales and marketing costs over a greater revenue
base.
 
    RESEARCH AND DEVELOPMENT EXPENSE.  Research and development spending
increased $118,000, or 57%, to $325,000 in 1998 from $206,000 in 1997. The
increase in spending represented investments in product development and
enhancement of the existing family of products. As a percentage of revenues,
research and development expense increased to 3% in 1998 from 2% in 1997.
 
   
    AMORTIZATION OF GOODWILL.  Amortization of goodwill consisted of a charge of
$28,000 in 1998 resulting from the acquisition of Medical Systems. There was no
corresponding charge in 1997.
    
 
    OTHER EXPENSES, NET.  Other expenses, net were $1.6 million in 1998 compared
to $330,000 in 1997. The increase was due primarily to a charge of $1.4 million
for common stock warrant interest expense.
 
   
    INCOME TAXES.  The Company's effective income tax rates have been
established at 35% for 1998 and 36% for 1997 notwithstanding the impact for
common stock warrant interest expense which is not deductible for income tax
purposes.
    
 
LIQUIDITY AND CAPITAL RESOURCES
 
   
    Historically, we have financed our business through cash provided by
operating activities, the issuance of common and preferred stock, and bank
borrowings. Our liquidity requirements have arisen primarily from investing
activities, including funding of acquisitions, payments on outstanding
indebtedness, research and development expenditures, and capital expenditures.
As of September 30, 2000, we had cash of $2.1 million. Since our reorganization
in March 1996, we have raised $14.2 million, consisting of $2.5 million of
preferred and common stock and $11.7 million of debt. As of September 30, 2000,
we had $6.8 million in debt under a bank term loan, $478,000 in subordinated
debt and $3.1 million outstanding under a $3.8 million revolving credit
facility.
    
 
   
    Our operating activities generated cash of $2.0 million in the first nine
months of 2000, $2.9 million in fiscal 1999, $1.8 million in fiscal 1998 and
$1.1 million in fiscal 1997. For all periods presented, operating cash flows
were primarily due to operating results, including the full-year effect of
acquisitions prior to non-cash charges, partially offset by working capital
requirements. Working capital requirements were affected by acquisitions, which
increased accounts receivable and inventory carrying amounts partially offset by
increased amounts in accounts payable and accrued expenses.
    
 
   
    Our investing activities used cash of $4.7 million in the first nine months
of 2000, $8.5 million in fiscal 1999, $1.4 million in fiscal 1998 and $653,000
in fiscal 1997. Cash has been used in the following technology and business
acquisitions:
    
 
   
    - $469,000 for Biotronik's amino acid analysis systems business in
      May 2000,
    
 
    - $390,000 for the NaviCyte diffusion chamber systems product line in
      November 1999,
 
    - $568,000 for Hugo Sachs Elektronik in November 1999,
 
    - $349,000 for intracellular research products from Clark Electromedical
      Instruments in September 1999,
 
   
    - $7.0 million for Biochrom in March 1999,
    
 
                                       24

<PAGE>
   
    - $1.0 million for Medical Systems Corporation's cell injection systems
      business in June 1998, and
    
 
   
    - $3.1 million for substantially all the assets of AmiKa Corporation in July
      2000.
    
 
   
    Our financing activities provided cash of $2.5 million for the first nine
months of 2000 and $6.9 million in fiscal 1999, and used cash of $105,000 in
fiscal 1998 and $874,000 in fiscal 1997. Financing cash flows consisted of
borrowings under a revolving credit facility, long-term debt and the issuance of
preferred stock. As of September 30, 2000, we had approximately $600,000
available under our revolving credit facility, subject to our ability to
maintain compliance with all of the covenants contained in our revolving credit
agreement. We were not in compliance with certain covenants as of September 30,
2000 due to non-cash stock compensation and variable accounting charges. We have
received waivers from our banks addressing our noncompliance.
    
 
    Prior to 1999, we had historically generated sufficient cash flow from
operations to fund expenditures on capital equipment, debt service, equity
transactions, stock repurchases and preferred dividend payments. In 1999, in
connection with the acquisition of Biochrom, we increased our long-term
indebtedness by approximately $5.5 million and issued approximately
$1.0 million in convertible preferred stock. As a result, the level of debt
service required increased substantially compared to historical levels. Upon
completion of the offering, we intend to use a portion of the proceeds to redeem
our series A redeemable preferred stock in the amount of $1.5 million, and to
repay the bank term loan, the subordinated debt and the revolving credit
facility.
 
   
    Based on our operating plans, we expect that proceeds from this offering,
available cash, cash generated from operations, and cash available from our
revolving credit facility will be sufficient to finance operations and capital
expenditures for at least two years from the date of this prospectus. However,
we may use a substantial portion of the proceeds from this offering to
accelerate product development, expand our sales and marketing activities or
consummate acquisitions, although we have no current plans in this regard.
Therefore, we may need to raise additional capital, which may be dilutive to
existing stockholders. The additional capital may not be available on acceptable
terms or at all. Accordingly, there can be no assurance that we will be
successful in raising additional capital.
    
 
IMPACT OF FOREIGN CURRENCIES
 
   
    We sell our products in many countries and a substantial portion of our
sales, costs and expenses are denominated in foreign currencies, especially the
United Kingdom pound sterling and the Euro. In the first nine months of 2000 and
in 1999, the U.S. dollar strengthened against these currencies resulting in
reduced consolidated revenue growth, as expressed in U.S. dollars. In addition,
the currency fluctuations resulted in foreign currency losses of approximately
$48,000 in 1999 and $456,000 in the first nine months of 2000.
    
 
   
    Historically, we have not hedged our foreign currency position. Currently,
we attempt to manage foreign currency risk through the matching of assets and
liabilities. However, as our sales expand internationally, we plan to evaluate
our currency risks and we may enter into foreign exchange contracts from time to
time to mitigate foreign currency exposure.
    
 
BACKLOG
 
   
    Our order backlog was approximately $2.7 million as of September 30, 2000
and $2.1 million as of September 30, 1999. We include in backlog only those
orders for which we have received valid purchase orders. Purchase orders may be
cancelled at any time prior to shipment. Our backlog as of any particular date
may not be representative of actual sales for any succeeding period. We expect
to ship substantially all of the September 30, 2000 backlog by December 31,
2000.
    
 
                                       25

<PAGE>
ACCOUNTING PRONOUNCEMENTS
 
   
    In June 1998, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes accounting and
reporting standards requiring that every derivative instrument be recorded in
the balance sheet as either an asset or liability measured at its fair value.
SFAS 133, as amended by SFAS 137 and SFAS 138, is effective for years beginning
after June 15, 2000. SFAS 133 will be adopted on January 1, 2001. We believe the
adoption of this statement will not have a significant impact on our financial
position, results of operations or cash flows.
    
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
   
    Interest rate risk and foreign currency rate risk are the primary sources of
market risk to our operations. As of September 30, 2000, we had aggregate
variable rate long-term debt of $6.8 million and revolving credit facility debt
of $3.2 million. A 10% change in interest rates would change the annual interest
expense on our long-term debt by approximately $68,000 and on our revolving
credit facility by approximately $32,000.
    
 
                                       26

<PAGE>

 
                                   BUSINESS
 
OVERVIEW
 
   
    We are a global provider of innovative, research enabling tools for drug
discovery. We provide a broad array of tools designed to accelerate the speed
and to reduce the cost at which our customers can introduce new drugs. Since our
1996 reorganization, we have focused on alleviating the protein purification and
ADMET screening bottlenecks in drug discovery.
    
 
    To address these two critical bottlenecks in protein purification and ADMET
screening, we recently introduced several new proprietary tools. For protein
purification, these tools include specially treated pipette tips, spin columns
and micro-dialyzers. For ADMET screening, these tools include NaviCyte diffusion
chambers for drug absorption testing, 96 well equilibrium dialysis plates for
drug distribution testing and ScanTox in vitro toxicology screening instruments.
 
   
    We also have an established product base in proteomics, which is the study
of gene function through the analysis of protein interactions. This product base
consists of DNA/RNA/protein calculators, life science spectrophotometers and
amino acid analysis systems, as well as precision infusion pumps, organ testing
systems and ventilators used in ADMET screening.
    
 
OUR HISTORY
 
    Our business began in 1901 and has grown over the intervening years with the
development and evolution of modern drug discovery tools. Our past inventions
include the mechanical syringe pump in the 1950s for drug infusion and the
microprocessor controlled syringe pump in the 1980s.
 
    In March 1996, a group of investors led by our current management team
acquired a majority of the then existing business of our predecessor, Harvard
Apparatus. Following this acquisition, we redirected our strategy to focus on
high growth areas within drug discovery by acquiring innovative technologies
through strategic acquisitions and licensing while continuing to grow our
existing business through internal product development and marketing. We have
completed five business acquisitions, including Biochrom, the licensing of key
new technology for in vitro toxicology assays and drug absorption measurement
chambers, the internal development of new product lines, including new
generation syringe pumps and DNA/RNA/protein calculators and the mailing of
expanded new catalogs.
 
INDUSTRY OVERVIEW
 
    The life sciences research industry is undergoing fundamental change and
growth resulting principally from the explosive growth in gene discovery and the
demand for greater efficiency in the drug discovery process. Industry experts
estimate that in 2000, the life sciences research industry will spend more than
$50 billion on drug discovery research and development. The goal of drug
discovery is to find compounds that will bind specifically to a given target
without significantly affecting any other molecules in the body. Traditionally,
chemists have laboriously synthesized new compounds with potential therapeutic
activity one at a time or painstakingly isolated them from natural resources.
Today, combinatorial chemistry techniques are used to greatly increase the
supply and diversity of such compounds. Libraries of hundreds of thousands, or
even millions, of compounds are now available for testing in biological assays
against targets.
 
    Until recently, life sciences researchers had identified only a few hundred
targets against which to test these compounds. Driven by large-scale DNA
sequencing projects, such as the Human Genome Project, life sciences researchers
expect to identify tens of thousands of new genes as they decipher the genomes
of both humans and disease-causing organisms. When a gene, which is a segment of
DNA, is expressed, a copy of the gene sequence is carried in messenger RNA, or
mRNA, which is used to direct the manufacture of a protein. Although genes, DNA,
mRNA and proteins are all targets for
 
                                       27

<PAGE>
drug discovery, proteins are by far the most common. Proteins are the molecular
machines of the cell that are responsible for performing the majority of
cellular functions. Once proteins are identified and validated as potential
targets, they need to be screened against hundreds of thousands, if not
millions, of compounds in a process known as primary screening.
 
    Drug discovery is a time-consuming and costly process. In the pre-genomics
era, the compound development, primary screening and clinical trials stages were
bottlenecks in this process. The successes of genomics, combinatorial chemistry
and high throughput screening in recent years have alleviated the bottlenecks at
the compound development and primary screening stages. However, these
bottlenecks have been replaced by bottlenecks at the target validation, assay
development and absorption, distribution, metabolism, elimination and
toxicology, or ADMET, testing stages. The revolution in genomics is expected to
increase the number of targets from 500 to 10,000, which will consequently
greatly increase the need for protein purification and analysis. The increase in
the number of compounds in libraries from tens of thousands to millions together
with the increase in the number of targets is greatly increasing the number of
leads requiring ADMET screening.
 
    THE DRUG DISCOVERY PROCESS
 
    The drug discovery process consists of several steps, which are illustrated
below.
 
    The diagram that illustrates the drug discovery process is initially split
into two parallel tracks which merge into a single track as the diagram moves to
the right. The upper track of the diagram is titled "Compound Development" and
includes an arrow titled "Compound Libraries." Below the arrow are the words
"Combinatorial Chemistry." The lower track of the diagram is titled "Target
Discovery" and includes two arrows. The first arrow is titled "Target
Identification." Below this arrow is the word "Genomics." The next arrow to the
right is titled "Target Validation." Below this arrow is the word "Proteomics."
Following the "Compound Libraries" arrow on the upper track and the "Target
Validation" arrow on the lower track, the two tracks of the diagram combine and
include arrows to illustrate the remaining stages and key bottlenecks in the
drug discovery process. The individual arrows from left to right include an
arrow titled "Assay Development" followed by an arrow titled "High Throughput
Screening." These two arrows in the diagram appear under the title "Primary
Screening." To the right of the "High Throughput Screening" arrow is an arrow
titled "Lead Optimization" followed by an arrow titled "ADMET Screening." These
two arrows in the diagram appear under the title "Secondary Screening." To the
right of the "ADMET Screening" arrow is an arrow titled "Clinical Trials," the
final arrow in the process flow diagram.
 
    TARGET IDENTIFICATION involves isolating a particular molecule, typically a
protein, and evaluating the role that it plays in the body to determine whether
it might be a viable target for further investigation. Today, this activity is
most often initiated by genomics studies, including DNA sequencing, RNA analysis
and genetic mapping.
 
    TARGET VALIDATION involves demonstrating that affecting the function of a
particular target has a positive effect on the course of a disease. Target
validation employs a variety of methods including RNA analysis, protein analysis
and cell biology. Target validation is a more time-consuming process than target
identification.
 
    PRIMARY SCREENING involves the large-scale testing of collections of
chemical compounds, known as compound libraries, against validated targets.
These libraries are tested using high throughput assays. The goal is to find
individual compounds that bind to and inhibit or activate a particular target,
commonly referred to as a hit. An assay, in the context of screening compounds
against a new target, refers to a test a researcher must develop for measuring
whether particular compounds in a library interact with the target in a certain
manner. An assay must be developed for each target to be screened. The major
pharmaceutical companies are moving towards screening up to 100 targets annually
with libraries of up to one million compounds each.
 
    SECONDARY SCREENING involves the refinement of hits into leads that can be
used in clinical trials. This step consists of lead optimization and ADMET
testing. Lead optimization involves conducting successive rounds of chemical
alterations and biological tests to find compounds similar to the original
compound identified in primary screening which have improved drug properties
over the initial compound, particularly efficacy. ADMET testing involves the
conducting of various tests on compounds
 
                                       28

<PAGE>
to ensure that they are safe and have good pharmacological properties such as
high adsorption into the blood from the digestive tract and good distribution to
the site of the target molecule in the body. This stage also involves the
testing of compounds to determine therapeutic activity in animal models of
disease and to ensure that the compounds can be manufactured with consistent
quality.
 
    CLINICAL TRIALS involve the testing of pharmaceutical compounds in humans to
demonstrate their safety and efficacy. Because clinical trials are by far the
most expensive part of drug discovery, and undesirable ADMET properties are the
most common reasons for failure, pharmaceutical and biotechnology companies can
achieve substantial cost savings by identifying drug candidates with poor ADMET
properties as early in the drug discovery process as possible. Drugs with
successful clinical trials are almost always commercialized.
 
    PROTEOMICS
 
    Proteomics involves the large-scale purification, identification and
analysis of proteins. Proteins are manufactured in the body's cells according to
the code contained in DNA and are the molecular machines of the cell that are
responsible for performing the majority of cellular functions. Proteins are the
most common targets in the field of drug discovery because proteins tend to be
far more accessible to drugs than either DNA or mRNA which are located in the
nucleus of the cell.
 
    Every protein that is identified as a potential target must be analyzed. The
trend in protein analysis currently is moving towards the use of mass
spectrometry, which is the fastest and most accurate technique for protein
analysis. Because mass spectrometers are highly sensitive, they require the use
of pure samples in order to properly analyze the protein. Thus, protein
purification, the removal of reagents such as salts, detergents and buffers, is
essential to target discovery.
 
    In the last few years the revolution in genomics and the completion of the
Human Genome Project has vastly increased the number of known targets. Before
the Human Genome Project there were only approximately 500 known targets. Some
experts believe that the sequencing of the human genome will ultimately lead to
the identification of 50,000 to 100,000 genes and over 1,000,000 proteins. Many
scientists expect that this will in turn lead to the identification of up to
10,000 targets. Each of these targets, many of which will be proteins, will need
to be purified and analyzed many times prior to becoming a validated target for
primary screening. As a result of the recent and projected increases in the
number of known drug targets, purifying protein samples has been and will
continue to be a significant bottleneck in the drug discovery process.
 
    ADMET SCREENING
 
    The goal of ADMET screening is to identify compounds that have toxic side
effects or undesirable pharmacological properties. These compounds are then
either eliminated or further chemically modified and re-screened. While ADMET
screening is traditionally conducted late in the drug discovery process, early
application of ADMET screening can be highly beneficial. This is because more
than half of the 90% of lead compounds which fail in the costly clinical trial
stage of drug discovery fail due to poor pharmacological properties. These
important pharmacological properties consist of absorption, distribution,
metabolism and elimination which, together with toxicology, are described below:
 
    ABSORPTION.  Absorption describes the ability of a drug to pass through the
wall of the digestive tract and enter the blood stream. Absorption is an
important property of an effective drug because adequate absorption allows a
drug to be administered orally rather than by direct injection into the blood.
If a lead candidate cannot be absorbed easily from the digestive tract into the
blood, its commercial viability will be adversely impacted even if it
effectively acts against the target.
 
                                       29

<PAGE>
    DISTRIBUTION.  Distribution describes the amount of a drug that different
tissues in the body take in from the blood. Distribution of the drug to the
tissue containing the target molecule is necessary for the drug to have the
desired effect. Moreover, undesirable side effects may occur if the drug is
distributed to tissues other than the one containing the target molecule.
Effective distribution requires the drug to be transported around the body and
released into the tissue containing the target molecule at an appropriate rate.
The flow of blood alone is often an effective distribution method. However,
while the binding of a drug to blood proteins can increase the proper
distribution of a drug, it can cause toxic problems if the bond formed is too
strong.
 
    METABOLISM.  Metabolism describes the chemical changes that the body makes
to a drug. This is an important property of an effective drug for three reasons.
First, some drugs must be metabolized in order to become effective. Second, some
drugs may have no toxic side effects, but the byproducts of their metabolism,
known as metabolites, may be toxic. Third, metabolism usually makes drugs more
soluble in water, which in turn makes it easier for the body to eliminate them
in the urine.
 
    ELIMINATION.  Elimination describes the process by which the body expels a
drug. If the blood absorbs a drug, it will be primarily eliminated in the urine
either in its native or metabolized forms. Elimination is important because
toxicity is primarily a matter of concentration--even common compounds such as
aspirin and caffeine are toxic at high enough concentrations. If the body does
not eliminate a drug, the drug's concentration will build up with every dose
taken, eventually reaching toxic levels.
 
    TOXICOLOGY.  Toxicology describes the adverse effects a drug has on the
body. These range from nausea to death. All drugs must be shown to be safe to
the satisfaction of regulatory authorities prior to commercialization.
Toxicology consists of tests designed to determine the likelihood that a drug
will cause death or the growth of tumors, disrupt normal reproductive function
or the immune system or mutate DNA.
 
   
    For every 1,000 hits identified through primary screening, only about ten
survive secondary screening and make it into clinical trials, the final stage of
drug discovery. Of those ten, only one, on average, survives the regulatory
process to be commercialized as a new drug.
    
 
    CURRENT TECHNOLOGIES FOR PROTEIN PURIFICATION AND ADMET SCREENING
 
    PROTEIN PURIFICATION.  Protein purification is an essential step in
proteomics. Researchers must remove any salts, buffers, detergents and cellular
debris prior to analyzing a protein sample. Current technologies for protein
purification include packed bed columns and dialysis. In order to isolate a
specific protein, two-dimensional gel electrophoresis, or 2DGE, is typically
used in advance of running a sample through a packed bed column or dialysis.
Two-dimensional gel electrophoresis isolates different types of proteins in a
two-stage process using electric currents passed through gels. Each protein
migrates to a specific location in the gel. The protein can then be separated
from the gel residue using packed bed columns or dialysis.
 
        PACKED BED COLUMNS are small disposable plastic tubes containing
    chromatography media. A protein sample is typically pipetted into the top of
    the column, which is then placed in a centrifuge or vacuum manifold to draw
    the sample through the media. These columns will remove salts, detergents,
    buffers and 2DGE gel residue, but may retain some of the protein in the
    media.
 
        DIALYSIS involves the use of a porous membrane which allows small
    molecules such as salts, detergents, buffers and 2DGE gel residue to pass
    through but blocks larger molecules such as proteins from passing through.
    Dialysis involves pipetting the protein sample into a device which consists
    of a chamber with the porous membrane covering one otherwise open end. The
    chamber is then placed in a large volume of pure water and stirred for a
    period of time, which may be minutes or hours.
 
                                       30

<PAGE>
    ADMET SCREENING.  ADMET testing at the secondary screening stage has
traditionally relied almost exclusively on live animal testing instead of tools.
The most common animals used in drug discovery studies are laboratory rats and
mice. As a drug compound moves closer to human clinical trials, the United
States Food and Drug Administration requires that studies be performed using
larger animals, such as rabbits and dogs.
 
    LIMITATIONS OF CURRENT TECHNOLOGIES
 
    PROTEIN PURIFICATION.  Current technologies for protein purification in
proteomics have the following limitations:
 
    - LOW PRODUCTIVITY.  Neither packed bed columns nor dialyzers are easily
      capable of automated sample handling. Using packed bed columns, either
      alone or in connection with two-dimensional gel electrophoresis, requires
      centrifugation or the use of a vacuum to move the sample through the
      purification media. This means the sample must be physically moved to the
      centrifuge or vacuum pump, left to run--typically for several
      minutes--then removed, washed and the protein eluted.
 
    - LOSS OF PROTEIN SAMPLE.  Packed bed columns consume a portion of the
      sample leading to sample loss. The amount of sample lost in the
      purification process may only be microliters. This is not a significant
      problem if several milliliters of sample are available, as is common in
      DNA purification. However, if only a few microliters of sample are
      available, as is common in protein purification, the loss of even one
      microliter may be a large percentage of the total. In addition, protein
      samples are typically expensive and thus sample loss must be minimized.
 
    ADMET SCREENING.  Current technologies for ADMET screening have the
following limitations:
 
    - HIGH COST.  Animal assays are costly because all animals have to be housed
      and cared for under strict government regulations often in clean room
      environments and with a significant staff to care for the animals. A
      standard 14-day range finding study performed using laboratory rats costs
      approximately $75,000, and a two-year carcinogenicity study carried out
      with laboratory rats costs approximately $1 million. A later stage 90-day
      study carried out using dogs typically costs almost twice as much as the
      same test performed using laboratory rats.
 
    - LABOR INTENSITY.  By their nature, animal assays cannot be automated and
      thus require the time of highly skilled research scientists, such as
      surgeons and pathologists.
 
    - ETHICAL CONSIDERATIONS.  Even though researchers must use the lowest
      number of the least sentient animals to achieve the scientifically needed
      information, avoid pain and consider alternatives to the use of live
      animals, the large number of animals used still creates ethical
      considerations.
 
OUR SOLUTIONS
 
    We overcome the limitations of current technologies by providing innovative,
enabling tools for protein purification and ADMET screening.
 
    PROTEIN PURIFICATION
 
    Our protein purification technologies are designed to be quick to use and to
reduce sample loss.
 
    - HIGHER PRODUCTIVITY.  Our purification pipette tips are quicker to use
      than packed bed columns because a centrifugation or vacuuming step is not
      necessary. This avoids both the moving of the sample to and from the
      centrifuge or vacuum pump and the run time in the centrifuge or vacuum
      pump. We believe our protein purification pipette tips are the only
      pipette tips capable of being fitted to standard pipetting workstations
      and thus being used for automated protein
 
                                       31

<PAGE>
      purification. This automation increases our customers' productivity. In
      addition, our 96 well plate versions of dialyzers and spin columns can be
      used directly in automated equipment, again increasing our customers'
      productivity.
 
    - REDUCED SAMPLE LOSS.  Our miniaturization of dialyzers and spin columns
      reduces sample loss in the membrane or column material. Our purification
      pipette tips contain smaller volumes of material than packed bed columns
      and thus less sample is retained in the material.
 
    ADMET SCREENING
 
    Our ADMET screening technologies employ novel approaches to obtaining ADMET
data while reducing the use of large numbers of live animals.
 
   
    - LOWER COST.  Most of our ADMET screening products use organs, tissue or
      blood proteins rather than live animals. For example, our in vitro
      toxicology assay uses the lenses of cows' eyes obtained as a by-product of
      the beef industry, and our 96 well plate for serum protein binding uses
      blood proteins in vitro rather than in the bloodstream of live laboratory
      animals.
    
 
   
    - IMPROVED AUTOMATION.  Our in vitro toxicology assay can be run in a few
      minutes of instrument time and a few hours of elapsed time. By contrast,
      basic toxicology tests in animals typically take days of elapsed time and
      more advanced tests take weeks or months. Our 96 well plate for serum
      protein binding, for instance, can be run on automated liquid handling
      equipment.
    
 
    - REDUCED ANIMAL USAGE.  Our in vitro toxicology assay uses cow eye lenses
      instead of live animals to detect toxic effects of compounds. Our drug
      absorption chamber uses cultured human colon cells instead of animal
      intestinal tissue to simulate the absorption of a drug into the blood from
      the digestive tract. Our 96 well plate for serum protein binding tests the
      binding ability of compounds on extracted blood proteins instead of
      infusing the compounds into the bloodstreams of live test animals.
 
OUR STRATEGY
 
    Our goal is to become the leading provider of innovative, enabling
technologies and products for proteomics and ADMET research in the drug
discovery process. Key elements of our strategy are to:
 
    ESTABLISH OUR PROTEOMICS AND ADMET SCREENING PRODUCTS AS INDUSTRY STANDARDS
 
    In order to establish our products as industry standards, we intend to
provide a broad selection of products focused on the target validation and ADMET
screening stages of the drug discovery process. We have recently introduced
several new innovative products designed to reduce the cost and time associated
with protein purification and ADMET screening in drug discovery. We have already
begun to realize revenue from the sales of our products, including purification
pipette tips, spin columns, dialyzers, in vitro toxicology assays and
equilibrium dialysis plates. We intend to rapidly increase the market acceptance
of these products through the development of new uses for these products,
focused, direct marketing campaigns to our extensive customer base and
promotions at scientific exhibitions.
 
    LAUNCH A BROAD RANGE OF INNOVATIVE NEW TOOLS FOR DRUG DISCOVERY
 
    Since our reorganization in 1996, we have focused on becoming a leading
provider of tools for proteomics and ADMET screening. We believe that our
customers are eager to acquire new and innovative tools that reduce drug
discovery time and expense. Since 1996, we have introduced several new tools for
proteomics and ADMET screening such as our protein and DNA purification pipette
tips, protein purification dialyzers, ScanTox in vitro toxicology assay and
NaviCyte diffusion chambers. We intend to continue to identify, develop and
introduce new tools to alleviate bottlenecks in all stages of the drug discovery
process.
 
                                       32

<PAGE>
    LEVERAGE OUR EXISTING DISTRIBUTION AND MARKETING CHANNELS
 
   
    We intend to leverage the strength of our existing distribution channels to
launch new products. Our 1,000 page catalog is currently distributed worldwide
to approximately 100,000 researchers engaged in drug discovery and is also
accessible on our website. Our customer list consists primarily of research
personnel, who are the end-users of our products and largely responsible for
initiating the purchase of our products. We also have wholly-owned subsidiaries
in the United Kingdom, Germany, France and Canada providing us with an
international market presence. In addition, some of our products are sold
through a distribution arrangement with Amersham Pharmacia Biotech, or
APBiotech, providing us with access to APBiotech's extensive customer base,
reputation and support infrastructure. We believe that our extensive existing
distribution channels, when combined with our strong reputation for high
quality, reliable and durable tools, provides us with a competitive advantage in
bringing new products to market quickly and cost effectively.
    
 
    PROVIDE A SINGLE SOURCE OF TOOLS FOR OUR CUSTOMERS' RESEARCH NEEDS IN
     PROTEOMICS AND ADMET SCREENING
 
    We seek to provide our customers with all of the tools necessary to conduct
a wide variety of proteomic and ADMET experiments that are crucial to the drug
discovery process. We believe that being a single source sets us apart from our
competitors by increasing the likelihood that our customers will turn to our
catalog or website first when looking for help with a particular experiment.
Currently, our catalog and website include approximately 10,000 products. In
addition, our extensive product selection allows us to leverage the sales of our
proprietary products through the simultaneous sale of complementary products.
 
    ACQUIRE COMPLEMENTARY TECHNOLOGIES
 
    We intend to selectively acquire companies and technologies which we believe
will strengthen our portfolio of tools for drug discovery, particularly in the
areas of proteomics and ADMET screening. Since 1996, we have completed the
acquisition of Biochrom, four other acquisitions involving the integration of
acquired products and technology into our existing manufacturing base and
distribution channel, and three technology acquisition or licensing
transactions. In the future, we may pursue acquisitions of new products and
technologies through business acquisitions, partnerships or licensing
arrangements.
 
                                       33

<PAGE>
OUR PRODUCTS
 
    Our broad array of products includes the following:
 
   

<TABLE>
<CAPTION>
                         REPRESENTATIVE PRODUCT                             NUMBER OF   YEAR OF INTRODUCTION FOR
PRODUCT CATEGORY                 AREAS                  DESCRIPTION         PRODUCTS        PRODUCT CATEGORY
----------------        ------------------------  ------------------------  ---------   -------------------------
<S>                     <C>                       <C>                       <C>         <C>
PROTEOMICS
Protein Purification    Purification Pipette      Disposable pipette tips      50             1999 (coated)
                        Tips                      - coated with                           Est. Q4 2000 (loaded)
                                                  purification media
                                                  - loaded with
                                                  purification media
                        -----------------------------------------------------------------------------------------
                        Macro Spin Columns        Disposable tubes             20                 1998
                                                  containing purification
                                                  media
                        -----------------------------------------------------------------------------------------
                        Ultra Micro Spin Columns  Disposable tubes             20                 1998
                                                  containing purification
                                                  media
                        -----------------------------------------------------------------------------------------
                        Dialyzers                 Membrane capped plastic      45            1996 and prior
                                                  chambers
                                                  - reusable
                                                  - disposable
                                                  - plates with 96 wells
                        -----------------------------------------------------------------------------------------
                        Equilibrium Dialyzers     Membrane separating two       9               1996-1999
                                                  plastic chambers
                                                  - disposable
                                                  - plates with 96 wells
-----------------------------------------------------------------------------------------------------------------
Protein Analysis        Molecular Biology         Range of                      6            1970s (initial)
                        Spectrophotometers        spectrophotometers                          2000 (latest)
                        -----------------------------------------------------------------------------------------
                        DNA/RNA/Protein           Spectrophotometers with       2            1993 (initial)
                        Calculators               application software                        2000 (latest)
                        -----------------------------------------------------------------------------------------
                        Multi-Well Plate Readers  Range of automated            3       Est. Q4 2000 (absorbance)
                                                  readers                               Est. 2001 (luminescence)
                                                  - absorbance                          Est. 2001 (fluorescence)
                                                  - luminescence
                                                  - fluorescence
                        -----------------------------------------------------------------------------------------
                        Amino Acid Analysis       Ninhydrin-based amino         2            1970s (initial)
                        Systems                   acid detection systems                      2000 (latest)
                        -----------------------------------------------------------------------------------------
 
ADMET SCREENING
Absorption              NaviCyte Diffusion        Simulated digestive           6                 1995
                        Chambers                  tract/ blood stream
                                                  interfaces
-----------------------------------------------------------------------------------------------------------------
Distribution            Equilibrium Dialysis      Membrane separating two       9               1996-1999
                        Plate                     chambers
-----------------------------------------------------------------------------------------------------------------
Metabolism/             Organ Testing Systems     Chambers with                 8              1970s-1999
Elimination                                       stimulators, perfusion
                                                  and recording devices
-----------------------------------------------------------------------------------------------------------------
Toxicology              ScanTox Assay             In vitro toxicology           1                 2000
                                                  assay
                        -----------------------------------------------------------------------------------------
                        Precision Infusion Pumps  Microprocessor               80           1952 (mechanical)
                                                  controlled syringe pumps                1986 (microprocessor)
                                                                                              1998 (latest)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

    
 
    PROTEOMICS PRODUCTS--PROTEIN PURIFICATION
 
    PREPTIP PROTEIN PURIFICATION PIPETTE TIPS
 
   
    Our proprietary PrepTip pipette tips consist of a standard disposable
pipette tip coated on the inside with the same chromatography media used in
packed bed columns. This coating selectively binds proteins, but not the salts,
detergents, electrophoresis gels, buffers and cellular debris that are often
mixed in with the proteins. Our PrepTip pipette tip enables customers to rapidly
purify proteins by avoiding the time-consuming usage of a centrifuge required
when using spin columns. In addition, it is easy to use because the protein
solution is handled entirely within the pipette tip and does not have to
    
 
                                       34

<PAGE>
   
be moved through a separate device like a packed bed column or dialyzer. Because
our PrepTip pipette tips use the same chromatography media as packed bed
columns, they can take advantage of the wide range of existing purification
protocols using these media.
    
 
    PURETIP DNA PURIFICATION PIPETTE TIPS
 
    PureTip pipette tip uses a pipette tip that is similar to the PrepTip
pipette tip, but is loaded with a gel rather than coated. This is well suited
for performing DNA purification. PureTip pipette tips are more adaptable to
automation than spin columns because they fit onto automated pipetting
workstations. We expect to launch the PureTip pipette tip later this year.
 
    SPIN COLUMNS
 
    Spin columns are short plastic tubes that contain purification media. Once a
sample is placed in the tube, it is typically spun in a centrifuge to move the
sample through the media and separate the proteins from the other cellular
debris. Our Ultra Micro spin columns, which we provide in both single and 96
well plate versions, contain chromatography media for use in purifying sample
volumes as small as five microliters. This is significantly smaller than the
sample volume required by columns produced by our largest competitors.
 
    PROTEIN PURIFICATION DIALYZERS
 
    Dialyzers are small chambers with an open end covered with a membrane. The
membrane allows small molecules to pass through but not large molecules. Because
proteins are large molecules and most contaminants are small molecules, this is
an effective way to purify proteins. We make single- and double-sided reusable
and disposable dialyzers.
 
    DISPOSABLE EQUILIBRIUM DIALYZERS
 
    Our proprietary disposable equilibrium dialyzers are effective
cost-efficient products for protein binding studies and can handle sample sizes
as small as 75 microliters. These disposable products are particularly useful
for binding studies involving radioactively labeled compounds because the
dialyzer does not require cleaning after use.
 
    PROTEOMICS PRODUCTS--PROTEIN ANALYSIS
 
    MOLECULAR BIOLOGY SPECTROPHOTOMETERS
 
    A spectrophotometer is an instrument widely used in molecular biology and
cell biology to quantify the amount of a compound in a sample by shining a beam
of white light through a prism or grating to divide it into component
wavelengths. Each wavelength in turn is shone through a liquid sample and the
spectrophotometer measures the amount of light absorbed at each wavelength. This
enables the quantification of the amount of a compound in a sample. We sell a
wide range of spectrophotometers under the names UltroSpec and NovaSpec. These
products are manufactured by our Biochrom subsidiary and sold primarily through
our distribution arrangement with Amersham Pharmacia Biotech.
 
    DNA/RNA/PROTEIN CALCULATORS
 
   
    A DNA/RNA/protein calculator is a bench top instrument dedicated to
quantifying the amount of DNA, RNA or protein in a sample. It uses a process
similar to that of a molecular biology spectrophotometer. These are sold under
the names GeneQuant and GeneQuantPro. Launched in 1993, we believe that we were
the first company to sell such an instrument and we believe that we are a leader
in this product line. These products are manufactured by our Biochrom subsidiary
and sold primarily through Amersham Pharmacia Biotech.
    
 
   
    MULTI-WELL PLATE READERS
    
 
   
    Multi-well plate readers are widely used for high throughput screening
assays in the drug discovery process. The most common format is 96 wells. They
use light to detect chemical interactions. We plan
    
 
                                       35

<PAGE>
   
to introduce a range of these products beginning with absorbance readers in the
fourth quarter of 2000 and luminescence and fluorescence readers in 2001
primarily for distribution through Amersham Pharmacia Biotech.
    
 
    AMINO ACID ANALYSIS SYSTEMS
 
   
    An amino acid analysis system uses chromatography to separate the amino
acids in a sample and then uses a chemical reaction to detect each one in turn
as they flow out of the chromatography column. Amino acids are the building
blocks of proteins. In June 2000, we acquired substantially all of the amino
acid analysis systems business of the Biotronik subsidiary of
Eppendorf-Netheler-Hinz GmbH and integrated it with the existing amino acid
analysis systems business in our Biochrom subsidiary.
    
 
    ADMET SCREENING PRODUCTS
 
    We have traditionally sold products for ADMET testing that are based upon
animal models. However, as a result of a series of acquisitions and licensing
transactions, we have begun to develop and manufacture organ testing systems,
tissue testing systems and serum protein binding assays for early toxicology
testing.
 
    NAVICYTE DIFFUSION CHAMBERS
 
    A diffusion chamber is a small plastic chamber with a membrane separating
the two halves of the chamber used to measure the absorption of a drug into the
bloodstream. The membrane can either be tissue such as intestinal tissue or a
cultured layer of cells such as human colon cells. This creates a miniaturized
model of intestinal absorption. We entered this market with our 1999 acquisition
of the assets of NaviCyte Inc. a wholly owned subsidiary of Trega Biosciences.
 
    96 WELL EQUILIBRIUM DIALYSIS PLATE FOR SERUM PROTEIN BINDING ASSAYS
 
    Our 96 well equilibrium dialysis plate operates in a similar way to the
equilibrium dialyzers for target validation described above. The difference is
that both chambers on either side of the membrane are capped. The protein target
is placed on one side of the membrane and the drug on the other. The small
molecule drug diffuses through the membrane. If it binds to the target, it
cannot diffuse back again. If it does not bind, it will diffuse back and forth
until an equilibrium is established. Thus, measuring the drug concentration
determines the strength of binding. This product is principally used for ADMET
screening to determine if a drug binds to blood proteins. A certain level of
reversible binding is advantageous in order to promote good distribution of a
drug through the human body. However, if the binding is too strong, it may
impair normal protein function and cause toxic effects.
 
    ORGAN TESTING SYSTEMS
 
    Organ testing systems use glass or plastic chambers together with
stimulators and recording electrodes to study organ function. Organ testing
systems enable either whole organs or strips of tissue from organs such as
hearts, livers and lungs to be kept functioning outside the body while
researchers perform experiments with them. They are typically used in place of
live animals. We have sold basic versions of these systems for many years, but
have significantly expanded our product offerings through our November 1999
acquisition of Hugo Sachs Elektronik. Studies on isolated livers are useful in
determining metabolism and studies on kidneys are useful in determining
elimination.
 
    SCANTOX IN VITRO TOXICOLOGY SCREENING
 
   
    Our proprietary ScanTox in vitro toxicology screening system uses a living
organ system, a bovine eye lens, to detect the toxic effect of compounds by
measuring the refraction of laser light passing through the eye lens. A healthy
lens focuses light to a point, but when a toxic compound is added to
    
 
                                       36

<PAGE>
   
the lens environment, the lens reacts by defocusing. The extent of defocusing is
measured and analyzed by the instrument. Its advantages include:
    
 
    - higher relevance to whole body toxicology than a cell-based assay, without
      the complicated support and measurement apparatus needed for other organs
      such as hearts or lungs,
 
    - higher sensitivity and reproducibility than live animal assays,
 
    - higher sensitivity than other tissue assays, and
 
    - easier operation than other animal or tissue assays because the data is
      collected and analyzed automatically.
 
    PRECISION INFUSION PUMPS
 
    Infusion pumps, typically syringe pumps, are used to accurately infuse very
small quantities of liquid, commonly drugs. Infusion pumps are typically used
for long-term toxicology testing of drugs by infusion into animals, typically
laboratory rats. We sell 80 types of syringe pumps.
 
    OTHER PRODUCTS
 
    CELL INJECTION SYSTEMS
 
    Cell injection systems use extremely fine bore glass capillaries to
penetrate and inject drugs into or around individual cells. Cell injection
systems are used to study the effects of drugs on single cells. Injection is
accomplished either with air pressure or, if the drug molecule is electrically
charged, by applying an electric current. We entered this market with our 1998
acquisition of the research products of Medical Systems Corporation.
 
    VENTILATORS
 
    Ventilators use a piston driven air pump to inflate the lungs of an
anesthestised animal. Ventilators are typically used in surgical procedures
common in drug discovery. Our advanced Inspira ventilators have significant
safety and ease of use features, such as default safety settings, not found on
other ventilators.
 
    CPK ATOMIC MODELS
 
    CPK atomic models use colored plastic parts to accurately model molecular
structures, such as DNA. We offer a wide range of components and assembled
models.
 
    STRONGHOLD LABORATORY CLAMPS
 
    Stronghold laboratory clamps are made from glass reinforced nylon. Our
clamps resist rusting which is a common problem with steel clamps. We provide a
wide variety of clamps, stands and lattices.
 
    OEM PRODUCTS
 
    Our reputation for quality, durability and reliability has led to the
formation of a number of original equipment manufacturer, or OEM, relationships
with major life science instrument companies. A good example of these
relationships is with respect to our syringe pumps. Our syringe pumps are
capable of delivering flow rates as low as 0.001 microliters per hour while
maintaining high accuracy. We have adapted, in conjunction with our OEMs, the
core technology embodied in our syringe pumps to make specialized sample
injectors for many of the major mass spectrometry manufacturers.
 
                                       37

<PAGE>
    DISTRIBUTED PRODUCTS
 
   
    In addition to the manufactured products described above, we buy and resell
through our catalog products made by other manufacturers. We have negotiated
supply agreements with the majority of the companies that provide our
distributed products. These supply agreements specify pricing only and contain
no minimum purchase commitments. None of these agreements represents more than
two percent of our revenues. Distributed products accounted for approximately
18% of our revenues for the nine months ended September 30, 2000. These
distributed products enable us to provide our customers with a single source for
their experimental needs. These complementary products consist of a large
variety of devices, instruments and consumable items used in experiments
involving animals and biological tissue in the fields of proteomics, physiology,
pharmacology, neuroscience, cell biology, molecular biology and toxicology. Our
manufactured products are often leaders in their fields, but researchers often
need complementary products in order to conduct their particular experiments.
Most of these complementary products come from small companies without our
extensive distribution and marketing channel.
    
 
OUR CUSTOMERS
 
    Our customers are primarily end user research scientists at pharmaceutical
and biotechnology companies, universities and government laboratories, such as
the U.S. National Institutes of Health, or NIH. Our largest customers in the
United States include Baylor College of Medicine, Bristol-Myers Squibb Company,
Eli Lilly and Company, Johns Hopkins University, Merck & Co., Inc., NIH, Parke-
Davis, Pfizer Inc., Schering-Plough Corporation, SmithKline Beecham plc and the
University of California.
 
   
    We conduct direct sales in the United States, the United Kingdom, Germany,
France and Canada. We also maintain distributors in other countries. Aggregate
sales to our largest customer, Amersham Pharmacia Biotech, as a distributor with
end users similar to ours, accounted for approximately 39% of our revenue for
the nine months ended September 30, 2000, and 44% of our revenue for the fiscal
year ended December 31, 1999. We have several thousand customers worldwide and
no other customer accounted for more than five percent of our revenue for such
periods.
    
 
SALES AND MARKETING
 
    DIRECT SALES
 
   
    We periodically produce and mail approximately 100,000 copies of our
1,000-page catalog, which contains approximately 10,000 items. We distribute the
majority of our products through our worldwide subsidiaries. Our manufactured
products accounted for approximately 82% of our revenues for the nine months
ended September 30, 2000. The complete catalog is also available as a CD-ROM and
can be accessed on our website, www.harvardbioscience.com. Our significant
positions in many of our manufactured products create traffic to the catalog and
web site which enables cross-selling and facilitates the introduction of new
products. In addition to the comprehensive catalog, we create and mail abridged
catalogs which focus on specific product areas along with direct mailers which
introduce or promote new products.
    
 
    AMERSHAM PHARMACIA BIOTECH DISTRIBUTOR
 
   
    Since the 1970s, our Biochrom subsidiary has used Amersham Pharmacia
Biotech, or APBiotech, and its predecessors as its primary marketing and
distribution channel. When we acquired Biochrom from Pharmacia and Upjohn in
1999, we signed a distribution, marketing and new product development agreement
with APBiotech. Under the terms of this agreement, APBiotech serves as the
exclusive distributor, marketer and seller of a majority of the products of our
Biochrom subsidiary. During the term of this agreement, APBiotech has agreed to
purchase at least a minimum number of our products
    
 
                                       38

<PAGE>
   
equal to a specified aggregate dollar value. We have certain affirmative duties
under the agreement to assist APBiotech in the sale of our products. For
example, we have agreed to cooperate with APBiotech in its sales and marketing
program and to provide sales, demonstration and support training for APBiotech.
This agreement may be terminated early under specified circumstances. For
example, if we breach the exclusivity, pricing or shipping provisions of the
agreement and fail to remedy the breach within 30 days of receiving written
notice of the breach from APBiotech, then the agreement may be terminated. In
addition, we may terminate the agreement under specified circumstances. For
example, failure by APBiotech to place certain information in escrow, to pay for
products or to purchase a minimum number of products each year enables us to
terminate the agreement unless APBiotech remedies the breach within 30 days of
receiving written notice of the breach from us. This agreement may be terminated
by either party upon 18 months' prior written notice.
    
 
RESEARCH AND DEVELOPMENT
 
    Our principal research and development mission is to develop a broad
portfolio of technologies, products and core competencies in drug discovery
tools, particularly for application in the areas of proteomics and ADMET.
 
    Our development expenditures were $206,000 in 1997, $325,000 in 1998 and
$1.2 million in 1999. We anticipate that we will continue to make significant
development expenditures. We plan to continue to pursue a balanced development
portfolio strategy of originating new products from internal research and
development programs and business and technology acquisitions.
 
    We maintain development staff in each of our manufacturing facilities to
design and develop new products. In-house development is focused on our current
technologies. For new technologies, our strategy has been to license or acquire
proven technology from universities and biotechnology companies and then develop
the technology into commercially viable products.
 
MANUFACTURING
 
    We manufacture and test the majority of our products in our four principal
manufacturing facilities located in the United States, the United Kingdom and
Germany. We have considerable manufacturing flexibility at our various
facilities, and each facility can manufacture multiple products at the same
time. We maintain in-house key manufacturing know-how, technologies and
resources. We seek to maintain multiple suppliers for key components that are
not manufactured in-house.
 
    Our manufacturing operations are essentially to assemble and test. Our
manufacturing of syringe pumps, ventilators, cell injectors and protein
purification products takes place in Holliston, Massachusetts. Our manufacturing
of spectrophotometers and amino acid analysis systems takes place in Cambridge,
England. Our manufacturing of surgery-related products and teaching products
takes place in Edenbridge, England. Our manufacturing of complete organ testing
systems takes place in March-Hugstetten, Germany. Our Cambridge, England
facility is certified to ISO 9001.
 
COMPETITION
 
   
    The markets into which we sell our products are highly competitive, and we
expect the intensity of competition to increase. We compete with many companies
engaged in developing and selling tools for drug discovery. Many of our
competitors have greater financial, operational, sales and marketing resources,
and more experience in research and development and commercialization than we
have. Moreover, competitors may have greater name recognition than we do, and
many offer discounts as a competitive tactic. These competitors and other
companies may have developed or could in the future develop new technologies
that compete with our products or which could render our products obsolete. We
cannot assure you that we will be able to make the enhancements to our
technologies necessary to
    
 
                                       39

<PAGE>
   
compete successfully with newly emerging technologies. We are not aware of any
significant products sold by us which are currently obsolete.
    
 
    We believe that we offer one of the broadest selections of protein
purification and ADMET technologies to companies engaged in drug discovery. We
are not aware of any competitor which offers a product line of comparable
breadth within the protein purification and ADMET product markets. We have
numerous competitors on a product line basis. We believe that we compete
favorably with our competitors on the basis of product performance, including
quality, reliability and speed, technical support, price and delivery time. We
compete with several companies that provide instruments for proteomics and ADMET
screening. In the DNA/RNA/protein calculator area, we compete with PerkinElmer
Instruments, Inc. and Bio-Rad Laboratories, Inc. In the molecular biology
spectrophotometer area, we compete with Beckman Coulter, Inc. and PerkinElmer
Instruments, Inc. In the protein sample preparation area, we compete with
Millipore Corporation, Pierce Chemical Company and Spectrum Medical. In the
ADMET screening area, we compete with KD Scientific, Razel Scientific
Instruments, Inc., Experimetria Ltd., Kent Scientific Corporation, Warner
Instruments, General Valve Company, Eppendorf-Netheler-Hinz GmbH, Ugo Basile and
Becton, Dickinson and Company. In the area of OEM products, we face competition
primarily from the in-house engineering teams of our OEM customers.
 
INTELLECTUAL PROPERTY
 
    To establish and protect our proprietary technologies and products, we rely
on a combination of patent, copyright, trademark and trade-secret laws, as well
as confidentiality provisions in our contracts. Most of our new technology is
covered by patents or patent applications. Most of our base business is
protected by trade names and trade secrets only.
 
   
    We have implemented a patent strategy designed to provide us with freedom to
operate and facilitate commercialization of our current and future products. We
currently own ten issued U.S. patents and have four pending applications. We
also hold exclusive licenses for the technologies used in our ScanTox in vitro
toxicology products, our NaviCyte drug absorption products and our PureTip
pipette tip products. In addition to these licenses, our principal technologies
are covered by issued patents for our dialyzers and our ultramicro spin columns
and by pending applications for our PrepTip pipette tips. Furthermore,
international patent applications are pending in connection with one of our U.S.
patent applications and one of our licensed patents.
    
 
    Generally, U.S. patents have a term of 17 years from the date of issue for
patents issued from applications filed with the U.S. Patent Office prior to
June 8, 1995, and 20 years from the application filing date or earlier claimed
priority date in the case of patents issued from applications filed on or after
June 8, 1995. Our issued US patents will expire between 2011 and 2018. Our
success depends to a significant degree upon our ability to develop proprietary
products and technologies. We intend to continue to file patent applications as
we develop new products and technologies.
 
    Patents provide some degree of protection for our intellectual property.
However, the assertion of patent protection involves complex legal and factual
determinations and is therefore uncertain. The scope of any of our issued
patents may not be sufficiently broad to offer meaningful protection. In
addition, our issued patents or patents licensed to us may be successfully
challenged, invalidated, circumvented or unenforceable so that our patent rights
would not create an effective competitive barrier. Moreover, the laws of some
foreign countries may not protect our proprietary rights to the same extent as
do the laws of the United States. In addition, the laws governing patentability
and the scope of patent coverage continue to evolve, particularly in areas of
interest to us. As a result, there can be no assurance that patents will issue
from any of our patent applications or from applications licensed to us. In view
of these factors, our intellectual property positions bear some degree of
uncertainty.
 
                                       40

<PAGE>
    We also rely in part on trade-secret protection of our intellectual
property. We attempt to protect our trade secrets by entering into
confidentiality agreements with third parties, employees and consultants. Our
employees and consultants also sign agreements requiring that they assign to us
their interests in patents and copyrights arising from their work for us. Many
of our U.S. employees have signed agreements not to compete unfairly with us
during their employment and after termination of their employment, through the
misuse of confidential information, soliciting employees, soliciting customers
and the like. However, it is possible that these agreements may be breached or
invalidated and if so, there may not be an adequate corrective remedy available.
Despite the measures we have taken to protect our intellectual property, we
cannot assure you that third parties will not independently discover or invent
competing technologies, or reverse engineer our trade secrets or other
technologies. Therefore, the measures we are taking to protect our proprietary
rights may not be adequate.
 
    We do not believe that our products infringe on the intellectual property
rights of any third party. We cannot assure you, however, that third parties
will not claim such infringement by us or our licensors with respect to current
or future products. We expect that product developers in our market will
increasingly be subject to such claims as the number of products and competitors
in our market segment grows and the product functionality in different market
segments overlaps. In addition, patents on production and business methods are
becoming more common and we expect that more patents will issue in our technical
field. Any such claims, with or without merit, could be time-consuming, result
in costly litigation and diversion of management's attention and resources,
cause product shipment delays or require us to enter into royalty or licensing
agreements. Moreover, such royalty or licensing agreements, if required, may not
be on terms acceptable to us, or at all, which could seriously harm our business
or financial condition.
 
GOVERNMENT REGULATION
 
    We are not subject to direct governmental regulation other than the laws and
regulations generally applicable to businesses in the domestic and foreign
jurisdictions in which we operate. In particular, we are not subject to
regulatory approval by the United States Food and Drug Administration as none of
our products are sold for use in diagnostic procedures or on human clinical
patients. In addition, we believe we are in compliance with all relevant
environmental laws.
 
EMPLOYEES
 
   
    As of September 15, 2000, we had 122 full-time employees and 5 part-time
employees, 35 of whom resided in the United States, 73 of whom resided in the
United Kingdom, 12 of whom resided in Germany, 3 of whom resided in France and 4
of whom resided in Canada. None of our employees is subject to any collective
bargaining agreement. We believe that our relationship with our employees is
good.
    
 
FACILITIES
 
    Our four principal facilities incorporate manufacturing, development, sales
and marketing and administration functions. Our facilities consist of:
 
    - a leased 20,000 square foot facility in Holliston, Massachusetts, which is
      our corporate headquarters,
 
    - a leased 28,000 square foot facility in Cambridge, England,
 
    - an owned 15,500 square foot facility in Edenbridge, England, and
 
    - a leased 9,000 square foot facility in March-Hugstetten, Germany.
 
                                       41

<PAGE>
    We lease additional facilities for sales and administrative support in Les
Ulix, Paris France and Montreal, Quebec Canada.
 
LEGAL PROCEEDINGS
 
    From time to time, we may be involved in various claims and legal
proceedings arising in the ordinary course of business. We are not currently a
party to any claims or proceedings which, we believe, if decided adversely to
us, would either individually or in the aggregate have a material adverse effect
on our business, financial condition or results of operations.
 
                                       42

<PAGE>

                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
   
    The following table shows information about our executive officers and
directors as of October 15, 2000.
    
 
   

<TABLE>
<CAPTION>
NAME                                                AGE                         POSITION
----                                              --------   ----------------------------------------------
<S>                                               <C>        <C>
Chane Graziano..................................     62      Chief Executive Officer and Director
 
David Green.....................................     36      President and Director
 
James Warren....................................     55      Chief Financial Officer
 
Mark Norige.....................................     46      Chief Operating Officer
 
John House......................................     56      Managing Director, Biochrom Ltd
 
Susan Luscinski.................................     44      Vice President of Finance and Administration
 
Christopher W. Dick.............................     46      Director
 
Robert Dishman*.................................     56      Director
 
Richard C. Klaffky, Jr..........................     54      Director
 
Earl R. Lewis*..................................     56      Director
</TABLE>

    
 
   
Messrs. Dick and Klaffky will be the members of our compensation committee
following the consummation of this offering.
    
 
   
Messrs. Dishman, Klaffky and Lewis will be the members of our audit committee
following the consummation of this offering.
    
 
   
*   To join our board of directors prior to the consummation of this offering.
    
 
   
    CHANE GRAZIANO has served as our Chief Executive Officer and as a member of
our board of directors since March 1996. Prior to joining Harvard Bioscience,
Mr. Graziano served as the President of Analytical Technology Inc., an
analytical electrochemistry instruments company, from 1993 to 1996 and as the
President and Chief Executive Officer of its predecessor, Analytical
Technology Inc.-Orion, an electrochemistry instruments and laboratory products
company, from 1990 until 1993. Mr. Graziano served as the President of Waters
Corporation, an analytical instrument manufacturer, from 1985 until 1989.
Mr. Graziano has over 36 years experience in the laboratory products and
analytical instruments industry.
    
 
    DAVID GREEN has served as our President and as a member of our board of
directors since March 1996. Prior to joining Harvard Bioscience, Mr. Green was a
strategy consultant with Monitor Company, a strategy consulting company, in
Cambridge, Massachusetts and Johannesburg, South Africa from June 1991 until
September 1995 and a brand manager for household products with Unilever PLC, a
packaged consumer goods company, in London from September 1985 to
February 1989. Mr. Green graduated from Oxford University with a B.A. Honors
degree in physics and holds a M.B.A. degree with distinction from Harvard
Business School.
 
    JAMES WARREN has served as our Chief Financial Officer since July 2000.
Prior to joining Harvard Bioscience, Mr. Warren served as the Chief Financial
Officer of Aquila Biopharmaceuticals, Inc., a life sciences company, from
January 1998 until July 2000 and as the Corporate Controller of Genzyme
Corporation, a biotechnology company, from 1991 until January 1998. Mr. Warren
holds a M.B.A. degree from Boston University.
 
    MARK NORIGE has served as our Chief Operating Officer since January 2000 and
in various other positions with us since September 1996. Prior to joining
Harvard Bioscience, Mr. Norige served as a
 
                                       43

<PAGE>
Business Unit Manager at QuadTech, Inc., an impedance measuring instrument
manufacturer, from May 1995 until September 1996. Mr. Norige worked at Waters
Corporation from 1977 until May 1995.
 
   
    JOHN HOUSE has served as Managing Director of our Biochrom Ltd subsidiary
since July 2000. Prior to joining Biochrom, Mr. House was retired from January
1995 until July 2000 and engaged during that period primarily in charitable
activities. Mr. House served in various positions with, and most recently as a
Managing Director of, Unicam Ltd., a manufacturer of analytical instruments,
from 1987 until January 1995.
    
 
    SUSAN LUSCINKSI has served as our Vice President of Finance and
Administration since May 1999. Ms. Luscinski served as our Corporate Controller
from May 1988 until May 1999 and has served in various other positions at our
company and its predecessor since January 1985.
 
    CHRISTOPHER W. DICK has served as a director of Harvard Bioscience since
March 1996. Mr. Dick has served as Managing Director of Ascent Venture
Management, Inc., a private equity firm, since March 1999. Mr. Dick has served
as a Managing Member or General Partner of Ascent Venture Partners, L.P. fund
and Ascent Venture Partners II, L.P. fund since 1999. Prior to joining Ascent
Venture Management, Inc., Mr. Dick served as General Partner of Pioneer Capital
Corporation, a private equity management firm, from 1991 until March 1999.
Mr. Dick is a graduate of Cornell University and holds a M.B.A. degree from
Babson College.
 
   
    ROBERT DISHMAN has agreed to join our board of directors prior to the
consummation of this offering. Since 1994, Mr. Dishman has served in various
positions with, and most recently as an Executive Vice President and Director of
Dyax Corp. (formerly Biotage, Inc.), a commercial physical and biological
research company. Mr. Dishman holds a Ph.D. in Analytical Chemistry from the
University of Massachusetts-Amherst.
    
 
    RICHARD C. KLAFFKY, JR. has served as a director of Harvard Bioscience since
March 1996. Since 1987, Mr. Klaffky has served as President of FINEC Corp., the
corporate general partner of two private equity partnerships, First New England
Capital L.P. and First New England Capital 2 L.P., based in Hartford,
Connecticut. Mr. Klaffky also serves as a director of Centrum Industries, a
manufacturing company in the metal forming, material handling and motor
production industries. Mr. Klaffky is a graduate of Brown University and holds a
M.B.A. degree from Columbia University.
 
   
    EARL R. LEWIS has agreed to join our board of directors prior to the
consummation of this offering. Mr. Lewis has served in various capacities with
Thermo Instrument Systems (now merged into Thermo Electron Corporation) since
1986 and was subsequently named President in 1997 and Chief Executive Officer in
1998. ThermoElectron Corporation develops, manufactures and markets measuring
and controlling devices. Mr. Lewis is Chairman of Thermo BioAnalysis
Corporation, Thermo Vision Corporation, Thermo Optek Corporation, ThermoQuest
Corporation, each of which is a developer of laboratory analytical instruments,
and ONIX Systems, Inc., a developer of measuring and controlling devices.
Mr. Lewis is a director of SpectRx, Inc., an electromedical and
electrotherapeutic company, Metrika Systems Corporation, a developer of
industrial instruments for measurement, display and control, and ThermoSpectra
Corporation, a developer of instruments for measuring and testing of electricity
and electric signals.
    
 
BOARD COMPOSITION
 
   
    Following the closing of this offering, our board of directors will be
divided into three classes, each of whose members will serve for a staggered
three-year term. Our board of directors will consist of Messrs. Dick and Klaffky
as Class I directors, whose term of office will continue until the 2001 annual
meeting of stockholders, Messrs. Green and Dishman as Class II directors, whose
term of office will continue until the 2002 annual meeting of stockholders, and
Messrs. Graziano and Lewis as Class III
    
 
                                       44

<PAGE>
   
directors, whose term of office will continue until the 2003 annual meeting of
stockholders. At each annual meeting of stockholders, a class of directors will
be elected for a three-year term to succeed the directors of the same class
whose terms are then expiring.
    
 
BOARD COMMITTEES
 
    Effective upon the closing of this offering, our board of directors will
reconstitute the audit committee and compensation committee.
 
   
    AUDIT COMMITTEE.  The members of the audit committee will be responsible for
recommending to the board of directors the engagement of our outside auditors
and reviewing our accounting controls and the results and scope of audits and
other services provided by our auditors. Our audit committee will consist of
three independent directors.
    
 
    COMPENSATION COMMITTEE.  The members of the compensation committee, a
majority of whom will be independent directors, will be responsible for
approving or recommending to the board of directors the amount and type of
consideration to be paid to senior management, administering our stock option
plans and establishing and reviewing general policies relating to compensation
and benefits of employees.
 
DIRECTOR COMPENSATION
 
   
    We reimburse our non-employee directors for their expenses incurred in
connection with attending board and committee meetings but do not provide cash
compensation for their services as board or committee members. Directors are
eligible to participate in our 2000 Stock Option and Incentive Plan. Each of our
non-employee directors, other than Messrs. Dick and Klaffky, will receive a
one-time option grant of 10,000 shares vesting annually over four years upon
joining the board and an annual option grant of 2,500 shares vesting annually
over four years on the date of each annual meeting of stockholders following the
closing of this offering. The exercise price for each of these option grants
will be equal to the fair market value of the underlying shares of our common
stock on the date of grant.
    
 

EXECUTIVE COMPENSATION
 
    The following table sets forth the total compensation paid or accrued in the
fiscal year ended December 31, 1999 to our Chief Executive Officer and the three
other executive officers whose aggregate compensation exceeded $100,000.
 
                                       45

<PAGE>
                           SUMMARY COMPENSATION TABLE
 
   

<TABLE>
<CAPTION>
                                                                         LONG-TERM
                                                 ANNUAL COMPENSATION   COMPENSATION
                                                 -------------------   -------------
                                                                          NUMBER
                                                                       OF SECURITIES
                                                                        UNDERLYING         ALL
                                                                          OPTIONS         OTHER
NAME AND POSITION                                 SALARY     BONUS        GRANTED      COMPENSATION
-----------------                                --------   --------   -------------   ------------
<S>                                              <C>        <C>        <C>             <C>
Chane Graziano ................................  $219,000   $232,000       458,257        $19,592(1)
  Chief Executive Officer
 
David Green ...................................   175,000    186,000       458,257         15,507(2)
  President
 
Mark A. Norige ................................   108,000     35,000            --          5,447(3)
  Chief Operating Officer
 
Susan M. Luscinski ............................    95,000     47,500            --          4,832(3)
  Vice President of Finance and Administration
</TABLE>

    
 
------------------------------
   
(1) Includes $7,357 in automobile lease payments, $7,520 in contributions by us
    to Mr. Graziano's 401(k) account and $4,715 representing life insurance
    purchased for Mr. Graziano's benefit.
    
 
   
(2) Includes $7,687 in automobile lease payments, $7,165 in contributions by us
    to Mr. Green's 401(k) account and $655 representing life insurance purchased
    for Mr. Green's benefit.
    
 
(3) Represents contributions by us to the executive officers' 401(k) accounts.
 
OPTION GRANTS IN LAST FISCAL YEAR AND OPTION VALUES AT FISCAL YEAR END
 
    The following table provides information regarding stock options granted to
the named executive officers during the fiscal year ended December 31, 1999.
 
                       OPTION GRANTS IN FISCAL YEAR 1999
 
   

<TABLE>
<CAPTION>
                                                                                                  POTENTIAL REALIZABLE
                                                      INDIVIDUAL GRANTS                             VALUE AT ASSUMED
                              -----------------------------------------------------------------      ANNUAL RATE OF
                                         NUMBER OF    PERCENT OF TOTAL                                 STOCK PRICE
                                         SECURITIES       OPTIONS                                     APPRECIATION
                                         UNDERLYING      GRANTED TO      EXERCISE                  FOR OPTION TERM(3)
                              DATE OF     OPTIONS       EMPLOYEES IN       PRICE     EXPIRATION   ---------------------
NAME                           GRANT     GRANTED(1)    FISCAL YEAR(2)    PER SHARE      DATE         5%          10%
----                          --------   ----------   ----------------   ---------   ----------   ---------   ---------
<S>                           <C>        <C>          <C>                <C>         <C>          <C>         <C>
Chane Graziano..............  3/2/1999    458,257            50%          $1.0461     3/2/2009    $301,480    $764,009
 
David Green.................  3/2/1999    458,257            50%           1.0461     3/2/2009     301,480     764,009
</TABLE>

    
 
--------------------------
   
(1) The options, as amended in September 2000, vest upon the sale of all or
    substantially all of our assets or capital stock for a price per share of
    common stock of at least $2.09, or if our fair market value at any time
    prior to December 31, 2000 results in a per share valuation, on a
    fully-diluted basis, of not less than $2.09 per share. The exercise price of
    the options is equal to the fair market value of our common stock on the
    date of grant.
    
 
   
(2) Based on an aggregate of 916,514 options granted in fiscal 1999.
    
 
(3) The amounts shown as potential realizable value illustrate what might be
    realized upon exercise immediately prior to expiration of the option term
    using the 5% and 10% appreciation rates compounded annually as established
    in regulations of the Securities and Exchange Commission.
 
                                       46

<PAGE>
   
    The following table sets forth the potential realizable value of the options
    granted to the listed executive officers using our assumed initial public
    offering price of $12.00 per share:
    
 
   

<TABLE>
<CAPTION>
                                                                            POTENTIAL REALIZABLE
                                                                              VALUE AT ASSUMED
                                                                              ANNUAL RATES OF
                                                                                STOCK PRICE
                                                           NUMBER OF            APPRECIATION
                                                          SECURITIES          FOR OPTION TERM
                                                          UNDERLYING      ------------------------
                                                        OPTIONS GRANTED       5%           10%
                                                        ---------------   ----------   -----------
<S>                                                     <C>               <C>          <C>
Chane Graziano........................................      458,257       $8,478,047   $13,783,827
 
David Green...........................................      458,257       $8,478,047   $13,783,827
</TABLE>

    
 
    The potential realizable value is not intended to predict future
    appreciation of the price of our common stock. The values shown do not
    consider non-transferability, vesting or termination of the options upon
    termination of the employee's employment relationship with us.
 
FISCAL YEAR-END OPTION VALUES
 
   
    The following table sets forth information concerning the number and value
of unexercised options to purchase common stock held as of December 31, 1999 by
the executive officers listed in the Summary Compensation Table. There was no
public trading market for our common stock as of December 31, 1999. Accordingly,
the values of the unexercised in-the-money options have been calculated on the
basis of the estimated fair value of our common stock at December 31, 1999 of
$3.67, less the applicable exercise price multiplied by the number of shares
which may be acquired on exercise. None of the executive officers listed in the
Summary Compensation Table exercised any stock options in fiscal 1999.
    
 
           AGGREGATE OPTION AMOUNTS AND FISCAL YEAR-END OPTION VALUES
 
   

<TABLE>
<CAPTION>
                                                   NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                  UNDERLYING UNEXERCISED         IN-THE-MONEY OPTIONS
                                                OPTIONS AT FISCAL YEAR-END        AT FISCAL YEAR-END
                                                ---------------------------   ---------------------------
NAME                                            EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                                            -----------   -------------   -----------   -------------
<S>                                             <C>           <C>             <C>           <C>
Chane Graziano................................    783,808        570,229      $2,872,746     $1,610,825
 
David Green...................................    783,808        570,229       2,872,746      1,610,825
 
Mark A. Norige................................     55,976         55,996         204,366        204,438
 
Susan M. Luscinski............................     83,965         28,007         307,742        102,653
</TABLE>

    
 
BENEFIT PLANS
 
   
    2000 STOCK OPTION AND INCENTIVE PLAN.  Our board of directors will adopt the
2000 Stock Option and Incentive Plan, subject to stockholder approval. The 2000
Stock Option and Incentive Plan will be submitted to our stockholders for
approval in October 2000. The 2000 Stock Option and Incentive Plan allows for
the issuance of up to 1,250,000 shares of common stock plus an additional amount
equal to 5% of any net increase in the total number of shares of common stock
outstanding after this offering. Our compensation committee will administer the
2000 Stock Option and Incentive Plan.
    
 
    Under the 2000 Stock Option and Incentive Plan, our compensation committee
may:
 
    - grant incentive stock options,
 
    - grant non-qualified stock options,
 
    - grant stock appreciation rights,
 
    - issue or sell common stock with vesting or other restrictions, or without
      restrictions,
 
                                       47

<PAGE>
    - grant rights to receive common stock in the future with or without
      vesting,
 
    - grant common stock upon the attainment of specified performance goals, and
 
    - grant dividend rights in respect of common stock.
 
    These grants and issuances may be made to our officers, employees,
directors, consultants, advisors and other key persons.
 
    Our compensation committee has the right, in its discretion, to select the
individuals eligible to receive awards, determine the terms and conditions of
the awards granted, accelerate the vesting schedule of any award and generally
administer and interpret the plan.
 
    The exercise price of options granted under the 2000 Stock Option and
Incentive Plan is determined by our compensation committee. Under present law,
incentive stock options and options intended to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986 may not
be granted at an exercise price less than the fair market value of the common
stock on the date of grant, or less than 110% of the fair market value in the
case of incentive stock options granted to optionees holding more than 10% of
the voting power.
 
    Non-qualified stock options may be granted at prices which are less than the
fair market value of the underlying shares on the date granted. Options are
typically subject to vesting schedules, terminate 10 years from the date of
grant and may be exercised for specified periods after the termination of the
optionee's employment or other service relationship with us. Upon the exercise
of options, the option exercise price must be paid in full either in cash or by
certified or bank check or other instrument acceptable to the committee or, in
the sole discretion of the committee, by delivery of shares of common stock that
have been owned by the optionee free of restrictions for at least six months.
 
    The 2000 Stock Option and Incentive Plan and all awards issued under the
plan will terminate upon a merger, reorganization or consolidation, the sale of
all or substantially all of our assets or all of our outstanding capital stock
or a liquidation or other similar transaction, unless Harvard Bioscience and the
other parties to such transactions have agreed otherwise. All participants under
the 2000 Stock Option and Incentive Plan will be permitted to exercise for a
period of 30 days before any such termination all awards held by them which are
then exercisable or will become exercisable upon the closing of the transaction.
 
   
    EMPLOYEE STOCK PURCHASE PLAN.  The Employee Stock Purchase Plan will be
adopted by our board of directors in October 2000 subject to stockholder
approval. The Employee Stock Purchase Plan will be submitted to stockholders in
October 2000. Up to 500,000 shares of our common stock may be issued under the
Employee Stock Purchase Plan. The Employee Stock Purchase Plan is administered
by our compensation committee.
    
 
    The first offering under the Employee Stock Purchase Plan will commence on
January 1, 2001 and end on June 30, 2001. Subsequent offerings will commence on
each January 1 and July 1 thereafter and will have a duration of six months.
Generally, all employees who are customarily employed for more than 20 hours per
week as of the first day of the applicable offering period are eligible to
participate in the Employee Stock Purchase Plan. Any employee who owns or is
deemed to own shares of stock representing in excess of 5% of the combined
voting power of all classes of our stock may not participate in the Employee
Stock Purchase Plan.
 
   
    During each offering, an employee may purchase shares under the Employee
Stock Purchase Plan by authorizing payroll deductions of up to 10% of his cash
compensation during the offering period. Unless the employee has previously
withdrawn from the offering, his accumulated payroll deductions will be used to
purchase shares of our common stock on the last business day of the period at a
price equal to 85% of the fair market value of our common stock on the first or
last day of the offering period, whichever is lower. Under applicable tax rules,
an employee may purchase no more than
    
 
                                       48

<PAGE>
   
$25,000 worth of our common stock in any calendar year under the Employee Stock
Purchase Plan. We have not issued any shares to date under the Employee Stock
Purchase Plan.
    
 
   
    1996 STOCK OPTION AND GRANT PLAN.  Our 1996 Stock Option and Grant Plan was
initially approved by our board of directors and was approved by our
stockholders in March 1996. Our 1996 Stock Option and Grant Plan provides for
the issuance of 4,072,480 shares of our common stock. As of October 15, 2000,
options to purchase 599,096 shares of our common stock were outstanding under
our 1996 Stock Option and Grant Plan. Options granted under our 1996 Stock
Option and Grant Plan generally vest over four years and terminate on the tenth
anniversary of the date of grant. We will not make any additional grants under
our 1996 Stock Option and Grant Plan after the completion of this offering.
    
 
EMPLOYMENT ARRANGEMENTS
 
   
    We anticipate entering into employment agreements with each of Messrs.
Graziano, Green and Warren. Each proposed agreement is for a period of two
years, other than Mr. Warren's agreement which is for one year. Each agreement
automatically extends for one additional year on the anniversary date unless
either party has given notice that it does not wish to extend the agreement.
Each agreement provides for the payment of base salary and incentive
compensation and for the provision of certain fringe benefits to the executive.
Under their respective employment agreements, the annual salary for
Mr. Graziano is $275,000, the annual salary for Mr. Green is $225,000 and the
annual salary for Mr. Warren is $185,000. The agreements require our executive
officers to refrain from competing with us and from soliciting our employees for
a period of 12 months following termination for any reason. Each agreement also
provides for certain payments and benefits for an executive officer should his
or her employment with us be terminated because of death or disability, by the
executive for good reason or by us without cause, as further defined in the
agreements. In general, in the case of a termination by the executive officer
for good reason, or by us without cause, the executive officer will receive up
to two years' salary and bonus in the cases of Messrs. Graziano and Green and
one year's salary and bonus in the case of Mr. Warren, an extension of benefits
for one year and an acceleration of vesting for stock options and restricted
stock which otherwise would vest during the next twelve months. Upon a change of
control, as defined in the agreements, the executive officer is eligible for
payment of up to three years' salary and bonus in the cases of Messrs. Graziano
and Green and one-and-a-half year's salary and bonus in the case of Mr. Warren,
an extension of benefits for one year and an acceleration of vesting for all
outstanding stock options and restricted stock.
    
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    Messrs. Dick and Klaffky are the members of our compensation committee.
Neither Mr. Dick nor Mr. Klaffky is an executive officer of our company or has
received any compensation from us within the last three years other than in his
capacity as a director.
 
                                       49

<PAGE>
                  RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
STOCK REDEMPTIONS AND LOAN REPAYMENTS WITH STOCKHOLDERS
 
   
    In March 1996, our business was acquired by a group that was led by our
current management team of Chane Graziano, our Chief Executive Officer, and
David Green, our President, and that also included Paul Grindle, a former member
of our board of directors, Ascent Venture Partners, L.P. (formerly known as
Pioneer Venture Limited Partnership), Ascent Venture Partners II, L.P. (formerly
known as Pioneer Venture Limited Partnership II) and First New England Capital,
L.P. In connection with this acquisition, we issued redeemable preferred stock
for an aggregate purchase price of $1.5 million and subordinated debentures with
an aggregate principal amount of $1.0 million to our investors. The redeemable
preferred stock pays cumulative dividends at the rate of $0.26 per share
quarterly in arrears and the subordinated debentures bear interest at an annual
rate of 13% payable quarterly in arrears. The terms of the redeemable preferred
stock and the subordinated debentures require us to redeem or repay these
instruments upon the completion of this offering. A portion of the proceeds of
this offering will be used to retire the redeemable preferred stock and the
subordinated debentures. The redemption of the preferred stock and the
retirement of the subordinated debentures will result in payments of
approximately $167,000 to Mr. Graziano, our Chief Executive Officer and a member
of our board of directors, $500,000 to Ascent Venture Partners, L.P.,
$1.0 million to Ascent Venture Partners II, L.P. and $500,000 to First New
England Capital, L.P. Christopher W. Dick, a member of our board of directors,
is a Managing Director of Ascent Venture Management, Inc., the general partner
of Ascent Venture Partners, L.P., and Ascent Management SBIC Corp., the general
partner of Ascent Venture Partners II, L.P., and Richard C. Klaffky, Jr., a
member of our board of directors, is the President of FINEC Corp., the general
partner of First New England Capital, L.P.
    
 
TRANSACTIONS WITH AN AFFILIATE OF AN EXECUTIVE OFFICER
 
   
    In March 1996, we acquired our business from a company now known as Harvard
Clinical Technology Inc. Following this acquisition, we entered into several
transition-related transactions with Harvard Clinical. In 1997, we sold Harvard
Clinical several items of furniture, fixtures, appliances and equipment, leased
Harvard Clinical office space on the same terms as the underlying lease with the
third-party landlord, provided transition support services and assumed Harvard
Clinical's obligations to pay specified professional fees in exchange for
1,529,180 shares of our common stock held by a principal stockholder of Harvard
Clinical at an agreed upon value of $0.11 per share. The assets purchased by
Harvard Clinical had an aggregate purchase price of $122,000, which reflected
their estimated fair market value as determined by Mr. Graziano, our Chief
Executive Officer. We originally purchased these assets as part of the
March 1996 acquisition of our business. We believe that each of these
transactions was consummated on terms at least as favorable to us as could have
been obtained from unaffiliated parties. Diane Green, who is an officer,
director and stockholder of Harvard Clinical, is the spouse of Mr. Green, our
President and a member of our board of directors.
    
 
   
LOANS TO OFFICERS IN CONNECTION WITH OPTION EXERCISES
    
 
   
    In October 2000, Mr. Graziano, our Chief Executive Officer, and Mr. Green,
our President, each exercised options to purchase 740,228 shares of our common
stock. Each of these officers paid substantially all of the exercise price for
these shares by issuing promissory notes to the Company. The aggregate loans to
Mr. Graziano are $774,000 and to Mr. Green are $789,000 pursuant to these
promissory notes. Each of these promissory notes is due in October 2003 and
bears interest at an annual rate of 10%. These promissory notes are secured by a
pledge of all of the shares for which the exercise price was paid with the
respective promissory notes as well as additional shares held by each of these
officers.
    
 
                                       50

<PAGE>
                       PRINCIPAL AND SELLING STOCKHOLDERS
 
   
    The following table sets forth information regarding the beneficial
ownership of Harvard Bioscience common stock as of October 15, 2000 and on an as
adjusted basis to reflect the sale of the common stock offered hereby by:
    
 
    - all persons known by us to own beneficially 5% or more of the common
      stock,
 
    - each of our directors,
 
    - the executive officers listed in the summary compensation table,
 
    - the stockholder selling shares in this offering, and
 
    - all of our directors and executive officers as a group.
 
   
    The number of shares beneficially owned by each stockholder is determined
under rules issued by the Securities and Exchange Commission and includes voting
or investment power with respect to securities. Under these rules, beneficial
ownership includes any shares as to which the individual or entity has sole or
shared voting power or investment power and includes any shares as to which the
individual or entity has the right to acquire beneficial ownership within
60 days after October 15, 2000 through the exercise of any warrant, stock option
or other right. The inclusion in this prospectus of such shares, however, does
not constitute an admission that the named stockholder is a direct or indirect
beneficial owner of such shares. Unless otherwise indicated, the address of all
listed stockholders is c/o Harvard Bioscience, Inc., 84 October Hill Road,
Holliston, MA 01746-1371.
    
 
   

<TABLE>
<CAPTION>
                                                        BENEFICIAL OWNERSHIP                 BENEFICIAL OWNERSHIP
                                                        PRIOR TO OFFERING(1)                  AFTER OFFERING(1)
                                                       ----------------------   SHARES TO   ----------------------
NAME OF BENEFICIAL OWNER                                 SHARES      PERCENT     BE SOLD      SHARES      PERCENT
------------------------                               ----------   ---------   ---------   ----------   ---------
<S>                                                    <C>          <C>         <C>         <C>          <C>
Christopher W. Dick(2) ..............................   6,465,037     34.9%           --     6,465,037     26.1%
  255 State Street
  Boston, MA 02109
 
Chane Graziano(3) ...................................   5,089,929     27.5%           --     5,089,929     20.5%
 
Ascent Venture Partners II, L.P.(4) .................   3,927,651     21.2%           --     3,927,651     15.8%
  255 State Street
  Boston, MA 02109
 
David Green .........................................   3,479,386     18.8%      172,450     3,306,936     13.3%
 
Ascent Venture Partners, L.P.(5) ....................   2,537,386     13.7%           --     2,537,386     10.2%
  255 State Street
  Boston, MA 02109
 
First New England Capital, L.P.(6) ..................   1,963,825     10.6%           --     1,963,825      7.9%
  100 Pearl Street
  Hartford, CT 06103
 
Richard C. Klaffky(7) ...............................   1,963,825     10.6%           --     1,963,825      7.9%
  100 Pearl Street
  Hartford, CT 06103
 
NEGF, II, L.P.(8) ...................................     955,935      5.2%           --       955,935      3.9%
  One Boston Place
  Suite 2100
  Boston, MA 02108
 
Susan M. Luscinski ..................................     111,972        *            --       111,972        *
 
Mark A. Norige ......................................      83,964        *            --        83,964        *
 
Robert Dishman ......................................          --        *            --            --        *
 
Earl R. Lewis .......................................          --        *            --            --        *
 
All executive officers and directors, as a group
  (8 persons) .......................................  17,194,113     92.8%      172,450    17,021,663     68.7%
</TABLE>

    
 
--------------------------
 
  *  Represents less than 1% of the outstanding shares of common stock.
 
                                       51

<PAGE>
   
 (1) All percentages assume the underwriters do not elect to exercise the
     over-allotment option to purchase an additional 937,500 shares of common
     stock. The number of shares of common stock set forth herein includes
     shares to be issued upon completion of this offering pursuant to the
     conversion of all outstanding shares of our series B convertible preferred
     stock into shares of common stock and the exercise of all outstanding
     warrants to purchase shares of our common stock.
    
 
   
 (2) Consists solely of the shares described in notes (4) and (5) below, of
     which Mr. Dick may be considered the beneficial owner. Mr. Dick disclaims
     beneficial ownership of such shares, except to the extent of his pecuniary
     interest therein.
    
 
   
 (3) Includes 1,291,004 shares held by two trusts for the benefit of
     Mr. Graziano's children, of which Mr. Graziano is a trustee.
    
 
   
 (4) Ascent Management SBIC Corp. is the general partner of Ascent Venture
     Management II, L.P., which is the general partner of Ascent Venture
     Partners II, L.P., which exercises sole voting and investment power with
     respect to all of the shares held of record by Ascent Venture Partners II,
     L.P. Mr. Dick, a member of our board of directors, is the Managing Director
     of Ascent Management SBIC Corp. Mr. Dick disclaims any beneficial ownership
     of the shares held by Ascent Venture Partners II, L.P., except to the
     extent of his pecuniary interest therein.
    
 
   
 (5) Ascent Venture Management, Inc. is the general partner of Ascent Venture
     Partners, L.P., which exercises sole voting and investment power with
     respect to all of the shares held of record by Ascent Venture Partners,
     L.P. Mr. Dick, a member of our board of directors, is the Managing Director
     of Ascent Venture Management, Inc. Mr. Dick disclaims any beneficial
     ownership of the shares held by Ascent Venture Partners, L.P., except to
     the extent of his pecuniary interest therein.
    
 
   
 (6) FINEC Corp. is the general partner of First New England Capital, L.P.,
     which exercises sole voting and investment power with respect to all of the
     shares held of record by First New England Capital, L.P. Mr. Klaffky, a
     member of our board of directors, is the President of FINEC Corp.
     Mr. Klaffky disclaims any beneficial ownership of the shares held by First
     New England Capital, L.P., except to the extent of his pecuniary interest
     therein.
    
 
   
 (7) Consists solely of the shares described in note (6) above, of which
     Mr. Klaffky may be considered the beneficial owner. Mr. Klaffky disclaims
     beneficial ownership of such shares, except to the extent of his pecuniary
     interest therein.
    
 
   
 (8) NEGF Ventures, Inc. is the general partner of New England Partners, II,
     L.P., which is the general partner of NEGF II, L.P. NEGF Ventures, Inc.
     exercises sole voting and investment power with respect to all of the
     shares held of record by NEGF II, L.P. Individually, no stockholder,
     director or officer of NEGF Ventures, Inc. is deemed to have or share such
     voting or investment power.
    
 
                                       52

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK
 
   
    Following this offering, our authorized capital stock will consist of
80,000,000 shares of common stock and 5,000,000 shares of undesignated preferred
stock, issuable in one or more series designated by our board of directors. No
other class of capital stock will be authorized. Prior to this offering, our
common stock was held by seven stockholders of record. The following information
relates only to our certificate of incorporation and by-laws, as they will exist
after this offering.
    
 
COMMON STOCK
 
    VOTING RIGHTS.  The holders of our common stock have one vote per share.
Holders of our common stock are not entitled to vote cumulatively for the
election of directors. Generally, all matters to be voted on by stockholders
must be approved by a majority, or, in the case of election of directors, by a
plurality, of the votes cast at a meeting at which a quorum is present, voting
together as a single class, subject to any voting rights granted to holders of
any then outstanding preferred stock.
 
    DIVIDENDS.  Holders of common stock will share ratably in any dividends
declared by our board of directors, subject to the preferential rights of any
preferred stock then outstanding. Dividends consisting of shares of common stock
may be paid to holders of shares of common stock.
 
    OTHER RIGHTS.  Upon our liquidation, dissolution or winding up, all holders
of common stock are entitled to share ratably in any assets available for
distribution to holders of shares of common stock. No shares of common stock are
subject to redemption or have preemptive rights to purchase additional shares of
common stock.
 
PREFERRED STOCK
 
    Our certificate of incorporation provides that 5,000,000 shares of preferred
stock may be issued from time to time in one or more series. Our board of
directors is authorized to fix the voting rights, if any, designations, powers,
preferences, qualifications, limitations and restrictions thereof, applicable to
the shares of each series. Our board of directors may, without stockholder
approval, issue preferred stock with voting and other rights that could
adversely affect the voting power and other rights of the holders of the common
stock and could have anti-takeover effects, including preferred stock or rights
to acquire preferred stock in connection with implementing a shareholder rights
plan. We have no present plans to issue any shares of preferred stock. The
ability of our board of directors to issue preferred stock without stockholder
approval could have the effect of delaying, deferring or preventing a change of
control with respect to our company or the removal of existing management.
 
WARRANTS
 
   
    As of October 15, 2000, we had outstanding warrants to purchase 8,509,905
shares of common stock at an exercise price of $0.0005 per share. The warrants
will expire on March 15, 2003. These warrants will be exercised in connection
with this offering.
    
 
   
REGISTRATION RIGHTS
    
 
   
    Following this offering, the holders of 17,208,101 shares of our common
stock will have rights with respect to registration of these shares under the
Securities Act of 1933. These rights are provided under the terms of a
securityholders agreement between us and certain of the holders of registrable
securities. Under these registration rights, holders of registrable securities
holding 30% or more of the then outstanding registrable securities held by all
holders of registrable securities may require on two occasions that we register
their shares for public resale. In addition, certain holders of registrable
securities may require that we register their shares for public resale on
Form S-3 or similar short-form registration, if we are eligible to use Form S-3
or similar short form registration, and the value of the
    
 
                                       53

<PAGE>
   
securities to be registered is at least $2,000,000. If we elect to register any
of our shares of common stock for any public offering, the holders of
registrable securities are entitled to include shares of common stock in the
registration. However, we may reduce the number of shares proposed to be
registered in view of market conditions. We will pay all expenses in connection
with any registration, other than underwriting discounts and commissions.
    
 
INDEMNIFICATION MATTERS
 
    Prior to the offering, we will have entered into indemnification agreements
with each of our directors. The form of indemnification agreement provides that
we will indemnify our directors for expenses incurred because of their status as
a director to the fullest extent permitted by Delaware law, our certificate of
incorporation and our by-laws.
 
    Our certificate of incorporation contains a provision permitted by Delaware
law that generally eliminates the personal liability of directors for monetary
damages for breaches of their fiduciary duty, including breaches involving
negligence or gross negligence in business combinations, unless the director has
breached his or her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of law, paid a dividend or
approved a stock repurchase in violation of the Delaware General Corporation Law
or obtained in improper personal benefit. This provision does not alter a
director's liability under the federal securities laws and does not affect the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty. Our by-laws provide that directors and officers shall
be, and in the discretion of our board of directors, non-officer employees may
be, indemnified by us to the fullest extent authorized by Delaware law, as it
now exists or may in the future be amended, against all expenses and liabilities
reasonably incurred in connection with service for or on behalf of us. Our
by-laws also provide for the advancement of expenses to directors and, in the
discretion of our board of directors, to officers and non-officer employees. In
addition, our by-laws provide that the right of directors and officers to
indemnification shall be a contract right and shall not be exclusive of any
other right now possessed or hereafter acquired under any by-law, agreement,
vote of stockholders or otherwise. We also have directors' and officers'
insurance against certain liabilities. We believe that the indemnification
agreements, together with the limitation of liability and indemnification
provisions of our certificate of incorporation and by-laws and directors' and
officers' insurance will assist us in attracting and retaining qualified
individuals to serve as our directors and officers.
 
    Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be provided to directors, officers or persons controlling us as
described above, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. At present, there is no
pending material litigation or proceeding involving any of our directors,
officers, employees or agents in which indemnification will be required or
permitted.
 
   
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BY-LAWS THAT MAY HAVE
  ANTI-TAKEOVER EFFECTS
    
 
    Certain provisions of our certificate of incorporation and by-laws described
below, as well as the ability of our board of directors to issue shares of
preferred stock and to set the voting rights, preferences and other terms
thereof, may be deemed to have an anti-takeover effect and may discourage
takeover attempts not first approved by our board of directors, including
takeovers which particular stockholders may deem to be in their best interests.
These provisions also could have the effect of discouraging open market
purchases of our common stock because they may be considered disadvantageous by
a stockholder who desires subsequent to such purchases to participate in a
business combination transaction with us or to elect a new director to our
board.
 
                                       54

<PAGE>
    NO STOCKHOLDER ACTION BY WRITTEN CONSENT
 
    Our certificate of incorporation provides that any action required or
permitted to be taken by our stockholders at an annual or special meeting of
stockholders must be effected at a duly called meeting and may not be taken or
effected by a written consent of stockholders.
 
    SPECIAL MEETINGS OF STOCKHOLDERS
 
    Our certificate of incorporation and by-laws provide that a special meeting
of stockholders may be called only by our board of directors. Our by-laws
provide that only those matters included in the notice of the special meeting
may be considered or acted upon at that special meeting unless otherwise
provided by law.
 
    ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND STOCKHOLDER PROPOSALS
 
    Our by-laws include advance notice and informational requirements and time
limitations on any director nomination or any new proposal which a stockholder
wishes to make at an annual meeting of stockholders. For the first annual
meeting following the completion of this offering, a stockholder's notice of a
director nomination or proposal will be timely if delivered to our secretary at
our principal executive offices not later than the close of business on the
later of the 75th day prior to the scheduled date of such annual meeting or the
10th day following the day on which public announcement of the date of such
annual meeting is made by us.
 
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
 
    As required by Delaware law, any amendment to our certificate of
incorporation must first be approved by a majority of our board of directors
and, if required by law, thereafter approved by a majority of the outstanding
shares entitled to vote with respect to such amendment, except that any
amendment to the provisions relating to stockholder action by written consent,
directors, limitation of liability and the amendment of our certificate of
incorporation must be approved by not less than 75% of the outstanding shares
entitled to vote with respect to such amendment.
 
AMENDMENT OF BY-LAWS
 
    Our certificate of incorporation and by-laws provide that our by-laws may be
amended or repealed by our board of directors or by the stockholders. Such
action by the board of directors requires the affirmative vote of a majority of
the directors then in office. Such action by the stockholders requires the
affirmative vote of at least 75% of the shares present in person or represented
by proxy at an annual meeting of stockholders or a special meeting called for
such purpose unless our board of directors recommends that the stockholders
approve such amendment or repeal at such meeting, in which case such amendment
or repeal only requires the affirmative vote of a majority of the shares present
in person or represented by proxy at the meeting.
 
STATUTORY BUSINESS COMBINATION PROVISION
 
    Following the offering, we will be subject to Section 203 of the Delaware
General Corporation Law, which prohibits a publicly-held Delaware corporation
from consummating a "business combination," except under certain circumstances,
with an "interested stockholder" for a period of three years after the date such
person became an "interested stockholder" unless:
 
    - before such person became an interested stockholder, the board of
      directors of the corporation approved the transaction in which the
      interested stockholder became an interested stockholder or approved the
      business combination;
 
                                       55

<PAGE>
    - upon the closing of the transaction that resulted in the interested
      stockholder becoming such, the interested stockholder owned at least 85%
      of the voting stock of the corporation outstanding at the time the
      transaction commenced, excluding shares held by directors who are also
      officers of the corporation and shares held by employee stock plans; or
 
    - following the transaction in which such person became an interested
      stockholder, the business combination is approved by the board of
      directors of the corporation and authorized at a meeting of stockholders
      by the affirmative vote of the holders of at least two-thirds of the
      outstanding voting stock of the corporation not owned by the interested
      stockholder.
 
    The term "interested stockholder" generally is defined as a person who,
together with affiliates and associates, owns, or, within the prior three years,
owned, 15% or more of a corporation's outstanding voting stock. The term
"business combination" includes mergers, consolidations, asset sales involving
10% or more of a corporation's assets and other similar transactions resulting
in a financial benefit to an interested stockholder. Section 203 makes it more
difficult for an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. A Delaware corporation
may "opt out" of Section 203 with an express provision in its original
certificate of incorporation or an express provision in its certificate of
incorporation or by-laws resulting from an amendment approved by holders of at
least a majority of the outstanding voting stock. Neither our certificate of
incorporation nor our by-laws contain any such exclusion.
 
TRADING ON THE NASDAQ NATIONAL MARKET SYSTEM
 
    We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "HBIO."
 
NO PREEMPTIVE RIGHTS
 
    No holder of any class of our stock has any preemptive right to purchase any
of our securities.
 
TRANSFER AGENT AND REGISTRAR
 
   
    The transfer agent and registrar for our common stock will be Registrar and
Transfer Company.
    
 
                                       56

<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
   
    Upon consummation of the offering, we will have outstanding 24,782,422
shares of common stock or 25,719,922 shares if the underwriters' over-allotment
option is exercised in full, in each case excluding shares underlying
outstanding options. Of these shares, all of the shares sold in this offering
(6,422,450 shares, or 7,359,950 shares if the underwriters' over-allotment
option is exercised in full) will be freely tradeable without restriction or
further registration under the Securities Act except for any shares purchased by
an "affiliate," which will be subject to the limitations of Rule 144 of the
Securities Act. As defined in Rule 144, an "affiliate" of an issuer is a person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the issuer. The remaining
outstanding shares of common stock will be "restricted securities" as defined in
Rule 144 and may not be resold in the absence of registration under the
Securities Act or pursuant to an exemption from such registration, including
exemptions provided by Rule 144.
    
 
   
    In addition, our executive officers, directors, and existing stockholders,
who own all of the shares of our capital stock outstanding prior to this
offering, have signed lock-up agreements in which they have agreed not to offer,
sell, contract to sell or otherwise dispose of any common stock or any
securities convertible into or exchangeable for common stock for a period of
180 days after the date of this prospectus without the prior written consent of
Thomas Weisel Partners LLC. Immediately following this offering, the shares
subject to the lock-up agreements will represent approximately 74% of the then
outstanding shares of common stock (71% if the underwriters' over-allotment
option is exercised in full). While the underwriters have indicated no present
intention to waive these restrictions, were they to do so, up to approximately
an additional 18,359,972 shares of our common stock could be available for sale
during the period following the offering, which could harm our stock price or
make it more difficult to sell our shares. Historically, factors that have led
underwriters to waive lock-up restrictions on a case by case basis include bona
fide gifts to charitable institutions and other small waivers which underwriters
reasonably believe will have minimal effect on the trading price of the common
stock of the applicable company.
    
 
RULE 144
 
    In general, under Rule 144, beginning 90 days after the date of this
prospectus, a person who has beneficially owned restricted shares for at least
one year, including persons who are affiliates, would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:
 
   
    - 1% of the then outstanding shares of our common stock, approximately
      247,824 shares immediately after this offering; or
    
 
    - the reported average weekly trading volume of our common stock during the
      four calendar weeks preceding a sale by such person.
 
    Sales under Rule 144 are also subject to manner-of-sale provisions, notice
requirements and the availability of current public information.
 
RULE 144(k)
 
   
    Under Rule 144(k), a person who has not been one of our affiliates during
the 90 days preceding a sale, and who has beneficially owned the shares proposed
to be sold for at least two years, is free to sell such shares without regard to
the volume, manner-of-sale or certain other limitations contained in Rule 144.
Upon completion of this offering, no holders of shares of our common stock will
be eligible to freely sell shares under Rule 144(k).
    
 
    Prior to this offering, there has been no public market for our common stock
and we can make no predictions about the effect, if any, that market sales of
shares or the availability of shares for sale will have on the market price of
our common stock prevailing from time to time. Future sales of substantial
 
                                       57

<PAGE>
amounts of our common stock in the public market, or the perception that such
sales may occur, may cause the market prices of our common stock to decline.
 
REGISTRATION RIGHTS
 
   
    After the 180-day period following the closing of this offering, the holders
of 17,208,101 shares of our common stock will have rights which require us to
register their shares for sale. See "Description of Capital Stock--Registration
Rights."
    
 
OPTIONS
 
   
    As of October 15, 2000, options to purchase 599,096 shares of our common
stock were outstanding. At some time following the effectiveness of the offering
chosen by the board of directors in its discretion, we intend to file a
registration statement on Form S-8 under the Securities Act to register all of
the shares of our common stock reserved for issuance under our 2000 Stock Option
and Incentive Plan, our Employee Stock Purchase Plan and our 1996 Stock Option
and Grant Plan. The filing of this registration statement will allow these
shares, other than those held by members of management who are deemed to be
affiliates, to be eligible for resale without restriction, subject to the
lock-up period related to this offering, or further registration upon issuance
to participants. After the effective date of the registration statement on
Form S-8 and, if applicable, the expiration of the lock-up period related to
this offering, shares purchased upon exercise of options granted pursuant to
these plans, generally will be available for resale in the public market by
non-affiliates without restriction. Sales by our affiliates of shares registered
on this registration statement are subject to all of the Rule 144 restrictions
except for the one-year minimum holding period requirement.
    
 
    In addition to possibly being able to sell option shares without restriction
under a Form S-8 registration statement when effective, persons other than our
affiliates are allowed under Rule 701 of the Securities Act to sell shares of
our common stock issued upon exercise of stock options beginning 90 days after
the date of this prospectus, subject only to the manner of sale provisions of
Rule 144 and to the lock-up period related to this offering. Our affiliates may
also begin selling option shares beginning 90 days after the date of this
prospectus but are subject to all of the Rule 144 restrictions except for the
one-year holding period requirement and to the 180-day lock-up period related to
this offering.
 
                                       58

<PAGE>

                                  UNDERWRITING
 
GENERAL
 
   
    Subject to the terms and conditions set forth in an agreement among the
underwriters and us, each of the underwriters named below, through their
representatives, Thomas Weisel Partners LLC, Dain Rauscher Incorporated and ING
Barings LLC have severally agreed to purchase from us the aggregate number of
shares of common stock set forth opposite its name below:
    
 
   

<TABLE>
<CAPTION>
                                                              NUMBER OF
UNDERWRITERS                                                    SHARES
------------                                                  ----------
<S>                                                           <C>
Thomas Weisel Partners LLC..................................
Dain Rauscher Incorporated..................................
ING Barings LLC.............................................
                                                              ----------
 
    Total...................................................  6,422,450
                                                              ==========
</TABLE>

    
 
   
    Of the 6,422,450 shares to be purchased by the underwriters, 6,250,000
shares will be purchased from us and 172,450 shares will be purchased from our
president as a selling stockholder.
    
 
    The underwriting agreement provides that the obligations of the several
underwriters are subject to various conditions. The nature of the underwriters'
obligations commits them to purchase and pay for all of the shares of common
stock listed above if any are purchased.
 
    The underwriting agreement provides that we and the selling stockholder will
indemnify the underwriters against liabilities specified in the underwriting
agreement under the Securities Act or will contribute to payments that the
underwriters may be required to make relating to these liabilities.
 
    Thomas Weisel Partners LLC expects to deliver the shares of common stock to
purchasers on               , 2000.
 
OVER-ALLOTMENT OPTION
 
   
    We have granted a 30-day over-allotment option to the underwriters to
purchase up to a total of 937,500 additional shares of our common stock from us
at the initial public offering price, less the underwriting discounts and
commissions payable by us, as set forth on the cover page of this prospectus. If
the underwriters exercise this option in whole or in part, then each of the
underwriters will be separately committed, subject to conditions described in
the underwriting agreement, to purchase the additional shares of our common
stock in proportion to their respective commitments set forth in the table
above.
    
 
DETERMINATION OF OFFERING PRICE
 
    Prior to this offering, there has been no public market for our common
stock. The initial public offering price will be determined through negotiations
between us and the representatives. In addition to prevailing market conditions,
the factors to be considered in determining the initial public offering price
will include:
 
    - the valuation multiples of publicly-traded companies that the
      representatives believe are comparable to us,
 
    - our financial information,
 
                                       59

<PAGE>
    - our history and prospects and the outlook for our industry,
 
    - an assessment of our management, our past and present operations, and the
      prospects for, and timing of, our future revenues,
 
    - the present state of our development and the progress of our business
      plan, and
 
    - the above factors in relation to market values and various valuation
      measures of other companies engaged in activities similar to ours.
 
    We cannot assure you that an active or orderly trading market will develop
for our common stock or that our common stock will trade in the public markets
subsequent to this offering at or above the initial offering price.
 
COMMISSIONS AND DISCOUNTS
 
    The underwriters propose to offer the shares of common stock directly to the
public at the public offering price set forth on the cover page of this
prospectus, and at this price less a concession not in excess of $      per
share of common stock to other dealers specified in a master agreement among
underwriters who are members of the National Association of Securities
Dealers, Inc. The underwriters may allow, and the other dealers specified may
reallow, concessions, not in excess of $      per share of common stock to these
other dealers. After this offering, the offering price, concessions and other
selling terms may be changed by the underwriters. Our common stock is offered
subject to receipt and acceptance by the underwriters and to other conditions,
including the right to reject orders in whole or in part.
 
    The following table summarizes the compensation to be paid to the
underwriters by us and the expenses payable by us:
 
   

<TABLE>
<CAPTION>
                                                                                   TOTAL
                                                                      -------------------------------
                                                                         WITHOUT            WITH
                                                          PER SHARE   OVER-ALLOTMENT   OVER-ALLOTMENT
                                                          ---------   --------------   --------------
<S>                                                       <C>         <C>              <C>
Public offering price...................................  $              $                $
Underwriting discount...................................
Proceeds, before expenses, to us........................
Proceeds, before expenses, to our president as a selling
  stockholder...........................................
</TABLE>

    
 
INDEMNIFICATION OF THE UNDERWRITERS
 
    We and the selling stockholder will indemnify the underwriters against some
civil liabilities, including liabilities under the Securities Act and
liabilities arising from breaches of our representations and warranties
contained in the underwriting agreement. If we are unable to provide this
indemnification, we will contribute to payments the underwriters may be required
to make in respect of those liabilities.
 
RESERVED SHARES
 
    The underwriters, at our request, have reserved for sale at the initial
public offering price up to       shares of common stock to be sold in this
offering for sale to our employees and other persons designated by us. The
number of shares available for sale to the general public will be reduced to the
extent that any reserved shares are purchased. Any reserved shares not purchased
in this manner will be offered by the underwriters on the same basis as the
other shares offered in this offering.
 
                                       60

<PAGE>
NO SALES OF SIMILAR SECURITIES
 
    Our directors, officers, selling stockholder and other stockholders holding
all of the outstanding shares of our capital stock prior to this offering have
agreed or have a contractual obligation to agree, subject to specified
exceptions, not to offer, sell, agree to sell, directly or indirectly, or
otherwise dispose of any shares of common stock or any securities convertible
into or exchangeable for shares of common stock without the prior written
consent of Thomas Weisel Partners LLC for a period of 180 days after the date of
this prospectus.
 
    We have agreed that for a period of 180 days after the date of this
prospectus we will not, without the prior written consent of Thomas Weisel
Partners LLC, offer, sell, or otherwise dispose of any shares of common stock,
except for the shares of common stock offered in the offering and the shares of
common stock issuable upon exercise of outstanding options and warrants on the
date of this prospectus.
 
INFORMATION REGARDING THOMAS WEISEL PARTNERS LLC
 
   
    Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since December
1998, Thomas Weisel Partners LLC has been named as a lead or co-manager on 148
completed transactions and has acted as a syndicate member in an additional 129
public offerings of equity securities. Thomas Weisel Partners LLC does not have
any material relationship with us or any of our officers, directors or other
controlling persons, except with respect to its contractual relationship with us
pursuant to the underwriting agreement entered into in connection with this
offering.
    
 
NASDAQ NATIONAL MARKET LISTING
 
    We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "HBIO."
 
DISCRETIONARY ACCOUNTS
 
    The underwriters do not expect sales of shares of common stock offered by
this prospectus to any accounts over which they exercise discretionary authority
to exceed five percent of the shares offered.
 
SHORT SALES, STABILIZING TRANSACTIONS AND PENALTY BIDS
 
    In order to facilitate this offering, persons participating in this offering
may engage in transactions that stabilize, maintain or otherwise affect the
price of our common stock during and after this offering. Specifically, the
underwriters may engage in the following activities in accordance with the rules
of the U.S. Securities and Exchange Commission.
 
    SHORT SALES.  Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from the issuer in the offering. The
underwriters may close out any covered short position by either exercising their
option to purchase shares or purchasing shares in the open market. In
determining the source of shares to close out the covered short position, the
underwriters will consider, among other things, the price of shares available
for purchase in the open market as compared to the price at which they may
purchase shares through the over-allotment option. "Naked" short sales are any
sales in excess of such over-allotment option. The underwriters must close out
any naked short position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who purchase in the
offering.
 
                                       61

<PAGE>
    STABILIZING TRANSACTIONS.  The underwriters may make bids for or purchases
of the shares for the purpose of pegging, fixing or maintaining the price of the
shares, so long as stabilizing bids do not exceed a specified maximum.
 
    PENALTY BIDS.  If the underwriters purchase shares in the open market in a
stabilizing transaction or syndicate covering transaction, they may reclaim a
selling concession from the underwriters and selling group members who sold
those shares as part of this offering. Stabilization and syndicate covering
transactions may cause the price of the shares to be higher than it would be in
the absence of these transactions. The imposition of a penalty bid might also
have an effect on the price of the shares if it discourages resales of the
shares.
 
    The transactions above may occur on the Nasdaq National Market or otherwise.
Neither we nor the underwriters make any representation or prediction as to the
effect that the transactions described above may have on the price of the
shares. If these transactions are commenced, they may be discontinued without
notice at any time.
 

                                 LEGAL MATTERS
 
    The validity of the shares of common stock offered hereby will be passed
upon for us by Goodwin, Procter & Hoar LLP, Boston, Massachusetts. Various legal
matters related to the sale of the common stock offered hereby will be passed
upon for the underwriters by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., Boston, Massachusetts.
 

                                    EXPERTS
 
   
    The consolidated financial statements of Harvard Apparatus, Inc. and
subsidiaries as of December 31, 1998, 1999 and September 30, 2000, and for each
of the years ended December 31, 1997, 1998 and 1999, and for the nine months
ended September 30, 2000, have been included herein and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and the authority of said firm as
experts in auditing and accounting.
    
 
   
    The audited consolidated financial statements of Pharmacia & Upjohn
(Cambridge) Limited as of December 31, 1997 and 1998, and for each of the years
ended December 31, 1997 and 1998, have been included herein and in the
registration statement in reliance upon the report of PricewaterhouseCoopers,
independent chartered accountants, appearing elsewhere herein, and the authority
of said firm as experts in auditing and accounting.
    
 
                      WHERE YOU CAN FIND MORE INFORMATION
 
    We have filed with the Securities and Exchange Commission, or SEC, a
registration statement on Form S-1 (including the exhibits and schedules
thereto) under the Securities Act and the rules and regulations thereunder, for
the registration of the common stock offered hereby. This prospectus is part of
the registration statement. This prospectus does not contain all the information
included in the registration statement because we have omitted certain parts of
the registration statement as permitted by the SEC rules and regulations. For
further information about us and our common stock, you should refer to the
registration statement. Statements contained in this prospectus as to any
contract, agreement or other document referred to are not necessarily complete.
Where the contract or other document is an exhibit to the registration
statement, each statement is qualified by the provisions of that exhibit.
 
    You can inspect and copy the registration statement at the public reference
facility maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the SEC's regional offices at Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison
 
                                       62

<PAGE>
Street, Suite 1400, Chicago, Illinois 60661. You may call the SEC at
1-800-732-0330 for further information about the operation of the public
reference rooms. Copies of all or any portion of the registration statement can
be obtained from the Public Reference Section of the SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the registration
statement is publicly available through the SEC's site on the Internet's World
Wide Web, located at http://www.sec.gov.
 
    We will also file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can also request copies of these
documents, for a copying fee, by writing to the SEC. We intend to furnish to our
stockholders annual reports containing audited financial statements for each
fiscal year.
 
                                       63

<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
   

<TABLE>
<S>                                                           <C>
HARVARD APPARATUS, INC. AND SUBSIDIARIES
 
Independent Auditors' Report................................     F-2
Consolidated Balance Sheets at December 31, 1998 and 1999
  and September 30, 2000....................................     F-3
Consolidated Statements of Operations for the years ended
  December 31, 1997, 1998 and 1999 and the nine months ended
  September 30, 1999 (unaudited) and 2000...................     F-5
Consolidated Statements of Stockholders' Equity (Deficit)
  and Comprehensive Income (Loss) for the years ended
  December 31, 1997, 1998 and 1999 and the nine months ended
  September 30, 2000........................................     F-6
Consolidated Statements of Cash Flows for the years ended
  December 31, 1997, 1998 and 1999 and the nine months ended
  September 30, 1999 (unaudited) and 2000...................     F-7
Notes to Consolidated Financial Statements..................     F-8
 
PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
Directors' Report...........................................    F-28
Statement of Directors' Responsibilities....................    F-30
Report of the Auditors......................................    F-31
Profit and Loss Account for the years ended December 31,
  1997 and 1998.............................................    F-32
Balance Sheet for the years ended December 31, 1997 and
  1998......................................................    F-33
Cash Flow Statement for the years ended December 31, 1997
  and 1998..................................................    F-34
Notes to the Accounts.......................................    F-35
</TABLE>

    
 
                                      F-1

<PAGE>
   
When the stock split referred to in note 20 of the notes to the consolidated
financial statements has been consummated, we will be in a position to render
the following report:
    
 
   

                          INDEPENDENT AUDITORS' REPORT
    
 
   
The Board of Directors
Harvard Apparatus, Inc.:
    
 
   
    We have audited the accompanying consolidated balance sheets of Harvard
Apparatus, Inc. and subsidiaries (the "Company") as of September 30, 2000,
December 31, 1999 and 1998, and the related consolidated statements of
operations, stockholders' equity (deficit) and comprehensive income (loss), and
cash flows for the nine months ended September 30, 2000 and for each of the
years in the three-year period ended December 31, 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
    
 
   
    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
    
 
   
    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Harvard Apparatus, Inc. and subsidiaries at September 30, 2000, December 31,
1999 and 1998, and the results of their operations and their cash flows for the
nine months ended September 30, 2000 and for each of the years in the three-year
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America.
    
 
   
KPMG LLP
October 19, 2000, except as to

note 20 which is
as of October 25, 2000
Boston, Massachusetts
    
 
                                      F-2

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                          CONSOLIDATED BALANCE SHEETS
    
 
   

<TABLE>
<CAPTION>
                                                         DECEMBER 31,    DECEMBER 31,    SEPTEMBER 30,
                                                             1998            1999             2000
                                                         -------------   -------------   --------------
<S>                                                      <C>             <C>             <C>
                                        ASSETS (NOTES 6 AND 7)
 
Current assets:
  Cash and cash equivalents............................   $  956,771      $ 2,396,053     $ 2,148,880
  Trade accounts receivable, net of reserve for
    uncollectible accounts of $61,004 and $87,642 at
    December 31, 1998 and 1999, respectively, and
    $88,648 at September 30, 2000......................    1,659,766        4,191,850       3,878,152
  Other receivables and other assets...................       49,716          201,946         223,090
  Inventories (note 4).................................    1,656,318        2,849,670       3,679,735
  Catalog costs........................................      450,087           66,829         394,558
  Prepaid expenses.....................................      202,916          593,348         265,340
  Deferred tax asset (note 13).........................       96,736          987,853         344,714
                                                          ----------      -----------     -----------
      Total current assets.............................    5,072,310       11,287,549      10,934,469
                                                          ----------      -----------     -----------
 
Property, plant and equipment, net (notes 5 and 10)....      969,905        1,559,922       1,513,098
                                                          ----------      -----------     -----------
 
Other assets:
  Catalog costs, less current portion..................      163,497          165,419         193,712
  Deferred tax asset (note 13).........................       28,182          432,797         344,304
  Deferred initial public offering costs...............           --               --         596,365
  Goodwill, net of accumulated amortization of $27,661,
    $395,896 and $902,891 at December 31, 1998 and 1999
    and September 30, 2000, respectively (note 3)......      925,973        6,583,354       9,148,744
  Other assets (notes 3 and 12)........................       60,626          580,829         505,387
                                                          ----------      -----------     -----------
      Total other assets...............................   $1,178,278      $ 7,762,399     $10,788,512
                                                          ----------      -----------     -----------
                                                          $7,220,493      $20,609,870     $23,236,079
                                                          ==========      ===========     ===========
</TABLE>

    
 
   
          See accompanying notes to consolidated financial statements.
    
 
                                      F-3

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                          CONSOLIDATED BALANCE SHEETS
    
 
   

<TABLE>
<CAPTION>
                                                       DECEMBER 31,    DECEMBER 31,    SEPTEMBER 30,
                                                           1998            1999             2000
                                                       -------------   -------------   --------------
<S>                                                    <C>             <C>             <C>
Current liabilities:
  Short-term debt (note 6)...........................   $1,050,000     $  2,200,000    $   3,150,000
  Current installments of long-term debt (note 7)....      190,389          794,173        1,556,618
  Trade accounts payable.............................      751,338        1,880,246        2,107,838
  Accrued income taxes payable (note 13).............      162,726          957,834          638,862
  Accrued expenses (note 17).........................      586,289        1,399,523        2,266,547
  Other liabilities..................................      101,271          272,731          183,478
  Current deferred income tax liability..............       24,524               --            6,011
                                                        ----------     ------------    -------------
      Total current liabilities......................    2,866,537        7,504,507        9,909,354
                                                        ----------     ------------    -------------
 
Long-term debt, less current installments (note 7)...      638,466        5,072,941        5,730,313
Deferred income tax liability (note 13)..............       37,601           48,649               --
                                                        ----------     ------------    -------------
      Total long-term liabilities....................      676,067        5,121,590        5,730,313
                                                        ----------     ------------    -------------
 
Commitments and contingencies (notes 8, 9, 10, 11,
  and 18)
 
Preferred stock, 600,000 shares authorized (note 8);
    Redeemable series "A" 469,300 shares issued and
      outstanding....................................    1,500,000        1,500,000        1,500,000
    Convertible and redeemable series "B" 48,500
      shares issued and outstanding..................           --        1,000,000        1,000,000
Common stock warrants (note 9).......................    1,500,352       31,194,371      102,114,613
                                                        ----------     ------------    -------------
      Total redeemable preferred stock and common
        stock warrants...............................    3,000,352       33,694,371      104,614,613
                                                        ----------     ------------    -------------
 
Stockholders' equity (deficit) (notes 9 and 14):
  Common stock, par value $.01 per share, 80,000,000
    shares authorized; 10,259,410 shares issued and
    outstanding at December 31, 1998 and 1999,
    13,727,365 shares issued and outstanding at
    September 30, 2000...............................      102,604          102,604          137,274
  Accumulated other comprehensive loss...............      (34,720)         (54,690)        (713,265)
  Additional paid-in capital--stock options..........           --        3,283,164        3,292,593
  Additional paid-in capital--common stock...........           --               --       14,838,792
  Retained earnings (accumulated deficit)............    1,277,398      (28,373,931)    (112,357,900)
  Notes receiveable..................................           --               --       (1,547,950)

  Treasury stock, 4,660,784 common shares, at cost...     (667,745)        (667,745)        (667,745)
                                                        ----------     ------------    -------------
      Total stockholders' equity (deficit)...........      677,537      (25,710,598)     (97,018,201)
                                                        ----------     ------------    -------------
                                                        $7,220,493     $ 20,609,870    $  23,236,079
                                                        ==========     ============    =============
</TABLE>

    
 
   
                See accompanying notes to financial statements.
    
 
                                      F-4

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                     CONSOLIDATED STATEMENTS OF OPERATIONS
    
 
   

<TABLE>
<CAPTION>
                                                                                     NINE MONTHS ENDED
                                              YEARS ENDED DECEMBER 31,                 SEPTEMBER 30,
                                      ----------------------------------------   --------------------------
                                         1997          1998           1999          1999           2000
                                      -----------   -----------   ------------   -----------   ------------
                                                                                 (UNAUDITED)
<S>                                   <C>           <C>           <C>            <C>           <C>
Revenues (notes 15 and 19)..........  $11,464,157   $12,154,025   $ 26,177,814   $18,469,913   $ 22,069,026
Cost of goods sold..................    5,127,709     5,351,271     13,546,933     9,359,160     11,461,610
Stock compensation expense (note
  14)...............................           --            --             --            --        151,200
                                      -----------   -----------   ------------   -----------   ------------
    Gross profit....................    6,336,448     6,802,754     12,630,881     9,110,753     10,456,216
 
General and administrative
  expense...........................    2,338,423     2,317,021      4,146,564     2,926,818      3,733,613
Sales and marketing expense.........    1,672,388     1,721,606      2,448,505     1,841,771      2,358,965
Research and development............      206,497       324,792      1,187,584       840,767      1,207,522
Stock compensation expense (note
  14)...............................           --            --      3,283,164       937,138     13,180,743
Amortization of goodwill
  (note 3)..........................           --        27,661        368,235       251,843        423,126
                                      -----------   -----------   ------------   -----------   ------------
    Operating (loss) income.........    2,119,140     2,411,674      1,196,829     2,312,416    (10,447,753)
                                      -----------   -----------   ------------   -----------   ------------
 
Other (expense) income:
  Foreign currency (loss) gain......      (96,549)       21,418        (47,982)       60,967       (456,393)
  Common stock warrant interest
    expense (note 9)................     (116,574)   (1,379,460)   (29,694,019)   (7,402,457)   (70,920,242)
  Interest expense..................     (238,669)     (221,932)      (679,122)     (484,330)      (689,066)
  Interest income...................       16,176        12,567         22,767        16,159         34,536
  Amortization of deferred financing
    costs...........................           --            --        (63,442)      (44,437)       (56,102)
  Other.............................      106,013        10,067        (17,468)      (14,813)        27,830
                                      -----------   -----------   ------------   -----------   ------------
    Other expense, net..............     (329,603)   (1,557,340)   (30,479,266)   (7,868,911)   (72,059,437)
                                      -----------   -----------   ------------   -----------   ------------
 
    (Loss) income before income
      taxes.........................    1,789,537       854,334    (29,282,437)   (5,556,495)   (82,507,190)
 
Income taxes (note 13)..............      682,329       783,192        137,480       649,392      1,354,351
                                      -----------   -----------   ------------   -----------   ------------
    Net (loss) income...............    1,107,208        71,142    (29,419,917)   (6,205,887)   (83,861,541)
Preferred stock dividends...........     (121,668)     (121,666)      (156,586)     (115,444)      (122,428)
                                      -----------   -----------   ------------   -----------   ------------
Net (loss) income available to
  common shareholders...............  $   985,540   $   (50,524)  $(29,576,503)  $(6,321,331)  $(83,983,969)
                                      ===========   ===========   ============   ===========   ============
 
(Loss) income per share
  (note 16):
  Basic.............................  $      0.13   $     (0.01)  $      (5.28)  $     (1.13)  $     (13.11)
                                      ===========   ===========   ============   ===========   ============
  Diluted...........................  $      0.06   $     (0.01)  $      (5.28)  $     (1.13)  $     (13.11)
                                      ===========   ===========   ============   ===========   ============
 
Weighted average common shares:
  Basic.............................    7,406,486     5,598,626      5,598,626     5,598,626      6,407,682
                                      ===========   ===========   ============   ===========   ============
  Diluted...........................   17,500,194     5,598,626      5,598,626     5,598,626      6,407,682
                                      ===========   ===========   ============   ===========   ============
</TABLE>

    
 
   
          See accompanying notes to consolidated financial statements.
    
 
                                      F-5

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE
                                 INCOME (LOSS)
    
   

<TABLE>
<CAPTION>
                                                                  ADDITIONAL    ADDITIONAL
                                                  ACCUMULATED      PAID-IN        PAID-IN       RETAINED
                                                     OTHER        CAPITAL--      CAPITAL--      EARNINGS
                                       COMMON    COMPREHENSIVE      STOCK         COMMON      (ACCUMULATED       NOTES
                                       STOCK         LOSS          OPTIONS         STOCK        DEFICIT)      RECEIVABLE
                                      --------   -------------   ------------   -----------   -------------   -----------
<S>                                   <C>        <C>             <C>            <C>           <C>             <C>
Balance at December 31, 1996........  $102,604     $  71,183     $         --   $        --   $     342,382   $        --
  Preferred stock dividends.........       --             --               --            --        (121,668)           --
  Purchase of treasury stock........       --             --                             --              --            --
  Comprehensive income (loss):
    Net income......................       --             --               --            --       1,107,208            --
    Translation adjustments.........       --        (97,444)              --            --              --            --
  Total comprehensive income........
                                      --------     ---------     ------------   -----------   -------------   -----------
 
Balance at December 31, 1997........  102,604        (26,261)              --            --       1,327,922            --
 
  Preferred stock dividends.........       --             --               --            --        (121,666)           --
 
  Comprehensive income (loss):
    Net income......................       --             --               --            --          71,142            --
    Translation adjustments.........       --         (8,459)              --            --              --            --
  Total comprehensive income........
                                      --------     ---------     ------------   -----------   -------------   -----------
 
Balance at December 31, 1998........  102,604        (34,720)              --            --       1,277,398            --
 
  Preferred stock dividends.........       --             --               --            --        (156,586)           --
 
  Preferred stock issuance
    costs...........................       --             --               --            --         (74,826)           --
 
  Stock compensation expense........       --             --        3,283,164            --              --            --
  Comprehensive income (loss):
    Net loss........................       --             --               --            --     (29,419,917)           --
    Translation adjustments.........       --        (19,970)              --            --              --            --
  Total comprehensive income
    (loss)..........................
                                      --------     ---------     ------------   -----------   -------------   -----------
 
Balance at December 31, 1999........  102,604        (54,690)       3,283,164            --     (28,373,931)           --
 
  Preferred stock dividends.........       --             --               --            --        (122,428)           --
 
  Issuance of common stock..........   34,670             --      (13,322,514)   14,838,792              --    (1,547,950)
 
  Stock compensation expense........       --             --       13,331,943            --              --            --
  Comprehensive income (loss):
    Net loss........................       --             --               --            --     (83,861,541)           --
    Translation adjustments.........       --       (658,575)              --            --              --            --
  Total comprehensive income
    (loss)..........................
                                      --------     ---------     ------------   -----------   -------------   -----------
 
Balance at September 30, 2000.......  $137,274     $(713,265)    $  3,292,593   $14,838,792   $(112,357,900)  $(1,547,950)
                                      ========     =========     ============   ===========   =============   ===========
 
<CAPTION>
 
                                                         TOTAL
                                                     STOCKHOLDERS'
                                        TREASURY        EQUITY
                                         STOCK         (DEFICIT)
                                      ------------   -------------
<S>                                   <C>            <C>
Balance at December 31, 1996........  $         --   $    516,169
  Preferred stock dividends.........            --       (121,668)
  Purchase of treasury stock........      (667,745)      (667,745)
  Comprehensive income (loss):
    Net income......................            --      1,107,208
    Translation adjustments.........            --        (97,444)
                                                     ------------
  Total comprehensive income........                    1,009,764
                                      ------------   ------------
Balance at December 31, 1997........      (667,745)       736,520
  Preferred stock dividends.........            --       (121,666)
  Comprehensive income (loss):
    Net income......................            --         71,142
    Translation adjustments.........            --         (8,459)
                                                     ------------
  Total comprehensive income........                       62,683
                                      ------------   ------------
Balance at December 31, 1998........      (667,745)       677,537
  Preferred stock dividends.........            --       (156,586)
  Preferred stock issuance
    costs...........................            --        (74,826)
  Stock compensation expense........            --      3,283,164
  Comprehensive income (loss):
    Net loss........................            --    (29,419,917)
    Translation adjustments.........            --        (19,970)
                                                     ------------
  Total comprehensive income
    (loss)..........................                  (29,439,887)
                                      ------------   ------------
Balance at December 31, 1999........      (667,745)   (25,710,598)
  Preferred stock dividends.........                     (122,428)
  Issuance of common stock..........            --          2,998
  Stock compensation expense........            --     13,331,943
  Comprehensive income (loss):
    Net loss........................            --    (83,861,541)
    Translation adjustments.........            --       (658,575)
                                                     ------------
  Total comprehensive income
    (loss)..........................                  (84,520,116)
                                      ------------   ------------
Balance at September 30, 2000.......  $   (667,745)  $(97,018,201)
                                      ============   ============
</TABLE>

    
 
   
          See accompanying notes to consolidated financial statements.
    
 
                                      F-6

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
    
 
   

<TABLE>
<CAPTION>
                                                                                                           NINE MONTHS ENDED
                                                                    YEARS ENDED DECEMBER 31,                 SEPTEMBER 30,
                                                             ---------------------------------------   --------------------------
                                                                1997         1998           1999          1999           2000
                                                             ----------   -----------   ------------   -----------   ------------
                                                                                                       (UNAUDITED)
<S>                                                          <C>          <C>           <C>            <C>           <C>
Cash flows from operating activities:
  Net (loss) income........................................  $1,107,208   $    71,142   $(29,419,917)  $(6,205,887)  $(83,861,541)
  Adjustments to reconcile net (loss) income to net cash
    provided by operating activities:
    Common stock warrant interest expense..................     116,574     1,379,460     29,694,019    7,402,457      70,920,242
    Stock compensation expense.............................          --            --      3,283,164      937,138      13,331,943
    Depreciation...........................................     127,555       154,776        331,822      219,965         284,747
    Amortization of catalog costs..........................     328,713       525,600        493,428      481,488         228,978
    Loss (gain) on sale of fixed assets....................     (33,980)       (4,075)         7,584       (7,584)             --
    Provision for bad debts................................      14,321       (41,388)        26,877        2,901           2,480
    Amortization of goodwill...............................          --        27,661        368,235      226,250         423,126
    Amortization of deferred financing costs...............          --            --         63,442       44,437          56,102
    Deferred income taxes..................................    (106,321)      (16,277)    (1,310,325)    (504,188)        669,584
    Changes in operating assets and liabilities, net of
      effects of business acquisition:
      (Increase) decrease in accounts receivable...........    (193,547)       46,214     (2,282,344)  (1,758,222)         22,884
      (Increase) decrease in other receivables.............      (2,741)       57,711       (113,949)    (134,915)        (40,785)
      (Increase) decrease in inventories...................      58,631        80,430        215,152      165,203        (777,071)
      (Increase) decrease in prepaid expenses and other
        assets.............................................     (19,306)       (5,514)      (260,285)    (115,048)        304,718
      (Increase) decrease in other assets..................     112,716      (184,534)      (202,460)    (162,220)         74,237
      Increase (decrease) in trade accounts payable........    (211,303)     (115,065)       541,065      371,739         351,636
      Increase (decrease) in accrued income taxes
        payable............................................      27,247      (191,013)       797,633      488,632        (224,673)
      Increase (decrease) in accrued expense...............    (178,965)       19,874        666,637      406,952         366,788
      Increase (decrease) in other liabilities.............     (30,881)        1,388         26,663      (23,912)       (106,253)
                                                             ----------   -----------   ------------   -----------   ------------
        Net cash provided by operating activities..........   1,115,921     1,806,390      2,926,441    1,835,186       2,027,142
                                                             ----------   -----------   ------------   -----------   ------------
Cash flows from investing activities:
  Additions to property, plant and equipment...............    (389,543)      (87,405)      (332,474)    (247,748)       (363,716)
  Additions to catalog costs...............................    (429,207)     (250,183)      (121,644)     (73,853)       (606,069)
  Proceeds from sales of fixed assets......................     165,528         8,173         34,566       41,946              --
  Acquisition of businesses, net of cash acquired..........          --    (1,090,553)    (8,126,656)  (7,164,454)     (3,682,482)
                                                             ----------   -----------   ------------   -----------   ------------
        Net cash used in investing activities..............    (653,222)   (1,419,968)    (8,546,208)  (7,444,109)     (4,652,267)
                                                             ----------   -----------   ------------   -----------   ------------
Cash flows from financing activities:
  Proceeds from short-term debt............................     275,000       600,000      2,300,000    1,050,000       1,350,000
  Repayments of short-term debt............................          --      (300,000)    (1,150,000)    (650,000)       (400,000)
  Proceeds from long-term debt.............................          --            --      5,500,000    5,500,000       2,000,000
  Repayments of long-term debt.............................    (263,050)     (283,433)      (460,663)    (336,313)       (282,778)
  Dividends paid...........................................    (218,667)     (121,666)      (121,666)     (91,000)        (91,000)
  Net proceeds from issuance of preferred stock............          --            --        925,174      925,174              --
  Treasury stock purchase..................................    (667,745)           --             --           --              --
  Issuance of common stock.................................          --            --             --           --           2,998
  Deferred initial public offering costs paid..............          --            --             --           --         (63,905)
                                                             ----------   -----------   ------------   -----------   ------------
        Net cash provided by (used in) financing
          activities.......................................    (874,462)     (105,099)     6,992,845    6,397,861       2,515,315
                                                             ----------   -----------   ------------   -----------   ------------
Effect of exchange rate changes on cash....................      30,572       (31,505)        66,204      (57,867)       (137,363)
                                                             ----------   -----------   ------------   -----------   ------------
Increase (decrease) in cash and cash equivalents...........    (381,191)      249,818      1,439,282      731,071        (247,173)
Cash and cash equivalents at beginning of period...........   1,088,144       706,953        956,771      956,771       2,396,053
                                                             ----------   -----------   ------------   -----------   ------------
Cash and cash equivalents at end of period.................  $  706,953   $   956,771   $  2,396,053   $1,687,842    $  2,148,880
                                                             ==========   ===========   ============   ===========   ============
Supplemental disclosures of cash flow information:
  Cash paid for interest...................................  $  227,747   $   241,002   $    671,452   $  392,414    $    634,089
                                                             ==========   ===========   ============   ===========   ============
  Cash paid for income taxes...............................  $  761,251   $ 1,128,929   $    686,675   $  617,076    $    697,049
                                                             ==========   ===========   ============   ===========   ============
</TABLE>

    
 
   
          See accompanying notes to consolidated financial statements.
    
 
                                      F-7

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(1)  ORGANIZATION
    
 
   
    On March 15, 1996, HAI Acquisition Corp. and its subsidiary, Guell Limited,
purchased certain assets and assumed certain liabilities of the former Harvard
Apparatus, Inc. and its subsidiary in the United Kingdom, Harvard
Apparatus, Ltd. (the "Purchase"). For cash consideration of approximately
$3,342,000 (including $342,000 of acquisition related expenses). The costs of
the acquisition were allocated based on the fair market value of the assets
acquired. The assets acquired consisted principally of cash of $441,000,
accounts receivable of $1,397,000, inventories of $1,661,000, miscellaneous
prepaid assets of $241,000, fixed assets of $846,000, and catalog costs of
$366,000. The Company assumed liabilities of approximately $1,605,000. The
acquisition was financed principally by issuing preferred stock of $1,500,000
and debt of $1,750,000. Assets acquired at the time of the purchase included 79%
of the capital stock of Ealing Scientific Ltd. (Canada) and Ealing S.A.R.L., now
Harvard Apparatus S.A.R.L. (France). The remainder of the capital stock of
Ealing Scientific Ltd. and Ealing S.A.R.L. was also acquired directly from the
stockholder at the time of the Purchase. After the date of the Purchase, HAI
Acquisition Corp. and Guell Limited legally changed their names to Harvard
Apparatus, Inc. and Harvard Apparatus, Ltd., respectively.
    
 
   
    The Company manufactures and distributes syringe pumps, ventilators, cell
injectors, diffusion chambers and other products principally used in the
toxicology, metabolism and efficacy testing of new drugs, as well as
spectrophotometers and amino acid analyzers primarily used in molecular biology
which are manufactured by Biochrom Ltd., a wholly owned subsidiary acquired
during 1999.
    
 
   
(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    
 
   
    (A)  PRINCIPLES OF CONSOLIDATION
    
 
   
       The consolidated financial statements include the accounts of Harvard
       Apparatus, Inc. and its subsidiaries. All intercompany balances and
       transactions have been eliminated in consolidation.
    
 
   
    (B)  INTERIM CONSOLIDATED FINANCIAL STATEMENTS
    
 
   
       The interim consolidated financial statements for the nine months ended
       September 30, 1999 are unaudited. In the opinion of management, all
       adjustments, consisting only of normal recurring adjustments, necessary
       for the fair presentation of the financial position and results of
       operations have been included in such unaudited consolidated financial
       statements. The results of operations for the nine months ended
       September 30, 2000 are not necessarily indicative of the results to be
       expected for the entire year.
    
 
   
    (C)  CASH AND CASH EQUIVALENTS
    
 
   
       For purposes of the consolidated statements of cash flows, the Company
       considers all highly liquid instruments with original maturities of three
       months or less to be cash equivalents.
    
 
   
    (D)  INVENTORIES
    
 
   
       Inventories are stated at the lower of cost or market. Cost is determined
       using a standard costing system which approximates the first-in,
       first-out (FIFO) method.
    
 
                                      F-8

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    
   
    (E)  PROPERTY, PLANT AND EQUIPMENT
    
 
   
       Property, plant and equipment are stated at cost. Equipment under capital
       leases is stated at the present value of the minimum lease payments at
       the lease agreement date. Property, plant and equipment is depreciated
       using the straight-line method over the estimated useful lives of the
       assets as follows:
    
 
   

<TABLE>
<S>                                                        <C>
Buildings................................................    40 years
Machinery and equipment..................................  3-10 years
Computer equipment.......................................   3-7 years
Furniture and fixtures...................................  5-10 years
Automobiles..............................................   4-6 years
</TABLE>

    
 
   
    (F)  CATALOG COSTS
    
 
   
       Significant costs of product catalog design, development and production
       are capitalized and amortized over the expected useful life of the
       catalog (usually two to three years). Costs of drawings and design that
       were acquired at the purchase on March 15, 1996 are being amortized over
       their estimated useful life of six years.
    
 
   
    (G)  INCOME TAXES
    
 
   
       Income taxes are accounted for under the asset and liability method.
       Deferred tax assets and liabilities are recognized for the future tax
       consequences attributable to differences between the financial statement
       carrying amounts of existing assets and liabilities and their respective
       tax bases. Deferred tax assets and liabilities are measured using enacted
       tax rates expected to be applied to taxable income in the years in which
       those temporary differences are expected to be recovered or settled. The
       effect on deferred tax assets and liabilities of a change in tax rates is
       recognized in income in the period that includes the enactment date.
    
 
   
    (H)  FOREIGN CURRENCY TRANSLATION
    
 
   
       All assets and liabilities of the Company's foreign subsidiaries are
       translated at exchange rates in effect at year-end. Income and expenses
       are translated at rates which approximate those in effect on the
       transaction dates. The resulting translation adjustment is recorded as a
       separate component of stockholders' equity in other comprehensive income.
    
 
   
    (I)  STOCK OPTIONS
    
 
   
       The Company accounts for stock options granted to employees in accordance
       with the requirements of Statement of Financial Accounting Standards
       (SFAS) No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION. As is permitted
       by this Statement, the Company has elected to account for stock options
       in accordance with the provisions of APB Opinion No. 25, ACCOUNTING FOR
       STOCK ISSUED TO EMPLOYEES and provide the additional disclosures that are
       required by SFAS No. 123.
    
 
                                      F-9

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    
   
    (J)  USE OF ESTIMATES
    
 
   
       The preparation of financial statements in conformity with generally
       accepted accounting principles requires the use of management's
       estimates. Such estimates include the determination and establishment of
       certain accruals and provisions, including those for inventory
       obsolescence, catalog cost amortization and reserves for bad debts.
       Actual results could differ from those estimates.
    
 
   
    (K)  REVENUE RECOGNITION
    
 
   
       The Company recognizes revenue from product sales at the time of
       shipment. Product returns are estimated and provided for based on
       historical experience.
    
 
   
    (L)  GOODWILL
    
 
   
       Goodwill, which represents the excess of purchase price over fair value
       of net assets acquired, is amortized on a straight-line basis over the
       expected periods to be benefited, ranging from 5 to 15 years. The Company
       continually evaluates whether events or circumstances have occurred that
       indicate that the remaining useful life of goodwill may warrant revision
       or that the remaining balance may not be recoverable. When factors
       indicate that goodwill should be evaluated for possible impairment, the
       Company estimates the undiscounted cash flow of the business segment, net
       of tax, over the remaining life of the asset in determining whether the
       asset is recoverable. Charges for impairment of goodwill would be
       recorded to the extent unamortized book value exceeds the related future
       discounted cash flow, net of tax. The discount factor would be the
       long-term debt rate currently obtainable by the Company.
    
 
   
    (M)  IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
    
 
   
       The Company uses the provisions of SFAS No. 121, ACCOUNTING FOR THE
       IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED
       OF. This statement requires that long-lived assets and certain
       identifiable intangibles be reviewed for impairment whenever events or
       changes in circumstances indicate that the carrying amount of an asset
       may not be recoverable. Recoverability of assets to be held and used is
       measured by a comparison of the carrying amount of an asset to
       undiscounted future net cash flows expected to be generated by the asset.
       If such assets are considered to be impaired, the impairment to be
       recognized is measured by the amount by which the carrying amount of the
       assets exceeds the fair value of the assets. Assets to be disposed of are
       reported at the lower of the carrying amount or fair value less costs to
       sell.
    
 
   
    (N)  EFFECT OF ACCOUNTING CHANGES
    
 
   
       In 1998, the Financial Accounting Standards Board issued SFAS 133,
       ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS 133,
       which was deferred through the issuance of SFAS 137 and subsequently
       amended by SFAS 138, is effective for fiscal years beginning after
       June 15, 2000. SFAS 133 will be adopted on January 1, 2001. Its impact on
       the consolidated financial statements is still being evaluated, but is
       not expected to be material.
    
 
                                      F-10

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    
   
    (O)  FAIR VALUE OF FINANCIAL INSTRUMENTS
    
 
   
       The carrying value of the Company's cash and cash equivalents, trade
       accounts receivable, trade accounts payable and accrued expenses
       approximate their fair values because of the short maturities of those
       instruments. The carrying value of the Company's debt approximates its
       fair value because of the short maturities and/or interest rates which
       are comparable to those available to the Company on similar terms.
    
 
   
(3)  ACQUISITION OF BUSINESSES
    
 
   
    On June 30, 1998, the Company acquired certain assets of Medical Systems
Corporation, a manufacturer and product developer of research medical equipment.
Cash consideration of approximately $1,000,000 plus certain acquisition costs
was paid for the assets. The costs of the acquisition were allocated on the
basis of the estimated fair market value of the assets acquired. The net
purchase price resulted in an allocation of $784,047 to goodwill and $281,506 to
tangible net assets.
    
 
   
    On February 26, 1999, the Company acquired substantially all of the assets
and certain liabilities of Pharmacia Biotech (Biochrom) Ltd. ("Biochrom"), a UK
manufacturer and developer of spectrophotometers, amino acid analyzers and other
related research equipment. Cash consideration of approximately $6,981,000
(including $502,000 of acquisition related expenses) was paid for the assets.
The costs of the acquisition allocated on the basis of estimated fair market
value of the assets acquired using the purchase method of accounting resulted in
an allocation of $5,446,000 to goodwill and other intangibles. The assets
acquired consisted of approximately $61,000 of accounts receivable, $1,039,000
of inventory, $100,000 of prepaid expenses, $612,000 of fixed assets, $372,000
of pension assets and liabilities assumed totaled approximately $649,000.
    
 
   
    On September 10, 1999, the Company acquired certain assets of Clark
Electromedical Instruments, a manufacturer of glass capillaries and distributor
of research equipment. Cash consideration of approximately $349,000 was paid for
the assets. The costs of the acquisition allocated on the basis of estimated
fair market value of the assets acquired using the purchase method of accounting
resulted in an allocation of $288,000 to goodwill and other intangibles.
    
 
   
    On November 19, 1999, the Company acquired the NaviCyte diffusion chamber
systems product line from NaviCyte, a wholly-owned subsidiary of Trega
Biosciences, Inc. Cash consideration of approximately $390,000 (including
$33,000 of acquisition related expenses) was paid for the assets. The costs of
the acquisition allocated on the basis of estimated fair market value of the
assets acquired and the purchase method of accounting resulted in an allocation
of $333,000 to goodwill and other intangibles.
    
 
   
    On November 30, 1999, the Company acquired substantially all of the assets
and certain liabilities of Hugo Sachs Elektronik a developer and manufacturer of
perfusion systems for research. Cash consideration of approximately $568,000 was
paid for the assets, net of cash acquired of $31,000. The costs of the
acquisition allocated on the basis of estimated fair market value of the assets
acquired and the purchase method of accounting resulted in an allocation of
$89,000 to goodwill and other intangibles.
    
 
                                      F-11

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(3)  ACQUISITION OF BUSINESSES (CONTINUED)
    
   
    On May 19, 2000, the Company acquired substantially all of the assets of
Biotronik, a manufacturer of Amino Acid Analyzers. Cash consideration of
approximately $469,000 was paid for the assets (including approximately $12,000
of acquisition related expenses). The cost of the acquisition was allocated on
the basis of fair market value of the assets acquired and the purchase method of
accounting resulted in an allocation of $335,000 to goodwill.
    
 
   
    On July 14, 2000, the Company acquired substantially all of the assets of
Amika Corporation, a manufacturer and distributor of sample preparation devices
and consumables. Cash consideration of $3,096,000 was paid for the assets
including approximately $61,000 of acquisition related expenses. The cost of the
acquisition allocated on the basis of fair market value of the assets acquired
and the purchase method of accounting resulted in an allocation of $3,011,000 to
goodwill and other intangibles. The assets acquired consisted of approximately
$85,000 of inventory. In addition, the Company acquired the right of first
refusal to all new technologies developed and offered for sale by the
predecessor Company for a period of four years on a fair value licensing
arrangement.
    
 
   
    All acquisitions have been accounted for by the purchase method of
accounting for business combinations. Accordingly, the accompanying consolidated
statements of operations do not include any revenues or expenses related to
these acquisitions prior to the respective acquisition dates.
    
 
   
    The following unaudited pro forma results of operations gives effect to the
acquisition of Biochrom as if it had occurred at the beginning of fiscal 1998
(the effect of the other acquisitions are considered insignificant). Such pro
forma information reflects certain adjustments including amortization of
goodwill, interest expense, income tax effect and an increase in the number of
weighted average shares outstanding. The pro forma information does not
necessarily reflect the results of operations that would have occurred had the
acquisition taken place as described and is not necessarily indicative of
results that may be obtained in the future.
    
 
   

<TABLE>
<CAPTION>
                                                     YEARS ENDED DECEMBER 31,
                                                    --------------------------
                                                       1998           1999
                                                    -----------   ------------
                                                           (UNAUDITED)
<S>                                                 <C>           <C>
Pro forma revenues................................  $23,942,973   $ 27,590,714
                                                    ===========   ============
Pro forma net earnings (loss).....................  $  (120,186)  $(29,415,046)
                                                    ===========   ============
Pro forma basic net earnings (loss) per share:
  Basic...........................................  $     (0.04)  $      (5.25)
                                                    ===========   ============
  Diluted.........................................  $     (0.04)  $      (5.25)
                                                    ===========   ============
Pro forma weighted average common shares:
  Basic...........................................    5,598,626      5,598,626
                                                    ===========   ============
  Diluted.........................................    5,598,626      5,598,626
                                                    ===========   ============
</TABLE>

    
 
                                      F-12

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(4)  INVENTORIES
    
 
   
    Inventories consist of the following:
    
 
   

<TABLE>
<CAPTION>
                                                DECEMBER 31,
                                           -----------------------   SEPTEMBER 30,
                                              1998         1999          2000
                                           ----------   ----------   -------------
<S>                                        <C>          <C>          <C>
Finished goods...........................  $  686,555   $  857,202    $1,194,810
Work in process..........................     335,150      359,505       448,744
Raw materials............................     634,613    1,632,963     2,036,181
                                           ----------   ----------    ----------
                                           $1,656,318   $2,849,670    $3,679,735
                                           ==========   ==========    ==========
</TABLE>

    
 
   
(5)  PROPERTY, PLANT AND EQUIPMENT
    
 
   
    Property, plant and equipment consists of the following:
    
 
   

<TABLE>
<CAPTION>
                                                DECEMBER 31,
                                           -----------------------   SEPTEMBER 30,
                                              1998         1999          2000
                                           ----------   ----------   -------------
<S>                                        <C>          <C>          <C>
Land and buildings.......................  $  654,172   $  636,250    $  576,366
Machinery and equipment..................     126,891      726,933       913,617
Computer equipment.......................     103,218      378,400       398,639
Furniture and fixtures...................     234,882      326,978       348,022
Automobiles..............................     190,354      326,978       122,051
                                           ----------   ----------    ----------
                                            1,309,517    2,191,674     2,358,695
Less accumulated depreciation............    (339,612)    (632,752)     (845,597)
                                           ----------   ----------    ----------
                                           $  969,905   $1,559,922    $1,513,098
                                           ==========   ==========    ==========
</TABLE>

    
 
   
(6)  SHORT-TERM DEBT
    
 
   
    At September 30, 2000, December 31, 1999 and 1998, short-term debt consisted
of an amount outstanding under a bank line of credit that is secured by a first
priority security interest in all assets of the Company and a pledge of 65% of
the capital stock of the Company's subsidiaries. Interest on the line of credit
is payable monthly, in arrears, at the related bank's "base rate" plus 1%
(10.5%, 9.5% and 8.75% at September 30, 2000, December 31, 1999 and 1998,
respectively). Borrowings under the line of credit are limited to an available
amount determined by an accounts receivable and inventory based formula,
$3,750,000, $3,750,000 and $2,000,000 at September 30, 2000, December 31, 1999
and 1998, respectively. This line of credit is due to mature on January 29,
2002. At September 30, 2000, December 31, 1999 and 1998, borrowings under the
line of credit were $3,150,000, $2,200,000 and $700,000, respectively.
    
 
   
    At December 31, 1998, short-term debt also included a note from the same
bank in the amount of $350,000 with interest payable monthly, in arrears at the
bank's "base rate" plus 1.5% (9.25%). This debt was rolled into long-term debt
on March 2, 1999 as part of the financing arrangement to acquire Biochrom in
March 1999, (see notes 3 and 7).
    
 
                                      F-13

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(7)  LONG-TERM DEBT
    
 
   
    Long-term debt consists of the following:
    
 
   

<TABLE>
<CAPTION>
                                                DECEMBER 31,
                                            ---------------------   SEPTEMBER 30,
                                              1998        1999          2000
                                            --------   ----------   -------------
<S>                                         <C>        <C>          <C>
Subordinated debentures, at 13%, payable
  in quarterly installments through March
  15, 2003................................  $787,500   $  727,500    $   477,500
Notes payable.............................        --    5,125,000      6,800,000
Capital lease obligations (note 10).......    41,355       14,614          9,431
                                            --------   ----------    -----------
                                             828,855    5,867,114      7,286,931
Less current installments.................   190,389      794,173      1,556,618
                                            --------   ----------    -----------
                                            $638,466   $5,072,941    $ 5,730,313
                                            ========   ==========    ===========
</TABLE>

    
 
   
    On March 2, 1999, the Company entered into two loan agreements with two
banks to borrow up to $5.5 million. The purpose of the loan agreements was to
partially finance the acquisition of Biochrom (see note 3). Principal and
interest are being paid in quarterly installments, with the final payment due in
January 2002. The interest rate is determined by one of the banks base rate plus
1%, (10.5% and 9.5% at September 30, 2000 and December 31, 1999, respectively).
The loans are secured by substantially all of the Company's assets. The loan
agreements contain covenants relating to net income, debt service coverage and
cash flow coverage. At September 30, 2000 and December 31, 1999, the Company was
not in compliance with certain of its covenants. The Company has received
waivers from its banks.
    
 
   
    Financing costs of $221,074 were incurred in 1999. These costs were
capitalized and are being amortized over the term of the loans. Amortization
expense was $56,102 for the nine months ended September 30, 2000 and $63,442 for
the year ended December 31, 1999.
    
 
   
    Aggregate annual principal payments on all long-term debt, excluding capital
lease obligations, for the next five years and thereafter at September 30, 2000
are as follows:
    
 
   

<TABLE>
<S>                                                           <C>
2001........................................................  $ 1,550,004
2002........................................................    4,449,996
2003........................................................      777,500
2004........................................................      500,000
Thereafter..................................................           --
                                                              -----------
                                                              $ 7,277,500
                                                              ===========
</TABLE>

    
 
   
(8)  CONVERTIBLE AND REDEEMABLE PREFERRED STOCK
    
 
   
    During 1999, 48,500 shares of Series B convertible and redeemable preferred
stock were issued to partially finance the acquisition of Biochrom (note 3). The
net proceeds from this issuance were $925,174. The Company's Series B
convertible redeemable preferred stock has a dividend preference over the
Series A preferred stock, and as a result, no dividends shall be paid in respect
of shares of
    
 
                                      F-14

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(8)  CONVERTIBLE AND REDEEMABLE PREFERRED STOCK (CONTINUED)
    
   
Series A preferred stock unless all accrued dividends that become payable in
respect of Series B preferred stock have been paid. The Series B redeemable
convertible preferred stock is convertible at the option of the holder, at any
time, into shares of common stock of the Company at a conversion rate of 19.71
shares of common stock for each share of Series B redeemable convertible
preferred stock, subject to adjustment for subdivision of Series B preferred
stock or any issuance of additional shares of Series B preferred stock.
    
 
   
    Redeemable preferred Series A stock pays quarterly cumulative dividends in
arrears at a rate of approximately $0.26 per share. On March 3, 2000,
convertible and redeemable preferred "B" stock started to accrue dividends at a
rate of $1.44 that will be payable a year in arrears on March 3, 2001, and
thereafter quarterly in arrears.
    
 
   
    In the event of any liquidation of the Company, the holders of the Company's
redeemable preferred stock are entitled to be paid from the assets available for
distribution to holders of the Company's capital stock $2,500,000, plus any
related dividends that are accrued but unpaid at such time, prior to other stock
distributions.
    
 
   
    Mandatory redemption requirements for the preferred stock are as follows:
    
 
   

<TABLE>
<CAPTION>
                                                        SERIES "A"     SERIES "B"
                                                       ------------   ------------
<S>                                                    <C>            <C>
March 15, 2002.......................................   $  500,000     $  333,320
March 15, 2003.......................................      500,000        333,320
March 15, 2004.......................................      500,000        333,320
                                                        ----------     ----------
                                                        $1,500,000     $1,000,000
                                                        ==========     ==========
</TABLE>

    
 
   
(9)  COMMON STOCK WARRANTS
    
 
   
    At September 30, 2000, December 31, 1999 and 1998, there were outstanding
8,509,905 warrants, which enable the holders to purchase a like amount of the
Company's common stock for $0.0005 per share. The warrants were issued in
connection with the issuance of Series A redeemable preferred stock (6,046,510
warrants) and subordinated debentures (2,463,395 warrants) that occurred on
March 15, 1996.
    
 
   
    Commencing on March 15, 2002, the holders of the warrants may at any time
require the Company to repurchase the warrants, or any common shares previously
acquired from exercise of the warrants, for their fair market value as
determined in good faith by the Company's board of directors. Such repurchase
price would be repaid in 12 equal quarterly installments beginning on the first
business day of the month following the surrender of the warrants or applicable
shares of common stock. In 1999, 1998 and 1997 and for the nine months ended
September 30, 2000 and 1999, $29,694,019, $1,379,460, $116,574, $70,920,242 and
$7,402,457, respectively, has been recorded as interest expense to accrue the
estimated amount of this potential liability in accordance with EITF 96-13,
ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS INDEXED TO AND POTENTIALLY
SETTLED IN, A COMPANY'S OWN STOCK. Future changes in the fair value of common
stock warrants will also be recorded as interest expense.
    
 
   
    In September 2000, the holders of the warrants agreed to automatically
terminate the requirement of the Company to repurchase the warrants in the event
of an initial public offering of the Company's Common Stock.
    
 
                                      F-15

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(10)  LEASES
    
 
   
    The Company leases automobiles under various leases that are classified as
capital leases. The carrying value of automobiles under capital leases at
September 30, 2000, December 31, 1999 and 1998 was $9,502, $14,532 and $40,795,
respectively, which is net of $48,871, $68,602 and $76,352, respectively, of
accumulated depreciation.
    
 
   
    The Company has noncancelable operating leases for office and warehouse
space expiring at various dates through 2009. Rent expense for the nine months
ended September 30, 2000 and for the years ended December 31, 1999, 1998 and
1997 was approximately $439,000, $484,000, $134,000 and $151,262, respectively.
    
 
   
    Future minimum lease payments for both capital and operating leases, with
initial or remaining terms in excess of one year at September 30, 2000, are as
follows:
    
 
   

<TABLE>
<CAPTION>
                                                         CAPITAL    OPERATING
                                                          LEASES      LEASES
                                                         --------   ----------
<S>                                                      <C>        <C>
2001...................................................  $ 9,116    $  660,861
2002...................................................    1,157       417,710
2003...................................................       --       372,238
2004...................................................       --       352,806
2005 and thereafter....................................       --            --
                                                         -------    ----------
  Net minimum lease payments...........................   10,273    $1,803,615
                                                                    ==========
Less amount representing interest......................      842
                                                         -------
Present value of net minimum lease payments............  $ 9,431
                                                         =======
</TABLE>

    
 
   
(11)  RELATED PARTY TRANSACTIONS
    
 
   
    The Company paid an annual consulting fee to a former stockholder who
formerly served on its board of directors and, by written agreement, provided no
less than five days of consulting services each month. The agreement was
scheduled to expire on March 15, 2001 or at the time of any initial public
offering of the Company's stock or other sale of a material portion of the
Company's stock or assets, if such a transaction occurred before that date. As
of September 30, 2000, the agreement with the former stockholder was rescinded.
The related consulting expense amounted to $294,583 for the nine months ended
September 30, 2000 and $258,437, $262,040 and $268,030 for the years ended
December 31, 1999, 1998 and 1997, respectively.
    
 
   
(12)  EMPLOYEE BENEFIT PLANS
    
 
   
    The Company sponsors a profit sharing retirement plan for its U.S.
employees, which includes an employee savings plan established under
Section 401(k) of the U.S. Internal Revenue Code. The plan covers substantially
all full-time employees who meet certain eligibility requirements. Contributions
to the profit sharing retirement plan are at the discretion of management. For
the nine months ended September 30, 2000 and for the years ended December 31,
1999, 1998 and 1997, the Company contributed approximately $60,000, $67,000,
$41,000 and $27,000, respectively, to the plan.
    
 
                                      F-16

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(12)  EMPLOYEE BENEFIT PLANS (CONTINUED)
    
   
    Certain of the Company's subsidiaries in the United Kingdom (UK), Harvard
Apparatus Limited, and Biochrom Limited maintain contributory, defined benefit
pension plans for substantially all of their employees.
    
 
   
    The components of the Company's pension expense, primarily for Biochrom, for
the nine months ended September 30, 2000 and for the year ended December 31,
1999 follow:
    
 
   

<TABLE>
<CAPTION>
                                                      DECEMBER 31,   SEPTEMBER 30,
                                                          1999           2000
                                                      ------------   -------------
<S>                                                   <C>            <C>
Components of net periodic benefit cost:
  Service cost......................................    $ 288,640      $ 182,376
  Interest cost.....................................      250,437        197,263
  Expected return on plan assets....................     (364,684)      (291,771)
  Net amortization gain.............................        6,965         (9,364)
                                                        ---------      ---------
    Net periodic benefit cost.......................    $ 181,358      $  78,504
                                                        =========      =========
</TABLE>

    
 
                                      F-17

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(12)  EMPLOYEE BENEFIT PLANS (CONTINUED)
    
   
    The funded status of the Company's defined benefit pension plans and the
amount recognized in the balance sheet at September 30, 2000 and December 31,
1999 follow:
    
 
   

<TABLE>
<CAPTION>
                                                      DECEMBER 31,   SEPTEMBER 30,
                                                          1999           2000
                                                      ------------   -------------
<S>                                                   <C>            <C>
Change in benefit obligation:
  Balance at beginning of period....................   $1,215,000     $5,829,403
  Acquisitions......................................    4,848,552             --
  Service cost......................................      288,640        182,376
  Interest cost.....................................      250,437        197,263
  Participants' contributions.......................       60,745         45,931
  Actuarial (gain)/loss.............................     (824,672)       571,532
  Benefits paid.....................................       (9,299)       (42,993)
  Currency translation adjustment...................           --       (594,437)
                                                       ----------     ----------
    Balance at end of period........................    5,829,403      6,189,075
                                                       ----------     ----------
 
Change in fair value of plan assets:
  Balance at beginning of period....................    1,158,138      7,062,645
  Acquisitions......................................    5,231,470             --
  Actual return on plan assets......................      440,606        (39,627)
  Participants' contributions.......................       60,745         45,931
  Employer contributions............................      180,985        153,275
  Benefits paid.....................................       (9,299)       (42,993)
  Currency translation adjustment...................           --       (673,592)
                                                       ----------     ----------
    Balance at end of period........................    7,062,645      6,505,639
                                                       ----------     ----------
Funded status:
  Plan assets greater than benefit obligation.......    1,233,242        316,564
  Unrecognized (gain) loss..........................     (881,299)        73,808
                                                       ----------     ----------
    Prepaid pension expense in consolidated balance
      sheet.........................................   $  351,943     $  390,372
                                                       ==========     ==========
</TABLE>

    
 
   
    The weighted average assumptions used in determining the net pension cost
for the Company's plans follows:
    
 
   

<TABLE>
<CAPTION>
                                                       DECEMBER 31,    SEPTEMBER 30,
                                                           1999             2000
                                                      --------------   --------------
<S>                                                   <C>              <C>
Weighted average assumptions:
  Discount rate.....................................  5.5%             6.5-8.5%
  Expected return on assets.........................  7.0-8.0%         7.0-8.0%
  Rate of compensation increase.....................  3.8-4.0%         4.5%
</TABLE>

    
 
                                      F-18

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(13)  INCOME TAXES
    
 
   
    The significant components of the Company's deferred tax assets and
liabilities at September 30, 2000, December 31, 1999 and 1998 are as follows:
    
 
   

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                            ---------------------   SEPTEMBER 30,
                                                              1998        1999          2000
                                                            --------   ----------   -------------
<S>                                                         <C>        <C>          <C>
Deferred tax assets:
  Accounts receivable.....................................  $     --   $   31,755    $   31,755
  Inventory...............................................   111,676      129,097       141,113
  Operating loss carryforward.............................    28,182       34,417       387,188
  Accrued expenses........................................   (14,940)   1,196,338       135,398
  Goodwill................................................        --       37,679        46,567
  Catalog costs...........................................        --        8,503            --
                                                            --------   ----------    ----------
Total deferred tax assets.................................   124,918    1,437,789       742,021
                                                            --------   ----------    ----------
Deferred tax liabilities:
  Catalog costs...........................................    24,524           --         6,011
  Pension fund asset......................................    15,051       18,461        16,725
  Property, plant and equipment...........................    22,053       42,632        36,278
  Other...................................................       497        4,695            --
                                                            --------   ----------    ----------
Total deferred tax liabilities............................    62,125       65,788        59,014
                                                            --------   ----------    ----------
Net deferred tax assets...................................  $ 62,793   $1,372,001    $  683,007
                                                            ========   ==========    ==========
</TABLE>

    
 
   
    In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. Based upon the level of historical taxable income
and projections for future taxable income over the periods during which deferred
tax assets are deductible, management believes it is more likely than not that
the Company will realize the benefits of these deductible differences.
    
 
   
    Income tax expense is based on the following pre-tax income (loss) for the
nine months ended September 30, 2000 and for the years ended December 31, 1999,
1998 and 1997:
    
 
   

<TABLE>
<CAPTION>
                                          DECEMBER 31,
                              ------------------------------------   SEPTEMBER 30,
                                 1997        1998         1999           2000
                              ----------   --------   ------------   -------------
<S>                           <C>          <C>        <C>            <C>
Domestic....................  $1,253,916   $115,418   $(32,040,219)  $(83,771,998)
Foreign.....................     535,621    738,916      2,757,782      1,264,808
                              ----------   --------   ------------   ------------
                              $1,789,537   $854,334   $(29,282,437)   (82,507,190)
                              ==========   ========   ============   ============
</TABLE>

    
 
                                      F-19

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(13)  INCOME TAXES (CONTINUED)
    
   
    Income tax expense (benefit) for the nine months ended September 30, 2000
and for the years ended December 31, 1999, 1998 and 1997 consisted of:
    
 
   

<TABLE>
<CAPTION>
                                            DECEMBER 31,
                                 ----------------------------------   SEPTEMBER 30,
                                   1997        1998        1999           2000
                                 ---------   --------   -----------   -------------
<S>                              <C>         <C>        <C>           <C>
Current income tax expense:
  Federal and state............  $ 584,239   $579,152   $   403,149    $        --
  Foreign......................    208,103    214,112     1,043,539        506,532
                                 ---------   --------   -----------    -----------
                                   792,342    793,264     1,446,688        506,532
                                 ---------   --------   -----------    -----------
Deferred income tax (benefit)
  expense:
  Federal and state............    (56,939)   (19,380)   (1,239,119)       840,106
  Foreign......................    (53,074)     9,308       (70,809)         7,713
                                 ---------   --------   -----------    -----------
                                  (110,013)   (10,072)   (1,309,208)       847,819
                                 ---------   --------   -----------    -----------
    Total income tax expense...  $ 682,329   $783,192   $   137,480    $ 1,354,351
                                 =========   ========   ===========    ===========
</TABLE>

    
 
                                      F-20

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(13)  INCOME TAXES (CONTINUED)
    
   
    Income tax expense for the nine months ended September 30, 2000 and for the
years ended December 31, 1999, 1998 and 1997 differed from the amount computed
by applying the U.S. federal income tax rate of 34% to pretax income as a result
of the following:
    
 
   

<TABLE>
<CAPTION>
                                          DECEMBER 31,
                               -----------------------------------   SEPTEMBER 30,
                                 1997       1998          1999           2000
                               --------   ---------   ------------   -------------
<S>                            <C>        <C>         <C>            <C>
Computed "expected" income
  tax (benefit) expense......  $608,443   $ 290,474   $ (9,956,029)  $(28,052,445)
Increase (decrease) in income
  taxes resulting from:
  Foreign tax rate and
    regulation
    differential.............    (3,625)    (27,811)        35,804         85,909
  State income taxes, net of
    federal income tax
    benefit..................    73,757      86,068       (154,569)       130,804
  Interest expense (common
    stock warrants)..........    39,564    (469,002)    10,254,946     24,177,992
  Foreign Subsidiary
    Corporation tax
    benefits.................        --     (27,804)       (28,761)       (32,876)
  Other......................     9,220      (6,737)       (13,911)         7,698
  Stock compensation expense
    in excess of allowable
    tax benefits on exercise
    of options...............        --          --             --      5,037,269
  Decrease in deferred tax
    valuation allowance......   (45,030)         --             --             --
                               --------   ---------   ------------   ------------
    Total....................  $682,329   $ 783,192   $    137,480   $  1,354,351
                               ========   =========   ============   ============
</TABLE>

    
 
   
    Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $4,013,000, $3,185,000 and $1,565,000 at September 30, 2000,
December 31, 1999 and 1998, respectively. Those earnings are considered to be
indefinitely reinvested and, accordingly, no related provision for U.S federal
and state income taxes has been provided. Upon distribution of those earnings in
the form of dividends or otherwise, the Company will be subject to both U.S.
income taxes (subject to an adjustment for foreign tax credits) and withholding
taxes in the various foreign countries.
    
 
   
(14)  STOCK OPTION PLAN
    
 
   
    The Company has adopted a stock option plan (the "Plan") pursuant to which
the Company's Board of Directors may grant stock options to employees. The Plan
authorizes grants of options to purchase up to 4,072,480 shares of authorized
but unissued stock.
    
 
   
    For the nine months ended September 30, 2000, and for the years ended
December 31, 1999 and 1998, 2,254,272, 1,119,725 and 1,119,725 "Incentive Stock
Options," and 1,812,295, 1,812,295 and 895,780 "Non-qualified Stock Options,"
respectively, had been granted to employees. The Incentive Stock Options become
fully vested over a four year period, on a pro rata basis. The Non-qualified
    
 
                                      F-21

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(14)  STOCK OPTION PLAN (CONTINUED)
    
   
Stock Options granted prior to 1999 only become vested if, prior to the end of
the year 2000: a sale of substantially all of the Company's assets or capital
stock occurs; or an initial public offering of the Company's common stock at a
net price of not less than $1.42 per share; or the fair market value of the
Company's common stock is otherwise determined to be, on a fully diluted basis,
not less than $1.42 per common share. For non-qualified options granted under
the plan during 1999, prior to an amendment to the plan dated September 29,
2000, the options were deemed to be vested and exercisable upon either (i) the
sale of all or substantially all of the assets or capital stock of the Company
for an actual or implied price per share of not less than $2.09 or (ii) an
initial public offering of the Company's stock with a price per share of not
less than $2.09 and gross proceeds to the Company of at least $15 million. On
September 29, 2000, the vesting schedule was amended so that the options are
vested and exercisable upon either (i) a sale of all or substantially all of the
assets or capital stock of the Company for an actual or implied net price per
share of Common Stock of not less than $2.09 or (ii) if the fair market value of
the Company at any time prior to December 31, 2000 results in a per share
valuation, on a fully diluted basis, of not less than $2.09 per share. As a
result of the Plan amendment, the related options vested immediately as a per
share valuation of $2.09 was attained.
    
 
   
    The Company applies APB Opinion No. 25 in accounting for the Plan. APB
No. 25 requires no recognition of compensation expense for stock option awards
when on the date of grant the exercise price is equal to the estimated fair
market value of the Company's common stock and the number of options granted is
fixed. During the nine months ended September 30, 2000, 1,134,547 stock options
were granted to employees at an exercise price of $1.05 which was estimated to
be less than the fair market value of the Company's common stock on the date of
grant. Accordingly, compensation expense of $3,292,593 was recognized on these
stock option grants. Additional compensation expense will be recognized in
future periods over the four year vesting period of the options. The Company's
1996 and 1999 Non-qualified Stock Option awards are considered variable awards
as the number of shares to be acquired by the employees is indeterminable at the
date of grant. Accordingly, in 1999 and for the nine months ended September 30,
1999, the Company recognized compensation expense of $3,283,164 and $937,138,
respectively, on the non-qualified Stock Options granted in 1996. At
December 31, 1999, all non-qualified stock options granted in 1996 were fully
vested because a per share valuation of $1.42 was attained. For the nine months
ended September 30, 2000, the Company recognized compensation expense of
$10,039,350 on the non-qualified options granted in 1999.
    
 
   
    On September 29, 2000, two employees exercised 563,942 non-vested options
that were granted during 2000 for 563,942 shares of restricted common shares for
cash consideration of $286 and two promissory notes amounting to $589,652
payable to the Company. The notes have a three-year maturity and a fixed
interest rate of 10% per annum, compounded annually. The restricted stock
becomes fully vested over a four-year period, on a pro rata basis. The estimated
fair market value of the shares awarded on the original option date grant and on
the date of exercise was estimated to be $6,767,310 of which $2,412,865 has been
recognized as stock compensation expense for the nine months ended
September 30, 2000. The remaining unearned compensation is being amortized to
expense over the four year vesting period. Also on September 29, 2000, two
employees of the Company exercised 916,514 fully vested options for cash of $465
and two promissory notes amounting to $958,298 payable to the Company. The notes
have a three-year maturity and a fixed interest rate of 10% per annum,
compounded annually.
    
 
                                      F-22

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(14)  STOCK OPTION PLAN (CONTINUED)
    
   
    The following is a summary of stock option activity.
    
 
   

<TABLE>
<CAPTION>
                                                        EMPLOYEE STOCK OPTIONS
                                                    ------------------------------
                                                      OPTIONS     WEIGHTED AVERAGE
                                                    OUTSTANDING    EXERCISE PRICE
                                                    -----------   ----------------
<S>                                                 <C>           <C>
Balance at December 31, 1996......................   1,903,533        $0.0005
  Options granted.................................     111,972         0.0147
                                                    ----------        -------
Balance at December 31, 1997......................   2,015,505         0.0152
  Options granted.................................          --             --
                                                    ----------        -------
Balance at December 31, 1998......................   2,015,505         0.0152
  Options granted.................................     916,515         1.0462
                                                    ----------        -------
Balance at December 31, 1999......................   2,932,020         0.3278
                                                    ----------        -------
  Options exercised...............................  (3,467,955)        0.4475
  Options granted.................................   1,134,547         1.0462
                                                    ----------        -------
Balance at September 30, 2000.....................     598,612        $0.9980
                                                    ==========        =======
</TABLE>

    
 
   
    During 1999, 1998 and 1997 and the first nine months of 2000, there were no
other additional options exercised, canceled, expired or forfeited, or changes
in any option terms, including exercise prices.
    
 
                                      F-23

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(14)  STOCK OPTION PLAN (CONTINUED)
    
 
   
    The weighted-average fair value of options granted during the nine months
ended September 30, 2000 and fiscal 1999 and 1997 was $9.73, $1.05 and $0.01,
respectively. No options were granted during 1998.
    
 
   
    The following is a summary of information relating to stock options
outstanding at September 30, 2000 (no options were exercisable at September 30,
2000):
    
 
   

<TABLE>
<CAPTION>
                                   OPTIONS OUTSTANDING
                      ---------------------------------------------
                          NUMBER                           WEIGHTED
                      OUTSTANDING AT       WEIGHTED-       AVERAGE
     RANGE OF         SEPTEMBER 30,    AVERAGE REMAINING   EXERCISE
  EXERCISE PRICE           2000        CONTRACTUAL LIFE     PRICE
-------------------   --------------   -----------------   --------
<C>                   <C>              <S>                 <C>
$      0.01               28,008         6.3 years          $ 0.01
$      1.05              570,605         9.5 years            1.05
-------------------      -------           ---------        ------
$        0.01-$1.05      598,613         9.4 years          $ 1.00
</TABLE>

    
 
   
    Had the Company determined compensation cost based on the fair value of the
options at the grant date, as is permitted by SFAS No. 123, the Company's net
income would have been as follows:
    
 
   

<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                            ------------------------------------   NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                               1997        1998         1999             2000
                                            ----------   --------   ------------   -----------------
<S>                                         <C>          <C>        <C>            <C>
Net income (loss) as reported.............  $1,107,208   $71,142    $(29,419,917)    $(83,861,541)
                                            ----------   -------    ------------     ------------
Pro forma net income (loss)...............  $1,106,988   $70,922    $(29,420,033)    $(83,926,155)
                                            ----------   -------    ------------     ------------
Basic net income (loss) per share.........  $     0.13   $ (0.01)   $      (5.28)    $     (13.11)
                                            ----------   -------    ------------     ------------
Pro forma basic net income (loss) per
  share...................................  $     0.13   $ (0.01)   $      (5.28)    $     (13.12)
                                            ----------   -------    ------------     ------------
Diluted net income (loss) per share.......  $     0.06   $ (0.01)   $      (5.28)    $     (13.11)
                                            ----------   -------    ------------     ------------
Diluted pro forma net income (loss) per
  share...................................  $     0.06   $ (0.01)   $      (5.28)    $     (13.12)
                                            ----------   -------    ------------     ------------
</TABLE>

    
 
   
    The fair value of each option grant for the Company's plans is estimated on
the date of the grant using the minimum value pricing model, with the following
weighted average assumptions used for grants in 2000, 1999 and 1997. There were
no grants of options in 1998.
    
 
   

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                                -------------------   SEPTEMBER 30,
                                                  1997       1999         2000
                                                --------   --------   -------------
<S>                                             <C>        <C>        <C>
Risk free interest rates......................  6.4%       5.6%       6.1%
 
Expected option lives.........................  7 years    7 years    2 years
 
Expected dividend yields......................  0%         0%         0%
</TABLE>

    
 
                                      F-24

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(15)  SEGMENT AND RELATED INFORMATION
    
 
   
    The Company operates in one significant business segment.
    
 
   
    Revenues by geographic area consists of the following:
    
 
   

<TABLE>
<CAPTION>
                                               YEARS ENDED                         NINE MONTHS ENDED
                                ------------------------------------------   -----------------------------
                                DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   SEPTEMBER 30,   SEPTEMBER 30,
                                    1997           1998           1999           1999            2000
                                ------------   ------------   ------------   -------------   -------------
                                                                              (UNAUDITED)
<S>                             <C>            <C>            <C>            <C>             <C>
United States.................  $ 6,263,264    $ 7,347,907    $ 8,169,470     $ 6,266,260     $ 6,867,515
United Kingdom................    2,668,300      2,458,772     15,353,761      10,344,187      11,549,083
Canada and Europe.............    2,532,593      2,347,346      2,654,583       1,859,106       3,652,428
                                -----------    -----------    -----------     -----------     -----------
                                $11,464,157    $12,154,025    $26,177,814     $18,469,913     $22,069,026
                                ===========    ===========    ===========     ===========     ===========
</TABLE>

    
 
   
    Long lived assets by geographic area consists of the following:
    
 
   

<TABLE>
<CAPTION>
                                          DECEMBER 31,   DECEMBER 31,   SEPTEMBER 30,
                                              1998           1999           2000
                                          ------------   ------------   -------------
<S>                                       <C>            <C>            <C>
United States...........................    $260,977      $  307,286     $  259,430
United Kingdom..........................     677,889       1,189,269      1,197,896
Canada and Europe.......................      31,039          63,367         55,772
                                            --------      ----------     ----------
                                            $969,905      $1,559,922     $1,513,098
                                            ========      ==========     ==========
</TABLE>

    
 
   
(16)  INCOME (LOSS) PER SHARE
    
 
   
    Basic income (loss) per share is based upon net income less dividends on
preferred stock divided by the weighted average common shares outstanding during
each year. The calculation of diluted net income (loss) per share assumes
conversion of convertible preferred stock, stock options and common stock
warrants into common stock, and also adjusts net income (loss) for the effect of
converting
    
 
                                      F-25

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(16)  INCOME (LOSS) PER SHARE (CONTINUED)
    
   
convertible preferred stock and common stock warrants into common stock. Net
income (loss) and shares used to compute net income per share, basic and
diluted, are reconciled below:
    
 
   

<TABLE>
<CAPTION>
                                              YEARS ENDED                         NINE MONTHS ENDED
                               ------------------------------------------   -----------------------------
                               DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   SEPTEMBER 30,   SEPTEMBER 30,
                                   1997           1998           1999           1999            2000
                               ------------   ------------   ------------   -------------   -------------
                                                                             (UNAUDITED)
<S>                            <C>            <C>            <C>            <C>             <C>
Net income (loss) available
  to common shareholders.....   $  985,540      $ (50,524)   $(29,576,503)   $(6,321,331)   $(83,983,969)
Effect of dilutive
  securities:
Common stock warrants........      116,574             --              --             --              --
                                ----------      ---------    ------------    -----------    ------------
Net income (loss), assuming
  dilution...................   $1,102,114      $ (50,524)   $(29,576,503)   $(6,321,331)   $(83,983,969)
                                ==========      =========    ============    ===========    ============
Weighted average common
  shares outstanding during
  the year...................    7,406,486      5,598,626       5,598,626      5,598,626       6,407,682
Effect of dilutive
  securities:
Common stock warrants........    8,509,911             --              --             --              --
Common stock options.........    1,583,797             --              --             --              --
                                ----------      ---------    ------------    -----------    ------------
                                17,500,194      5,598,626       5,598,626      5,598,626       6,407,682
                                ==========      =========    ============    ===========    ============
</TABLE>

    
 
   
    For the years ended December 31, 1999 and 1998, and for the nine months
ended September 30, 2000 and 1999, common equivalent shares of 11,378,110,
9,688,766, 10,628,401 and 11,446,996, respectively, resulting from stock
options, warrants and restricted stock were not included in the computation of
diluted earnings per share because to do so would have been antidilutive.
    
 
   
(17)  ACCRUED EXPENSES
    
 
   
    Accrued expenses consist of:
    
 
   

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                                    ---------------------   SEPTEMBER 30,
                                                      1998        1999          2000
                                                    --------   ----------   -------------
<S>                                                 <C>        <C>          <C>
Accrued compensation and payroll..................  $392,066   $  736,021    $  955,543
Accrued interest..................................     8,062      158,101       153,682
Accrued legal and professional fees...............   128,812      251,926       720,599
Other.............................................    57,349      253,475       436,723
                                                    --------   ----------    ----------
                                                    $586,289   $1,399,523    $2,266,547
                                                    ========   ==========    ==========
</TABLE>

    
 
                                      F-26

<PAGE>
   
                    HARVARD APPARATUS, INC. AND SUBSIDIARIES
    
 
   
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
    
 
   
                 SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND 1998
    
 
   
(18) CONTINGENCIES
    
 
   
    The Company is subject to legal proceedings and claims arising out of its
normal course of business. Management, after review and consultation with
counsel, considers that amounts accrued for in connection therewith are
adequate.
    
 
   
(19) CONCENTRATION OF CREDIT RISK
    
 
   
    One commercial customer accounted for 44% of revenues for the year ended
December 31, 1999 and 39% and 41% for the nine months ended September 30, 2000
and 1999, respectively. At September 30, 2000 and 1999, and December 31, 1999,
one customer accounted for 41%, 46% and 48% of accounts receivable,
respectively. Except as noted above, no other individual customer accounted for
more than 10% of revenues for the nine months ended September 30, 2000 and 1999
and for the years ended December 31, 1999, 1998, and 1997. In addition, except
as noted above, no other individual customer accounted for more than 10% of
account receivable at September 30, 2000, December 31, 1999 and December 31,
1998.
    
 
   
(20) STOCK SPLIT
    
 
   
    On October 25, 2000, the Board of Directors approved a merger, subject to
stockholder approval, of the Company with and into its wholly-owned subsidiary,
Harvard Bioscience, Inc., to be effected prior to the consummation of the
anticipated initial public offering ("IPO"). In the merger each share of common
stock of the Company will be exchanged for one share of Harvard Bioscience, Inc.
The Board of Directors of Harvard Bioscience, Inc. has approved a 19.71:1 stock
split effective immediately after consummation of the merger. All common stock
share and per share data have been restated in these financial statements for
all periods presented to reflect this split.
    
 
   
(21) SUBSEQUENT EVENT
    
 
   
    Subsequent to September 30, 2000, 5,913 stock options were granted to
employees resulting in deferred compensation of approximately $65,000.
    
 
                                      F-27

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
                                    FORMERLY
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                            REPORT OF THE DIRECTORS
 
                     FOR THE YEAR ENDED 31ST DECEMBER 1998
 
The Directors present their report and the audited financial statements for the
year ended 31st December 1998.
 
TRADING RESULTS FOR THE YEAR AND OUTLOOK
 
    The trading results for the year are set out on page F-29 of the accounts.
The year was satisfactory.
 
    Following the Company's disposal of the majority of its net assets on the
26th February 1999, (note 23), the Company will cease to trade.
 
PRINCIPAL ACTIVITIES
 
    During the year the Company developed, manufactured and marketed scientific
instruments and associated chemicals.
 
DIRECTORS
 
    The Directors throughout the year were as listed below. None of the
Directors holds any beneficial interest in the share capital of the Company.
 

<TABLE>
<S>              <C>        <C>        <C>        <C>
W.B. Brown       --         Managing   Resigned   01/03/99
J.G. Lee         --                    Joined     23/12/98
K.T. Krzywicki   --                    Joined     23/12/98
</TABLE>

 
YEAR 2000 AND EUROPEAN MONETARY UNION
 
    As the Company ceased to trade on the 26th February 1999 the directors are
satisfied that there are no risks associated with the impact of the Year 2000
date change or European Monetary Union.
 
RESEARCH AND DEVELOPMENT
 
    It is the Company's policy to carry out research and development to develop
products in the fields of spectrophotometry and amino acid analysis. Our
objective is the rapid creation of products utilising Biochrom's strengths in
electronic, software, optical and mechanical design plus production skills.
 
    Expenditure on research and development is set out in the profit and loss
accounts on page F-29.
 
CLOSE COMPANY PROVISIONS
 
    As far as the Directors are aware the close company provisions of the Income
and Corporation Taxes Act 1988 as amended do not apply to the Company. There has
been no change in this respect since the end of the financial year.
 
POST BALANCE SHEET EVENT
 
    Effective 26th February 1999, the Company sold the majority of its net
assets to Biochrom Limited.
 
    (See note 23).
 
                                      F-28

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
                                    FORMERLY
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                            REPORT OF THE DIRECTORS
 
                     FOR THE YEAR ENDED 31ST DECEMBER 1998
 
AUDITORS
 
    Our auditors, Coopers & Lybrand, merged with Price Waterhouse on 1
July 1998, following which Coopers & Lybrand resigned and the directors
appointed the new firm, PricewaterhouseCoopers, as auditors.
 
    A resolution to reappoint PricewaterhouseCoopers as auditors to the company
will be proposed at the annual general meeting.
 
BY ORDER OF THE BOARD
 
J.G. LEE
DIRECTOR
 
                                      F-29

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                         YEAR ENDED 31ST DECEMBER 1998
 
STATEMENT OF DIRECTORS' RESPONSIBILITIES
 
    Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
these financial statements, the directors are required to:
 
    * Select suitable accounting policies and then apply them consistently;
 
    * Make judgements and estimates that are reasonable and prudent;
 
    * State whether applicable accounting standards have been followed, subject
      to any material departures disclosed and explained in the financial
      statements;
 
    * Prepare the financial statements on the going concern basis unless it is
      inappropriate to presume that the company will continue in business.
 
    The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
 
BY ORDER OF THE BOARD
 
        /s/ J.G. Lee
----------------------------    Director
 
        9 April 1999
----------------------------    Date
 
                                      F-30

<PAGE>
                    REPORT OF THE AUDITORS TO THE MEMBERS OF
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
 
                      REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Directors of Pharmacia & Upjohn (Cambridge) Limited:
 
    In our opinion, the accompanying balance sheet, profit and loss account and
statement of cash flows present fairly, in all material respects, the financial
position of Pharmacia & Upjohn (Cambridge) Limited as at 31 December 1997 and
1998 and the profit and loss accounts and cash flows for the years ended
31 December 1997 and 1998 in conformity with generally accepted accounting
principles in the United Kingdom, which differ in certain respects from those
accepted in the United States (see note 24 to the financial statements).
 
    These financial statements are the responsibility of Pharmacia & Upjohn
(Cambridge) Limited's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
 
    We conducted our audit of these statements in accordance with generally
accepted auditing standards in the United Kingdom and the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statements presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
 
PRICEWATERHOUSECOOPERS
Chartered Accountants and Registered Auditors
Cambridge, England
February 26, 1998 (year ended December 31, 1997)
and April 9, 1999 (year ended December 31, 1998),
except for Note 24, which is as of September 15, 2000.
 
                                      F-31

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
                                    FORMERLY
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
                            PROFIT AND LOSS ACCOUNT
                         YEAR ENDED 31ST DECEMBER 1998
 

<TABLE>
<CAPTION>
                                                              1998                           1997
                                                    ------------------------   --------------------------------
                                          NOTES         L             L            L                 L
                                         --------   ----------   -----------   ----------   -------------------
<S>                                      <C>        <C>          <C>           <C>          <C>
TURNOVER...............................     2                      7,101,776                          8,699,944
Cost of sales..........................                           (5,160,296)                        (6,252,278)
                                                                 -----------                -------------------
GROSS PROFIT...........................                            1,941,480                          2,447,666
Distribution costs.....................               (457,939)                  (421,254)
Administration costs...................               (604,918)                  (493,374)
Research and Development costs.........               (395,569)                  (418,000)
                                                    ----------                 ----------
                                                    (1,458,426)                (1,332,628)
Other operating income.................     4           48,808                     61,019
                                                    ----------                 ----------
NET OPERATING EXPENSES.................                           (1,409,618)                        (1,271,609)
                                                                 -----------                -------------------
OPERATING PROFIT.......................     3                        531,862                          1,176,057
Interest receivable....................     5                         83,095                            114,392
                                                                 -----------                -------------------
PROFIT ON ORDINARY ACTIVITIES BEFORE
  TAXATION.............................                              614,957                          1,290,449
Tax on profit on ordinary activities...     6                       (194,935)                          (444,323)
                                                                 -----------                -------------------
PROFIT FOR THE YEAR....................                              420,022                            846,126
Dividend Paid Net......................                                   --                         (2,349,827)
                                                                 -----------                -------------------
PROFIT(LOSS) RETAINED FOR THE YEAR.....                             L420,022                        L(1,503,701)
                                                                 ===========                ===================
</TABLE>

 
Reserves statement see note 15
 
All activities are discontinued (note 23).
 
    The company has no recognised gains and losses other than those included in
the profits above, and therefore no separate statement of total recognised gains
and losses has been presented.
 
    There is no difference between the profit on ordinary activities before
taxation and the retained profit for the year stated above and historical cost
equivalents.
 
                                      F-32

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                                 BALANCE SHEET
 
                               31ST DECEMBER 1998
 

<TABLE>
<CAPTION>
                                                                    1998                             1997
                                                       ------------------------------   ------------------------------
                                             NOTES         L               L                L               L
                                            --------   ---------   ------------------   ---------   ------------------
<S>                                         <C>        <C>         <C>                  <C>         <C>
FIXED ASSETS
Tangible assets...........................    9                               415,900                          455,504
 
CURRENT ASSETS
Stock.....................................   10          636,556                          706,141
Debtors...................................   11        1,603,559                        1,537,499
Cash at bank and in hand..................             1,545,230                        1,026,766
                                                       ---------                        ---------
                                                       3,785,345                        3,270,406
CREDITORS: Amounts falling due within one
  year....................................   12          888,747                          804,784
                                                       ---------                        ---------
 
NET CURRENT ASSETS........................                                  2,896,598                        2,465,622
                                                                   ------------------               ------------------
 
TOTAL ASSETS LESS CURRENT LIABILITIES.....                                 L3,312,498                       L2,921,126
PROVISIONS FOR LIABILITIES AND CHARGES....   13                                46,350                           75,000
                                                                   ------------------               ------------------
NET ASSETS................................                                 L3,266,148                       L2,846,126
                                                                   ==================               ==================
 
CAPITAL AND RESERVES
Called up share capital...................   14                             2,000,000                        2,000,000
Profit and loss account...................   15                             1,266,148                          846,126
                                                                   ------------------               ------------------
 
EQUITY SHAREHOLDERS' FUNDS................   16                            L3,266,148                       L2,846,126
                                                                   ==================               ==================
</TABLE>

 
    The financial statements on pages F-29 to F-43 were approved by the Board of
Directors on 9 April 1999 and were signed on its behalf by:
 
        /s/ J.G. Lee
----------------------------    Director
 
        9 April 1999
----------------------------    Date
 
                                      F-33

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
           CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 1998
 

<TABLE>
<CAPTION>
                                                                1998        1997
See note 19                                                   --------   ----------
<S>                                                           <C>        <C>
                                                                 L           L
Operating Activities
Net cash in flow from operating activities..................   742,243    1,355,841
 
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received...........................................    81,764      118,918
                                                              --------   ----------
 
TAXATION
UK Corporation Tax paid.....................................  (160,915)    (576,323)
Advance Corporation Tax paid................................        --     (587,457)
                                                              --------   ----------
                                                              (160,915)  (1,163,780)
                                                              --------   ----------
 
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets...........................  (144,628)    (123,966)
Sale of tangible fixed assets...............................        --          350
                                                              --------   ----------
                                                              (144,628)    (123,616)
                                                              --------   ----------
 
Equity Dividends Paid Net...................................        --   (2,349,827)
                                                              --------   ----------
INCREASE/(DECREASE) IN CASH IN THE PERIOD...................   518,464   (2,162,464)
                                                              ========   ==========
</TABLE>

 
                                      F-34

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                             NOTES TO THE ACCOUNTS
 
                         YEAR ENDED 31ST DECEMBER 1998
 
1. ACCOUNTING POLICIES
 
(a) BASIS OF ACCOUNTING
    Although it is intended that the Company shall cease to trade following the
    sale of its net assets on the 26th February 1999 (note 23), the accounts
    have been prepared on the going concern basis. This is because in the
    directors' opinion there is no material difference between the recoverable
    amounts of the assets and liabilities and their values in the balance sheet.
    The accounts have been prepared on the historical cost basis and in
    accordance with applicable Accounting Standards in the United Kingdom. A
    summary of the more important accounting policies which have been applied
    consistently is set out below:
 
(b) DEPRECIATION OF TANGIBLE FIXED ASSETS
    The cost of fixed assets is their purchase cost, together with any
    incidental costs of acquisition.
 
   
    Depreciation is calculated using the straight line method to write off the
    fixed assets over their estimated useful lives as follows:
    
 

<TABLE>
<S>                                                           <C>        <C>
Leasehold improvements......................................     --        7 years
Plant, machinery, equipment and tooling.....................     --      3-7 years
Computer equipment..........................................     --        5 years
</TABLE>

 
(c) DEFERRED TAXATION
    Provision is made using the liability method for the tax effect of all
    material timing differences between profits computed for taxation purposes
    and those stated in the accounts, except insofar as the timing differences
    are expected to continue for the foreseeable future.
 
(d) FOREIGN CURRENCY
    Assets and liabilities in foreign currencies are translated to sterling at
    the rates of exchange ruling at the end of the financial year. Exchange
    differences resulting from changes in foreign currency rates are written off
    to the profit and loss account.
 
(e) RESEARCH AND DEVELOPMENT EXPENDITURE
    Expenditure on research and development is written off to the profit and
    loss account during the year in which it is incurred.
 
(f) OPERATING LEASES
    Costs in respect of operating leases are charged on a straight line basis in
    arriving at the operating profit.
 
                                      F-35

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                             NOTES TO THE ACCOUNTS
 
                         YEAR ENDED 31ST DECEMBER 1998
 
1. ACCOUNTING POLICIES (CONTINUED)
 

<TABLE>
<S>                                                           <C>        <C>
</TABLE>

 
(g) STOCKS AND WORK IN PROGRESS
    Stocks are stated at the lower of cost and net realisable value. Cost in
    this context includes all attributable costs in getting each item to its
    present location and condition and, for finished goods and work in progress,
    a proportion of attributable overheads based on a normal level of activity.
    Net realisable value is the price at which stock can be sold in the normal
    course of business after allowing for the costs of realisation, and where
    appropriate, the costs of conversion from their existing state to a finished
    condition. Provision is made for obsolete, slow moving and defective stocks.
 
(h) PENSION COSTS
    The Company operates a funded defined benefit pension scheme which is
    contracted out of the state scheme. The fund is valued every three years by
    a professionally qualified independent actuary, the rates of contribution
    payable being determined by the actuary. Pension costs are accounted for on
    the basis of charging the expected cost of providing pensions over the
    period during which the company benefits from the employees' services. The
    effects of variations from regular cost are spread over the expected average
    remaining service lives of members of the scheme.
 
2. TURNOVER
 
    Turnover represents the invoiced value of goods and services supplied during
the year, less trade discounts and trade commissions, excluding Value Added Tax.
 
    Turnover arises from the principal activity of the Company and was derived
from the following geographical areas by destination:
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
Europe...............................................           4,519,415            5,280,673
Asia and Australasia.................................             831,277              978,144
The Americas.........................................           1,693,897            2,301,527
Middle East and Africa...............................              57,187              139,600
                                                       ------------------   ------------------
Turnover is all UK by origin.........................           7,101,776            8,699,944
                                                       ==================   ==================
</TABLE>

 
                                      F-36

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                             NOTES TO THE ACCOUNTS
 
                         YEAR ENDED 31ST DECEMBER 1998
 
3. OPERATING PROFIT
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
Operating profit has been arrived at after charging:-
  Auditors remuneration--audit services..............              22,030               19,350
                     --non audit services............              13,325               15,175
Operating lease rentals:-
  Machinery, equipment and vehicles..................              51,753               58,987
  Premises...........................................             231,333              227,000
  Depreciation.......................................             190,915              212,740
</TABLE>

 
4. OTHER OPERATING INCOME
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
Miscellaneous income.................................              48,808               61,019
                                                       ------------------   ------------------
                                                                  L48,808              L61,019
                                                       ==================   ==================
</TABLE>

 
5. INTEREST RECEIVABLE
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
On bank current account cash balance.................              83,095              114,392
                                                       ------------------   ------------------
                                                                  L83,095             L114,392
                                                       ==================   ==================
</TABLE>

 
6. TAXATION
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
United Kingdom corporation tax at 31%
  Current............................................             193,000              439,000
Under provision in respect of prior years;
  Current............................................               1,935                5,323
                                                       ------------------   ------------------
                                                                 L194,935             L444,323
                                                       ==================   ==================
</TABLE>

 
                                      F-37

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                             NOTES TO THE ACCOUNTS
 
                         YEAR ENDED 31ST DECEMBER 1998
 
7. EMPLOYEES
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                              NO.                  NO.
The average number of employees, (including the
  executive Director) was made up as follows:
  Manufacturing, production and development..........                  48                   48
  Distribution.......................................                   7                    8
  Administration.....................................                   5                    5
                                                       ------------------   ------------------
                                                                       60                   61
                                                       ==================   ==================
                                                               L                    L
Staff costs, including full time working Directors
  amounted to:
  Salaries and bonuses...............................           1,308,728            1,368,189
  National insurance.................................             105,959              107,986
  Pension costs......................................             127,348              118,317
                                                       ------------------   ------------------
                                                               L1,542,035           L1,594,492
                                                       ==================   ==================
</TABLE>

 
8. DIRECTORS` EMOLUMENTS
 

<TABLE>
<CAPTION>
                                                              1998                 1997
                                                       ------------------   ------------------
<S>                                                    <C>                  <C>
                                                               L                    L
Emoluments of Directors of Pharmacia & Upjohn
  (Cambridge) Limited
  Fees...............................................                  --                   --
  Other emoluments--salary, bonus and benefits in
    kind.............................................              73,705               68,244
                                                       ------------------   ------------------
                                                                   73,705               68,244
                                                       ==================   ==================
</TABLE>

 
    Retirement benefits are accruing to one Director under a defined benefit
scheme (1997:one).
 
                                      F-38

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
9. TANGIBLE FIXED ASSETS
 

<TABLE>
<CAPTION>
                                                                               PLANT
                                                              LEASEHOLD      MACHINERY
                                                 COMPUTER      BUILDING     EQUIPMENT &
                                                 EQUIPMENT   IMPROVEMENTS     TOOLING       TOTAL
                                                 ---------   ------------   -----------   ---------
                                                     L            L              L            L
<S>                                              <C>         <C>            <C>           <C>
COST
At 1st January 1998............................   428,534       227,692      1,263,370    1,919,596
Disposals during year..........................   (45,949)           --        (12,929)     (58,878)
Additions......................................    42,429            --        108,882      151,311
                                                  -------       -------      ---------    ---------
At 31st December 1998..........................   425,014       227,692      1,359,323    2,012,029
                                                  -------       -------      ---------    ---------
DEPRECIATION
At 1st January 1998............................   323,582       203,176        937,334    1,464,092
Disposals during year..........................   (45,949)           --        (12,929)     (58,878)
Charge for the year............................    43,780         6,475        140,660      190,915
                                                  -------       -------      ---------    ---------
At 31st December 1998..........................   321,413       209,651      1,065,065    1,596,129
                                                  -------       -------      ---------    ---------
NET BOOK VALUE
At 31st December 1998..........................   103,601        18,041        294,258      415,900
                                                  =======       =======      =========    =========
At 31st December 1997..........................   104,952        24,516        326,036      455,504
                                                  =======       =======      =========    =========
</TABLE>

 
10. STOCK
 

<TABLE>
<CAPTION>
                                                                1998        1997
                                                              ---------   ---------
                                                                  L           L
<S>                                                           <C>         <C>
Components, materials and supplies..........................    528,408     636,259
Work in progress............................................     32,002       3,053
Finished goods..............................................     76,146      66,829
                                                              ---------   ---------
                                                               L636,556    L706,141
                                                              =========   =========
</TABLE>

 
    The Directors do not believe that the current replacement cost of stock is
materially different from its historical cost.
 
                                      F-39

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
11. DEBTORS
 

<TABLE>
<CAPTION>
                                                                 1998         1997
                                                              ----------   ----------
                                                                  L            L
<S>                                                           <C>          <C>
Advance Corporation Tax Recoverable.........................     307,437      306,187
Trade debtors...............................................   1,093,118    1,038,502
Amounts owed by holding company and fellow subsidiaries.....       4,145        2,814
Other debtors and prepayments...............................     198,859      189,996
                                                              ----------   ----------
                                                              L1,603,559   L1,537,499
                                                              ==========   ==========
</TABLE>

 
12. CREDITORS--AMOUNTS FALLING DUE WITHIN ONE YEAR
 

<TABLE>
<CAPTION>
                                                                 1998         1997
                                                              ----------   ----------
                                                                  L            L
<S>                                                           <C>          <C>
Trade creditors.............................................     484,770      526,387
Other creditors.............................................     181,806       86,986
Other taxation and social security..........................      29,171       33,681
Corporation tax.............................................     193,000      157,730
                                                              ----------   ----------
                                                                 888,747     L804,784
                                                              ==========   ==========
</TABLE>

 
13.(A) PROVISIONS FOR LIABILITIES AND CHARGES
 

<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
                                                                 L          L
<S>                                                           <C>        <C>
Pension fund liability......................................   46,350         --
</TABLE>

 
    Following the net asset sale dated 26th February 1999 a pension fund
liability may crystalise when the Company's pension fund transfers scheme assets
to Biochrom Limited's new pension scheme in 1999.
 

<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
                                                                 L          L
<S>                                                           <C>        <C>
Building lease dilapidation provision.......................       --     75,000
</TABLE>

 
    The dilapidation provision was released to the Profit and Loss account in
the light of the surrender without penalty of the building lease on the sale of
net assets of the Company described in note 23.
 
                                      F-40

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
13.(B) DEFERRED TAXATION
 
    The provision for deferred taxation, and the full potential asset, are made
up as follows:-
 

<TABLE>
<CAPTION>
                                                         1998                             1997
                                            ------------------------------   ------------------------------
                                             FULL POTENTIAL     PROVISION     FULL POTENTIAL     PROVISION
                                            (ASSET)/LIABILITY      MADE      (ASSET)/LIABILITY      MADE
                                            -----------------   ----------   -----------------   ----------
                                                    L               L                L               L
<S>                                         <C>                 <C>          <C>                 <C>
Accelerated capital allowances............       (45,713)               --         (43,881)              --
Short term timing differences.............          (738)               --         (22,499)              --
                                                --------        ----------      ----------       ----------
                                                L(46,451)              L--        L(66,380)             L--
                                                ========        ==========      ==========       ==========
</TABLE>

 
14. CALLED UP SHARE CAPITAL
 

<TABLE>
<CAPTION>
                                                                    1998                1997
                                                              -----------------   -----------------
<S>                                                           <C>                 <C>
AUTHORISED
Ordinary shares of L1 each..................................         L2,000,000          L2,000,000
                                                              =================   =================
ALLOTTED, CALLED UP AND FULLY PAID
Ordinary shares of L1 each..................................         L2,000,000          L2,000,000
                                                              =================   =================
</TABLE>

 
15. STATEMENT OF RESERVES
 

<TABLE>
<CAPTION>
                                                                    1998                1997
                                                              -----------------   -----------------
                                                                      L                   L
<S>                                                           <C>                 <C>
At 1st January 1998.........................................            846,126           2,349,827
Retained Profit/(Loss) for the year.........................            420,022          (1,503,701)
                                                              -----------------   -----------------
At 31st December 1998.......................................          1,266,148             846,126
                                                              =================   =================
</TABLE>

 
16. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
 

<TABLE>
<CAPTION>
                                                                    1998                1997
                                                              -----------------   -----------------
                                                                      L                   L
<S>                                                           <C>                 <C>
Profit for the year.........................................            420,022             846,126
Appropriation, net dividend on ordinary shares..............                 --          (2,349,827)
                                                              -----------------   -----------------
Net addition/(reduction) to shareholders' funds.............            420,022          (1,503,701)
Opening shareholders' funds.................................          2,846,126           4,349,827
Closing shareholders' funds.................................          3,266,148           2,846,126
                                                              =================   =================
</TABLE>

 
                                      F-41

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
17. CAPITAL COMMITMENTS
 

<TABLE>
<CAPTION>
                                                                    1998                1997
                                                              -----------------   -----------------
                                                                      L                   L
<S>                                                           <C>                 <C>
Future capital expenditure contracted, but not provided
  for:......................................................                 --                  --
                                                              =================   =================
</TABLE>

 
18. CONTINGENT LIABILITIES AND FINANCIAL COMMITMENTS
 

<TABLE>
<CAPTION>
                                                                    1998               1997
                                                              ----------------   ----------------
                                                                     L                  L
<S>                                                           <C>                <C>
Amount of performance bonds.................................               944                944
Guarantee given to H.M. Customs & Excise in respect of
  import duty & VAT.........................................           120,000            120,000
                                                              ----------------   ----------------
                                                                      L120,944           L120,944
                                                              ================   ================
</TABLE>

 
    a)  The Directors do not expect liabilities to arise from the performance
       bonds issued.
 
    b)  The company has entered into a composite accounting agreement with
       Barclays Bank PLC., along with other members of the Pharmacia & Upjohn
       Limited group. As a member of the Pharmacia & Upjohn Limited group cash
       pool, the company has a contingent liability of L10 million (1997
       L10 million) in respect of overdrafts of the other members in the group
       cash pool.
 
    c)  At 31st December 1998, the Company had financial commitments in respect
       of operating leases for vehicles, equipment and premises, terminating in
       1999 and thereafter. The total amount payable in the next year under
       these leases is as follows:-
 

<TABLE>
<CAPTION>
                                                                       1998                             1997
                                                        ----------------------------------   ---------------------------
                                                            LAND AND                         LAND AND
                                                           BUILDINGS            OTHER        BUILDINGS        OTHER
                                                        ----------------   ---------------   ---------   ---------------
                                                               L                  L              L              L
<S>                                                     <C>                <C>               <C>         <C>
Leases expiring between
Less than one year....................................           170,250             3,870          --             2,894
One to two years......................................                --             2,497     227,000             4,992
Two and five years inclusive..........................                --            42,048          --            34,356
                                                        ----------------   ---------------   ---------   ---------------
                                                                L170,250           L48,415    L227,000           L42,242
                                                        ================   ===============   =========   ===============
</TABLE>

 
                                      F-42

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
19. CASH FLOW STATEMENT
 
(a) Reconciliation of operating profit to net cash inflow from operating
    activities:
 

<TABLE>
<CAPTION>
                                                                    1998                1997
                                                              ----------------   ------------------
                                                                     L                   L
<S>                                                           <C>                <C>
Operating profit............................................           531,862            1,176,057
Depreciation charges........................................           190,915              212,740
(Gain) on sale of tangible fixed assets.....................                --                 (215)
Decrease/(Increase) in stocks...............................            69,585               59,566
(Increase) in debtors.......................................           (63,479)             (63,377)
Increase/(Decrease) in creditors............................            13,360              (28,930)
                                                              ----------------   ------------------
Net cash inflow from operating activities...................          L742,243           L1,355,841
                                                              ================   ==================
</TABLE>

 
(b) Analysis of changes in net funds and movement during the year
 

<TABLE>
<CAPTION>
                                                                     1998                 1997
                                                              ------------------   ------------------
                                                                      L                    L
<S>                                                           <C>                  <C>
Balance at 1st January 1998.................................           1,026,766            3,189,230
Net cash inflow/(outflow)...................................             518,464           (2,162,464)
                                                              ------------------   ------------------
Balance at 31st December 1998...............................          L1,545,230           L1,026,766
                                                              ==================   ==================
</TABLE>

 
(c) Analysis of the balances of cash shown in the balance sheet
 

<TABLE>
<CAPTION>
                                                                                       CHANGE
                                                                1998        1997      IN YEAR
                                                              ---------   ---------   --------
                                                                  L           L          L
<S>                                                           <C>         <C>         <C>
Cash at bank and in hand....................................  1,545,230   1,026,766   518,464
</TABLE>

 
20. PENSION OBLIGATIONS
 
    The Company participates in a pension fund operated by Pharmacia Biotech UK,
a branch office of Pharmacia Biotech Europe GmbH (previously Pharmacia Limited)
providing benefits based on final pensionable pay. The assets of the fund are
held separately from those of the Company being invested with investment
managers in a managed fund.
 
                                      F-43

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
20. PENSION OBLIGATIONS (CONTINUED)
    The total pension cost for the company is set out in note 7. The pension
cost is assessed in accordance with the advice of an independent qualified
actuary using the projected unit method. The most recent actuarial valuation
adopted by the Trustees of the Pharmacia Limited Staff Superannuation Fund was
as at 1 January 1997. The assumptions which had the most significant effect on
the results of the valuation were those relating to:
 
    a)  the future rate of investment return on the fund;
 
    b)  the future rate at which members' salaries would increase;
 
    c)  the rate of withdrawal from service.
 
    It was assumed that the long term rate of investment return would be at an
average of 9% per annum and the rate of future salary increases would be at 7.5%
per annum. The rate of withdrawal from service was selected at a rate slightly
less than the rate experienced over the inter-valuation period.
 
    The most recent actuarial valuation adopted by the Trustees showed that the
market value of the fund's assets was L5,564,000 and that the actuarial value of
those assets represented 112% of the benefits that had accrued to members, after
allowing for expected future increases in basic salary.
 
    The existing pension fund was formed in 1986 by the amalgamation of the
Pharmacia Biotech Limited and Pharmacia LKB Biochrom Limited schemes. Following
the net asset sale on 26 February 1999 (note 23), all Pharmacia Biotech active
members (staff formerly employed by Pharmacia Biotech Limited) will transfer
into the Nycomed Amersham Scheme. The remaining "Biochrom" active members will
have the choice to transfer into the new Biochrom Limited pension scheme. All
current and deferred members will remain in the Pharmacia Biotech UK Pension
Fund which will be administered by Pharmacia & Upjohn at Milton Keynes.
 
21. RELATED PARTY TRANSACTIONS
 
    As a wholly owned subsidiary, whose results are included in the consolidated
financial statements of Pharmacia & Upjohn, Inc. (see note 22), the company is
exempt from the requirement to disclose details of transactions with other group
companies.
 
   
    The Director regards Amersham Pharmacia Biotech AB ("APB") as a related
party by virtue of the fact that the company's ultimate parent undertaking
Pharmacia & Upjohn Inc. holds a 45% interest in APB and that there are certain
common directorships. Sales to APB group companies amounted to L6,608,485 and
the company was owed L1,010,761 as at 31 December 1998 in relation to trading
balances.
    
 
                                      F-44

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
22. ULTIMATE AND IMMEDIATE PARENT UNDERTAKING
 
    The directors regard Pharmacia & Upjohn, Inc, a company incorporated in the
USA, as the ultimate parent and controlling undertaking. Copies of the ultimate
parent's consolidated financial statements may be obtained from:
 
    Pharmacia & Upjohn, Inc
    7000 Portage Road, Kalamazoo
    Michigan 49001, USA
 
    According to the register kept by the company, Pharmacia & Upjohn Limited, a
company registered in England and Wales, has a 100% interest in the equity
capital of the company at 31 December 1998.
 
23. POST BALANCE SHEET EVENTS
 
    On the 26th February 1999, the Company sold the majority of its net assets
to Biochrom Limited for a consideration of US Dollars 6,362,574. Following this,
the Company will cease to trade.
 
24. SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES ("GAAP")
 
   
    The company has prepared financial statements in accordance with UK GAAP.
There are no reconciling differences between US and UK GAAP related to the
equity shareholders' funds as of 31 December 1997 and 1998 and the net income
for the years ended 31 December 1997 and 1998. The financial statements reflect
all costs of doing business including costs incurred by other group companies on
behalf of the Company. As of 31 December 1997 and 1998 the following other
differences exist:
    
 
DEFERRED TAXATION
 
    Under UK GAAP, provision for deferred tax is only required to the extent
that it is probable that a taxation liability or asset will crystallise, in the
foreseeable future, as a result of timing differences between taxable profits
and accounting profit, with provision made at the known tax rate.
 
    Under US GAAP, full provision for deferred tax is required to the extent
that accounting profit differs from taxable profit due to temporary differences.
Provision is made at the tax rate in effect at the time the difference is likely
to reverse. A valuation adjustment is made against deferred tax assets when it
is more likely than not that a deferred tax asset will not be realised. As such,
provision for the taxable losses carried forward of L46,451 would be provided
with a valuation allowance for the full amount, resulting in no net impact on
the profit and loss account or shareholders' equity, as of 31 December 1998.
Provision for the taxable losses carried forward of L66,380 would be provided
with a valuation allowance for the full amount, resulting in no net impact on
the profit and loss account or shareholders' equity, as of 31 December 1997.
 
                                      F-45

<PAGE>
                     PHARMACIA & UPJOHN (CAMBRIDGE) LIMITED
 
                                    FORMERLY
 
                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
 
                       NOTES TO THE ACCOUNTS (CONTINUED)
 
                         YEAR ENDED 31ST DECEMBER 1998
 
24. SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES ("GAAP") (CONTINUED)
CASH FLOW STATEMENTS
 
    The cash flow statement is prepared in accordance with United Kingdom
Financial Reporting Standard 1 "FRS 1 (Revised 1996)", whose objective and
principles are similar to those set out in SFAS No.95, "Statement of Cash
Flows". The principal differences between the standards relate to
classification. Under FRS 1 (Revised 1996), the company presents its cash flows
for (a) operating activities, (b) returns on investments and servicing of
finance, (c) taxation, (d) capital expenditure and financial investment,
(e) equity dividends paid, (f) management of liquid resources and
(g) financing. SFAS No.95 requires only three categories of cash flow activity
being (a) operating, (b) investing and (c) financing.
 
    Cash flows from taxation and returns on investments and servicing of finance
under FRS 1 (Revised 1996) would be included as operating activities under SFAS
No.95, capital expenditure and financial investment would be included as
investing activities, and equity dividends paid would be included as a financing
activity under SFAS No.95. Under FRS 1 (Revised 1996) cash comprises cash in
hand and deposits repayable on demand, less overdrafts repayable on demand, and
liquid resources comprise current asset investments held as readily disposable
stores of value. Under SFAS No.95 cash equivalents, comprising short-term highly
liquid investments, generally with original maturities of three months or less,
are grouped together with cash. Cash equivalents exclude overdrafts. There are
no differences between cash as stated under UK GAAP and cash and cash
equivalents as stated under US GAAP at 31 December 1997 and 1998.
 
    Set out below, for illustrative purposes, is a summary of cash flows under
US GAAP.
 

<TABLE>
<CAPTION>
                                                              YEAR ENDED 31 DECEMBER
                                                              ----------------------
                                                                1998         1997
                                                              ---------   ----------
                                                                L'000       L'000
<S>                                                           <C>         <C>
Net cash provided by operating activities...................    663,092      310,979
Net cash used in investing activities.......................   (144,628)    (123,616)
Net cash used in financing activities.......................         --   (2,349,827)
                                                              ---------   ----------
Net increase/(decrease) in cash and cash equivalents........    518,464   (2,612,464)
Cash and cash equivalents at beginning of period............  1,026,766    3,639,230
Cash and cash equivalents at end of period..................  1,545,230    1,026,766
                                                              ---------   ----------
Supplement cash flow information:
Cash paid for interest......................................         --           --
Cash paid for income taxes..................................   (160,915)  (1,163,780)
                                                              ---------   ----------
</TABLE>

 
                                      F-46

<PAGE>
   
PROSPECTUS
    
 
                       [THOMAS WEISEL PARTNERS LLC LOGO]
 
                           [HARVARD BIOSCIENCE LOGO]
 
   
                                6,422,450 SHARES
                                  COMMON STOCK
    
 
   
                           THOMAS WEISEL PARTNERS LLC
                             DAIN RAUSCHER WESSELS
                                  ING BARINGS
    
 
------------------------------------------------------------
 
Neither we nor any of the underwriters have authorized anyone to provide
information different from that contained in this prospectus. When you make a
decision about whether to invest in our common stock, you should not rely upon
any information other than the information in this prospectus. Neither the
delivery of this prospectus nor the sale of our common stock means that
information contained in this prospectus is correct after the date of this
prospectus. This prospectus is not an offer to sell or solicitation of an offer
to buy these shares of common stock in any circumstances under which the offer
or solicitation is unlawful.
 
Until               , 2000 (25 days after commencement of this offering), all
dealers that buy, sell or trade these shares of common stock, whether or not
participating in this offering, may be required to deliver a prospectus. This is
an addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

<PAGE>

                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
    The following table sets forth the estimated expenses payable by us in
connection with the offering (excluding underwriting discounts and commissions):
 
   

<TABLE>
<CAPTION>
NATURE OF EXPENSE                                               AMOUNT
-----------------                                             ----------
<S>                                                           <C>
SEC Registration Fee........................................  $   25,260
NASD Filing Fee.............................................       8,000
Nasdaq National Market Listing Fee..........................      95,000
Accounting Fees and Expenses................................     550,000
Legal Fees and Expenses.....................................     600,000
Printing Expenses...........................................     200,000
Blue Sky Qualification Fees and Expenses....................       5,000
Transfer Agent's Fee........................................       5,000
Miscellaneous...............................................      11,740
                                                              ----------
    TOTAL...................................................  $1,500,000
</TABLE>

    
 
   
    The amounts set forth above, except for the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and Nasdaq National
Market fees, are in each case estimated.
    
 

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
    In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of our certificate of incorporation provides that none of our
directors will be personally liable to us or our stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability
(1) for any breach of the director's duty of loyalty to us or our stockholders,
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (3) in respect of unlawful dividend
payments or stock redemptions or repurchases, or (4) for any transaction from
which the director derived an improper personal benefit. In addition, our
certificate of incorporation provides that if the Delaware General Corporation
Law is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
 
    Article V of our by-laws provides for our indemnification of our officers
and certain non-officer employees under certain circumstances against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement,
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceeding in which any such person is
involved by reason of the fact that such person is or was an officer or employee
of the registrant if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to our best interests, and, with
respect to criminal actions or proceedings, if such person had no reasonable
cause to believe his or her conduct was unlawful.
 
    Prior to the offering, we will have entered into indemnification agreements
with each of our directors. The form of indemnification agreement provides that
we will indemnify our directors for expenses incurred because of their status as
a director to the fullest extent permitted by Delaware law, our certificate of
incorporation and our by-laws.
 

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
 
   
    Set forth in chronological order below is information regarding the number
of shares of capital stock issued by us since October 15, 1997. Also included is
the consideration, if any, received by us for such shares. There was no public
offering in any such transaction and we believe that each transaction
    
 
                                      II-1

<PAGE>
   
was exempt from the registration requirements of the Securities Act of 1933 by
reason of Section 4(2) thereof, based on the private nature of the transactions
and the financial sophistication of the purchasers, all of whom had access to
complete information concerning us and acquired the securities for investment
and not with a view to the distribution thereof. In addition, we believe that
the transactions described below with respect to issuances and option grants to
our employees and directors were exempt from the registration requirements of
said Act by reason of Section 4(2) of said Act or Rule 701 promulgated
thereunder.
    
 
    (a) ISSUANCE OF CAPITAL STOCK
 
       (i) In 1999, we issued an aggregate of 48,500 shares of our series B
           convertible preferred stock to Ascent Venture Partners, L.P.
           (formerly known as Pioneer Capital Corp.) and Citizens Capital, Inc.
           for an aggregate purchase price of $1,000,000.
 
   
       (ii) In March 2000, we issued 1,091,716 shares of our common stock upon
           the exercise of previously granted stock options at an aggregate
           exercise price of $1,792.14.
    
 
   
       (iii) In September 2000, we issued 2,376,236 shares of our common stock
           upon the exercise of previously granted stock options at an aggregate
           exercise price of $1,549,155.40.
    
 
    (b) GRANTS OF STOCK OPTIONS
 
   
       (i) As of October 15, 2000, options to purchase 599,096 shares of common
           stock were outstanding under our 1996 Stock Option and Grant Plan.
           None of these options is exercisable within 60 days of such date. All
           such options were granted between March 1996 and October 2000 to our
           officers, directors, employees and consultants.
    
 

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
    (A) EXHIBITS.  The following is a complete list of exhibits filed or
incorporated by reference as part of this Registration Statement.
 
   

<TABLE>
    <C>              <S>
              *1.1   Form of Underwriting Agreement.
               2.1   Asset Purchase Agreement dated March 2, 1999 by and among
                     Biochrom Limited and Pharmacia Biotech Limited and Pharmacia
                     & Upjohn, Inc. and Harvard Apparatus, Inc. (Excluding
                     schedules and exhibits which Registrant agrees to furnish
                     supplementally to the Commission upon request.)
               2.2   Asset Purchase Agreement dated July 14, 2000 by and between
                     Harvard Apparatus, Inc., AmiKa Corporation and Ashok Shukla.
                     (Excluding schedules and exhibits which Registrant agrees to
                     furnish supplementally to the Commission upon request.)
              *3.1   Amended and Restated Certificate of Incorporation of the
                     Registrant.
              *3.2   Form of Second Amended and Restated Certificate of
                     Incorporation of the Registrant.
              *3.3   Amended and Restated By-laws of the Registrant.
              *4.1   Specimen certificate for shares of Common Stock, $0.01 par
                     value, of the Registrant.
               4.2   Amended and Restated Securityholders' Agreement dated as of
                     March 2, 1999 by and among Harvard Apparatus, Inc., Pioneer
                     Ventures Limited Partnership, Pioneer Ventures Limited
                     Partnership II, Pioneer Capital Corp., First New England
                     Capital, L.P. and Citizens Capital, Inc. and Chane Graziano
                     and David Green.
              *5.1   Opinion of Goodwin, Procter & Hoar LLP as to the legality of
                     the securities offered.
              10.1   Harvard Apparatus, Inc. 1996 Stock Option and Grant Plan.
             *10.2   Harvard Bioscience, Inc. 2000 Stock Option and Incentive
                     Plan.
             *10.3   Harvard Bioscience, Inc. Employee Stock Purchase Plan.
             +10.4   Distribution Agreement dated March 2, 1999 by and between
                     Biochrom Limited and Amersham Pharmacia Biotech AB.
</TABLE>

    
 
                                      II-2

<PAGE>
   

<TABLE>
    <C>              <S>
             *10.5   Employment Agreement dated             between Harvard
                     Bioscience and Chane Graziano.
             *10.6   Employment Agreement dated             between Harvard
                     Bioscience and David Green.
             *10.7   Employment Agreement dated             between Harvard
                     Bioscience and James L. Warren.
              10.8   Form of Director Indemnification Agreement.
              21.1   Subsidiaries of the Registrant.
             *23.1   Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
                     5.1 hereto).
              23.2   Consent of KPMG LLP.
              23.3   Consent of PricewaterhouseCoopers.
            **24.1   Powers of Attorney.
              27.1   Financial Data Schedule.
              99.1   Consent of Robert Dishman to be named as a person to be
                     appointed a director of Registrant in this Registration
                     Statement.
              99.2   Consent of Earl R. Lewis to be named as a person to be
                     appointed a director of Registrant in this Registration
                     Statement.
</TABLE>

    
 
------------------------
 
  * To be filed by amendment to this registration statement.
 
   
 ** Previously filed.
    
 
   
  + Confidential treatment requested as to this previously filed exhibit.
    
 
    (B) FINANCIAL STATEMENT SCHEDULES
 
    All schedules have been omitted because they are not required or because the
required information is given in the consolidated financial statements or notes
to those statements.
 

ITEM 17.  UNDERTAKINGS
 
    The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
 
    Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
    The undersigned registrant hereby undertakes that:
 
        (1) For purposes of determining any liability under the Securities Act
    of 1933, the information omitted from the form of prospectus filed as part
    of this registration statement in reliance upon Rule 430A and contained in a
    form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
    or 497(h) under the Securities Act shall be deemed to be part of this
    registration statement as of the time it was declared effective.
 
        (2) For the purpose of determining any liability under the Securities
    Act of 1933, each post-effective amendment that contains a form of
    prospectus shall be deemed to be a new registration statement relating to
    the securities offered therein, and the offering of such securities at that
    time shall be deemed to be the initial BONA FIDE offering thereof.
 
                                      II-3

<PAGE>

                                   SIGNATURES
 
   
    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, on October 25,
2000.
    
 
   

<TABLE>
<S>                                                    <C>  <C>
                                                       HARVARD BIOSCIENCE, INC.
 
                                                       By:               /s/ JAMES WARREN
                                                            -----------------------------------------
                                                                           James Warren
                                                                     CHIEF FINANCIAL OFFICER
</TABLE>

    
 
    Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
 
   

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                          *                            Chief Executive Officer and
     -------------------------------------------         Director (Principal         October 25, 2000
                   Chane Graziano                        Executive Officer)
 
                                                       Chief Financial Officer
                  /s/ JAMES WARREN                       (Principal Financial
     -------------------------------------------         Officer and Principal       October 25, 2000
                    James Warren                         Accounting Officer)
 
                          *
     -------------------------------------------       President and Director        October 25, 2000
                     David Green
 
                          *
     -------------------------------------------       Director                      October 25, 2000
                 Christopher W. Dick
 
                          *
     -------------------------------------------       Director                      October 25, 2000
               Richard C. Klaffky, Jr.
</TABLE>

    
 
   

<TABLE>
<S>   <C>
*By:              /s/ JAMES WARREN
      ----------------------------------------
                    James Warren
                  Attorney-in-fact
</TABLE>

    
 
                                      II-4

<PAGE>

                                 EXHIBIT INDEX
 
   

<TABLE>
       EXHIBIT
         NO.            DESCRIPTION
       ------           ------------------------------------------------------------
<C>                     <S>
         *1.1           Form of Underwriting Agreement.
 
          2.1           Asset Purchase Agreement dated March 2, 1999 by and among
                          Biochrom Limited and Pharmacia Biotech Limited and
                          Pharmacia & Upjohn, Inc. and Harvard Apparatus, Inc.
                          (Excluding schedules and exhibits which Registrant agrees
                          to furnish supplementally to the Commission upon request.)
 
          2.2           Asset Purchase Agreement dated July 14, 2000 by and between
                          Harvard Apparatus, Inc., AmiKa Corporation and Ashok
                          Shukla. (Excluding schedules and exhibits which Registrant
                          agrees to furnish supplementally to the Commission upon
                          request.)
 
         *3.1           Amended and Restated Certificate of Incorporation of the
                          Registrant.
 
         *3.2           Form of Second Amended and Restated Certificate of
                          Incorporation of the Registrant.
 
         *3.3           Amended and Restated By-laws of the Registrant.
 
         *4.1           Specimen certificate for shares of Common Stock, $0.01 par
                          value, of the Registrant.
 
          4.2           Amended and Restated Securityholders' Agreement dated as of
                          March 2, 1999 by and among Harvard Apparatus, Inc.,
                          Pioneer Ventures Limited Partnership, Pioneer Ventures
                          Limited Partnership II, Pioneer Capital Corp., First New
                          England Capital, L.P. and Citizens Capital, Inc. and Chane
                          Graziano and David Green.
 
         *5.1           Opinion of Goodwin, Procter & Hoar LLP as to the legality of
                          the securities offered.
 
         10.1           Harvard Apparatus, Inc. 1996 Stock Option and Grant Plan.
 
        *10.2           Harvard Bioscience, Inc. 2000 Stock Option and Incentive
                          Plan.
 
        *10.3           Harvard Bioscience, Inc. Employee Stock Purchase Plan.
 
        +10.4           Distribution Agreement dated March 2, 1999 by and between
                          Biochrom Limited and Amersham Pharmacia Biotech AB.
 
        *10.5           Employment Agreement dated             between Harvard
                          Bioscience and Chane Graziano.
 
        *10.6           Employment Agreement dated             between Harvard
                          Bioscience and David Green.
 
        *10.7           Employment Agreement dated             between Harvard
                          Bioscience and James L. Warren.
 
         10.8           Form of Director Indemnification Agreement.
 
         21.1           Subsidiaries of the Registrant.
 
        *23.1           Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
                          5.1 hereto).
 
         23.2           Consent of KPMG LLP.
 
         23.3           Consent of PricewaterhouseCoopers.
 
       **24.1           Powers of Attorney.
 
         27.1           Financial Data Schedule.
 
         99.1           Consent of Robert Dishman to be named as a person to be
                          appointed a director of Registrant in this Registration
                          Statement.
 
         99.2           Consent of Earl R. Lewis to be named as a person to be
                          appointed a director of Registrant in this Registration
                          Statement.
</TABLE>

    
 
------------------------
 
  * To be filed by amendment to this registration statement.
 
   
 ** Previously filed.
    
 
   
  + Confidential treatment requested as to this previously filed exhibit.
    





<PAGE>

                                                                EXHIBIT 2.1

PURCHASE AGREEMENT

                                  by and among

                                BIOCHROM LIMITED
                                    as Buyer

                                       and

                      PHARMACIA BIOTECH (BIOCHROM) LIMITED
                                    as Seller

                                       and

                            PHARMACIA & UPJOHN, INC.
                      as guarantor of Seller's obligations

                                       and

                             HARVARD APPARATUS, INC.
                       as guarantor of Buyer's obligations

                             Dated on March 2, 1999



================================================================================


                                       1


<PAGE>


                            ASSET PURCHASE AGREEMENT

                                      INDEX


<TABLE>
<CAPTION>

                                                                                                  Page
<S>                                                                                               <C>

1.  INTERPRETATION...................................................................................1

2.  PURCHASE AND SALE OF ASSETS......................................................................2
         2.1      Sale of Assets.....................................................................2
         2.2      Liabilities........................................................................6
         2.3      Purchase Price and Payment.........................................................8
         2.4      Time and Place of Closing.........................................................10
         2.5      Change of Seller's Name...........................................................10
         2.6      Post-Closing Access...............................................................10
         2.7      Further Assurances................................................................11
         2.8      Allocation of Purchase Price......................................................11
         2.9      Non-AP Biotech Accounts Receivable................................................11
         2.10     Required Consents; Consents and Assets Not Delivered at Closing...................13
         2.11     Employees.........................................................................13
         2.12     World Wide Web Site...............................................................15
         2.13     LKB Biochrom Trademark............................................................15
         2.14     Pensions..........................................................................15
         2.15     Assignment of Trademarks..........................................................16

3.  REPRESENTATIONS AND WARRANTIES OF SELLER........................................................16
         3.1      Making of Representations and Warranties..........................................16
         3.2      Organization and Qualifications of Seller.........................................16
         3.3      Authority of Seller...............................................................16
         3.4      Freehold, Leasehold and Personal Property.........................................17
         3.5      Financial Statements and Ordinary Course..........................................22
         3.6      Taxes.............................................................................22
         3.7      Collectibility of Non-AP Biotech Accounts Receivable..............................22
         3.8      Inventory.........................................................................23
         3.9      Absence of Certain Changes........................................................23

         3.10     Intellectual Property.............................................................24
         3.11     Contracts.........................................................................26
         3.12     Litigation........................................................................27
         3.13     Compliance with Laws..............................................................27
         3.14     Insurance.........................................................................28
         3.15     Powers of Attorney................................................................28
         3.16     Finder's Fee......................................................................28
         3.17     Product Liability or Other Claims.................................................28
         3.18     Governmental Approvals; Orders Affecting the Business.............................28


                                        (i)

<PAGE>


         3.19     Copies of Documents...............................................................28
         3.20     Transactions with Interested Persons..............................................28
         3.21     Intentionally Omitted.............................................................29
         3.22     Environmental Matters.............................................................29
         3.23     Officers..........................................................................29
         3.24     Employees.........................................................................29
         3.25     Customers, Distributors and Suppliers.............................................31
         3.26     Vehicles..........................................................................31
         3.27     Disclosure........................................................................31

4.  COVENANTS OF SELLER.............................................................................31
         4.1      Making of Covenants and Agreements................................................31
         4.2      Notice of Default.................................................................31
         4.3      Consummation of Agreement.........................................................32
         4.4      Notice to Third Parties...........................................................32
         4.5      Protection of Goodwill............................................................32
         4.6      Confidentiality...................................................................34
         4.7      Intentionally Omitted.............................................................34
         4.8      Value Added Tax...................................................................34
         4.9      Audited Financial Statements......................................................35

5.  REPRESENTATIONS AND WARRANTIES OF BUYER.........................................................35
         5.1      Making of Representations and Warranties..........................................35
         5.2      Organization of Buyer.............................................................35
         5.3      Authority of Buyer................................................................36
         5.4      Finder's Fee......................................................................36

6.  COVENANTS OF BUYER..............................................................................37
         6.1      Making of Covenants and Agreement.................................................37
         6.2      Notice of Default.................................................................37
         6.3      Consummation of Agreement.........................................................37

7.  CONDITIONS......................................................................................37
         7.1      Conditions to the Obligations of Buyer............................................37
         7.2      Conditions to Obligations of Seller...............................................38
         7.3      Further Conditions to Obligations of Buyer and Seller.............................39

8.  INTENTIONALLY OMITTED...........................................................................40

9.  RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING....................................................40
         9.1      Survival of Warranties............................................................40
         9.2      Payment of Excluded Liabilities...................................................40
         9.3      Payment of Assumed Liabilities....................................................40


                                         (ii)

<PAGE>


10.  INDEMNIFICATION................................................................................40
         10.1     Indemnification by Seller.........................................................40
         10.2     Limitations on Indemnification by Seller..........................................41
         10.3     Indemnification by Buyer..........................................................42
         10.4     Limitation on Indemnification by Buyer............................................43
         10.5     Notice; Defense of Claims.........................................................44

11.  MISCELLANEOUS..................................................................................45
         11.1     Warranty Obligations..............................................................45
         11.2     Fees and Expenses.................................................................45
         11.3     Governing Law.....................................................................45
         11.4     Notices...........................................................................46
         11.5     Entire Agreement..................................................................47
         11.6     Assignability; Binding Effect.....................................................47
         11.7     Execution in Counterparts.........................................................47
         11.8     Amendments........................................................................47
         11.9     Publicity and Disclosures.........................................................47
         11.10    Agreement to Continue in Full Force...............................................48
         11.11    Dispute Resolution................................................................48
         11.12    Severability......................................................................49

</TABLE>



                                       (iii)

<PAGE>


<TABLE>

<S>                        <C>
EXHIBITS

Exhibit 2.3(b)             December 31 Statement of Net Tangible Assets
Exhibit 2.3(c)             Inventory Obsolescence Reserve Calculation
Exhibit 2.14               Pension Matters
Exhibit 4.4                Notification Letter to Third Parties
Exhibit 7.1(g)             Form of Distribution Agreement
Exhibit 7.1(h)             Form of License Agreement for Pharmacia Biotech Name
Exhibit 7.1(i)             Form of License Agreement for Amersham Name
Exhibit 7.1(k)             Bill of Sale to Buyer
Exhibit 7.1(n)             Assignment of Contracts and Assumption of Liabilities

SCHEDULES

Schedule 2.1(a)(ii)        Off-Site Assets
Schedule 2.1(a)(v)         Leased Personal Property
Schedule 2.1(a)(vii)       Contracts of Seller and Purchase Orders Issued by 
                           Seller
Schedule 2.1(a)(viii)      Purchase Orders of Customers Received by Seller
Schedule 2.1(a)(xi)        Computer Software
Schedule 2.1(d)(i)         AP Biotech Receivables
Schedule 2.1(d)(iii)       Affiliate Contracts
Schedule 2.1(d)(v)         Network Software
Schedule 2.2(a)            Assumed Liabilities (Section 2.2(b); Section 11.1)
Schedule 2.10              Required Consents and Approvals (Section 3.4(d); 
                           Section 3.10(c))
Schedule 3.4(b)            Leasehold Property
Schedule 3.4(c)            Machinery, Equipment and Other Personal Property
                           (Section 2.1(a)(iv))
Schedule 3.5               Financial Statements
Schedule 3.7               Non-AP Biotech Receivables (Section 2.1(a)(vi))
Schedule 3.8               Inventory (Section 2.1(a)(i))
Schedule 3.9               Absence of Certain Changes
Schedule 3.10              Buyer Purchased Intellectual Property 
                           (Section 2.1(a)(xiv))
Schedule 3.11              Assumed Contracts (Section 2.1(a)(xi); Section 2.1(a)
                           (xiv); Section 2.2(a); Section 2.10; Section 3.10(a);
                           Section 3.10(c))
Schedule 3.14              Insurance
Schedule 3.18              Permits
Schedule 3.22              Environmental Matters
Schedule 3.23              Officers
Schedule 3.24              Employees (Section 2.1(a)(xiii); Section 3.9(f))
Schedule 3.25              Customers, Distributors and Suppliers
Schedule 3.26              Vehicles (Section 2.1(ix))

</TABLE>



                                      (iv)


<PAGE>

                            ASSET PURCHASE AGREEMENT

         AGREEMENT entered into on March 2, 1999 by and among Biochrom Limited
(a limited liability company incorporated in England with registered number
3526954 whose registered office is at Unit 22 Phase I Cambridge Science Park,
Milton Road, Cambridge CB4 4FJ England) ("Buyer") and Pharmacia Biotech
(Biochrom) Limited (a limited liability company incorporated in England with
registered number 974213 whose registered office is at 22 Cambridge Science
Park, Milton Road, Cambridge CB4 4FJ England) ("Seller"), and Pharmacia &
Upjohn, Inc. (a company incorporated in the State of Delaware), as guarantor of
Seller's obligations hereunder (the "Seller Guarantor"), and Harvard Apparatus,
Inc. (a company incorporated in the Commonwealth of Massachusetts), as guarantor
of Buyer's obligations hereunder ("HAI" or the "Buyer Guarantor").

                              W I T N E S S E T H:

         WHEREAS, Seller principally carries on the business of manufacturing
and selling chemical analysis instruments;

         WHEREAS, Seller is empowered by its Memorandum of Association to sell
or dispose of its assets and undertaking (wholly or in part) for such
consideration and on such terms as it thinks fit and there is nothing in any
deed or document restricting or prohibiting the sale of the goodwill or other
assets of Seller which are the subject matter of this Agreement;

         WHEREAS, subject to the terms and conditions set forth herein, Buyer
desires to purchase from Seller, and Seller desires to sell, transfer and assign
to Buyer, substantially all of the assets of Seller;

         WHEREAS, subject to the terms and conditions hereof, Buyer desires to
purchase said assets of Seller for the consideration specified herein and the
assumption by Buyer only of certain liabilities and obligations of Seller
specified herein; and

         WHEREAS, as a condition to the consummation of the transactions
contemplated hereby, Buyer will enter into a Distribution Agreement (the
"Distribution Agreement") with Amersham Pharmacia Biotech AB, a Swedish
corporation ("AP Biotech"), on the Closing Date (as hereinafter defined).

         NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:

                               1. INTERPRETATION

         In the interpretation of this Agreement:

         1.1      The headings are for convenience only and shall not affect the
interpretation hereof;


<PAGE>

         1.2      References in this Agreement to Sections, Recitals or
Schedules are to sections of and recitals or schedules to this Agreement and all
of the foregoing are included in any reference to this Agreement;

         1.3      Unless the context otherwise requires the singular shall
include the plural and vice versa, and references to persons shall include
bodies corporate, unincorporated associates and partnerships;

         1.4      References in this Agreement to any statute or statutory
provision or EC Directive shall include any statute or statutory provision or EC
Directive which amends, extends, consolidates or replaces the same or which has
been amended, extended, consolidated or replaced by the same up to the Closing
Date and shall include any order, regulation, instrument or other subordinate
legislation made under the relevant statute or statutory provision or EC
Directive; and

         1.5      References to any legal term of the United States or a state
therein for any right, action, remedy, method of judicial proceeding, legal
document legal status, court, official or any legal concept or thing shall in
respect of any jurisdiction other than the United States or a state therein be
deemed to include what most nearly approximates in that jurisdiction to the
legal term of the United States or a state therein.

         1.6      The term "Business" shall refer to the manufacture, design,
development and sale of all products sold by Seller prior to the Closing,
including without limitation, spectrophotometers and amino acid analyzers and
related accessories, chemicals, service support, software and spare parts as
conducted by Seller prior to the Closing, with the exception of the Excluded
Assets as provided in Section 2.1(d).

         1.7      The term "Business Day" shall mean a day, other than Saturday,
when banks are open for business in London.

                         2. PURCHASE AND SALE OF ASSETS

         2.1      SALE OF ASSETS

                  (a)      Subject to the provisions of this Agreement, at the
Closing (as defined in Section 2.4 hereof) Seller shall sell and transfer free
from all liens, charges and encumbrances to Buyer and Buyer shall purchase with
effect from the Closing Date all of Seller's Business as a going concern
comprising the right, title and interest in all of the properties and assets of
Seller (except as hereinafter provided in Sections 2.1(c) and 2.1(d)) of every
kind and description, tangible and intangible, real, personal or mixed, and
wherever located, including, without limitation, the following:


                                       2


<PAGE>

                           (i)      all inventory, stock in trade,
work-in-process, finished goods and raw materials owned by Seller (collectively,
the "Inventory"), including, without limitation, such items set forth on
SCHEDULE 3.8 attached hereto;

                           (ii)     (A)     all assets, including, without 
limitation, printed circuit board artwork and all patterns, drawings and tooling
owned by Seller which are not located on the Leasehold Property (as hereinafter
defined) (the "Off-Site Assets"), it being understood by the parties hereto that
SCHEDULE 2.1(a)(ii) contains information as to the name, address and telephone
number of each third party where such assets are located as well as information
identifying the tooling located at each such location;

                                    (B)     all printed circuit board artwork
and all patterns, drawings and tooling owned by Seller which are located on the
Leasehold Property (as defined hereinafter);

                           (iii)    the goodwill of Seller in connection with
Seller's Business and the exclusive right to represent itself as carrying on
Seller's Business in succession to Seller (the "Goodwill");

                           (iv)     all machinery, equipment and tangible
personal property owned by Seller including, without limitation, (A) the
machinery, equipment and tangible personal property listed on SCHEDULE 3.4(c)
attached hereto, (B) all tooling (including molds), spare parts, fixtures,
castings, and other tangible assets related to or used in connection with such
scheduled machinery and equipment and all other tools, spare parts, fixtures and
other tangible assets and (C) office equipment, telephones, facsimile machines,
desks, tables, chairs and file cabinets (all of the foregoing described in
clauses (A), (B) and (C) collectively, the "Equipment");

                           (v)      the leases to all machinery, equipment and
tangible personal property leased by Seller, including, without limitation,
those listed on SCHEDULE 2.1(a)(v) (but excluding leases of vehicles);

                           (vi)     all trade receivables of Seller (other than
those representing accounts of AP Biotech or its affiliates and Seller Guarantor
or its affiliates) including, without limitation, those listed on SCHEDULE 3.7
attached hereto, but excluding those trade receivables expressly identified on
such SCHEDULE 3.7 as being delinquent (the "Delinquent Non-AP Biotech
Receivables"), which such Delinquent Non-AP Biotech Receivables will not be
conveyed to Buyer pursuant to this Agreement (the "Non-AP Biotech Receivables");

                           (vii)    All contracts of Seller and purchase orders
(and the benefits thereunder) issued by Seller in relation to Seller's Business
entered into or issued prior to the Closing Date, including without limitation
those listed on SCHEDULE 2.1(a)(vii), and under which the obligations of all the
parties thereto have not at the Closing Date been fully performed, including,
without limitation, Seller's contracts with third party suppliers and


                                       3


<PAGE>

distributors (but excluding contracts with employees, leases and customer
purchase orders received by Seller);

                           (viii)   all purchase orders of customers received by
Seller prior to the Closing Date, including without limitation as set forth in
SCHEDULE 2.1(a)(viii), and under which the obligations of all the parties
thereto have not at the Closing Date been fully performed;

                           (ix)     the leases to the vehicles leased by Seller
in connection with Seller's Business at the Closing Date, listed in SCHEDULE
3.26 (the "Vehicles");

                           (x)      such manufacturers' guarantees and
warranties, if any, relating to the Equipment and the Vehicles (or any of them)
as may be in force at the Closing Date insofar as the same are capable of
assignment and the benefit of any claims against such manufacturers relating to
the Equipment and Vehicles (including without limitation any claim for breach of
the manufactures' guarantees and warranties);

                           (xi)     all computer software (except with respect
to that computer software specified on SCHEDULE 3.11 as not being assignable
without consent, which such computer software shall be handled in accordance
with Section 2.10) used by Seller in connection with the operation of Seller's
Business, including without limitation as set forth on SCHEDULE 2.1(a)(xi)
(excluding the network software set forth in Section 2.1(d)(v));

                           (xii)    the accounting and financial records of
Seller and the fiscal records contemplated in Section 4.8;

                           (xiii)   the personnel records and employment
contracts of the Employees (as defined hereinafter), such Employees being listed
on SCHEDULE 3.24;

                           (xiv)    except with respect to the Biochrom Name (as
hereinafter defined), all intellectual property rights of Seller (whether owned,
licensed or otherwise), including without limitation trade secrets, proprietary
information, designs and design rights, styles, technologies, inventions,
know-how, formulae, processes, procedures, research records, test information,
software and software documentation (except with respect to that computer
software specified on SCHEDULE 3.11 as not being assignable without consent,
which such computer software shall be handled in accordance with Section 2.10),
market surveys, marketing know-how and manufacturing, research and technical
information, trade names, service marks and trademarks (except as provided in
Section 2.1(d)(ii)) including, without limitation, the trade names and
trademarks listed in SCHEDULE 3.10 attached hereto, and, subject to Section 2.12
hereof and any necessary third party consent set forth on SCHEDULES 2.10,
information and materials contained in Seller's world-wide-web site (the "Web
Site"), the address of which is set forth on SCHEDULE 3.10 attached hereto (all
such intellectual property, collectively, the "Buyer Purchased Intellectual
Property");


                                       4


<PAGE>

                           (xv)     the names and addresses of all end-user
customers world wide during each of the last three (3) years owned by or in the
possession of Seller (the "Customer List"), end-user customer records and
histories owned by or in the possession of Seller (it being understood by the
parties that the foregoing is not intended to include the end-user customers of
AP Biotech owned or in the possession of AP Biotech), lists of suppliers and
vendors and all records relating thereto, engineering drawings, records with
respect to production, engineering, product development, costs, advertising,
catalogues, photographs, sales materials, purchasing materials, manufacturing
and quality control records and procedures, research and development files, data
and laboratory books, media materials and plates and other records; and

                           (xvi)    except as set forth in Section 2.1(d)
hereof, all other assets (i.e., other than as described in paragraphs (i) - (xv)
above) and properties of every nature whatsoever tangible and intangible, and
wherever located, to the extent transferable, of Seller, including without
limitation Seller's current phone and fax numbers and electronic mail addresses,

         The assets and property of Seller being sold to and purchased by Buyer
under this Section 2.1(a) are hereinafter sometimes referred to as the "Subject
Assets."

                  (b)      Intentionally Omitted.

                  (c)      Subject to the provisions of this Agreement, at the
Closing, Seller shall, in consideration of the Purchase Price, and without any
further consideration payable to Seller, sell and transfer free from all liens,
charges and encumbrances to HAI and HAI shall purchase and acquire, with effect
from the Closing Date, all rights, title and interest in and to the name
"Biochrom" and all related and associated logos and trademarks (except as set
forth in Section 2.13) (collectively, the "Biochrom Name" and, together with the
Buyer Purchased Intellectual Property, the "Intellectual Property").

                  (d)      Notwithstanding anything to the contrary in this
Agreement, there shall be excluded from such purchase and sale the following
property and assets:

                           (i)      all cash in hand and at bank, cash
equivalents, refunds (including tax refunds), taxes advanced, collected or
withheld by Seller, intra-group cash pool receivables, and all other receivables
of Seller other than the Non-AP Biotech Receivables, including, without
limitation, the receivables listed on SCHEDULE 2.1(d)(i);

                           (ii)     all rights, title and interest in and to the
names "Upjohn," "Pharmacia Biotech," "Amersham" and "LKB" and all related and
associated logos and trademarks and all licenses to or from third parties with
respect to each of the foregoing, except to the extent provided for in the
license agreements contemplated by Sections 7.1(h) and 7.1(i) hereto, the forms
of which are attached hereto as EXHIBITS 7.1(h) and 7.1(i);


                                       5


<PAGE>

                           (iii)    those contracts set forth on SCHEDULE
2.1(d)(iii) between or among any of Seller, AP Biotech or its affiliates and
Seller Guarantor or its affiliates;

                           (iv)     all the statutory books and statutory and
fiscal records of Seller other than the fiscal records contemplated in Section
4.8;

                           (v)      as set forth on SCHEDULE 2.1(d)(v), the
network software of AP Biotech and Seller Guarantor that is used by Seller;

                           (vi)     the Distribution Agreement between Seller
and Transgenomics Inc.;

                           (vii)    any and all assets owned by AP Biotech,
including its inventory of products manufactured and sold by Seller to AP
Biotech and its affiliates, as well as any accounts receivable for such products
owing to AP Biotech and its affiliates from their customers; and

                           (viii)   the assets of Innovir Limited that are
located in the subleased portion of the Leasehold Property (as hereinafter
defined).

         The assets and property of Seller which are excluded from the Subject
Assets under this Section 2.1(d) are hereinafter sometimes referred to as
"Excluded Assets."

         2.2      LIABILITIES.

                  (a)      Upon the sale and purchase of the Subject Assets,
Buyer agrees to assume (i) the liabilities of the types set forth on EXHIBIT
2.3(b) and SCHEDULE 2.2(a) hereto that are unpaid on the Closing Date, in
accordance with their terms (not in excess of the amounts set forth therein and
subject to paragraph (b) of this Section 2.2) (collectively, the "Assumed
Liabilities") and (ii) all obligations arising or coming due under the Assumed
Contracts (as defined below), in accordance with their terms, for the period
from and after the Closing Date with respect to acts or services to be performed
by Buyer under such Assumed Contracts after the Closing Date. The Assumed
Liabilities and the obligations under the Assumed Contracts are the only
liabilities and obligations of Seller existing on or prior to the Closing Date
(including, without limitation, contractual liabilities and obligations) to be
assumed by Buyer under this Agreement. Notwithstanding anything contained herein
to the contrary, the Assumed Liabilities shall not include any trade payables
representing accounts of AP Biotech or its affiliates or Seller Guarantor or its
affiliates. The assumption of the Assumed Liabilities and the Assumed Contracts
by Buyer hereunder shall not enlarge any rights of third parties under any
contracts or arrangements with Buyer or Seller or any of their respective
affiliates or subsidiaries. The "Assumed Contracts" shall mean only those
contracts or agreements to be assumed by Buyer as expressly identified in (i)
Schedule 3.11 and (ii) Sections 2.1(a)(vii) and 2.1(a)(viii).


                                       6


<PAGE>

                  (b)      Notwithstanding anything to the contrary contained in
this Agreement, in no event shall the amounts assumed with respect to those
Assumed Liabilities of the types that are set forth on EXHIBIT 2.3(b) and
SCHEDULE 2.2(a) exceed in the aggregate $1,300,000 U.S. dollars at the exchange
rate set forth in EXHIBIT 2.3(b). All liabilities and obligations not assumed by
Buyer under this Agreement are referred to herein as "Excluded Liabilities."

                  (c)      Except for the Assumed Liabilities and the Assumed
Contracts, Buyer shall not assume or be bound by any obligations or liabilities
of Seller or any affiliate of Seller of any kind or nature, known, unknown,
accrued, absolute, contingent or otherwise, whether now existing or hereafter
arising.

                  (d)      Subject to paragraph (c) above, Seller shall be
solely (as between Seller and Buyer) responsible for and pay any and all debts,
losses, damages, obligations, liens, assessments, judgments, fines, disposal and
other costs and expenses, liabilities and claims, including, without limitation,
interest, penalties and fees of counsel, engineers and experts, as the same are
incurred, of every kind or nature whatsoever (all the foregoing being a "Claim"
or the "Claims"), made by or owed to any person to the extent any of the
foregoing relates to (i) the Excluded Assets, (ii) the operations and assets of
Seller's Business or any other business or enterprise of Seller and arises in
connection with or on the basis of events, acts, omissions, conditions, or any
other state of facts occurring or existing solely prior to or on the Closing
Date (including, in each case, without limitation, any Claim relating to or
associated with tax matters, any failure to comply with applicable laws and/or
permitting or licensing requirements and personal injury and property damage
matters) or (iii) any on-account service charge, balancing service charge or
insurance payments relating to the Leasehold Property (as hereinafter defined)
which arise in connection with or on the basis of events, acts, omissions,
conditions, tenant's covenants or any other state of facts occurring or existing
solely prior to or on the Closing Date or accruing after the Closing Date in
respect of a period solely prior to or on the Closing Date. Seller agrees with
Buyer that Seller shall be solely responsible (as between Seller and Buyer) for
any and all Claims for injury (including death) or Claims for damage, direct or
consequential, resulting from or connected with products manufactured by or
services provided by Seller or its affiliates prior to or on the Closing Date,
and Buyer shall have no liability for such Claims.

                  (e)      Subject to paragraph (c) above, Buyer shall be solely
(as between Buyer and Seller) responsible for and pay any and all Claims made by
or owed to any person to the extent they relate to (i) the Assumed Liabilities,
(ii) the operations and assets (including the Subject Assets) of Buyer's
business after the Closing Date and arise in connection with or on the basis of
events, acts, omissions, conditions or any other state of facts occurring or
existing solely after the Closing Date (including, in each case, without
limitation, any Claim relating to or associated with tax matters, any failure to
comply with applicable laws and/or permitting or licensing requirements and
personal injury and property damage matters) or (iii) any on-account service
charge, balancing service charge or insurance payments relating to the Leasehold
Property (as hereinafter defined) which arise in connection with or on the basis
of events, acts, omissions, conditions, tenant's covenants or any other state of
facts occurring or 


                                       7


<PAGE>

existing solely after the Closing Date or accruing after the Closing Date in 
respect of a period solely after the Closing Date. Buyer agrees with Seller 
that Buyer shall be solely (as between Buyer and Seller) responsible for any 
and all warranty Claims or Claims for injury (including death) or Claims for 
damage, direct or consequential, resulting from or connected with products 
manufactured by or services provided by Buyer after the Closing Date, and 
Seller shall have no liability for such Claims.

                  (f)      Any Claim, other than for the payment of the Assumed
Liabilities, relating to operations and assets of Seller's Business and arising
in connection with or on the basis of events, acts, omissions, conditions or any
other state of facts occurring or existing both before and after the Closing
Date will be apportioned between Seller and Buyer according to their relative
degrees of causation.

                  (g)      Notwithstanding anything contained in paragraphs (d),
(e) or (f) of this Section 2.2 to the contrary, such paragraphs (d), (e) or (f)
of this Section 2.2 shall not be applicable to any Claim with respect to
environmental and worker health and safety matters or pension matters or
employment matters (to the extent covered by Section 2.11 hereof), it being the
express agreement and intent of the parties hereto that only Sections 10.1(f)
and 10.3(e) shall apply to indemnification for a Claim with respect to
environmental and worker health and safety matters and that only Section 3.21
and EXHIBIT 2.14 hereto shall apply to indemnification for a Claim with respect
to pension matters and that Section 10.1(d) shall apply to indemnification for a
Claim with respect to employment matters (to the extent not covered by Section
2.11 hereof).

         2.3      PURCHASE PRICE AND PAYMENT.

                  (a)      In consideration of the sale by Seller to Buyer of
the Subject Assets (and the related sale by Seller to HAI of the Biochrom Name),
subject to Buyer's agreement to assume the Assumed Liabilities and the Assumed
Contracts and the satisfaction of all of the conditions contained herein, Buyer
agrees that at the Closing it will deliver to Seller or otherwise pay as
instructed by Seller the sum of Six Million Three Hundred Sixty Two Thousand
Five Hundred Seventy Four U.S. Dollars ($6,362,574) (the "Purchase Price"),
which amount includes Six Hundred Thousand U.S. Dollars ($600,000) which is
being paid by HAI with respect to HAI's purchase of the Biochrom Name, by bank
cashiers checks in Boston Clearing House Funds or by wire transfer.

                  (b)      The Purchase Price is premised upon the Statement of
Net Tangible Assets as of December 31, 1998, which is set forth at EXHIBIT
2.3(b) hereto, together with the exchange rate used in the preparation thereof
(the "December 31 Statement").

                  (c)      Immediately following the Closing Date, the parties
shall, if so requested by Buyer, jointly perform a physical count of the
Inventory. In the event that Buyer does not so request such a physical count of
the Inventory, the parties agree that, for purposes of the Closing Statement (as
defined below), the Inventory count shall be as reflected in the 


                                       8


<PAGE>

December 31 Statement adjusted based upon the books and records kept by 
Seller in the ordinary course of business, consistent with past practice. Any 
obsolete or excess Inventory shall be written off on a basis consistent with 
and in accordance with the principles and practices described at EXHIBIT 2.3(c) 
hereto.

                  (d)      Within forty five (45) days after the Closing Date,
Buyer shall at its expense prepare and deliver to Seller a Statement of Net
Tangible Assets as of the Closing Date (the "Closing Statement"). The Closing
Statement shall be prepared in accordance with this Agreement, including the
Exhibits hereto, and the practices and methodology used by Seller in preparing
the December 31 Statement; PROVIDED, HOWEVER, that in the event of a conflict
between the Agreement, including the Exhibits hereto, and the practices and
methodology used by Seller in preparing the December 31 Statement, then this
Agreement, including the Exhibits thereto, shall govern. The Closing Statement
shall be in the same format as the December 31 Statement, and shall consist
solely of an update of the December 31 Statement from December 31, 1998 through
the Closing Date.

                  (e)      The Purchase Price shall be increased one dollar for
each dollar that the total sum in respect to Net Tangible Assets exceeds
$1,055,524; the Purchase Price shall be decreased one dollar for each dollar
that the total sum in respect to Net Tangible Assets is less than $1,055,524.
For purposes of this Section 2.3, Net Tangible Assets shall be determined by
subtracting the total liabilities set forth on the Closing Statement from the
total assets set forth on the Closing Statement.

                  (f)      If Seller disagrees with the Closing Statement,
Seller shall, within ten (10) Business Days after receipt thereof, furnish to
Buyer a written statement of such disagreement, together with an explanation of
the reasons therefor. If within such ten (10) Business Day period, Buyer does
not receive such a written statement of disagreement from Seller, Seller shall
be deemed to have accepted the Closing Statement for all purposes of this
Agreement. If Buyer does receive such a written statement of disagreement from
Seller within such ten (10) Business Day period, then within ten (10) Business
Days of such receipt, senior executives of Buyer and Seller shall discuss, in
person, by telephone or by video conference, their disagreement in order to
attempt to resolve it through good faith negotiations. If Buyer and Seller are
unable to resolve their disagreement within forty-five (45) Business Days after
the delivery of the Closing Statement to Seller, the disagreement shall be
submitted for determination to Arthur Andersen, LLP (so long as Arthur Andersen,
LLP shall not have acted on behalf of any party hereto in the three (3) year
period prior to submission of the disagreement), which determination shall be
final and binding upon Buyer and Seller. Such determination by Arthur Andersen,
LLP shall be made in accordance with this Agreement, including the Exhibits
hereto, and the practices and methodology used by Seller in preparing the
December 31 Statement; PROVIDED, HOWEVER, that in the event of a conflict
between the Agreement, including the Exhibits hereto, and the practices and
methodology used by Seller in preparing the December 31 Statement, then this
Agreement, including the Exhibits hereto, shall govern. The expenses incurred by
Arthur Andersen, LLP in making such determination shall be borne equally by
Buyer and Seller. Each of the parties hereto hereby represents that 


                                       9


<PAGE>

Arthur Andersen, LLP has not acted on its behalf in the three (3) year period 
prior to the Closing Date.

                  (g)      The amount of any adjustment to the Purchase Price
shall be paid by the relevant party within fifteen (15) Business Days after the
later of (i) delivery of the Closing Statement if accepted by Seller and (ii)
the earlier of the resolution of any dispute by Buyer and Seller following
notification of their disagreement or a determination by Arthur Andersen, LLP
pursuant to paragraph (f) above. Any such cash amount shall be paid by cashier's
or certified check or by wire transfer of immediately available funds to an
account designated by the party receiving the funds.

         2.4      TIME AND PLACE OF CLOSING. The closing of the purchase and
sale provided for in this Agreement (herein called the "Closing") shall be held
at the offices of Goodwin, Procter & Hoar LLP at 53 State Street, Boston,
Massachusetts. For the purpose of passage of title and risk of loss, allocation
of expenses and other legal, economic or financial effects, the Closing when
completed shall be deemed to have occurred at 12:00 noon, Eastern Standard Time,
on February 26, 1999 (such date and time being referred to herein as the
"Closing Date").

         2.5      CHANGE OF SELLER'S NAME. On or about the Closing Date, but in
no event later than the date five (5) Business Days after the Closing Date,
Seller shall change its name to a corporate name which does not include the word
"Biochrom" and each of Seller and Seller Guarantor further agrees, from and
after the Closing Date not to use as a trade or business name or mark, or carry
on a business under a title containing, the word "Biochrom" or any other word(s)
colorably resembling the same and they each will at all times procure that none
of their respective affiliates will carry on any such business under such name
or names. Seller shall file, within the requisite time period as set out in the
Companies Act 1985, at the Companies Registry forthwith the resolutions as to
change of name applicable to it with the appropriate fee and use all reasonable
endeavors to obtain the requisite Certificate of Incorporation on Change of Name
from the Companies Registry in respect thereof effective as soon as is
practicable.

         2.6      POST-CLOSING ACCESS.

                  (a)      After the Closing, Buyer shall afford to Seller and
its accountants and attorneys, for any reasonable legal or business purpose,
including defending third party claims and preparing such tax returns of Seller
as may be reasonably required after the Closing, reasonable access during normal
business hours and subject to reasonable notice to the books and records of
Seller delivered to Buyer under this Agreement and shall permit Seller, at
Seller's expense, to make extracts and copies therefrom.

                  (b)      After the Closing, Seller shall afford to Buyer and
its accountants and attorneys, for any reasonable legal or business purpose,
reasonable access during normal business hours and subject to reasonable notice
to the statutory books and statutory and fiscal 


                                       10


<PAGE>


records of Seller retained by it in accordance with Section 2.1(d)(iv), and 
shall permit Buyer, at Buyer's expense, to make extracts and copies therefrom.

         2.7      FURTHER ASSURANCES.

                  (a)      The Law of Property (Miscellaneous Provisions) Act
1994 shall not apply to the dispositions of property made under or pursuant to
this Agreement.

                  (b)      Seller shall, from time to time on being reasonably
required to do so by Buyer, now or at any time in the future, do or procure the
doing of all such acts and/or execute or procure the execution of all such
documents in a form reasonably satisfactory to Buyer as Buyer may reasonably
consider necessary for giving full effect to this Agreement and securing to
Buyer the full benefit of the rights, powers and remedies conferred upon Buyer
in this Agreement.

                  (c)      Seller shall promptly transfer or deliver to Buyer
any of the Subject Assets delivered to, or retained or received by, Seller after
the Closing Date.

                  (d)      In respect of any of the Leasehold Property (as
hereinafter defined) which is let, Seller shall deliver to Buyer authorities
signed by Seller addressed to the relevant tenants if any, informing them of the
sale and requiring them henceforth to pay all rents and other amounts due to the
landlord to Buyer.

         2.8      ALLOCATION OF PURCHASE PRICE. Within forty-five (45) days
after the Closing or, if later, within ten (10) days following the acceptance by
Seller of the Closing Statement in accordance with Section 2.3(d) or the
resolution of a dispute with respect to the Closing Statement in accordance with
Section 2.3(f), Buyer's auditors shall, with the cooperation of Seller's
auditors, issue a certificate apportioning the consideration payable hereunder
amongst the Subject Assets for the purpose of enabling Buyer to file Stamps Form
No. 22. If such a certificate is not delivered within fourteen (14) days after
the date specified in this Section 2.8 and/or in the event Seller gives notice
to Buyer of its dissatisfaction with the same within fourteen (14) days after
receipt thereof, at the request of either party, senior executives of Buyer and
Seller shall discuss, in person, by telephone or by video conference, their
disagreement with respect to the certificate in order to attempt to resolve it
through good faith negotiations. If Buyer and Seller are unable to resolve their
disagreement within forty-five (45) Business Days after the delivery of the
Closing Statement to Seller, the disagreement shall be submitted for
determination to Arthur Andersen, LLP, which determination shall be final and
binding upon Buyer and Seller. The expenses incurred by Arthur Andersen, LLP in
making such determination shall be borne equally by Buyer and Seller.

         2.9      NON-AP BIOTECH ACCOUNTS RECEIVABLE.

                  (a)      Buyer shall have the right and authority, and shall
use commercially reasonable efforts consistent with past practice, to collect
the Non-AP Biotech Receivables


                                  11

<PAGE>


after the Closing Date. In the event that subsequent to the Closing, Buyer 
receives a check or other instrument on account of such Non-AP Biotech 
Receivables in the name of Seller (a "Non-AP Biotech Receivables 
Instrument"), Buyer shall deliver such Non-AP Biotech Receivables Instrument 
to the attention of Graham Lee (or such other authorized person as Seller 
shall notify Buyer in writing) at the address and facsimile number set forth 
in Section 11.4 hereof. Upon receipt of such Non-AP Biotech Receivables 
Instrument, Mr. Lee shall endorse the Non-AP Biotech Receivables Instrument 
over to Buyer (without set-off) and return the Non-AP Biotech Receivables 
Instrument to Buyer within two (2) business days of such receipt. At Buyer's 
request, Seller shall use commercially reasonable efforts to assist Buyer in 
collecting the Non-AP Biotech Receivables. Any and all amounts received by 
Seller in respect of any Non-AP Biotech Receivables shall be promptly 
remitted to Buyer. All payments received by Buyer from a customer owing 
Non-AP Biotech Receivables which do not designate a specific invoice to which 
they should be applied shall be applied on a "first in, first out" basis with 
respect to non-disputed Non-AP Biotech Receivables (i.e., proceeds received 
shall be applied to the oldest outstanding non-disputed Non-AP Biotech 
Receivables of such customer). To the extent consistent with past practice 
Buyer shall not accept any order placed by a customer or distributor that is 
past due with respect to any Non-AP Biotech Receivable until such Non-AP 
Biotech Receivable has been paid-in-full by such customer or distributor, 
unless such customer or distributor is past due as a result of a dispute in 
connection with a Non-AP Biotech Receivable.

                  (b)      (i)      Upon the demand by Buyer at any time after 
two hundred seventy (270) days following the date of any invoice relating to any
Non-AP Biotech Receivable which remains uncollected, Seller shall pay to Buyer
the amount of such uncollected Non-AP Biotech Receivable. In the event of any
such payment, (A) Buyer shall assign to Seller all of Buyer's right, title and
interest in and to such uncollected Non-AP Biotech Receivable (collectively, the
"Re-Assigned Non-AP Biotech Receivables") and shall furnish Seller with all
files concerning such uncollected Non-AP Biotech Receivable and (B) except as
otherwise provided in Section 2.9(c) below, Buyer shall have no further
responsibilities with respect to such uncollected Non-AP Biotech Receivable
except to remit promptly to Seller any amounts subsequently received by it on
account of such uncollected Non-AP Biotech Receivable.

                           (ii)     If subsequent to the Closing, Buyer collects
Non-AP Biotech Receivables in an amount in excess of the Non-AP Biotech
Receivables set forth on the Closing Statement, any such excess amount shall be
returned to Seller within two (2) business days of receipt of such Non-AP
Biotech Receivables.

                  (c)      Buyer shall use commercially reasonable efforts
consistent with past practice to assist Seller in collecting the Re-Assigned
Non-AP Biotech Receivables and the Delinquent Non-APB Receivables. To the extent
consistent with past practice, Buyer shall not accept any order placed by a
customer or distributor owing either a Re-Assigned Non-AP Biotech Receivable or
a Delinquent Non-AP Biotech Receivable until such Re-Assigned Non-AP Biotech
Receivable or Delinquent Non-AP Biotech Receivable, as the case may be, has been
paid-in-full by such customer or distributor, unless such Re-Assigned Non-AP
Biotech


                                       12

<PAGE>


Receivable or Delinquent Non-AP Biotech Receivable has not been paid as a 
result of a dispute in connection therewith.

         2.10     REQUIRED CONSENTS; CONSENTS AND ASSETS NOT DELIVERED AT
                  CLOSING.

                  (a)      Seller shall use commercially reasonable efforts to
obtain the consents listed in SCHEDULE 2.10 (the "Required Consents") before or
after the Closing Date. Notwithstanding any other provision of this Agreement,
this Agreement shall not constitute an agreement to assign any contract or lease
requiring a third-party consent if such an agreement to assign or an attempted
assignment would constitute a breach thereof.

                  (b)      In relation to any of the Assumed Contracts for which
a third party consent is not obtained by Seller in accordance with paragraph (a)
of this Section 2.10 and unless and until any such contract or lease shall be so
assigned, Buyer shall (insofar as Buyer has notice of them and as it is lawful
and practicable) perform as Seller's sub-contractor at the risk and cost of
Buyer and for Buyer's benefit the obligations of Seller thereunder from the
Closing Date on such terms as shall (insofar as aforesaid) give to Buyer the
benefits and obligations of each such contract or lease to the same extent as if
the same had been assigned to Buyer and Buyer shall indemnify Seller fully at
all times from and against all costs, proceedings, claims, demands and expenses
which may be incurred by Seller as a result of any failure by Buyer in the
performance of any such contract or lease in accordance with its terms after the
Closing Date, provided as concerns this Section 2.10(b) that the contract or
lease was an Assumed Contract. If Seller has not obtained such third party
consent within ninety (90) days of the Closing Date, Seller and Buyer shall
negotiate in good faith to provide Buyer with the substantially equivalent
benefit (in the reasonable judgment of Buyer) of any contract or lease the
Seller is unable to assign due to lack of third party consent. Any costs or
expenses incurred in providing Buyer with such benefit shall be borne by Seller.

                  (c)      In relation to any Subject Asset not assigned at the
Closing, Seller shall, from the Closing until the relevant Subject Asset has
been assigned to Buyer hold such asset in trust for Buyer, shall forthwith give
Buyer notice of any notices or other material communications or information
received by it in relation thereto and shall act under the direction of Buyer in
all matters relating to the relevant Subject Asset (so far as it lawfully may do
so).

         2.11     EMPLOYEES.

                  (a)      The parties acknowledge and agree that the sale of
Seller's Business from Seller to Buyer is a "relevant transfer" within the
meaning of the Transfer of Undertakings (Protection of Employment) Regulations
1981 (the "Employment Regulations") and the contracts of employment of the
Employees and Seller's rights, powers, duties and liabilities under or in
connection with such contracts will transfer to Buyer pursuant to the Employment
Regulations.


                                      13

<PAGE>


                  (b)      Seller undertakes to Buyer contracting for itself and
as agent for any successor in title to part or all of Seller's Business to
indemnify and keep indemnified Buyer from and against all and any costs, losses,
damages, expenses or claims suffered or incurred by Buyer or such successor as a
result of or in relation to:

                           (i)      any claim or other legal recourse by all or
any of those persons employed (including but not limited to the Employees) at or
prior to the Closing Date by Seller in Seller's Business in respect of any fact,
matter or omission concerning or arising from employment with Seller occurring
or arising on or prior to the Closing Date;

                           (ii)     any claim or other legal recourse in respect
of any fact or matter concerning or arising from employment with Seller;

                           (iii)    any claim or other legal recourse by any
former, current or future employee of Seller (or any of its associated employers
as defined in the Employment Rights Act 1996) other than the Employees against
Seller or its officers, employees, agents or shareholders concerning or relating
to any matter whatsoever;

                           (iv)     any claim or fine or other liability arising
out of a breach by Seller of its obligations under the Trade Union and Labour
Relations Consolidation Act 1992 or arising out of a failure by Seller to inform
and/or consult appropriate representatives as required by Regulation 10 of the
Employment Regulations or to comply with its obligations under Regulation 10
thereof; or

                           (v)      any claim by Employees for redundancy pay or
unfair dismissal, (basic award or compensatory or additional award) or pay in
lieu of notice, or unlawful deduction of wages or any discrimination claim or
damages for breach of contract in respect of any fact or matter concerning or
arising from employment with Seller occurring or arising on or prior to the
Closing Date.

                  (c)      If any contract of employment between Seller and any
of its employees other than the Employees shall as a result of the operation of
the provisions of the Employment Regulations have effect as if originally made
between Buyer and such employee, Buyer may terminate such contract forthwith,
and Seller shall indemnify and keep indemnified Buyer fully at all times from
and against all and any costs, losses, damages, claims, liabilities and expenses
of any nature suffered or incurred by Buyer as a result of or in relation to
such termination or that person's employment by Buyer or the operation of the
Employment Regulations upon that person's contract of employment.

                  (d)      Buyer undertakes to Seller contracting for itself and
as agent for any successor in title to part or all of Buyer's business to
indemnify and keep indemnified Seller from and against all and any costs,
losses, damages, expenses or claims suffered or incurred by Seller or such
successor as a result of or in relation to:


                                    14

<PAGE>


                           (i)      any claim or other legal recourse by all or
any of the Employees in respect of any fact or matter concerning or arising from
employment with Buyer occurring or arising solely after the Closing Date; and

                           (ii)     any claim or fine or other liability arising
out of a breach by Buyer of its obligations under the Trade Union and Labour
Relations Consolidation Act 1992 or arising out of a failure by Buyer to inform
or consult employee representatives as required by Regulation 10 of the
Employment Regulations or to comply with its obligations under Regulation 10(3)
thereof.

                  (e)      In the event that within six (6) months following the
Closing Date, the employment of up to three (3) employees of Buyer (who shall be
separately identified) is terminated for any reason, any amounts required to be
paid to any such employee(s) as a consequence of such termination pursuant to
the Seller's employment agreements and policies in effect on the Closing Date
and which are in excess of statutory redundancy or notice payments (if any)
shall be reimbursed by Seller to Buyer. Seller's obligation hereunder shall
include the reimbursement of salary and car benefits paid in lieu of notice of
termination on condition that the employee(s) do not in fact work for Buyer
(whether as employee(s) or otherwise) during the notice period. Seller shall not
be required to reimburse any other amounts payable to such employee(s),
including any amounts relating to claims for wrongful or unfair dismissal, for
unlawful deduction from wages or for unlawful discrimination by Buyer.

         2.12     WORLD WIDE WEB SITE. It is the express understanding and
intention of the parties hereto that the Web Site shall be assigned and
transferred to Buyer at the Closing. To the extent that the Web Site contains
references to Seller Guarantor or AP Biotech, Buyer agrees to remove any and all
such references as soon as practicable following the Closing unless otherwise
agreed upon with Seller Guarantor or AP Biotech. Seller agrees to cooperate in
good faith with Buyer in connection with the foregoing.

         2.13     LKB BIOCHROM TRADEMARK. Notwithstanding any other provision
herein, Seller shall not cause the "LKB Biochrom" Spanish trademark registration
number 1218194, dated February 20, 1990, to be assigned by AP Biotech to Buyer.
Promptly after the Closing, Seller shall cause AP Biotech to terminate and/or
cease using, and shall not permit any third party to use, the "LKB Biochrom"
trademark. If such trademark cannot be terminated, Seller shall cause AP Biotech
to not renew such registration upon its expiring and Seller shall cause AP
Biotech to not apply for any other registration of that trademark. Neither party
shall have any right to use such trademark. Seller and Buyer acknowledge and
agree that the "LKB" trademark is and shall continue to be the property of AP
Biotech and that the Biochrom Name shall become the property of Buyer Guarantor
on the Closing Date.

         2.14     PENSIONS. The provisions of EXHIBIT 2.14 hereto shall have
effect in relation to pensions.


                                    15

<PAGE>


         2.15     ASSIGNMENT OF TRADEMARKS. Within thirty (30) days following
the Closing Date, Seller shall assign to Buyer those trademarks listed in
SCHEDULE 3.10 hereto. The assignment documentation with respect to each
trademark shall be in a form recordable in each jurisdiction in which such
trademark is registered. Seller shall be responsible for any cost and expense
incurred in connection with providing Buyer with such assignments; PROVIDED,
HOWEVER, that Buyer shall be responsible for all costs and expenses incurred in
connection with the registration or recordation of such assignments.

                   3. REPRESENTATIONS AND WARRANTIES OF SELLER

         3.1      MAKING OF REPRESENTATIONS AND WARRANTIES. Seller hereby makes
to Buyer the representations and warranties contained in this Section 3. For the
purposes of this Agreement, references to "knowledge" or "best knowledge" of
Seller or "known" by Seller or words of similar import, shall be deemed to
include such knowledge as any executive officer employed by Seller at the
Closing Date or manager of Seller actually has. Furthermore:

                  (a)      Buyer has entered into this Agreement in reliance
upon the representations and warranties and the same shall survive the Closing
as provided in Section 9.1 hereof;

                  (b)      The benefit of the representations and warranties may
be assigned in whole or in part by Buyer in connection with an assignment of
this Agreement pursuant to Section 11.6 hereof; and

                  (c)      In connection with all representations and warranties
relating to the Leasehold Property, Seller shall not have been required to carry
out any Land Charges searches, Local Land Charges searches, Commons Registration
searches, HM Land Registry searches or Index Map searches and shall not have
made any other enquiries.

         3.2      ORGANIZATION AND QUALIFICATIONS OF SELLER. Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of England and Wales with full corporate power and authority to own or
lease its properties and to conduct its Business in the manner and in the places
where such properties are owned or leased or such Business is currently
conducted or proposed to be conducted. Seller has no subsidiaries.

         3.3      AUTHORITY OF SELLER.

                  (a)      Each of Seller and Seller Guarantor has or has
received full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Seller or
Seller Guarantor, respectively, pursuant to this Agreement. The execution,
delivery and performance by Seller and Seller Guarantor of this Agreement and
each such other agreement, document and instrument have been duly authorized by
all necessary action of Seller and Seller Guarantor, respectively, and their


                                    16

<PAGE>


respective shareholders, if required, and no other action on the part of Seller
or Seller Guarantor, or their respective shareholders, is required in connection
therewith.

                  (b)      This Agreement and each agreement, document and
instrument executed and delivered by Seller and Seller Guarantor pursuant to
this Agreement constitutes, or when executed and delivered will constitute,
valid and binding obligations of Seller and Seller Guarantor, respectively,
enforceable in accordance with their terms. The execution, delivery and
performance by Seller and Seller Guarantor of this Agreement and each such
agreement, document and instrument:

                           (i)      does not and will not violate any provision
of the Memorandum of Association of Seller or the Certificate of Incorporation
and By-laws of Seller Guarantor;

                           (ii)     does not and will not violate any laws of
England and Wales, the United States, or, to the best of its knowledge, any
nation, state or other jurisdiction applicable to Seller or Seller Guarantor;

                           (iii)    does not require Seller or Seller Guarantor
to obtain any approval, consent or waiver other than Required Consents or make
any filing prior to or on the Closing Date or, solely as a result of the
consummation of the transactions contemplated by this Agreement, following the
Closing Date with any person or entity (governmental or otherwise) that has not
been obtained or made; and

                           (iv)     does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give rise to a
right of termination of any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which Seller or Seller Guarantor is a party or by which the property of Seller
or Seller Guarantor is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the Subject Assets.

         3.4      FREEHOLD, LEASEHOLD AND PERSONAL PROPERTY.

                  (a)      FREEHOLD PROPERTY.  Seller owns no freehold property.

                  (b)      LEASEHOLD PROPERTY. Seller hereby makes the following
representations and warranties with respect to all those leasehold premises
known as Unit 22 Phase I Cambridge Science Park, Milton Road, Cambridge CB4 4FJ
England, comprised in a lease (the "Seller Lease") dated September 30, 1974 made
between the Master Fellows and Scholars of Trinity College, Cambridge ("Trinity
College"), LKB Biochrom Limited and LKB Instruments Limited (the "Leasehold
Property"), with the exceptions set forth in the disclosure letter attached
hereto as SCHEDULE 3.4(b):


                                      17

<PAGE>


                           (i)      TITLE. Seller has not received notice from
the freehold owner of Cambridge Science Park to suggest that it has anything
other than a good and marketable title to the Leasehold Property and is legally
and beneficially entitled to the same;

                           (ii)     EXISTING USE. The Existing Use is the design
manufacture and distribution of scientific instruments accessories and spare
parts application software and chemicals;

                           (iii)    ENCUMBRANCES.

                                    (A)      to Seller's knowledge, the
Leasehold Property and the title deeds and documentation relating thereto are
not subject to any charge, debenture (whether fixed or floating), option, right
of pre-emption, agreement for sale, overriding interest (as defined in Section
70 of the Land Registration Act 1925) or any other encumbrance nor is there any
person in possession or occupation of or who has or claims any right of any kind
in respect of the Leasehold Property adversely to the estate, interest, right or
title therein of Seller;

                                    (B)      to Seller's knowledge, there are no
rights, interests, covenants, restrictions, reservations, licences or easements
nor any disputes or outstanding notices (whether given by a landlord, a local
authority or any other person) nor (without prejudice to the generality of the
foregoing) any other matters or things which adversely affect the value of the
Leasehold Property or the proper use and enjoyment of the Leasehold Property for
the purpose of the Business now being carried on at the Leasehold Property by
Seller;

                                    (C)      to Seller's knowledge, there are no
lawfully enforceable restrictions or prohibitions which restrict or prohibit the
Existing Use of the Leasehold Property; and

                                    (D)      the Leasehold Property is not
subject to the payment of any outgoings other than the usual rates and taxes and
all sums due to date in respect thereof have been paid;

                           (iv)     ACCESS AND SERVICES.

                                    (A)      to Seller's knowledge, the
Leasehold Property enjoys access and egress over roads and footpaths which have
been adopted by the appropriate highway authority and are maintainable at the
public expense;

                                    (B)      the Leasehold Property is served by
water, electricity, gas and telephone utilities and to Seller's knowledge,
drains foul sewage and surface water to public sewers. Either the pipes, sewers,
wires, cables, conduits and other conducting media serving the Leasehold
Property connect directly to the mains without passing through land in the
occupation or ownership of any other person or, if they do not, the Leasehold
Property has


                                   18

<PAGE>


the benefit of all necessary easements and rights for the maintenance and use 
thereof and such rights are held on terms which do not entitle any person to 
terminate or curtail the same; and

                                    (C)      to the knowledge of Seller, the
Leasehold Property has the benefit of all other easements and rights necessary
for the proper use and enjoyment of the Leasehold Property for the purposes of
the Business now being carried on at the Leasehold Property by Seller and such
easements and rights are held on terms which do not entitle any person to
terminate or curtail the same;

                           (v)      PLANNING.

                                    (A)      Seller has not received any notice
advising that the Existing Use is in breach of the permitted use under the Town
and Country Planning legislation (which term includes the Town and Country
Planning Act 1990 the Planning (Listed Buildings and Conservation Areas) Act
1990, the Planning (Hazardous Substances) Act 1990 or is of a temporary or
personal nature.

                                    (B)      to the knowledge of Seller, all
development carried out in relation to the Leasehold Property since the
commencement of the lease has been lawful and all necessary consents and
permissions have been obtained for such development;

                                    (C)      to the knowledge of Seller, the
consents and permissions referred to in paragraph (v)(B) above are valid,
subsisting and unimpeachable and are also either unconditional or subject only
to conditions which have been satisfied so that nothing further remains to be
done thereunder;

                                    (D)      Seller has not received notice
confirming that any resolution, proposal, order or act has been made or is
contemplated for the compulsory acquisition of the Leasehold Property by the
local or any other authority nor to the knowledge of Seller is there any
outstanding order, notice or other requirement of any such authority that
affects the Existing Use or involves expenditure in compliance with it nor has
Seller received notice that there any other circumstances which may result in
any such order or notice being made or served or which may otherwise affect the
Leasehold Property;

                                    (E)      no compensation has been received
consequent upon a refusal of any planning permission affecting the Leasehold
Property and applied for by Seller or the imposition of any restrictions in any
such planning permission and no such planning permission is suspended; and

                                    (F)      Seller has not received notice
confirming that any of the buildings or other structures or erections on the
Leasehold Property have been listed under Section 1 of the Planning (Listed
Buildings and Conservation Areas) Act 1990 nor to the knowledge of Seller has
the relevant local authority authorised the service of any building preservation
notice under Section 3 of the Planning (Listed Building and Conservation Areas)


                                   19

<PAGE>


Act 1990 or any repairs notice under Section 48 of the Planning (Listed 
Buildings and Conservation Areas) Act 1990 in respect of the Leasehold 
Property or any building structure or erection thereon and Seller has not 
received notice that the relevant local authority has made or resolved to 
make any noise abatement zone order under Section 63 of the Control of 
Pollution Act 1974 for the area which includes the Leasehold Property;

                           (vi)     PARTICULARS OF LEASE. Certain particulars of
the Seller Lease are set out in SCHEDULE 3.4(b) attached hereto.

                                    (A)      to Seller's knowledge the Leasehold
Property forms part of the Landlord's ancient possessions; and

                                    (B)      Value Added Tax is chargeable on
the rent and any other payment to be made under the Lease;

                           (vii)    INFERIOR LEASES. Seller holds the Leasehold
Property subject to no inferior leases;

                           (viii)   STATUTORY COMPLIANCE/FIRE CERTIFICATE.

                                    (A)      Seller has not received notice of
any breach of the requirements of the Shops Act 1950 to 1965, the Factories Act
1961, the Offices Shops and Railway Premises Act 1963, the Fire Precautions Act
1971, the Health and Safety at Work etc. Act 1974 or any other legislation,
regulations, orders notices or directions made thereunder which affect the
Leasehold Property; and

                                    (B)      where required a fire certificate
has been issued in respect of the Leasehold Property. Seller has not received
notice that the Leasehold Property does not comply in all material respects with
current fire regulations affecting the Leasehold Property and nor has Seller
received notice that the current requirements of the insurers of the Leasehold
Property have not been complied with; and

                           (ix)     CONDITION AND REPAIR.

                                    (A)      to Seller's knowledge, there are
(and there have been) no structural or other material defects in respect of the
buildings and structures at or comprising the Leasehold Property or any parts
thereof other than those contained or referred to in a survey report of February
1996 commissioned by Seller and carried out by JSS Cardoe; and

                                    (B)      to Seller's knowledge, there are no
latent or patent defects in the buildings and structures on or comprising the
Leasehold Property and in the construction thereof or any alterations thereto
none of the following materials were used:

                                             (I)      high alumina cement in 
structural elements;


                                    20


<PAGE>


                                             (II)     wood wool slabs in 
permanent formwork to concrete or in structural elements;

                                             (III)    calcium chloride in 
admixtures for use in reinforced concrete;

                                             (IV)     asbestos or asbestos 
containing products as defined in the Asbestos Regulations 1969 and 1987;

                                             (V)      naturally occurring 
aggregates for use in reinforced concrete which do not comply with British
Standard Specification 882: 1983 and naturally occurring aggregates for use in
concrete which do not comply with the provisions of British Standard
Specification 8110: 1985;

                                             (VI)     urea formaldehyde foam or
materials which may release formaldehyde in quantities which may be hazardous
with reference to the limits set from time to time by the Health and Safety
Executive;

                                             (VII)    materials which are 
generally comprised of mineral fibres either man-made or naturally occurring
which have a diameter of 3 microns or less or which contain fibre not sealed or
otherwise stabilised to ensure that fibre migration is prevented; or

                                             (VIII)   any other materials not 
in accordance with good design standards and good building practice at the time
of construction of any such buildings.

                  (c)      PERSONAL PROPERTY. A list of the machinery, equipment
and other fixed assets (including, without limitation, any improvements to the
Leasehold Property) owned by Seller having an original purchase value of $1,000
or more is set forth in SCHEDULE 3.4(c). Except as specifically disclosed in
said Schedule, Seller has good and marketable title to all of its tangible
personal property. None of such personal property is subject to any mortgage,
pledge, lien, conditional sale agreement, security agreement, encumbrance, fixed
charge or floating charge that has crystallized, or other charge except as
specifically disclosed in said Schedule. Except as otherwise specified in
SCHEDULE 3.4(c), all machinery, equipment and other tangible property listed in
SCHEDULE 3.4(c) is in good working order, ordinary wear and tear excepted, has
been well maintained, and substantially complies with applicable laws,
ordinances and regulations.

                  (d)      The Subject Assets will be sufficient to allow Buyer
to conduct the Business subsequent to the Closing and, at the Closing, title to
the Subject Assets will pass to Buyer free and clear of all mortgages, pledges,
liens, encumbrances and charges of any kind, other than those Subject Assets
that are the subject matter of any of the Required Consents that have not been
obtained at or prior to the Closing.


                                    21

<PAGE>


                  (e)      Seller represents that those assets referred to in
Section 2.1(a)(xvi), together with any other Subject Assets (other than those
contracts requiring consent as set forth on SCHEDULE 2.10 hereof) that are not
transferable to Buyer (whether as a result of requiring consent or otherwise)
are not, individually or in the aggregate, material to Seller's Business.

         3.5      FINANCIAL STATEMENTS AND ORDINARY COURSE.

                  (a)      Seller has delivered to Buyer the following financial
statements, copies of which are attached hereto as SCHEDULE 3.5:

                           (i)      Balance sheets of Seller for its fiscal
years ending on December 31, 1995, December 31, 1996 and December 31, 1997 and
statements of income, retained earnings and cash flows for each of the three (3)
years then ended, with appropriate footnotes, accompanied by Coopers & Lybrand,
L.L.P.'s, independent public accountants, opinion.

                           (ii)     Balance sheet of Seller as of June 30, 1998
(herein, the "Base Balance Sheet").

                  (b)      Said financial statements have been prepared in
accordance with the requirements of the Companies Act 1985 (so far as
applicable) and good accounting principles and practices generally accepted at
the date hereof in the United Kingdom, are complete and correct in all material
respects and present fairly in all material respects the financial condition of
Seller at the dates of said statements and the results of its operations and its
cash flows for the periods covered thereby, all subject to the matters set forth
or referenced in said disclaimer opinions.

                  (c)      Since the date of the Base Balance Sheet, Seller has
conducted its Business only in the ordinary course and consistently with its
prior practices.

         3.6      TAXES. Seller has paid or caused to be paid all United Kingdom
taxes, including, without limitation, advanced corporation taxes, income taxes,
estimated taxes, excise taxes, sales taxes, use taxes, value-added taxes, gross
receipts taxes, franchise taxes, employment and payroll-related taxes,
withholding taxes, stamp taxes, transfer taxes, windfall profit taxes,
environmental taxes and property taxes, whether or not measured in whole or in
part by net income with respect to the Subject Assets, Seller's Business and the
Assumed Liabilities (in respect to Seller's Business and the Assumed
Liabilities, if in arrears prior to the Closing Date) and all deficiencies, or
other additions to tax, interest, fines and penalties owed by it (other than any
stamp duty or value added or other taxes payable by Buyer in connection with the
transactions contemplated by the Agreement) (the "Taxes") required to be paid by
it through the date hereof whether disputed or not.

         3.7      COLLECTIBILITY OF NON-AP BIOTECH ACCOUNTS RECEIVABLE. All of
the Non-AP Biotech Receivables of Seller, including without limitation those
listed on SCHEDULE 3.7, or existing at the date hereof are or will be at the
Closing valid and enforceable claims. The


                                      22

<PAGE>

Non-AP Biotech Receivables are fully collectible and subject to no setoff or 
counterclaim. Seller has no loan receivables from employees, directors or 
unaffiliated third parties.

         3.8      INVENTORY. The Inventory has been maintained by Seller at
levels consistent with the ordinary course of Seller's Business, consistent with
past practice. The Inventory reflects write-offs or write-downs to realizable
values in the case of items which are excessive or have become obsolete, such
write-offs or write-downs to be calculated in accordance with the methodology
indicated on EXHIBIT 2.3(c). The values of the Inventory stated in the Base
Balance Sheet and the December 31 Statement were prepared by Seller in
accordance with EXHIBIT 2.3(c). Purchase commitments for raw materials and parts
are not in excess of normal requirements and have not been made at prices
materially in excess of market prices at the time of the purchase commitment.
All Inventory is located on the Leasehold Property. Since the date of the Base
Balance Sheet, no Inventory items have been sold or disposed of except through
sales in the ordinary course of business.

         3.9      ABSENCE OF CERTAIN CHANGES. Except as disclosed in SCHEDULE
3.9, since the date of the Base Balance Sheet there has not been:

                  (a)      Any change in the financial condition, revenues,
properties, assets, liabilities, business or operations of Seller which change
by itself or in conjunction with all other such changes, whether or not arising
in the ordinary course of business, has been materially adverse with respect to
Seller;

                  (b)      Any mortgage, encumbrance or lien placed on any of
the properties of Seller which remains in existence on the date hereof or will
remain on the Closing Date;

                  (c)      Any known obligation or liability of any nature
incurred by Seller, whether accrued, absolute, contingent, potential or
otherwise, asserted or unasserted (including, without limitation, liabilities
for Taxes due or to become due (other than any such Taxes which, following the
Closing, will be the sole responsibility of Seller) or liabilities relating to
products or services provided by Seller or the conduct of Seller's Business
since the date of the Base Balance Sheet regardless of whether claims in respect
thereof have been asserted), other than obligations and liabilities incurred in
the ordinary course of business (it being understood that product or service
liability claims shall not be deemed to be incurred in the ordinary course of
business);

                  (d)      Any purchase, sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any of the properties or assets of Seller other than in the ordinary course of
business;

                  (e)      Any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the properties, assets
or Business of Seller;


                                     23

<PAGE>


                  (f)      Any labor trouble or claim of unfair labor practices
involving Seller; and, except as set forth on SCHEDULE 3.9 or SCHEDULE 3.24, any
change in the compensation payable or to become payable by Seller to any of its
officers, employees, agents or independent contractors other than normal merit
increases in accordance with its usual practices, or any bonus payment or
arrangement made to or with any of such officers, employees, agents or
independent contractors;

                  (g)      Any change with respect to the officers or management
employees of Seller;

                  (h)      Any change in accounting methods or practices, credit
practices or collection policies used by Seller;

                  (i)      Any declaration, setting aside or payment of any
dividend by Seller, or the making of any other distribution in respect of the
share capital of Seller, other than with respect to a dividend or distribution
made solely in cash, or any direct or indirect redemption, purchase or other
acquisition made solely in cash by Seller of its own share capital;

                  (j)      Any payment or discharge of a material lien or
liability of Seller which was not shown on the Base Balance Sheet or was not
incurred in the ordinary course of business thereafter;

                  (k)      Any obligation or liability incurred by Seller to any
of its officers, directors or employees, or any loans or advances made by Seller
to any of its officers, directors or employees, except normal compensation and
expense allowances payable to officers, directors or employees;

                  (l)      Any transaction with a party affiliated with Seller,
other than sales to AP Biotech in the normal course of Seller's Business;

                  (m)      Any other transaction entered into by Seller other
than transactions in the ordinary course of Seller's Business; or

                  (n)      Any agreement or understanding whether in writing or
otherwise, for Seller to take any of the actions specified in paragraphs (a)
through (m) above.

         3.10     INTELLECTUAL PROPERTY.

                  (a)      Except as described in SCHEDULE 3.10 or SCHEDULE
3.11(k), Seller has exclusive ownership or has a licence to use all of the
Intellectual Property used in Seller's Business as presently conducted. Except
as set forth on SCHEDULE 3.10 or SCHEDULE 3.11(k), Seller's rights in all of
such Intellectual Property are freely transferable. There are no claims or
demands of any other person pertaining to any of such Intellectual Property and
no proceedings have been instituted, or are pending or threatened, which
challenge the rights of


                                      24

<PAGE>


Seller in respect thereof; and, except as set forth on SCHEDULE 3.10, Seller 
has the right to use, free and clear of claims or rights of other persons, 
the Customer Lists, designs, manufacturing or other processes, computer 
software, systems, data compilations, research results and other information 
required for or incident to its products or its Business as presently 
conducted. None of the Intellectual Property has been, or will be, charged, 
mortgaged or otherwise encumbered by Seller.

                  (b)      All trademarks and common law copyrights which are
owned by or licensed to Seller or used by Seller in its Business as presently
conducted are listed in SCHEDULE 3.10. Seller owns no patents, registered
copyrights or registered designs and has no pending applications to register any
patents, copyrights, designs or trademarks. All of Seller's trademark
registrations have been duly registered in, filed in or issued by the
appropriate offices in the countries identified on said Schedule.

                  (c)      All licenses or other agreements under which Seller
is granted rights in the intellectual property of others are listed in SCHEDULE
3.11(k). Except as stated in SCHEDULE 3.11(k), all said licenses or other
agreements are in full force and effect, Seller is not in default under any such
licenses or other agreements described in said Schedule and has no knowledge of
conditions or facts which with notice or the passage of time, or both, would
constitute a default, and, except as set forth on SCHEDULE 2.10 or SCHEDULE
3.11(k), all of the rights of Seller thereunder are freely assignable and will
be assigned to Buyer at the Closing. Except as set forth on SCHEDULE 3.11(k), to
the best of Seller's knowledge, the licensors under said licenses and other
agreements have and had all requisite power and authority to grant the rights
purported to be conferred thereby. Seller has provided or made available to
Buyer true and complete copies of all such licenses or other agreements, and any
amendments thereto. SCHEDULE 3.11(k) specifically references those licenses and
agreements which Seller is unable to locate and therefore have not been provided
to Buyer.

                  (d)      In relation to registered rights, all registrations
forming part of the Intellectual Property have been maintained and all renewal
fees have been paid on time. Seller has received no adverse opinion (whether
from the registry concerned or its advisor) or notice of opposition in relation
to any such application.

                  (e)      Seller has no licenses, authorizations (whether
express or implied) or other agreements under which Seller has granted rights to
others in Intellectual Property.

                  (f)      Seller has required all of its employees to execute
agreements under which such employees are required to maintain the
confidentiality of any information concerning the Business, transactions,
secrets or affairs of Seller or of any of its customers or suppliers during or
after termination of their employment.

                  (g)      Seller has no knowledge of any infringement by others
of any of its Intellectual Property rights.


                                   25

<PAGE>


                  (h)      Seller's activities and products do not infringe any
intellectual property rights of any other person. No proceeding charging Seller
with infringement of any adversely held intellectual property rights has been
filed or is threatened to be filed and Seller has not received notice of any
breach and is not aware of any dispute or claim in relation to the Intellectual
Property or any other intellectual property. To the best of Seller's knowledge,
there exists no unexpired patent or patent application which includes claims
that would be infringed by or otherwise adversely affect the products,
activities or Business of Seller. Seller is not making unauthorized use of any
confidential information or trade secrets of any person, including, without
limitation, any former employer of any past or present employee of Seller.
Except as set forth in SCHEDULE 3.10, neither Seller nor, to the best of
Seller's knowledge, any of its employees have any agreements or arrangements
with any persons other than Seller related to confidential information or trade
secrets of such persons or restricting any such employee's ability to engage in
business activities of any nature. The activities of its employees on behalf of
Seller do not violate any such agreements or arrangements known to Seller which
any such employees have with other persons.

         3.11     CONTRACTS. Except for contracts, commitments, plans,
agreements and licenses described in SCHEDULE 3.11, Seller is not a party to or
subject to:

                  (a)      any plan or contract providing for bonuses, options,
share purchases, deferred compensation, profit sharing, collective bargaining or
the like, or any contract or agreement with any labor union;

                  (b)      any employment contract or contract for services
which requires the payment of more than $10,000 annually or which is not
terminable within 30 days by Seller without liability for any penalty or
severance payment;

                  (c)      any contract or agreement for the purchase of any
commodity, material or equipment, except purchase orders in the ordinary course
for less than $10,000 each, such purchase orders not exceeding $20,000 in the
aggregate;

                  (d)      any other contracts or agreements creating any
obligations of Seller of $10,000 or more with respect to any such contract or
agreement not specifically disclosed elsewhere under this Agreement;

                  (e)      any contract or agreement providing for the purchase
of all or substantially all of Seller's requirements of a particular product
from a supplier;

                  (f)      any contract or agreement being assigned hereunder
involving more than $10,000 which by its terms does not terminate or is not
terminable without penalty by Seller or any successor or assign within one year
after the date hereof;

                  (g)      any contract or agreement for the sale or lease of
its products not made in the ordinary course of business;


                                     26

<PAGE>


                  (h)      any contract with any sales agent or distributor of
products of Seller;

                  (i)      any confidentiality agreement or contract containing
covenants limiting the freedom of Seller to compete in any line of business or
with any person or entity;

                  (j)      any contract or agreement for the purchase of any
fixed asset for a price in excess of $1,000 whether or not such purchase is in
the ordinary course of business;

                  (k)      any license agreement (as licensor or licensee) or
agreement relating to Buyer Purchased Intellectual Property;

                  (l)      any indenture, mortgage, promissory note, loan
agreement, credit agreement or arrangement, guaranty or other agreement or
commitment for the borrowing of money; or

                  (m)      any contract or agreement (other than an employment
agreement listed on SCHEDULE 3.11 or not required to be so listed) with any
officer, employee or director. There are no agreements between Seller and any
shareholder of Seller or with any persons or organizations controlled by or
affiliated with any of them that are material, individually or in the aggregate,
to Seller's Business.

         Seller is not in default under any such contracts, commitments, plans,
agreements or licenses described in SCHEDULE 3.11 and, except as expressly
disclosed on SCHEDULE 3.11, Seller has no knowledge of conditions or facts which
with notice or passage of time, or both, would constitute a default. Except as
set forth on SCHEDULE 2.10 and SCHEDULE 3.11, all such contracts, plans,
commitments, agreements and licenses and any other contracts or agreements
included within the Subject Assets are freely assignable and will be assigned to
Buyer at the Closing. Seller has provided or made available to Buyer true and
complete copies of all such contracts, commitments, plans, agreements or
licenses described in SCHEDULE 3.11, and any amendments thereto. SCHEDULE 3.11
specifically references those contracts, commitments, plans, agreements or
licenses which Seller is unable to locate and therefore have not been provided
to Buyer.

         3.12     LITIGATION. There is no litigation or governmental or
administrative proceeding or investigation pending or, to the knowledge of
Seller, threatened against Seller or its affiliates which may have any adverse
effect on the properties, assets, prospects, financial condition or business of
Seller or which would prevent or hinder the consummation of the transactions
contemplated by this Agreement.

         3.13     COMPLIANCE WITH LAWS. Seller is in compliance in all material
respects with all applicable statutes, ordinances, orders, judgments, decrees
and rules and regulations promulgated by any English or other governmental
authority which apply to Seller or to the conduct of its Business, and Seller
has not received notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation.


                                     27

<PAGE>


         3.14     INSURANCE. The physical properties and assets of Seller are
insured to the extent disclosed in SCHEDULE 3.14 and all such insurance policies
are disclosed in said Schedule. Said insurance policies are in full force and
effect, all premiums with respect thereto are currently paid, and Seller is in
compliance in all material respects with the terms thereof. Said insurance is
adequate and customary for the Business engaged in by Seller prior to the
Closing.

         3.15     POWERS OF ATTORNEY. Seller has not granted powers of attorney
which are presently outstanding with respect to the Subject Assets.

         3.16     FINDER'S FEE. Seller has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement or any other agreement contemplated
hereby, except with respect to a fee due to John Sharrock, Inc., which fee will
remain an obligation of Seller and be payable by Seller and will not be included
in either the Subject Assets or in the Assumed Liabilities hereunder.

         3.17     PRODUCT LIABILITY OR OTHER CLAIMS. There are no existing or,
to the best of Seller's knowledge, threatened product or service liability or
other similar claims, or to the best of Seller's knowledge, any facts upon which
a material claim of such nature could be based, against Seller for products or
services which are defective.

         3.18     GOVERNMENTAL APPROVALS; ORDERS AFFECTING THE BUSINESS.
SCHEDULE 3.18 lists all permits, registrations, licenses, franchises,
certifications and other approvals (collectively, the "Approvals") which are, to
the best of Seller's knowledge, required from English authorities in order for
Seller to conduct its Business. To the best of Seller's knowledge, all such
Approvals are valid and in full force and effect, and Seller is operating in
compliance therewith. Such Approvals include, but are not limited to, those
required under the laws of England and Wales pertaining to environmental
protection, public health and safety, worker health and safety, buildings,
highways or zoning. Except as disclosed in SCHEDULE 3.18, to the best of
Seller's knowledge, all such Approvals will be available to Buyer and remain in
full force and effect upon Buyer's purchase of the Subject Assets, and, to the
best of Seller's knowledge, no further Approvals will be required for Buyer to
conduct Seller's Business as currently conducted by Seller subsequent to the
Closing. Seller is not subject to or bound by any judgment, decree or order
which may materially and adversely affect its business or prospects, its
condition, financial or otherwise, or any of its assets or properties.

         3.19     COPIES OF DOCUMENTS. Seller has made available for inspection
and copying by Buyer and its counsel complete and correct copies of all
documents referred to in the Schedules to this Agreement. Such Schedules
specifically reference those documents which Seller is unable to locate and
therefore have not been provided to Buyer.

         3.20     TRANSACTIONS WITH INTERESTED PERSONS. To the best of Seller's
knowledge, no officer, management employee or director of Seller or any of their
respective spouses or family members, owns directly or indirectly on an
individual or joint basis any material interest in, or


                                 28

<PAGE>


serves as an officer or director or in another similar capacity of, any 
competitor, distributor or supplier of Seller or any organization which has a 
material contract or arrangement with Seller.

         3.21     PENSION SCHEME. All capitalized terms used in this Section
3.21 not otherwise defined in this Agreement shall have the meanings ascribed to
them in EXHIBIT 2.14 attached hereto.

                  (a)      Particulars of the Transferring Scheme have been
disclosed including true and complete copies of the following in relation to
each pension scheme:

                           (i)      trust deeds and rules and all other deeds;

                           (ii)     booklets currently in force and any 
                                    subsequent announcements to scheme 
                                    members;

                           (iii)    latest finalized actuarial valuation 
                                    together with any subsequent valuation in 
                                    draft and any subsequent written 
                                    actuarial advice not included in such 
                                    valuations;

                           (iv)     details of all Transferring Employees 
                                    (including dates of birth, sex, entry and 
                                    current salary and pensionable salary and 
                                    name of employer);

                           (v)      details of contributions by the 
                                    Transferring Employees and the employer 
                                    in respect of them in the last three 
                                    years;

                           (vi)     latest Transferring Scheme accounts and 
                                    trustee reports;

                           (vii)    evidence of Inland Revenue approval;

                           (viii)   contracting-out certificate;

                           (ix)     insurance policies and certificates and 
                                    details of premiums paid; and

                           (x)      details of ex-gratia pensions and any 
                                    discretionary increases in benefits given 
                                    in respect of any Transferring Employee 
                                    in the last three years.

         Other than as disclosed there are no other pension schemes for current
or past directors or employees of Seller who will be transferring to the
employment of Buyer on the Closing Date.


                                    29

<PAGE>


                  (b)      In relation to the Transferring Scheme:

                           (i)      no power to augment benefits has been 
                                    exercised;

                           (ii)     no discretion has been exercised to admit 
                                    an employee to membership of the pension 
                                    scheme who would not otherwise be 
                                    eligible;

                           (iii)    no discretion has been exercised to 
                                    provide a benefit which would not 
                                    otherwise be provided;

                           (iv)     all benefits (other than a refund of 
                                    contributions with interest where 
                                    appropriate) payable under the 
                                    Transferring Scheme on the death of a 
                                    member while in an employment to which 
                                    the Transferring Scheme relates or during 
                                    a period of sickness or disability of a 
                                    member are fully insured by a policy with 
                                    an insurance company of good repute. Each 
                                    member has been covered for insurance by 
                                    the insurance company at its normal rates 
                                    and on its normal terms for persons in 
                                    good health and all premiums payable have 
                                    been paid;

                           (v)      there are no contributions to the 
                                    Transferring Scheme which are due but 
                                    unpaid and have remained unpaid for more 
                                    than one month and in any event 
                                    contributions have been paid which are at 
                                    least equal to and by the due date 
                                    specified in the schedule of 
                                    contributions under Section 58 of the 
                                    Pensions Act;

                           (vi)     no take-over protection provision will be 
                                    triggered by the Closing Date; and

                           (vii)    no amendment has been made in contravention
                                    of Section 67 of the Pensions Act.

                  (c)      The Transferring Scheme:

                           (i)      is approved by the Board of Inland 
                                    Revenue for the purposes of Chapter I of 
                                    Part XIV of the Income and Corporation 
                                    Taxes Act 1988;

                           (ii)     is established under irrevocable trusts; 
                                    and

                           (iii)    has been administered in accordance with:


                                   30


<PAGE>

                       (A)     the preservation requirements under the Pensions 
                               Schemes Act 1993;

                       (B)     the equal access requirements of the Pensions 
                               Schemes Act 1993;

                       (C)     the contracting-out requirements of the Pensions 
                               Schemes Act 1993 (where applicable);

                       (D)     the Pensions Schemes Act 1993; and

                       (E)     all other applicable laws (including Article 119 
                               of the Treaty of Rome save in respect of 
                               guaranteed minimum pensions), regulations and 
                               requirements of any competent governmental body 
                               or regulatory authority and the trusts and rules
                               of the Transferring Scheme.

              (d)   No claim has been threatened or made or litigation 
commenced against the trustees or administrator of the Transferring Scheme or 
against Seller or any other person whom Seller is or may be liable to indemnify 
or compensate in respect of any matter arising out of or in connection with the 
Transferring Scheme. So far as Seller is aware there are no circumstances which 
may give rise to any such claim or litigation. There are no unresolved disputes 
under the Transferring Scheme's internal dispute resolution procedure.

      3.22    ENVIRONMENTAL MATTERS.

              (a)   Seller represents and warrants that Seller's Business, the 
Subject Assets and the Leasehold Property comply with, and the Subject Assets 
and the Leasehold Property have been used in compliance with, all applicable 
Environmental Laws and that none of Seller's Business, any of the Subject 
Assets or the Leasehold Property is or has been the subject of any existing, 
pending or threatened judgment, consent decree, compliance order, 
administrative order, investigation or inquiry by any governmental authority or 
subject to any remediation obligation under any Environmental Laws and, so far 
as Seller is aware, there exist no circumstances that could give rise to any of 
the foregoing. Seller further represents and warrants that Seller's Business, 
the Subject Assets and the Leasehold Property comply in all material respects 
with all applicable occupational health and safety regulations and similar 
worker safety rules and regulations. SCHEDULE 3.22 sets forth a list of the 
chemicals used by Seller prior to the Closing and details the internal 
procedure for the disposal of chemicals. The use and disposal of such chemicals 
by Seller has been in compliance with all applicable Environmental Laws at all 
times prior to the Closing Date.

              (b)   Seller has disclosed to Buyer copies of: (i) the Due 
Diligence Report relating to Pharmacia Biotech (Biochrom) Limited, Cambridge 
(UK), prepared by Alfredo 


                                       31

<PAGE>

Ricci dated March 11, 1997; and (ii) the Due Diligence Follow-Up Report 
relating to Pharmacia Biotech (Biochrom) Limited, Cambridge (UK), prepared by 
Finbarr Fitzgerald on or about August 6, 1998.

              (c)   "Environmental Laws" shall mean any environmental or health 
and safety-related laws, regulations, rules, ordinances, or by-laws of England 
and Wales, whether existing as of the date hereof or previously in force.

      3.23    OFFICERS. SCHEDULE 3.23 contains a true and complete list of the 
officers and directors of Seller immediately prior to the Closing.

      3.24    EMPLOYEES.

              (a)   SCHEDULE 3.24 contains a list of all current managers and 
employees of Seller who, individually, have received or are scheduled to 
receive compensation, benefits, bonus, incentive schemes, commission, periods 
of notice, pension, voluntary pension, annuities, rights under any retirement 
benefits, life assurance or a hospital insurance scheme from Seller for the 
fiscal year ending December 31, 1998 or December 31, 1999, listing the gross 
compensation (including any bonuses) each such person received and/or is 
scheduled to receive for the fiscal year ended December 31, 1998 and the fiscal 
year ending December 31, 1999, respectively, and their job title or position. 
Except as set forth on SCHEDULE 3.24, all such managers and employees were 
employed by Seller as of the Closing Date (those persons so employed, the 
"Employees"). In addition, except as set forth on SCHEDULE 3.24, none of the 
Employees is a party to any employment agreement or other employment 
arrangement with Seller other than Seller's standard employment agreement, a 
copy of which is attached to SCHEDULE 3.24. Seller has no contracts or 
agreements (whether written or oral) with consultants other than consulting 
relationships terminable at will by Seller without payment of any fees, 
penalties or other amounts by Seller.

              (b)   There is no dispute between Seller and any of the Employees 
or any trades union existing or pending at the date of this Agreement and so 
far as Seller is aware there are no circumstances likely to give rise to the 
same.

              (c)   The Employees are the only employees of Seller whose 
contract of employment will have effect as if originally made with Buyer by 
reason of the Employment Regulations.

              (d)   There is no agreement or arrangement between Seller and any 
trades union. Seller has informed and consulted the appropriate representatives 
of the Employees.

              (e)   Other than with respect to gross compensation to be paid to 
the Employees for the fiscal year ending December 31, 1999, which are set forth 
on SCHEDULE 3.24, since June 30, 1998, no change has been made in the rates of 
remuneration, emoluments, benefits or other terms of employment of any of the 
Employees.


                                       32

<PAGE>

              (f)   None of the Employees has given or received notice 
terminating his employment, nor will any of the Employees be entitled to give 
notice as a result of the provisions of this Agreement.

              (g)   Except as set forth on SCHEDULE 3.24, there is not in 
existence any written or unwritten contract of employment with any Employee (or 
any contract for services with any person) which cannot be terminated by three 
(3) months' notice or less without giving rise to a claim for damages or 
compensation (other than a redundancy payment and/or statutory compensation for 
unfair dismissal).

              (h)   Except as set forth on SCHEDULE 3.24, there are no 
dispensations agreed with or notifications under Section 166 of the Taxes Act 
1988 issued by the Inland Revenue which are currently in force in relation to 
the Employees.

              (i)   There are no inquiries or investigations, existing, pending 
or threatened, affecting Seller's Business by the Equal Opportunities 
Commission or the Commission for Racial Equality.

      3.25    CUSTOMERS, DISTRIBUTORS AND SUPPLIERS. SCHEDULE 3.25 is a true 
and complete list of the customers, distributors and suppliers of Seller's 
Business to whom Seller made payments or to whom Seller has shipped products 
and issued invoices, as the case may be, aggregating $20,000 or more during the 
fiscal year ended December 31, 1998, showing, with respect to each, the name, 
address and volume in British Pounds Sterling involved (the "Customers, 
Distributors and Suppliers"). Except as set forth on SCHEDULE 3.25, the 
relationships of Seller with its Customers, Distributors and Suppliers are good 
commercial working relationships and there have been no material adverse 
changes to any of such relationships during said period.

      3.26    VEHICLES.  Except as set forth in SCHEDULE 3.26:

              (a)   the Vehicles are duly licensed and are, to the best of 
Seller's knowledge, capable of being properly used for the purposes of Seller's 
Business, roadworthy and maintained in a serviceable condition;

              (b)   all forms of taxation payable by Seller in respect of the 
Vehicles have been fully paid; and

              (c)   the Vehicles have, to the best of Seller's knowledge, been 
annually tested and passed as fit for service by the Department of Transport.

      3.27    DISCLOSURE. The representations, warranties and statements of 
Seller contained in this Agreement and in the certificates, exhibits and 
schedules delivered by Seller pursuant to this Agreement do not contain any 
untrue statement of a material fact, and, when taken together, do not, to the 
best of Seller's knowledge, omit to state a material fact known to Seller 


                                       33

<PAGE>

required to be stated therein or necessary in order to make such 
representations, warranties or statements not misleading in light of the 
circumstances under which they were made. There are no facts known to Seller 
which presently or in the future will have a material adverse affect on the 
business, properties, operations or condition of Seller which have not been 
disclosed herein or in a Schedule furnished herewith, other than general 
economic, industry and political conditions affecting the industries in which 
Seller operates.

                              4. COVENANTS OF SELLER

      4.1     MAKING OF COVENANTS AND AGREEMENTS. Seller hereby makes the 
covenants and agreements set forth in this Section 4.

      4.2     NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly 
upon Seller becoming aware of the impending or threatened occurrence of, any 
event which would cause or constitute a breach or default, or would have caused 
or constituted a breach or default had such event occurred or been known to 
Seller prior to the date hereof, of any of the representations, warranties or 
covenants of Seller contained in or referred to in this Agreement or in any 
Schedule or Exhibit referred to in this Agreement, Seller shall give detailed 
written notice thereof to Buyer and shall use its best efforts to prevent or 
promptly remedy the same.

      4.3     CONSUMMATION OF AGREEMENT. Seller shall use its best efforts to 
perform and fulfill all conditions and obligations on its part to be performed 
and fulfilled under this Agreement, to the end that the transactions 
contemplated by this Agreement shall be fully carried out.

      4.4     NOTICE TO THIRD PARTIES.

              (a)   After the Closing, Seller shall notify any and all persons 
or entities in possession of Off-Site Assets that title thereto has passed to 
Buyer, such Off-Site Assets are then owned by Buyer, and such persons and 
entities thereafter shall look solely to Buyer with respect to the ownership 
thereof and for instructions with respect thereto.

              (b)   After the Closing, at the request of Buyer, Seller and 
Buyer shall send a jointly executed letter to those persons and entities as 
Buyer may request notifying such persons or entities of the consummation of the 
transactions contemplated by this Agreement, such letter to be substantially in 
the form of EXHIBIT 4.4.

      4.5     PROTECTION OF GOODWILL.

              (a)   As further consideration for Buyer agreeing to purchase the 
Subject Assets from Seller on the terms herein contained and with the intent of 
assuring to Buyer the Goodwill, Seller and Seller Guarantor hereby undertake to 
Buyer that (except with the prior written consent of Buyer) Seller and Seller 
Guarantor shall not, either solely or jointly with any person or entity, 
directly or indirectly, at any time within a period of two (2) years from 


                                       34

<PAGE>

the Closing Date, in the United Kingdom of Great Britain and Northern Ireland 
(or any other country in which Seller or any of its distributors has done 
business within the twelve (12) months preceding the Closing Date):

                    (i)   carry on or be engaged in the manufacture, 
distribution or sale of any products of the same type which have been 
manufactured, distributed or sold in the normal course of Seller's Business at 
any time during the twelve (12) months preceding the Closing Date and which are 
still manufactured, distributed or sold by Buyer at the relevant time; or

                    (ii)  employ or solicit any of the Employees or entice any 
of the Employees to decline employment with Buyer pursuant to Section 3.24 or 
to terminate their employment with Buyer.

              (b)   Notwithstanding clause (a)(i) above, nothing in this 
Agreement shall prevent Seller Guarantor from:

                    (i)   engaging in the manufacture, distribution or sale of: 
(A) mass spectrometers and related products or instruments in which mass 
spectrometry technology is utilized; (B) chromatography instruments and related 
products or instruments in which spectrophotometer technology is utilized; or 
(C) electrophoresis instruments and related products or instruments in which 
electrophoresis technology is utilized, including without limitation DNA 
sequencing instruments; and

                    (ii)  subject to the last sentence of this clause (b)(ii), 
acquiring, being acquired by, or merging (in each case whether by sale of 
stock, assets, or otherwise) with a company that sells spectrophotometers or 
amino acid analyzers (a "Subject Company"); PROVIDED, HOWEVER, that Seller 
Guarantor shall notify Buyer that it has entered into such a transaction within 
thirty (30) days following the consummation of such transaction. 
Notwithstanding the foregoing, (a) Seller Guarantor may not enter into such a 
transaction with a Subject Company whose sales of spectrophotometers or amino 
acid analyzers accounted for greater than fifty percent (50%) of the Subject 
Company's gross revenues with respect to its most recently completed fiscal 
year (a "Significant Portion") and (b) in the event that Seller Guarantor 
enters into such a transaction with a Subject Company whose sales of 
spectrophotometers or amino acid analyzers does not constitute a Significant 
Portion of such Subject Company's business, then Seller Guarantor shall use 
commercially reasonable efforts to dispose of that portion of such Subject 
Company's business that sells spectrophotometers or amino acid analyzers.

              (c)   While each of the undertakings contained in Section 4.5(a) 
above is considered by the parties to be reasonable, if any such undertaking 
should be held invalid as an unreasonable restraint of trade or for any other 
reason but would have been held valid if part of the wording thereof had been 
deleted or the period thereof reduced or the range of activities or area dealt 
with thereby reduced in scope, said undertaking shall apply with such 
modifications as may be necessary to make them valid and effective.


                                       35

<PAGE>

              (d)   Each undertaking contained in Section 4.5(a) above shall be 
read and construed independently of the other undertakings therein contained so 
that if one or more should be held to be invalid as an unreasonable restraint 
of trade or for any other reason whatsoever then the remaining undertakings 
shall be valid to the extent that they are not held to be so invalid.

              (e)   The benefit of the undertakings contained in Section 4.5(a) 
above may be assigned in whole or in part by Buyer in accordance with Section 
11.6.

              (f)   The undertakings contained in Section 4.5(a) above are 
given by each of Seller and Seller Guarantor for itself and (on the basis that 
references to Seller or Seller Guarantor were treated as references to the 
company concerned) on behalf of each company which is a member of the group of 
companies to which Seller or Seller Guarantor belongs (formed by itself, its 
holding company and any subsidiary of itself or any such holding company, as 
such expressions are defined in the Companies Act 1985); and Seller and Seller 
Guarantor hereby warrant to Buyer that each of Seller and Seller Guarantor, 
respectively, has been duly authorized so to undertake. The preceding 
notwithstanding, the undertakings contained in Section 4.5(a) above do not 
apply to AP Biotech or any entity that, directly or indirectly, is 
wholly-owned, or has not less than a majority of its voting power or economic 
interests owned, by Amersham Pharmacia Biotech Ltd. (each, an "AP Biotech 
Affiliate"), as similar undertakings with respect to AP Biotech or any AP 
Affiliate are expressly contained in the Distribution Agreement.

      4.6     CONFIDENTIALITY. Seller and Seller Guarantor agree that, after 
the Closing has been consummated, Seller, Seller Guarantor, and their 
respective officers, directors, agents, representatives and employees and 
affiliates (other than the Employees) will hold in strict confidence, and will 
not distribute or make available, any confidential or proprietary data or 
information of Seller that is used in connection with or related to Seller's 
Business, except:

              (a)   information which, as of the date hereof, is published or 
otherwise generally available to the public;

              (b)   information which after the date hereof becomes available 
to the public other than through an act or omission of the parties which is in 
violation of the provisions hereof;

              (c)   information rightfully acquired from a third party which 
did not obtain such information under a pledge of confidentiality;

              (d)   information which is developed by the disclosing party 
independently of the relationship established by this Agreement; or

              (e)   any information which the disclosing party is required to 
disclose by law (including the regulations of a stock exchange) or court order.


                                       36

<PAGE>

      4.7     INTENTIONALLY OMITTED.

      4.8     VALUE ADDED TAX.

              (a)   Buyer hereby represents that it will register under the 
Value Added Tax Act 1994 as soon as practicable after the Closing. The parties 
shall use all reasonable endeavors to secure that Section 49(1) of the Value 
Added Tax Act 1994 and Article 5 of the Value Added Tax (Special Provisions) 
Order 1995 shall apply to the transfer of Seller's Business hereunder. 
Accordingly, Seller shall on or about Closing deliver to Buyer all records 
referred to in the said Section 49 and shall not thereafter make any request to 
H.M. Customs & Excise for such records to be taken out of the custody of Buyer. 
Buyer hereby undertakes to preserve such records for such periods as may be 
required by law.

              (b)   If, notwithstanding the provisions referred to above, 
Seller is required to account to H.M. Customs & Excise for any Value Added Tax 
on the sale hereunder, Buyer shall pay to Seller such taxation, including any 
interest and penalties, in addition to the price otherwise agreed, such payment 
by Buyer to be made forthwith on its payment by Seller to H.M. Customs & Excise 
or, if later, delivery by Seller to Buyer of invoices for value added tax 
purposes in respect thereof.

              (c)   Seller shall ensure that until Closing all such records are 
kept and all such returns and payments are made in connection with Seller's 
Business as may be required by law for the purposes of the enactments relating 
to Value Added Tax.

              (d)   All Value Added Tax payable in respect of goods and 
services supplied or deemed to be supplied by Seller prior to the Closing Date 
and all interest payable thereon and penalties attributable thereto shall be 
paid to H.M. Customs & Excise by Seller.

              (e)   In addition to its obligations under Section 4.8 above, 
Seller shall on or before Closing give to Buyer written notice of the identity 
of such of the Subject Assets as are capital items covered by the Capital Goods 
Scheme pursuant to Part VA of the Value Added Tax (General) Regulations 1985 
and deliver to Buyer all such information as shall be necessary to enable Buyer 
to calculate any future adjustments to the deduction of input tax on such 
Subject Assets.

      4.9     AUDITED FINANCIAL STATEMENTS. Following the Closing, Seller 
shall, in the ordinary course, complete or cause to be completed its audited 
financial statements for the fiscal year ended December 31, 1998, with 
appropriate footnotes, accompanied by Cooper & Lybrand L.L.P.'s, independent 
public accountant, opinion, and Seller shall provide such financial statements 
to Buyer promptly thereafter.


                                       37

<PAGE>

                    5. REPRESENTATIONS AND WARRANTIES OF BUYER

      5.1     MAKING OF REPRESENTATIONS AND WARRANTIES. Buyer hereby makes the 
representations and warranties to Seller contained in this Section 5. For the 
purposes of this Agreement, references to "knowledge" or "best knowledge" of 
Buyer or "known" by Buyer or words of similar import, shall be deemed to 
include such knowledge as any executive officer employed by Buyer at the 
Closing Date or manager of Buyer actually has.

      5.2     ORGANIZATION OF BUYER. Buyer is a limited liability company duly 
organized, validly existing and in good standing under the laws of England and 
Wales with full corporate power to own or lease its properties and to conduct 
its business in the manner and in the places where such properties are owned or 
leased or such business is currently conducted or proposed to be conducted.

      5.3     AUTHORITY OF BUYER.

              (a)   Each of Buyer and Buyer Guarantor has or has received full 
right, authority and power to enter into this Agreement and each agreement, 
document and instrument to be executed and delivered by Buyer and Buyer 
Guarantor pursuant to this Agreement (including, without limitation, the 
Distribution Agreement) and to carry out the transactions contemplated hereby 
and thereby. The execution, delivery and performance by Buyer and Buyer 
Guarantor of this Agreement, and each such other agreement, document and 
instrument (including, without limitation, the Distribution Agreement) have 
been duly authorized by all necessary corporate action of Buyer and Buyer 
Guarantor, respectively, and their respective shareholders, if required, and no 
other action on the part of Buyer or Buyer Guarantor or their respective 
shareholders is required in connection therewith.

              (b)   This Agreement, and each agreement, document and instrument 
executed and delivered by Buyer and Buyer Guarantor pursuant to this Agreement 
(including, without limitation, the Distribution Agreement) constitute, or when 
executed and delivered will constitute, valid and binding obligations of Buyer 
and Buyer Guarantor enforceable in accordance with their terms. The execution, 
delivery and performance by Buyer and Buyer Guarantor of this Agreement and 
each such agreement, document and instrument:

                    (i)   does not and will not violate any provision of the 
Memorandum of Association of Buyer or the Articles of Organization and By-laws 
of Buyer Guarantor;

                    (ii)  does not and will not violate any laws of England and 
Wales, the United States, or, to the best of its knowledge, any nation, state 
or other jurisdiction applicable to Buyer or Buyer Guarantor;

                    (iii) does not require Buyer or Buyer Guarantor to obtain 
any approval, consent or waiver or make any filing prior to or on the Closing 
Date or, solely as a result of the consummation of the transactions 
contemplated by this Agreement, following the 


                                       38

<PAGE>

Closing Date with any person or entity (governmental or otherwise) that has not 
been obtained or made; and

                    (iv)  does not and will not result in a breach of, 
constitute a default under, accelerate any obligation under, or give rise to a 
right of termination of any indenture or loan or credit agreement or any other 
agreement, contract, instrument, mortgage, lien, lease, permit, authorization, 
order, writ, judgment, injunction, decree, determination or arbitration award 
to which Buyer or Buyer Guarantor is a party or by which the property of Buyer 
or Buyer Guarantor is bound or affected.

      5.4     FINDER'S FEE. Buyer has not incurred or become liable for any 
broker's commission or finder's fee relating to or in connection with the 
transactions contemplated by this Agreement or any other agreement contemplated 
hereby.

                            6. COVENANTS OF BUYER

      6.1     MAKING OF COVENANTS AND AGREEMENT. Buyer hereby makes the 
covenants and agreements set forth in this Section 6.

      6.2     NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly 
upon Buyer becoming aware of the impending or threatened occurrence of, any 
event which would cause or constitute a breach or default, or would have caused 
or constituted a breach or default had such event occurred or been known to 
Buyer prior to the date hereof, of any of the representations, warranties or 
covenants of Buyer contained in or referred to in this Agreement or in any 
Schedule or Exhibit referred to in this Agreement, Buyer shall give detailed 
written notice thereof to Seller and shall use its best efforts to prevent or 
promptly remedy the same.

      6.3     CONSUMMATION OF AGREEMENT. Buyer shall use its best efforts to 
perform and fulfill all conditions and obligations on its parts to be performed 
and fulfilled under this Agreement, to the end that the transactions 
contemplated by this Agreement shall be fully carried out.

                                7. CONDITIONS

      7.1     CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligation of Buyer 
to consummate this Agreement and the transactions contemplated hereby is 
subject to the fulfillment, prior to or at the Closing, of the following 
conditions precedent and the delivery of the following documents:

              (a)   REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the 
representations and warranties of Seller contained in Section 3 shall be true 
and correct as though made on and as of the Closing; Seller shall, on or before 
the Closing, have performed all of its obligations hereunder which by the terms 
hereof are to be performed on or before the Closing.


                                       39

<PAGE>

              (b)   NO MATERIAL CHANGE. There shall have been no material 
adverse change in the financial condition, prospects, properties, assets, 
liabilities, business or operations of Seller since June 30, 1998.

              (c)   CERTIFICATE FROM OFFICERS. Seller shall deliver to Buyer a 
certificate dated as of the Closing to the effect that: (i) the statements set 
forth in paragraph (a) and (b) above in this Section 7.1 are true and correct; 
and (ii) all bolts and fastenings attaching plant, machinery or fittings to 
land or buildings (insofar as included in the sale hereunder) which can safely 
be undone have been undone so that the same shall be severed at the Closing 
Date and title thereto shall pass by delivery.

              (d)   APPROVAL OF BUYER'S COUNSEL. All instruments and documents 
required to carry out this Agreement and the transactions contemplated hereby 
shall be consistent with the forms attached as exhibits hereto or shall 
otherwise have been reasonably approved by Goodwin, Procter & Hoar LLP and 
Cameron McKenna, each as counsel for Buyer.

              (e)   INTENTIONALLY OMITTED.

              (f)   INTENTIONALLY OMITTED.

              (g)   DISTRIBUTION AGREEMENT. Seller shall deliver two (2) 
originals of the Distribution Agreement in the form of EXHIBIT 7.1(g) executed 
by AP Biotech.

              (h)   LICENSE TO THE "PHARMACIA BIOTECH" NAME. Seller shall 
deliver two (2) originals of the License Agreement relating to the "Pharmacia 
Biotech" name in the form of EXHIBIT 7.1(h) executed by Seller Guarantor.

              (i)   LICENSE TO THE "AMERSHAM" NAME. Seller shall deliver two 
(2) originals of the License Agreement relating to the "Amersham" name in the 
form of EXHIBIT 7.1(i) executed by Amersham International plc.

              (j)   DELIVERY OF REQUIRED CONSENTS. Seller shall deliver to 
Buyer the Required Consents that it has obtained prior to the Closing.

              (k)   BILL OF SALE TO BUYER. Seller shall deliver two (2) 
originals of the Bill of Sale in the form of EXHIBIT 7(k) executed by Seller.

              (l)   INTENTIONALLY OMITTED.

              (m)   INTENTIONALLY OMITTED.

              (n)   ASSIGNMENT OF CONTRACTS AND ASSUMPTION OF LIABILITIES. 
Seller shall deliver two (2) originals of the Assignment of Contracts and 
Assumption of Liabilities in the form of EXHIBIT 7.1(n).


                                       40


<PAGE>


                  (o)      NAME CHANGE RESOLUTIONS. Seller shall deliver a
certified copy of a special resolution changing its name to some other name not
incorporating the word "Biochrom" or any other word or combination of words
capable of confusion therewith.

         7.2      CONDITIONS TO OBLIGATIONS OF SELLER. Seller's obligation to
consummate this Agreement and the transactions contemplated hereby is subject to
the fulfillment, prior to or at the Closing, of the following conditions
precedent and the delivery of the following documents:

                  (a)      REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the
representations and warranties of Buyer contained in Section 5 shall be true and
correct as though made on and as of the Closing; Buyer shall, on or before the
Closing, have performed all of its obligations hereunder which by the terms
hereof are to be performed on or before the Closing.

                  (b)      CERTIFICATE FROM OFFICERS. Buyer shall deliver to
Seller a certificate dated as of the Closing to the effect that the statements
set forth in paragraph (a) above in this Section 7.2 are true and correct.

                  (c)      APPROVAL OF SELLER'S COUNSEL. All instruments and
documents required to carry out this Agreement and the transactions contemplated
hereby shall be consistent with the forms attached as exhibits hereto or shall
otherwise have been reasonably approved by Curtis, Mallet-Prevost, Colt & Mosle,
as counsel for Seller.

                  (d)      DISTRIBUTION AGREEMENT. Buyer shall deliver two (2)
originals of the Distribution Agreement in the form of EXHIBIT 7.1(g) executed
by Buyer.

                  (e)      LICENSE TO THE "PHARMACIA BIOTECH" NAME. Buyer shall
deliver two (2) originals of the License Agreement relating to the "Pharmacia
Biotech" name in the form of EXHIBIT 7.1(h) executed by Buyer.

                  (f)      LICENSE TO THE "AMERSHAM" NAME. Buyer shall deliver
two (2) originals of the License Agreement relating to the "Amersham" name in
the form of EXHIBIT 7.1(i) executed by Buyer.

                  (g)      ASSIGNMENT OF CONTRACTS AND ASSUMPTION OF
LIABILITIES. Buyer shall deliver two (2) originals of the Assignment of
Contracts and Assumption of Liabilities in the form of EXHIBIT 7.1(n).

         7.3      FURTHER CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER. Each of
Buyer's and Seller's obligation to consummate this Agreement and the
transactions contemplated hereby is subject to the fulfillment, prior to or at
the Closing, of the following conditions precedent:

                  (a)      GOVERNMENTAL MATTERS. No government or governmental,
quasi-governmental supranational or state agency or regulatory body professional
association


                                    41

<PAGE>


or trade union or court or any other person or organization in any 
jurisdiction having by the date on which all the other conditions set out in 
this Section 7 have either been fulfilled or waived:

                           (i)      instituted, implemented or threatened any
action, suit or investigation to restrain, prohibit or otherwise challenge or
interfere with the transaction proposed hereunder or any part thereof;

                           (ii)     threatened to take any action as a result
or in anticipation of the implementation of such transaction or any part
thereof; or

                           (iii)    proposed or enacted any statute or
regulation which would prohibit, materially restrict or materially delay
implementation of such transaction or any part thereof or the operations of
Seller.

                  (b)      LEASEHOLD PROPERTY MATTERS.

                           (i)      Seller shall have entered into the Deed of
Surrender of Lease with Buyer and shall have terminated the Seller Lease with
the consent of Buyer; and

                           (ii)     Following the termination of the Seller
Lease as described in clause (i) above, Buyer shall have entered into a lease
agreement with Trinity College with respect to the Leasehold Property on terms
acceptable to Buyer, in its sole discretion.

                             8. INTENTIONALLY OMITTED

                 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING

         9.1      SURVIVAL OF WARRANTIES. The representations, warranties,
agreements, covenants and obligations in this Agreement or any other agreement
schedule, exhibit or certificate executed by Seller or Seller Guarantor are
material, shall be deemed to have been relied upon by the other party and shall
survive the Closing for the period of time as to which indemnification is
payable under Section 10 with respect thereto, regardless of any investigation
or knowledge acquired on the part of Buyer or its affiliates and shall not merge
in the performance of any obligation by either party hereto.

         9.2      PAYMENT OF EXCLUDED LIABILITIES. Seller shall pay or perform
all of the Excluded Liabilities in accordance with their terms as soon as
practicable.

         9.3      PAYMENT OF ASSUMED LIABILITIES. Buyer shall pay all of the
Assumed Liabilities and perform its obligations under the Assumed Contracts in
accordance with their terms as soon as practicable.


                                      42

<PAGE>


                               10. INDEMNIFICATION

         10.1     INDEMNIFICATION BY SELLER. Seller agrees subsequent to the
Closing to indemnify and hold Buyer and its shareholders, subsidiaries and
affiliates and persons serving as officers, directors, partners or employees
thereof (individually a "Buyer Indemnified Party" and collectively, the "Buyer
Indemnified Parties") harmless from and against any damages, actions,
proceedings, demands, liabilities, diminution in value, losses, taxes, fines,
penalties, costs, claims and expenses (including, without limitation, reasonable
fees of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts paid in investigation, defense or
settlement of the foregoing) which may be sustained or suffered by any of them
arising out of or based upon any of the following matters:

                  (a)      fraud, dishonesty, intentional misrepresentation or a
deliberate or willful breach by Seller of any of its representations,
warranties, agreements or covenants under this Agreement or any other agreement,
certificate, schedule or exhibit executed by Seller or Seller Guarantor and
delivered pursuant hereto;

                  (b)      any other breach of any representation or warranty of
Seller under this Agreement or any other agreement, certificate, schedule or
exhibit executed by Seller or Seller Guarantor and delivered pursuant hereto, or
by reason of any claim, action or proceeding asserted or instituted growing out
of any matter or thing constituting a breach of such representations or
warranties;

                  (c)      any breach of any agreement or covenant of Seller
under this Agreement or any other agreement, certificate, schedule or exhibit
executed by Seller and delivered pursuant hereto, or by reason of any claim,
action or proceeding asserted or instituted growing out of any matter or thing
constituting a breach of such covenants;

                  (d)      any failure by Seller to perform and discharge any of
the Excluded Liabilities, including its obligations pursuant to Sections 2.2(d)
and (f) hereof;

                  (e)      any liability of Seller for Taxes (as defined in
Section 3.6 hereof), whether levied or imposed in the United Kingdom or
elsewhere, of whatever nature and whether past, present or, solely to the extent
arising from the Subject Assets or from the conduct of the Business, including
the Excluded Liabilities, by Seller prior to the Closing Date, future, and all
penalties, charges, costs and interest relating to the same and any penalties
chargeable for non-compliance by Seller with any statutory provisions or
regulations in connection therewith; and

                  (f)      any liability (whether arising before or after the
Closing Date) relating to any environmental or worker health and safety matter
of any kind or nature whatsoever, known or unknown, asserted or unasserted, that
arises in connection with or on the basis of events, acts, omissions,
conditions, or any other state of facts occurring or existing prior to or on the
Closing Date.


                                      43

<PAGE>


         10.2     LIMITATIONS ON INDEMNIFICATION BY SELLER. Notwithstanding the
foregoing, the right of Buyer Indemnified Parties to indemnification under
Section 10.1 shall be subject to the following provisions:

                  (a)      No indemnification shall be payable pursuant to
Section 10.1(b) to any Buyer Indemnified Party, unless the total of all claims
for indemnification pursuant to Section 10.1(b) (a "Buyer Indemnification
Claim") shall exceed $50,000 in the aggregate (the "Buyer $50,000 Threshold"),
whereupon the full amount of such Buyer Indemnification Claims shall be
recoverable in accordance with the terms hereof. In the event that a Buyer
Indemnified Party makes a Buyer Indemnification Claim that, individually, or
together with all other such Buyer Indemnification Claims, exceeds the Buyer
$50,000 Threshold, thereafter no indemnification shall be payable with respect
to any subsequently made Buyer Indemnification Claim pursuant to Section 10.1(b)
to any Buyer Indemnified Party, unless the total of all such subsequently made
Buyer Indemnification Claims shall exceed $10,000 in the aggregate (the "Buyer
$10,000 Threshold"), whereupon the full amount of such subsequently made Buyer
Indemnification Claims shall be recoverable in accordance with the terms hereof;
PROVIDED, HOWEVER, that if the Buyer $50,000 Threshold has been exceeded and on
the Indemnification Cut-Off Date (as defined below) there exist subsequently
made Buyer Indemnification Claims that do not, in the aggregate, exceed the
Buyer $10,000 Threshold, the full amount of such subsequently made Buyer
Indemnification Claims shall be recoverable in accordance with the terms hereof.

                  (b)      No indemnification shall be payable to a Buyer
Indemnified Party with respect to Buyer Indemnification Claims asserted pursuant
to Section 10.1(b) (exclusive of Buyer Indemnification Claims for
indemnification for Taxes or a breach of any representation, warranty or
covenant with respect to Taxes or tax related matters, environmental related
matters and title to the Subject Assets) after March 31, 2001 (the
"Indemnification Cut-Off Date"), except in respect of matters which have been
the subject of a bona fide written Buyer Indemnification Claim which is made
before the Indemnification Cut-Off Date by or on behalf of a Buyer Indemnified
Party to Seller; and

                  (c)      Buyer Indemnified Parties shall not be entitled to
indemnification (A) with respect to claims asserted pursuant to Sections
10.1(b)-(e) hereof in an amount in excess of the Purchase Price or (B) with
respect to claims asserted pursuant to Sections 10.1(f) hereof in an amount in
excess of $15,000,000.

         10.3     INDEMNIFICATION BY BUYER. Buyer agrees subsequent to the
Closing to indemnify and hold Seller and its shareholders, subsidiaries,
affiliates and persons serving as officers, directors, partners or employees
thereof (individually a "Seller Indemnified Party" and collectively, the "Seller
Indemnified Parties") harmless from and against any damages, actions,
proceedings, demands, liabilities, diminution in value, losses, taxes, fines,
penalties, costs, claims and expenses (including, without limitation, reasonable
fees of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts


                                    44

<PAGE>


paid in investigation, defense or settlement of the foregoing) which may be 
sustained or suffered by any of them arising out of or based upon any of the 
following matters:

                  (a)      fraud, dishonesty, intentional misrepresentation or a
deliberate or willful breach by Buyer of any of its representations, warranties,
agreements or covenants under this Agreement or any other agreement (other than
the Distribution Agreement), certificate, schedule or exhibit executed by Buyer
or Buyer Guarantor and delivered pursuant hereto;

                  (b)      any other breach of any representation or warranty of
Buyer under this Agreement or any other agreement (other than the Distribution
Agreement), certificate, schedule or exhibit executed by Buyer or Buyer
Guarantor and delivered pursuant hereto, or by reason of any claim, action or
proceeding asserted or instituted growing out of any matter or thing
constituting a breach of such representations or warranties;

                  (c)      any breach of any agreement or covenant of Buyer
under this Agreement or any other agreement entered into in connection herewith
(other than the Distribution Agreement) or in any certificate delivered by Buyer
pursuant hereto, or by reason of any claim, action or proceeding asserted or
instituted growing out of any matter or thing constituting a breach of such
covenant;

                  (d)      any failure by Buyer to perform and discharge any of
the Assumed Liabilities, including its obligations pursuant to Sections 2.2(d)
and (f) hereof; and

                  (e)      any liability relating to any environmental or worker
health and safety matter of any kind or nature whatsoever, known or unknown,
asserted or unasserted, that arises in connection with or on the basis of
events, acts, omissions, conditions, or any other state of facts caused by
Buyer, its affiliates, directors, officers, employees, agents or representatives
after the Closing Date.

         10.4     LIMITATION ON INDEMNIFICATION BY BUYER. Notwithstanding the
foregoing, the right of Seller Indemnified Parties to indemnification under
Section 10.3 shall be subject to the following provisions:

                  (a)      No indemnification shall be payable pursuant to
Section 10.3(b) to any Seller Indemnified Party, unless the total of all claims
for indemnification pursuant to Section 10.3(b) (a "Seller Indemnification
Claim") shall exceed $50,000 in the aggregate (the "Seller $50,000 Threshold"),
whereupon the full amount of such Seller Indemnification Claims shall be
recoverable in accordance with the terms hereof. In the event that a Seller
Indemnified Party makes a Seller Indemnification Claim that, individually, or
together with all other Seller Indemnification Claims, exceeds the Seller
$50,000 Threshold, thereafter no indemnification shall be payable with respect
to any subsequently made Seller Indemnification Claim pursuant to Section
10.3(b) to any Seller Indemnified Party, unless the total of all such
subsequently made Seller Indemnification Claims shall exceed $10,000 in the
aggregate (the "Seller $10,000 Threshold"), whereupon the full amount of such
subsequently made Seller Indemnification


                                    45

<PAGE>


Claims shall be recoverable in accordance with the terms hereof; PROVIDED, 
HOWEVER, that if the Seller $50,000 Threshold has been exceeded and on the 
Indemnification Cut-Off Date there exist subsequently made Seller 
Indemnification Claims that do not, in the aggregate, exceed the Seller 
$10,000 Threshold, the full amount of such subsequently made Seller 
Indemnification Claims shall be recoverable in accordance with the terms 
hereof.

                  (b)      No indemnification shall be payable to a Seller
Indemnified Party with respect to Seller Indemnification Claims asserted
pursuant to Section 10.3(b) (exclusive of Seller Indemnification Claims for
indemnification for a breach of any representation, warranty or covenant with
respect to payment of Value Added Taxes) after the Indemnification Cut-Off Date,
except in respect of matters which have been the subject of a bona fide written
Seller Indemnification Claim which is made before the Indemnification Cut-Off
Date by or on behalf of Seller to Buyer; and

                  (c)      Seller Indemnified Parties shall not be entitled to
indemnification (A) with respect to claims asserted pursuant to Sections
10.3(b)-(d) hereof in an amount in excess of the Purchase Price or (B) with
respect to claims asserted pursuant to Sections 10.3(e) hereof in an amount in
excess of $15,000,000.

         10.5     NOTICE; DEFENSE OF CLAIMS.

                  (a)      An indemnified party may make claims for
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder.
If indemnification is sought for a claim or liability asserted by a third party,
the indemnified party shall also give written notice thereof to the indemnifying
party promptly after it receives notice of the claim or liability being
asserted, but the failure to do so shall not relieve the indemnifying party from
any liability except to the extent that it is prejudiced by the failure or delay
in giving such notice. Such notice shall summarize the bases for the claim for
indemnification and any claim or liability being asserted by a third party.

                  (b)      Within thirty (30) days after receiving such notice
the indemnifying party shall give written notice to the indemnified party
stating whether it disputes the claim for indemnification and whether it will
defend against any third party claim or liability at its own cost and expense.

                           (i)      With respect to any claim for
indemnification (other than a claim or liability asserted by a third party), if
the indemnifying party fails to give notice that it disputes an indemnification
claim within thirty (30) days after receipt of notice thereof, it shall be
deemed to have accepted and agreed to the claim, which shall become immediately
due and payable.

                           (ii)     With respect to any claim or liability being
asserted by a third party, the indemnifying party shall be entitled to direct
the defense against a third party claim


                                     46

<PAGE>


or liability with counsel selected by it (subject to the consent of the 
indemnified party, which consent shall not be unreasonably withheld) as long 
as the indemnifying party is conducting a good faith and diligent defense.

         The indemnified party shall at all times have the right to fully
participate in the defense of a third party claim or liability at its own
expense directly or through counsel; PROVIDED, HOWEVER, that if the named
parties to the action or proceeding include both the indemnifying party and the
indemnified party and the indemnified party is advised by its own counsel that
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the indemnified party may engage
separate counsel at the reasonable expense of the indemnifying party. If the
indemnifying party fails to give notice as required by the first sentence of
this paragraph (b) stating whether it disputes the claim for indemnification and
whether it will defend against any third party claim or liability at its own
cost or expense, or if such good faith and diligent defense is not being or
ceases to be conducted by the indemnifying party, the indemnified party shall
have the right, at the expense of the indemnifying party, to undertake the
defense of such claim or liability (with counsel selected by the indemnified
party), and to compromise or settle it, exercising reasonable business judgment.
If the third party claim or liability is one that by its nature cannot be
defended solely by the indemnifying party, then the indemnified party shall make
available such information and assistance as the indemnifying party may
reasonably request and shall cooperate with the indemnifying party in such
defense, at the expense of the indemnifying party.

                                11.MISCELLANEOUS

         11.1     WARRANTY OBLIGATIONS. In the event that there exist warranty
claims relating to products sold by Seller prior to the Closing Date, Seller
shall be responsible to perform the obligations associated with such warranty
claims (the "Warranty Obligations"). Notwithstanding the foregoing, Buyer agrees
to perform the Warranty Obligations on Seller's behalf, subject to receipt of
payment as provided below. In connection with the performance of the Warranty
Obligations, Buyer shall invoice Seller reflecting (a) the cost for parts used
by Buyer in, and Buyer's labor costs associated with, the performance of the
Warranty Obligations, at Buyer's then current rates for such parts and labor and
(b) reasonable out-of-pocket travel and accommodation expenses associated with
Buyer's performance of the Warranty Obligations. Seller agrees to pay each such
invoice within thirty (30) days following Seller's receipt thereof.

         11.2     FEES AND EXPENSES.

                  (a)      Except as otherwise provided in this Agreement, each
of the parties will bear its own expenses in connection with the negotiation and
the consummation of the transactions contemplated by this Agreement, and no
expenses of Seller relating in any way to the purchase and sale of the Subject
Assets hereunder and the transactions contemplated


                                    47

<PAGE>


hereby, including, without limitation, legal, accounting or other 
professional expenses of Seller, shall be charged to or paid by Buyer or 
included in any of the Assumed Liabilities.

                  (b)      Buyer shall pay any stamp duty on this Agreement and
on any assignments to the Subject Assets together with any Land Registry fees.

         11.3     GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws of the State of New York without regard to its
conflict of laws provisions. The preceding notwithstanding, the parties
acknowledge that Seller's Business is situated in England and Wales and that,
accordingly, the laws of England and Wales of a mandatory nature may apply to
certain matters, including without limitation, employment, pension,
environmental, tax and competition matters.

         11.4     NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered personally or sent by facsimile transmission (receipt
acknowledged), upon receipt, or if sent by first class registered, certified or
recorded delivery post, upon the sooner of the date on which receipt is
acknowledged or the expiration of five (5) Business Days after deposit into the
custody of the relevant postal authorities properly addressed with postage
prepaid. All notices to a party will be sent to the addresses set forth below or
to such other address or person as such party may designate by notice to each
other party hereunder:

TO BUYER:                  Harvard Apparatus, Inc.
                           84 October Hill Road
                           Holliston, MA  01746-1371
                           Attn:    Chane Graziano, Chief Executive Officer
                           David Green, President
                           Fax:  (508) 429-5732

With a copy to:            Goodwin, Procter & Hoar LLP
                           Exchange Place
                           Boston, MA  02109
                           Attn:  H. David Henken, P.C.
                           Fax:  (617) 523-1231

                           Cameron McKenna
                           Mitre House
                           160 Aldersgate Street
                           London, EC1A 4DD
                           Attn:  Guilherme Brafman
                           Fax:  011-44-171-367-2000

TO SELLER:                 Pharmacia & Upjohn, Inc.
                           7000 Portage Road


                                    48

<PAGE>


                           Kalamazoo, Michigan 49001-0199
                           Attn: Robert J. Meisenhelder, Esq.
                           Fax: (616) 833-7564

With a copy to:            Pharmacia & Upjohn Limited
                           Davy Avenue
                           Knowlhill
                           Milton Keynes MK5 8PH
                           Buckingham, England
                           Attn: Graham Lee
                           Fax: 011-44-190-860-3909

                           Curtis, Mallet-Prevost, Colt & Mosle
                           101 Park Avenue
                           New York, New York  10178
                           Attn:  Eric L. Gilioli, Esq.
                           Fax:  (212) 697-1559

         Any notice given hereunder may be given on behalf of any party by his
counsel or other authorized representatives. In proving service of a notice it
shall be sufficient to prove that personal delivery was made, or that the
envelope containing such notice was properly addressed and delivered into the
custody of the postal authorities as a prepaid first class registered or
recorded delivery letter or Datapost letter as the case may be.

         11.5     ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits referred to herein and other agreements entered into in connection
herewith (including, without limitation, the Distribution Agreement) and the
other writings specifically identified herein or contemplated hereby, is
complete, reflects the entire agreement of the parties with respect to its
subject matter, and supersedes all previous written or oral negotiations,
commitments and writings. No promises, representations, understandings,
warranties and agreements have been made by any of the parties hereto except as
referred to herein or therein in such Schedules and Exhibits or in such other
writings; and all inducements to the making of this Agreement and such other
agreements relied upon by either party hereto have been expressed herein or in
such Schedules or Exhibits or in such other writings.

         11.6     ASSIGNABILITY; BINDING EFFECT. This Agreement may not be
assigned by a party without the prior written consent of the other parties
hereto, which shall not be unreasonably withheld. This Agreement shall be
binding upon and enforceable by, and shall inure to the benefit of, the parties
hereto and their respective heirs, successors and permitted assigns.

         11.7     EXECUTION IN COUNTERPARTS. For the convenience of the parties
and to facilitate execution, this Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.


                                     49

<PAGE>


         11.8     AMENDMENTS. This Agreement may not be amended or modified, nor
may compliance with any condition or covenant set forth herein be waived, except
by a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.

         11.9     PUBLICITY AND DISCLOSURES.

                  (a)      Except if and insofar as required by law (including
any applicable stock exchange regulation), no press releases, announcements or
public disclosure, either written or oral, of the transactions contemplated by
this Agreement, shall be made by a party to this Agreement without the prior
knowledge and written consent of Buyer and Seller.

                  (b)      Seller and Buyer each undertake to provide all such
information known to it or which on reasonable inquiry ought to be known to it
as may reasonably be required by Buyer, Seller or Seller Guarantor for the
purpose of complying with the requirements of law (including any applicable
stock exchange regulation).

         11.10    AGREEMENT TO CONTINUE IN FULL FORCE. This Agreement shall,
insofar as it remains to be performed, continue in full force and effect
notwithstanding Closing.

         11.11    DISPUTE RESOLUTION.

                  (a)      The parties hereby agree to cooperate in good faith
to resolve any disputes, claims or controversies that may arise hereunder or
with respect to the performance by either party of its obligations as
contemplated hereby.

                  (b)      Except as provided below, in the event that any
dispute, claim or controversy shall not be so resolved by the parties among
themselves, the parties agree that any and all disputes, claims or controversies
arising out of or relating to this Agreement or a breach thereof, whether
grounded in common law or statutory law, shall be finally settled under the
Rules of Arbitration of the International Chamber of Commerce, in New York City,
New York.

                  (c)      The arbitration shall be conducted by three (3)
arbitrators, one (1) selected by each of Seller and Buyer and the third
appointed by the two (2) arbitrators selected by such parties. The judgment of
the three (3) arbitrators shall be rendered no later than the earlier of (i) one
year after such dispute is submitted to arbitration in accordance with this
Section 11.11 or (ii) such shorter period of time as the three (3) arbitrators
shall determine at the outset of such arbitration to be reasonable in light of
the nature of such dispute (which such determination shall be memorialized in
writing and delivered to the parties hereto).

                  (d)      Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.


                                      50

<PAGE>


                  (e)      Except as provided below, the failure or refusal of a
party to submit to arbitration in accordance with this Section 11.11 shall be
deemed a breach of this Agreement. If a party seeks and secures judicial
intervention requiring enforcement of this arbitration provision, such party
shall be entitled to recover from the other party(ies) in such judicial
proceeding all costs and expenses, including reasonable attorneys' fees, that it
was thereby required to incur.

         Notwithstanding anything to the contrary contained herein, the
provisions of this Section 11.11 shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.

         Each of the parties hereto (a) hereby irrevocably submits to the
jurisdiction of the United States District Court of the State of New York for
the purpose of enforcing the award or decision in any such proceeding, (b)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named court, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered or certified mail at the address to which
notices are to be given. Each of the parties hereto agrees that its or his
submission to jurisdiction and its or his consent to service of process by mail
is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced
in other jurisdictions by suit, action or proceeding on the judgment, or in any
other manner provided by or pursuant to the laws of such other jurisdiction.

         11.12    SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained in this Agreement shall
not be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      51

<PAGE>


         AS WITNESS the hands of the parties hereto or their duly authorized
representatives within the United States the day and year first above written.

Signed by Biochrom         )
Limited acting by          )        /S/ CHANE GRAZIANO     
                           )        ------------------------------------
Chane Graziano             )        Chane Graziano
and                        )
David Green                )        /S/ DAVID GREEN
                                    ------------------------------------
                                    David Green

Signed by Pharmacia        )
Biotech (Biochrom)         )        /S/ GRAHAM LEE 
                           )        ------------------------------------
Limited acting by          )        Graham Lee
Graham Lee                 )
and                        )
Keith Krzywicki            )        /S/ KEITH KRZYWICKI    
                                    ------------------------------------
                                    Keith Krzywicki

         The undersigned hereby agrees to guarantee the obligations of Buyer
under this Agreement, including, without limitation, Buyer's indemnification
obligations pursuant to Section 10 hereto and further agrees to be bound by the
provisions of Section 2.1(c) hereto.

                                        Signed by an authorized signatory of 
                                        HARVARD APPARATUS, INC.


                                        By:    /S/ CHANE GRAZIANO        
                                               -------------------------
                                               Name: Chane Graziano
                                               Title:   Chief Executive Officer

         The undersigned hereby agrees to guarantee the obligations of Seller
under this Agreement including, without limitation, Seller's indemnification
obligations pursuant to Section 10 hereto and further agrees to be bound by the
provisions of Section 4.5 hereto.

                                        Signed by an authorized signatory of 
                                        PHARMACIA & UPJOHN, INC.


                                        By:    /S/ MATS PETTERSSON       
                                               -------------------------
                                               Name: Mats Pettersson
                                               Title: Senior Vice President,
                                                      Business Development





<PAGE>

                                                                   EXHIBIT 2.2

                            ASSET PURCHASE AGREEMENT

         AGREEMENT entered into as of July 14, 2000 by and between Harvard 
Apparatus, Inc., a Massachusetts corporation ("BUYER"), AmiKa Corporation., a 
Maryland corporation ("AMIKA"), and Ashok Shukla (the "SHAREHOLDER") for the 
purposes of the Sections entitled "1.8. New Technology Licensing," "2.5(b)(i) 
and (ii). Subject Assets; Personal Property," "3.4. Non-Competition" and 
"3.5. Confidentiality."

                              W I T N E S S E T H

         WHEREAS, subject to the terms and conditions set forth herein, Buyer 
desires to purchase from AmiKa, and AmiKa desires to sell, transfer and 
assign to Buyer, all of the properties and assets of the business and 
operations of AmiKa relating to the manufacturing, distribution and sale of 
the Products (as defined in Section 2.9(o)(ii) hereof). The business and 
operations of AmiKa which relate solely to the Products are referred to 
herein as the "BUSINESS";

         WHEREAS, Buyer and AmiKa have previously entered into a non-binding 
letter agreement dated May 26, 2000 (the "ORIGINAL LETTER AGREEMENT"); and

         WHEREAS, this Agreement is intended by the parties hereto to 
constitute the entire agreement of the parties and to supersede the Original 
Letter Agreement and, accordingly, upon the execution of this Agreement the
 
provisions of the Original Letter Agreement shall be of no further force and 
effect.

         NOW, THEREFORE, in order to consummate the purchase and sale of the 
Subject Assets and in consideration of the mutual agreements set forth 
herein, the parties hereto agree as follows:

1.       PURCHASE AND SALE OF ASSETS.

         1.1      PURCHASE AND SALE OF ASSETS.

                  (a) Subject to the provisions of this Agreement, at the 
Closing (as defined in Section 1.5 hereof) AmiKa shall sell, transfer and 
assign to Buyer and Buyer shall acquire all right, title and interest in all 
of the assets, property and business of AmiKa related to, used or held for 
use in the Business (except for patent application number 09/591009 relating 
to the Puretip product, and the cash and accounts receivable on AmiKa's 
balance sheet at the Closing set forth on SCHEDULE 1.1(A) (collectively, the 
"EXCLUDED ASSETS")) of every kind and description, tangible and intangible, 
real, personal or mixed, and wherever located, including, without limitation, 
all goodwill and Intellectual Property Assets (as defined in Section 2.9 
hereof) and all of AmiKa's rights and interests in and to all purchase 
orders, commitments, contracts and agreements relating to the Business, 
including without limitation the assets, property and business set forth on 
SCHEDULE 1.1(A) hereto.


<PAGE>

         The assets, property and business of AmiKa being sold to and 
purchased by Buyer under this Section 1.1(a) are hereinafter sometimes 
referred to as the "SUBJECT ASSETS."

         1.2 LIABILITIES. Except with respect to those unexpired purchase 
orders made in the ordinary course of business as set forth on SCHEDULE 1.2 
attached hereto and those warranty obligations set forth in the AmiKa 
Catalogue (as defined in Section 2.19(o)(ii)), as to which Buyer will assume 
the obligations thereunder but only to the extent set forth therein, Buyer 
will not assume any liabilities of AmiKa, including, without limitation 
accounts payable and any liabilities arising from or related to severance 
payments required to be made or owed in connection with the termination of 
any employees of AmiKa. Notwithstanding anything in this Agreement to the 
contrary, Buyer will not assume, and Seller shall remain solely responsible 
for, any liability (whether arising before or after the Closing Date) 
relating to any environmental or worker health and safety matter of any kind 
or nature whatsoever, known or unknown, asserted or unasserted, that arises 
in connection with or on the basis of events, acts, omissions, conditions, or 
any other state of facts occurring or existing prior to or on the Closing 
Date.

          1.3. PURCHASE PRICE AND PAYMENT. In consideration of the sale by 
AmiKa to Buyer of the Subject Assets, subject to the satisfaction of all of 
the conditions contained herein, at the Closing (as defined in Section 1.5) 
Buyer shall cause the amount of $3,000,000 (the "PURCHASE PRICE") to be 
delivered as follows:

               (a) Buyer shall deliver to Boston Safe Deposit & Trust Company 
(the "ESCROW AGENT") cash in the amount of $100,000 (the "INDEMNIFICATION 
ESCROW AMOUNT") to be held in escrow pursuant to and in accordance with the 
terms of an Escrow Agreement in the form attached hereto as EXHIBIT 1.3 (the 
"ESCROW Agreement"); and

               (b) Buyer shall deliver to AmiKa an amount equal to the 
Purchase Price less the Escrow Amount (or $2,900,000) by wire transfer of 
immediately available funds to First Union National Bank, Center Park Drive, 
Columbia, Maryland 21045, ABA #:055003201, Account #: 4371239315 (the "WIRE 
TRANSFER INSTRUCTIONS").

         Each of Buyer, AmiKa and the Shareholder hereby agree that following 
the Closing Date, they, and each of their respective officers and directors, 
will hold in strict confidence, and will not distribute or make available, 
the financial terms of this Agreement, except as required by law or subject 
to an obligation of confidence by a third party receiving such information.

         1.4. INVENTORY ADJUSTMENT. AmiKa's Inventory (as defined in Section 
2.7) at Closing, as such amount is mutually determined and agreed upon by 
Buyer and AmiKa prior to the Closing (the "CLOSING INVENTORY VALUE"), shall 
have a retail value equal to approximately $200,000, but in no event shall 
the Closing Inventory Value be less than $180,000. If the sum of the retail 
value of any finished goods Inventory made by AmiKa at Buyer's request 
following the Closing Date (as defined in Section 1.5) plus the Closing 
Inventory Value (the "INVENTORY SUM") exceeds $180,000, Buyer shall pay to 
AmiKa by wire transfer (in 

                                       2


<PAGE>

accordance with the Wire Transfer Instructions) an amount equal to 35% of the 
excess of the Inventory Sum over $180,000 within three (3) business days 
following receipt of such finished goods inventory by Buyer.

         1.5. TIME AND PLACE OF CLOSING. The closing of the purchase and sale 
provided for in this Agreement (herein called the "CLOSING") shall be held at 
the offices of Goodwin, Procter & Hoar LLP at Exchange Place, Boston, 
Massachusetts, on July 14, 2000 (the "CLOSING DATE") or at such other place 
or earlier or later date or time as may be fixed by mutual agreement of Buyer 
and AmiKa.

         1.6. TRANSFER OF SUBJECT ASSETS. At the Closing, AmiKa shall deliver 
or cause to be delivered to Buyer good and sufficient instruments of transfer 
transferring to Buyer title to all the Subject Assets. Such instruments of 
transfer (a) shall be in the form and will contain the warranties, covenants 
and other provisions (not inconsistent with the provisions hereof) which are 
usual and customary for transferring the type of property involved under the 
laws of the jurisdictions applicable to such transfers, (b) shall be in form 
and substance satisfactory to Buyer and its counsel, and (c) shall 
effectively vest in Buyer good and marketable title to all the Subject Assets 
free and clear of all liens, restrictions and encumbrances. The Subject 
Assets will be packed and shipped by common carrier (both at Buyer's expense) 
to Buyer's place of business at 84 October Hill Road, Holliston, 
Massachusetts.

         1.7  FURTHER ASSURANCES. AmiKa, at any time on and after the Closing 
Date, shall execute and deliver such further instruments of transfer and 
assignment and other documents and take such other actions as may reasonably 
requested by Buyer in order to transfer to Buyer or its permitted assigns 
title to and possession of any of the Subject Assets acquired hereunder or 
otherwise to carry out the purposes of this Agreement.

         1.8  NEW TECHNOLOGY LICENSING.

              (a) For a period of four (4) years following the Closing Date, 
Buyer will have the right to be the first party offered (the "RIGHT OF FIRST 
OFFER") a license to all new technology developed by any of AmiKa or the 
Shareholder (collectively, the "LICENSING PARTIES") (i) which competes with 
the technology underlying the Products or (ii) for sample preparation using 
proteins, peptides, nucleic acids or other biomolecules (whether patented, 
patent pending, patent applied for or unpatented), for the worldwide, 
exclusive rights to make, use and sell such technology.

              (b) In connection with Buyer's Right of First Offer, the 
applicable Licensing Party(ies) shall deliver to the Buyer (i) a written 
notice offering a license to the new technology pursuant to Section 1.8(a) 
(the "NEW TECHNOLOGY LICENSE") and (ii) a license agreement substantially in 
the form attached hereto as EXHIBIT 1.8 that will include all terms and 
conditions of the New Technology License; PROVIDED, that the parties shall, 
within fifteen (15) business days following the exercise by Buyer of its 
Right of First Offer hereunder, mutually agree to the level of minimum sales 
to be used for determining the minimum royalties to be paid under each such 
license agreement entered into with respect to each New Technology 

                                       3


<PAGE>

License ("MINIMUM SALES"). Buyer shall have thirty (30) calendar days in 
which to exercise its Right of First Offer by providing written notice to the 
applicable Licensing Party(ies). In the event Buyer does not so exercise its 
Right of First Offer within such thirty (30) day period, or if Buyer does 
exercise it Right of First Offer but the parties cannot mutually agree upon 
the Minimum Sales within the fifteen (15) business day period as described 
above, Buyer's Right of First Offer with respect only to the particular New 
Technology License being offered by Seller shall be deemed waived.

              (c) In the event Buyer shall not have exercised its Right of 
First Offer, the applicable Licensing Party(ies) may offer such New 
Technology License to a third party on the same terms and subject to the same 
conditions as were offered to Buyer pursuant to Section 1.8(b). If, however, 
the Licensing Party(ies) offers such New Technology License to a third party 
on terms or conditions that are more favorable than those offered to the 
Buyer in connection with its Right of First Offer (a "DIFFERING NEW 
TECHNOLOGY LICENSE"), prior to entering into the Differing New Technology 
License with such third party, (i) the applicable Licensing Party(ies) shall 
notify Buyer in writing of its offer of the Differing New Technology License 
to such third party and (ii) Buyer shall have the right to accept the 
Differing New Technology License on the same terms and conditions so offered 
by the applicable Licensing Party(ies) to such third party (the "RIGHT OF 
LAST REFUSAL"). Buyer shall have fifteen (15) calendar days in which to 
exercise its Right of Last Refusal by providing written notice to the 
applicable Licensing Party(ies). In the event Buyer does not so exercise its 
Right of Last Refusal within such fifteen (15) day period, Buyer's Right of 
Last Refusal with respect only to the particular Differing New Technology 
License being offered by Seller shall be deemed waived. The offer of a New 
Technology License by a Licensing Party(ies) to a third party in accordance 
with the terms of this Section 1.8(c) shall be exempt from the provisions of 
Section 3.4 and 3.5.

         1.9  ALLOCATION OF PURCHASE PRICE. Prior to the Closing, Buyer and 
AmiKa shall agree on the fair market values by class, in accordance with 
Section 1060 of the Internal Revenue Code of 1986, as amended (the "CODE"), 
and the Treasury Regulations thereunder, of the Subject Assets and the 
undertakings set forth in Section 3.4, which such agreement is contained in 
SCHEDULE 1.9. The fair market provided in SCHEDULE 1.9 shall be used by Buyer 
and AmiKa for all financial, accounting, regulatory and tax purposes, 
including, but not limited to, any reporting requirement of the Internal 
Revenue Service (the "IRS") or any state, local, or foreign taxing authority. 
Buyer and AmiKa agree to file IRS Forms 8594 that are consistent with the 
fair market values provided in SCHEDULE 1.9 and in accordance with Section 
1060 of the Code and the Treasury Regulations thereunder.

         1.10 SALES AND TRANSFER TAXES. All sales and transfer taxes, fees 
and duties under applicable law incurred in connection with this Agreement 
will be borne and paid by Buyer.

                                       4


<PAGE>

2.       REPRESENTATIONS AND WARRANTIES OF AMIKA.

         2.1  MAKING OF REPRESENTATIONS AND WARRANTIES. As a material 
inducement to Buyer to enter into this Agreement and consummate the 
transactions contemplated thereby, AmiKa hereby makes to Buyer the 
representations and warranties contained in this Section 2.

         2.2  ORGANIZATION AND QUALIFICATIONS OF AMIKA. AmiKa is a 
corporation duly organized, validly existing and in good standing under the 
laws of the State of Maryland with full corporate power and authority to own 
or lease its properties and to conduct its business in the manner and in the 
places where such properties are owned or leased or such business is 
currently conducted or proposed to be conducted. A copy of AmiKa's Articles 
of Incorporation, as amended to date, certified by the State Department of 
Assessment and Taxation of Maryland, and by-laws, as amended to date, 
certified by AmiKa's Secretary, and heretofore delivered to Buyer's counsel, 
are complete and correct, and no amendments thereto are pending. AmiKa is not 
in violation of any term of its Articles of Incorporation or by-laws.

         2.3  CAPITAL STOCK; SUBSIDIARIES. The Shareholder and Mukta Shukla 
own, beneficially and of record, all of the issued and outstanding shares of 
capital stock of AmiKa. AmiKa does not have any subsidiaries.

         2.4  AUTHORITY.

              (a) Each of AmiKa and Shareholder has full right, authority and 
power to enter into this Agreement and each agreement, document and 
instrument to be executed and delivered by AmiKa and Shareholder pursuant to 
this Agreement and to carry out the transactions contemplated thereby. The 
execution, delivery and performance by each of AmiKa and Shareholder of this 
Agreement and each such other agreement, document and instrument have been 
duly authorized by all necessary action of AmiKa, the Shareholder and the 
stockholders of AmiKa and no other action on the part of AmiKa, the 
Shareholder or the stockholders of AmiKa is required in connection therewith.

                  This Agreement and each agreement, document and instrument 
executed and delivered by AmiKa and the Shareholder pursuant to this 
Agreement constitutes, or when executed and delivered will constitute, valid 
and binding obligations of AmiKa and the Shareholder enforceable in 
accordance with their terms. The execution, delivery and performance by AmiKa 
and the Shareholder of this Agreement and each such agreement, document and 
instrument:

                       (i)   does not and will not violate any provision of 
the Certificate of Incorporation or by-laws of AmiKa;

                       (ii)  to the knowledge of AmiKa, does not and will not 
violate any laws of the United States, or any state or other jurisdiction 
applicable to AmiKa or require AmiKa to obtain any approval, consent or 
waiver of, or make any filing with, any person or entity (governmental or 
otherwise) that has not been obtained or made; and

                                       5


<PAGE>

                       (iii) does not and will not result in a breach of, 
constitute a default under, accelerate any obligation under, or give rise to 
a right of termination of any indenture or loan or credit agreement or any 
other agreement, contract, instrument, mortgage, lien, lease, permit, 
authorization, order, writ, judgment, injunction, decree, determination or 
arbitration award to which AmiKa is a party or by which the property of AmiKa 
is bound or affected, or result in the creation or imposition of any 
mortgage, pledge, lien, security interest or other charge or encumbrance on 
any of the Subject Assets, except as specifically identified on SCHEDULE 
2.4(A).

         2.5  SUBJECT ASSETS; PERSONAL PROPERTY.

              (a) AmiKa is the true and lawful owner of the Subject Assets, 
and has the right to sell and transfer to Buyer good, clear, record and 
marketable title to such Subject Assets, and, in the case of those Subject 
Assets which are tangible assets, free and clear of all claims, liabilities, 
liens, pledges, charges, collateral assignments, preemptive or refusal 
rights, security interests, encumbrances and equities of any kind 
(collectively, the "ENCUMBRANCES"). The delivery to Buyer of the instruments 
of transfer of ownership contemplated by this Agreement will vest good and 
marketable or merchantable title to such Subject Assets which are tangible 
assets in Buyer, free and clear of all Encumbrances.

              (b) The Subject Assets are and have been sufficient to operate 
the Business as currently conducted by AmiKa. The Shareholder shall provide 
such training to Buyer's employees as part of this Agreement as follows: (i) 
the Shareholder shall make himself available to Buyer at reasonable times for 
the purpose of providing such training as reasonably requested by Buyer for 
the period prior to the Closing Date and (ii) the Shareholder shall provide 
such training at Buyer's request for the four (4) week period following the 
Closing Date. All lodging and travel of Shareholder in connection with 
Shareholder's providing such training shall be arranged and provided by Buyer 
in accordance with Buyer's customary practices, and shall be borne by Buyer, 
subject to reasonable documentation and substantiation.

              (c) Except as set forth on SCHEDULE 2.5, all of the Subject 
Assets are located at AmiKa's sole place of business at 8980F Route 108, 
Oakland Center, Columbia, Maryland 21045. A complete description of the 
machinery, equipment and other tangible personal property of AmiKa relating 
to, used in or held for use in the Business (collectively, the "PERSONAL 
PROPERTY"), including, without limitation, all tooling, whether or not owned 
by AmiKa (the "TOOLING"), and all test, loaner or demonstration inventory 
(the "EQUIPMENT") is contained in SCHEDULE 2.5. SCHEDULE 2.5 also 
specifically sets forth the location of all of the loaner or demonstration 
inventory and the Tooling as well as whether such Tooling is owned by AmiKa 
and if not so owned, the name of the owner. All of the Personal Property is 
in working order, has been maintained in accordance with AmiKa's past 
practices, and, to AmiKa's knowledge, comply with applicable laws, ordinances 
and regulations.

                                       6


<PAGE>

         2.6  FINANCIAL STATEMENTS.

              (a) AmiKa has delivered to Buyer the Statement of Profit and 
Loss for January to April 2000 (dated June 7, 2000), a copy of which is 
attached hereto as part of SCHEDULE 2.6. Said statement is complete and 
correct in all material respects, and presents fairly in all material 
respects the financial condition of AmiKa at the dates of said statement and 
the results of its operations for the periods covered thereby prepared in 
accordance with AmiKa's past practices.

              (b) AmiKa has delivered to Buyer a copy of their tax returns 
for the fiscal years 1998 and 1999, copies of which are attached hereto as 
part of SCHEDULE 2.6.

         2.7  INVENTORIES. Except as disclosed in SCHEDULE 2.7, all items in 
the inventories of AmiKa relating to, used in or held for use in the Business 
(the "INVENTORY") are of a quality and quantity saleable in the ordinary 
course of business of AmiKa.

         2.8  ORDINARY COURSE. Since January 1, 2000, AmiKa has conducted the 
Business only in the ordinary course and consistently with its prior 
practices and, since such date, and, to AmiKa's knowledge, there has been no 
material adverse change in the financial condition, prospects, properties, 
assets, liabilities, business or operations of the Business, whether or not 
in the ordinary course of business.

         2.9  INTELLECTUAL PROPERTY.

              (a) OWNERSHIP OF INTELLECTUAL PROPERTY ASSETS. AmiKa is the 
exclusive owner of, and has good, valid and marketable title to all of the 
Intellectual Property Assets (as defined below) free and clear of all 
Encumbrances, and has the right to use without payment to a third party all 
of the Intellectual Property Assets. No claim is pending or, to the knowledge 
of AmiKa, threatened against AmiKa or its officers, employees, and 
consultants to the effect that AmiKa's right, title and interest in and to 
the Intellectual Property Assets is invalid or unenforceable by AmiKa. All 
former and current employees of AmiKa have executed written instruments with 
AmiKa that assign to AmiKa all rights to any inventions, improvements, 
discoveries, or information relating to the Business. No employee of AmiKa 
has entered into any agreement that restricts or limits in any way the scope 
or type of work in which the employee may be engaged or requires the employee 
to transfer, assign, or disclose information concerning his work to anyone 
other than AmiKa.

              (b) PATENTS. SCHEDULE 2.9(B) sets forth a complete and accurate 
list and summary description of all Patents (as defined below). Except as set 
forth in SCHEDULE 2.9(B), all of the issued Patents are currently in 
compliance with legal requirements (including without limitation payment of 
filing, examination and maintenance fees and proofs of working or use), are, 
to the knowledge of AmiKa's knowledge, valid and enforceable, and are not 
subject to any maintenance fees or taxes or actions falling due within ninety 
(90) days after the date of the Closing except as set forth in SCHEDULE 
2.9(B). No Patent has been or is now involved in any interference, reissue, 
re-examination or opposition proceeding. Except as set forth on SCHEDULE 

                                       7


<PAGE>

2.9(B), to the knowledge of AmiKa, there is no potentially interfering patent 
or patent application of any third party. Payment of all filing, examination 
and maintenance fees incurred following the Closing shall be the 
responsibility of Buyer.

              (c) TRADEMARKS. SCHEDULE 2.9(C) sets forth a complete and 
accurate list and summary description of all Marks (as defined below). None 
of the Marks have been registered with the United States Patent and Trademark 
Office. Except as set forth on SCHEDULE 2.9(C), no Mark has been or is now 
involved in any opposition, invalidation or cancellation proceeding and, to 
the knowledge of AmiKa, no such action is threatened with respect to any of 
the Marks.

              (d) COPYRIGHTS. SCHEDULE 2.9(D) sets forth a complete and 
accurate list and summary description of all Copyrights (as defined below). 
None of the Copyrights have been registered with the United States Copyright 
Office. None of the source or object code, algorithms, or structure included 
in the Products is copied from, based upon, or derived from any other source 
or object code, algorithm or structure in violation of the rights of any 
third party. All copies of works encompassed by the Copyrights have been 
marked with the proper copyright notice under common law requirements.

              (e) TRADE SECRETS. AmiKa has taken reasonable security measures 
(including entering into the Employment Agreement attached hereto as EXHIBIT 
2.9(E) with all employees of AmiKa and any other persons with access to the 
Trade Secrets (as defined below)) to protect the secrecy, confidentiality and 
value of all Trade Secrets. To the knowledge of AmiKa, there has not been any 
breach by any party to any such confidentiality or non-disclosure agreement. 
To the knowledge of AmiKa, the Trade Secrets have not been disclosed by AmiKa 
to any person or entity other than employees of AmiKa who had a need to know 
and use the Trade Secrets in the course of their employment or contract 
performance. AmiKa has the right to use, free and clear of claims of third 
parties, all Trade Secrets. To the knowledge of AmiKa, no third party has 
asserted that the use by AmiKa of any Trade Secret violates the rights of any 
third party.

              (f) OTHER INTANGIBLES. SCHEDULE 2.9(F) sets forth a complete 
and accurate list of Other Intangibles (as defined below).

              (g) EXCLUSIVITY OF RIGHTS. AmiKa has the exclusive right to 
use, license, distribute, transfer and bring infringement actions with 
respect to the Intellectual Property Assets. Except as set forth on SCHEDULE 
2.9(G), AmiKa (i) has not licensed or granted to anyone rights of any nature 
to use any of its Intellectual Property Assets; and (ii) is not obligated to 
and do not pay royalties or other fees to anyone for AmiKa's ownership, use, 
license or transfer of any of its Intellectual Property Assets.

              (h) LICENSES RECEIVED. All licenses or other agreements under 
which AmiKa is granted rights by others in Intellectual Property Assets are 
listed in SCHEDULE 2.9(H). All such licenses or other agreements are in full 
force and effect, to the knowledge of AmiKa, there is no material default by 
any party thereto, and, all of the rights of AmiKa thereunder are 

                                       8


<PAGE>

freely assignable. True and complete copies of all such licenses or other 
agreements, and any amendments thereto, have been provided to Buyer, and to 
the knowledge of AmiKa, the licensors under the licenses and other agreements 
under which AmiKa is granted rights have all requisite power and authority to 
grant the rights purported to be conferred thereby.

              (i) LICENSES GRANTED. All licenses or other agreements under 
which AmiKa has granted rights to others in Intellectual Property Assets are 
listed in SCHEDULE 2.9(I). Except as set forth thereon, all such licenses or 
other agreements are in full force and effect, and to the knowledge of AmiKa, 
there is no material default by any party thereto. True and complete copies 
of all such licenses or other agreements, and any amendments thereto, have 
been provided to Buyer.

              (j) AFFIRMATIVE OBLIGATIONS. AmiKa has no obligation to any 
person to maintain, modify, improve or upgrade the Products.

              (k) SUFFICIENCY. The Intellectual Property Assets constitute 
all of the assets of AmiKa used in designing, creating and developing the 
Products, and are those necessary for the operation of the Business as 
currently conducted and planned to be conducted.

              (l) INFRINGEMENT. Except as set forth on SCHEDULE 2.9(L), none 
of the Products manufactured and sold, nor any process or know-how used, by 
AmiKa infringes or is alleged to infringe any patent, trademark, service 
mark, trade name, copyright or other proprietary right or is a derivative 
work based on the work of another person.

              (m) PRODUCT PERFORMANCE. The Products perform in accordance 
with their specifications as set forth in, and subject to the limitation of 
liability provisions contained in, the AmiKa Catalogue as defined in Section 
2.9(o)(ii) below.

              (n) NONDISCLOSURE CONTRACTS. Each of the Nondisclosure 
Contracts is a valid and binding obligation of AmiKa enforceable in 
accordance with its terms, subject to applicable bankruptcy, insolvency and 
similar laws affecting creditors' rights generally.

              (o) For purposes of this Agreement,

                  (i)  "INTELLECTUAL PROPERTY ASSETS" means:

                       (A)  the Products (as defined in Section 2.9(o)(ii) 
                            below);

                       (B)  the patents, patent applications, patent rights, 
              and inventions and discoveries and invention disclosures 
              (whether or not patented) relating to, used or held for use in 
              the Business, with the exception of patent application number 
              09/591009 relating to the Puretip product (collectively, 
              "PATENTS");

                       (C)  the name "AmiKa Corporation", and the trade names, 
              trade dress, logos, packaging design and slogans enumerated in 
              the AmiKa 

                                       9


<PAGE>

              Catalogue (as defined below), Internet domain names 
              set forth on SCHEDULE 2.9(O)(I)(C), registered and unregistered 
              trademarks and service marks and applications relating to, used 
              or held for use in the Business (collectively, "MARKS");

                       (D)  the copyrights in both published and unpublished 
              works, including without limitation all compilations, databases 
              and computer programs, and all copyright registrations and 
              applications, and all derivatives, translations, adaptations 
              and combinations of the above relating to, used or held for use 
              in the Business (collectively, "COPYRIGHTS");

                       (E)  the know-how, trade secrets, confidential or 
              proprietary information, research in progress, algorithms, data, 
              designs, processes, formulae, drawings, schematics, blueprints, 
              flow charts, models, prototypes, techniques, Beta testing 
              procedures and Beta testing results relating to, used or held 
              for use in the Business (collectively, "TRADE SECRETS");

                       (F)  the goodwill, franchises, licenses, permits, 
              consents, approvals, technical information, telephone numbers, 
              and claims of infringement against third parties relating to, 
              used or held for use in the Business; and 

                       (G)  the customer lists and telephone numbers (except 
              for the telephone number 1 (800) 742-5624), business strategies, 
              outside analyst's plans and reports, outlooks, forecasts and 
              other similar documents relating to, used or held for use in the 
              Business (collectively, "OTHER INTANGIBLES")

                  (ii) "PRODUCTS" mean those products listed in the AmiKa 
Catalogue, a copy of which is attached hereto as EXHIBIT 2.9(O)(II) (the 
"AMIKA CATALOGUE"), and any and all products sold by AmiKa in the twelve (12) 
months prior to the Closing Date, a complete list of which is provided on 
SCHEDULE 2.9(O)(II) attached hereto.

                  (iii) "NONDISCLOSURE CONTRACTS" means all nondisclosure 
and/or confidentiality agreements entered into between AmiKa and persons in 
connection with disclosures by AmiKa relating to the Products and the 
Intellectual Property Assets. A complete list of all Nondisclosure Contracts 
is provided on SCHEDULE 2.9(O)(III) attached hereto.

         2.10 CONTRACTS. Except for contracts, commitments, plans, agreements 
and licenses listed in SCHEDULE 2.10 (true and complete copies of which have 
been delivered to Buyer and with respect to which no other arrangements or 
understandings (whether written or oral) exist that otherwise amend or modify 
such agreements), AmiKa is not a party to or subject to any of the foregoing 
that relate to, are used in or are relevant to the Business. Except as set 
forth in SCHEDULE 2.10, all of the foregoing are freely assignable without 
the consent of any person or entity and will be assigned to Buyer at Closing. 
AmiKa is not a party to any contract or 

                                      10


<PAGE>

agreement containing confidentiality covenants or covenants limiting the 
freedom of AmiKa to compete in any line of business or with any person or 
entity.

         2.11 LITIGATION. SCHEDULE 2.11 hereto lists all currently pending 
litigation and governmental or administrative proceedings or investigations 
to which AmiKa is a party. Except for matters described in SCHEDULE 2.11, 
there is no litigation or governmental or administrative proceeding or 
investigation pending or, to the knowledge of AmiKa, threatened against AmiKa 
or its affiliates which may have any adverse effect on the properties, 
assets, prospects, financial condition or business of AmiKa or which would 
prevent or hinder the consummation of the transactions contemplated by this 
Agreement. With respect to each matter set forth therein, SCHEDULE 2.11 sets 
forth a description of the matter, the forum (if any) in which it is being 
conducted, the parties thereto and the type and amount of relief sought.

         2.12 WARRANTY OR OTHER CLAIMS. There are no existing or, to AmiKa's 
knowledge, threatened product liability, warranty or other similar claims, or 
any facts upon which a material claim of such nature could be based, against 
AmiKa for products or services which are defective or fail to meet any 
product or service warranties, except as disclosed in SCHEDULE 2.12. No claim 
has been asserted against AmiKa for renegotiation or price redetermination of 
any business transaction, and there are no facts upon which any such claim 
could be based.

         2.13 PERMITS. SCHEDULE 2.13 lists those permits, registrations, 
licenses, franchises, certifications and other approvals (collectively, the 
"APPROVALS") that AmiKa has obtained from federal, state or local 
authorities. AmiKa is not required to obtain any federal Approval for the 
operation of the Business as currently conducted.

         2.14     INTENTIONALLY OMITTED.

         2.15 WARRANTIES. Except as set forth in the AmiKa Catalogue, AmiKa 
has made no warranties (whether written or oral) with respect to any of its 
products.

         2.16 BACKLOG. As of the date hereof, AmiKa has a backlog of orders 
for the sale of its products or services in respect of the Business which 
have been placed in the ordinary course of business, for which revenues have 
not been recognized by AmiKa, as set forth in SCHEDULE 2.16 (the "BACKLOG"). 
Buyer hereby agrees to fulfill the orders comprising the Backlog that exist 
at the Closing, which such orders will be set forth on a statement of 
existing orders to be provided by AmiKa to Buyer at Closing, so long as such 
orders have been accepted by AmiKa on normal business terms. Consistent with 
past practice of the Business and so long as no payments or deposits have 
been received by AmiKa with respect to such orders as of the Closing, Buyer 
will fulfill such orders consistent with Buyer's past practices.

         2.17 CUSTOMERS, DISTRIBUTORS AND SUPPLIERS. The relationships of 
AmiKa with its customers, distributors and suppliers relating to the Business 
are good commercial working relationships. No such customer, distributor or 
supplier has canceled, materially modified, or otherwise terminated its 
relationship with AmiKa, nor, to the knowledge of AmiKa, does any such 
customer, distributor or supplier have any plan or intention to do any of the 
foregoing.

                                      11


<PAGE>

         2.18 DISCLOSURE. The representations, warranties and statements 
contained in this Agreement and in the certificates, exhibits and schedules 
delivered by AmiKa pursuant to this Agreement to Buyer do not contain any 
untrue statement of a material fact, and, when taken together, do not omit to 
state a material fact required to be stated therein or necessary in order to 
make such representations, warranties or statements not misleading in light 
of the circumstances under which they were made. There are no facts known to 
AmiKa which presently have a material adverse affect on the business, 
properties, prospects, operations or condition of AmiKa which have not been 
specifically disclosed herein or in a Schedule furnished herewith, other than 
general economic, industry and political conditions affecting the industries 
in which AmiKa operates.

3.       COVENANTS OF AMIKA.

         3.1  MAKING OF COVENANTS AND AGREEMENTS. AmiKa hereby makes the 
covenants and agreements set forth in this Section 3.

         3.2. CONSUMMATION OF AGREEMENT. AmiKa shall use its best efforts to 
perform and fulfill all conditions and obligations on their parts to be 
performed and fulfilled under this Agreement, to the end that the 
transactions contemplated by this Agreement shall be fully carried out. To 
this end, AmiKa will promptly in connection with or following the Closing 
take all appropriate actions to:

              (a) Transfer the Subject Assets to Buyer; and

              (b) Cooperate with Buyer to notify all customers and prospects
of the consummation of the transaction contemplated by this Agreement in a
mutually agreeable fashion.

         3.3. CHANGE IN CORPORATE NAME. AmiKa shall take all action necessary 
to effect a change in its corporate name from "AmiKa Corporation" to a name 
not utilizing the word "AmiKa", or a similar name, such change to be 
effective no later than five (5) calendar days after the Closing.

         3.4. NON-COMPETITION. As a material inducement to Buyer to enter 
into this Agreement and consummate the transactions contemplated hereby, 
AmiKa and the Shareholder (each, a "NON-COMPETE PARTY") each agree that he or 
it will not, for a period of four (4) years following the Closing Date 
without the prior written consent of Buyer, directly or indirectly, engage or 
participate in, be employed by or assist in any manner or in any capacity, or 
have any interest in or make any loan to any person, firm, corporation or 
business which engages in any activity which directly competes with the 
Business or the Subject Assets so long as Buyer or any of Buyer's 
subsidiaries (or its or their successor, if any) shall engage in such 
activity; PROVIDED, HOWEVER, the foregoing shall not prevent a Non-Compete 
Party from owning beneficially or of record up to one percent (1%) of the 
outstanding securities of a publicly-held corporation which engages in such 
competitive activities. Notwithstanding the foregoing, a Licensing Party(ies) 
shall not be in violation of this Section 3.4 in the event Buyer waives or is 

                                      12


<PAGE>

deemed to have waived its Right of First Offer pursuant to Section 1.8(a) and 
such Licensing Party(ies) offers the relevant New Technology License to a 
third party pursuant to Section 1.8(c).

         3.5. CONFIDENTIALITY. AmiKa and the Shareholder each agree that, for 
a period of four (4) years following the Closing Date, they, and each of 
their respective officers and directors will hold in strict confidence, and 
will not distribute or make available, any confidential or proprietary data 
or information of AmiKa that is used in connection with or related to the 
Business (the "CONFIDENTIAL INFORMATION"). Each such party's obligations 
under this Agreement with respect to any portion of the Confidential 
Information shall terminate when such party can document that: (a) such 
Confidential Information was public knowledge at the time it was communicated 
to the party; (b) such Confidential Information entered the public domain 
subsequent to the time it was communicated to the party through no fault of 
the party; (c) it was in the party's possession free of any obligation of 
confidence at the time it was communicated to the party; (d) it was 
rightfully communicated to the party free of any obligation of confidence 
subsequent to the time it was communicated to the party; or (e) it was 
developed by employees or agents of the party who had no access to any 
information communicated to the party. Notwithstanding the foregoing, a 
Licensing Party(ies) shall not be in violation of this Section 3.5 in the 
event Buyer waives or is deemed to have waived its Right of First Offer 
pursuant to Section 1.8(a) and such Licensing Party(ies) offers the relevant 
New Technology License to a third party pursuant to Section 1.8(c).

         3.6. ORDERS AND INQUIRIES. From and after the Closing, AmiKa shall 
forward any and all orders and inquiries relating to the Business to Buyer 
immediately upon receipt.

         3.7. CERTAIN REMEDIES. It is specifically understood and agreed that 
any breach of this Section 3 by any of the parties hereto will result in 
irreparable injury to Buyer that the remedy at law alone will be an 
inadequate remedy for such breach and that, in addition to any other remedy 
for such breach and any other remedy it may have, Buyer shall be entitled to 
enforce the specific performance of the agreements contained in this Section 
3 by AmiKa and to seek both temporary and permanent injunctive relief as well 
as other equitable remedies, without the necessity of proving actual damages, 
but without limitation of their rights to recover damages.

         3.8  ASSIGNMENT OF DISTRIBUTION ARRANGEMENT. Immediately following 
Closing, AmiKa shall use commercially reasonable efforts to obtain the 
consent of Dianorm GmbH ("DIANORM") to the assignment of the distribution 
arrangement between AmiKa and Dianorm evidenced by the Certificate of Dianorm 
dated July 5, 2000, a copy of which is attached EXHIBIT 3.8. Upon receipt of 
such consent, AmiKa shall execute an assignment to Buyer of such distribution 
arrangement in a form reasonably acceptable to Buyer. AmiKa or Shareholder 
shall not be liable to Buyer if, after using its commercially reasonable 
efforts to do so, AmiKA fails to obtain such consent of Dianorm.

         3.9  DELIVERY OF ORIGINAL ASSIGNMENT AGREEMENTS. AmiKa shall cause 
to be sent to Buyer, no later than the first (1st) business day following the 
conclusion of the Closing, via 

                                      13


<PAGE>

overnight courier the originally executed assignments referred to below in 
Section 4.1(b) and Section 4.1(c).

4.       CONDITIONS.

         4.1  CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligation of 
Buyer to consummate this Agreement and the transactions contemplated hereby 
is subject to the fulfillment, prior to or at the Closing, of the following 
conditions precedent:

              (a) CERTIFICATE(S). AmiKa shall have delivered to Buyer such 
supporting documents and certificates as Buyer may reasonably request and as 
may be required pursuant to this Agreement.

              (b) ASSIGNMENT OF PATENTS TO AMIKA. All of the rights and 
interests in the Patents shall have been sold, transferred and assigned by 
the appropriate parties to AmiKa prior to the conclusion of the Closing and a 
copy of such executed assignments shall have been delivered to Buyer.

              (c) ASSIGNMENT OF PATENTS AGREEMENT. AmiKa shall have entered 
into an Assignment of Patents Agreement with Buyer substantially in the form 
attached hereto as EXHIBIT 4.1(C).

              (d) PURETIP LICENSE AGREEMENT. AmiKa shall have entered into a 
License Agreement with Buyer substantially in the form attached hereto as 
EXHIBIT 4.1(D).

              (e) ARTICLES OF SALE AND TRANSFER. Buyer shall have properly 
filed with the State Department of Assessments and Taxation of Maryland the 
Articles of Sale and Transfer substantially in the form attached hereto as 
EXHIBIT 4.1(E).

              (f) SUPROTIP RECIPE. AmiKa shall have delivered to Buyer the 
complete recipe (including, without limitation, detailing all materials, 
compounds and processes) for the production of Suprotip.

              (g) OPINION OF SELLER'S COUNSEL. On the Closing Date, Buyer 
shall have received from Blum, Yumkas, Mailman, Gutman & Denick, P.A., 
counsel to Seller, an opinion as of said date, in substantially the form 
attached hereto as EXHIBIT 4.1(G).

              (h) SIDE LETTER AGREEMENT. AmiKa shall have delivered to Buyer 
an executed Side Letter Agreement in the form attached hereto as EXHIBIT 
4.1(H).

5.       RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.

         5.1  SURVIVAL OF WARRANTIES. Each of the representations, 
warranties, agreements, covenants and obligations herein, or any other 
agreement entered into in connection herewith or therewith or in any 
schedule, exhibit, certificate or financial statement delivered by any 

                                      14


<PAGE>

party to the other party incident to the transactions contemplated hereby and 
thereby are material, shall be deemed to have been relied upon by the other 
party and shall survive the Closing, regardless of any investigation or 
knowledge acquired on the part of Buyer or its affiliates and shall not merge 
in the performance of any obligation by either party hereto.

6.       INDEMNIFICATION.

         6.1  INDEMNIFICATION BY AMIKA. AmiKa hereby agrees subsequent to the 
Closing to indemnify and hold Buyer and its respective subsidiaries and 
affiliates and persons serving as officers, directors, partners or employees 
thereof (individually a "BUYER INDEMNIFIED PARTY" and collectively, the 
"BUYER INDEMNIFIED PARTIES") harmless from and against any damages, 
liabilities, diminution in value, losses, taxes, fines, penalties, costs, and 
expenses (including, without limitation, reasonable fees of counsel) of any 
kind or nature whatsoever (whether or not arising out of third-party claims 
and including all amounts paid in investigation, defense or settlement of the 
foregoing) (collectively, "DAMAGES") which may be sustained or suffered by 
any of them arising out of, attributable to or based upon any of the 
following matters:

         (a)  fraud, intentional misrepresentation or a deliberate or willful 
breach by AmiKa of any of its representations, warranties or covenants under 
Sections 2.9(a) (only as it relates to the Patents), 2.9(b) (only as it 
relates to the Patents), 2.9(g) (only as it relates to the Patents) and 
2.9(l) (only as it relates to the Patents) of this Agreement or any schedule 
or exhibit delivered pursuant thereto;

         (b)  fraud, intentional misrepresentation or a deliberate or willful 
breach by AmiKa of any of its representations, warranties or covenants under 
this Agreement or any other agreement entered into in connection herewith or 
in any certificate, schedule or exhibit delivered pursuant hereto or thereto, 
other than as set forth in Section 6.1(a) above;

         (c)  any other breach of any representation or warranty, covenant or 
agreement of AmiKa under this Agreement or any other agreement entered into 
in connection herewith or therewith or in any certificate, schedule or 
exhibit delivered pursuant hereto or thereto, or by reason of any claim, 
action or proceeding asserted or instituted growing out of any matter or 
thing constituting a breach of such representations or warranties, covenants 
or agreements;

         (d)  any liability of AmiKa (whether arising before or after the 
Closing Date) relating to any product liability matter of any kind or nature 
whatsoever, known or unknown, asserted or unassented, that arises in 
connection with or on the basis of events, acts, omissions, conditions, or 
any other state of facts occurring or existing prior to or on the Closing 
Date;

         (e)  any liability of AmiKa relating to federal, state, local, 
foreign or other taxes; and

         (f)  all claims asserted under any Bulk Sales Law.

                                      15


<PAGE>

         6.2  LIMITATIONS ON INDEMNIFICATION BY AMIKA.

              (a) Notwithstanding anything contained in Section 6.1 to the 
contrary, AmiKa's obligations to indemnify Buyer Indemnified Parties with 
respect to any indemnification claims asserted pursuant to Section 6.1(a) 
shall be limited in the aggregate to $3,000,000.

              (b) Notwithstanding anything contained in Section 6.1 to the 
contrary, no indemnification shall be payable to a Buyer Indemnified Party 
with respect to any indemnification claims asserted pursuant to Section 
6.1(b) - (g) after the first anniversary of the Closing Date (the 
"INDEMNIFICATION CUT-OFF DATE"), except in respect of matters which have been 
the subject of a bona fide written indemnification claim which is made before 
the Indemnification Cut-Off Date by or on behalf of a Buyer Indemnified Party 
to AmiKa. Furthermore, AmiKa's obligations to indemnify Buyer Indemnified 
Parties with respect to any indemnification claims asserted pursuant to 
Section 6.1(b) - (g) shall be limited in the aggregate to $200,000.

         6.3  NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims 
for indemnification hereunder by giving written notice thereof to the 
indemnifying party. If indemnification is sought for a claim or liability 
asserted by a third party, the indemnified party shall also give written 
notice thereof to the indemnifying party promptly after it receives notice of 
the claim or liability being asserted, but the failure to do so shall not 
relieve the indemnifying party from any liability except to the extent that 
it is prejudiced by the failure or delay in giving such notice. Such notice 
shall summarize the bases for the claim for indemnification and any claim or 
liability being asserted by a third party. Within twenty (20) days after 
receiving such notice the indemnifying party shall give written notice to the 
indemnified party stating whether it disputes the claim for indemnification 
and whether it will defend against any third party claim or liability at its 
own cost and expense. If the indemnifying party fails to give notice that it 
disputes an indemnification claim within twenty (20) days after receipt of 
notice thereof, it shall be deemed to have accepted and agreed to the claim, 
which shall become immediately due and payable. If the indemnifying party 
shall dispute a non-third party indemnification claim and the disputed 
indemnification claim has not been resolved or compromised within thirty (30) 
days after the indemnifying party sends notice of such dispute as provided 
above, such indemnification claim shall be referred to J.A.M.S./Endispute, 
Inc. to be settled by binding arbitration in Washington, D.C. as provided in 
Section 7.5 of hereof. The indemnifying party shall be entitled to direct the 
defense against a third party claim or liability with counsel selected by it 
(subject to the consent of the indemnified party, which consent shall not be 
unreasonably withheld) as long as the indemnifying party is conducting a good 
faith and diligent defense. The indemnifying party shall not, in the defense 
of such a third party claim or any litigation resulting therefrom, consent to 
entry of any judgment (other than a judgment of dismissal on the merits 
without costs) without the prior written consent of the indemnified party 
(which consent shall not be unreasonably withheld or delayed) or enter into 
any settlement or compromise without the prior written consent of the 
indemnified party (which consent shall not be unreasonably withheld or 
delayed) which does not include as an unconditional term thereof the giving 
by the 

                                      16


<PAGE>

claimant or the plaintiff to the indemnified party a full release from all 
liability in respect of such claim or litigation. The indemnified party shall 
at all times have the right to fully participate in the defense of a third 
party claim or liability at its own expense directly or through counsel; 
PROVIDED, HOWEVER, that if the named parties to the action or proceeding 
include both the indemnifying party and the indemnified party and the 
indemnified party is advised that representation of both parties by the same 
counsel would be inappropriate under applicable standards of professional 
conduct, the indemnified party may engage separate counsel at the expense of 
the indemnifying party. If no such notice of intent to dispute and defend a 
third party claim or liability is given by the indemnifying party, or if such 
good faith and diligent defense is not being or ceases to be conducted by the 
indemnifying party, the indemnified party shall have the right, at the 
expense of the indemnifying party, to undertake the defense of such claim or 
liability (with counsel selected by the indemnified party), and to compromise 
or settle it, exercising reasonable business judgment. If the third party 
claim or liability is one that by its nature cannot be defended solely by the 
indemnifying party, then the indemnified party shall make available such 
information and assistance as the indemnifying party may reasonably request 
and shall cooperate with the indemnifying party in such defense, at the 
expense of the indemnifying party.

         6.4  SATISFACTION OF AMIKA'S INDEMNIFICATION OBLIGATIONS. In order 
to satisfy the indemnification obligations of AmiKa pursuant to this Section 
6, a Buyer Indemnified Party shall have the right in its sole discretion (in 
addition to proceeding directly against AmiKa and any of its assets and 
enforcing any and all other rights and remedies it may have) to proceed 
directly against the Indemnification Escrow Amount as further set forth in 
the Escrow Agreement.

         6.5  MILLIPORE LIABILITY. Notwithstanding anything contained herein 
to the contrary, AmiKa and Shareholder shall not be liable to Buyer for any 
Damages arising out of, attributable to or based upon any infringement claims 
made by Millipore, Inc. relating to the manufacture and sale by Buyer of any 
of the Products following the Closing.

7.       MISCELLANEOUS.

         7.1  BULK SALES LAW. Buyer waives compliance by AmiKa with the 
provisions of any applicable bulk sales, fraudulent conveyance or other law 
for the protection of creditors (collectively, the "BULK SALES LAWS") in 
connection with the transfer of the Subject Assets under this Agreement.

         7.2  GOVERNING LAW. This Agreement shall be construed under and 
governed by the internal laws of The State of Maryland without regard to its 
conflict of laws provisions.

         7.3  ENTIRE AGREEMENT. This Agreement, including the Schedules and 
Exhibits referred to herein and other agreements entered into in connection 
herewith and the other writings specifically identified herein or 
contemplated hereby, is complete, reflects the entire agreement of the 
parties with respect to its subject matter, and supersedes all previous 
written 

                                      17


<PAGE>

or oral negotiations, commitments and writings, including without limitation 
the Original Letter Agreement.

         7.4  ARBITRATION. The parties agree that, except for any matter 
where the remedy sought involves an equitable remedy, specific performance or 
injunctive relief, any controversy or dispute arising under this Agreement, 
including, without limitation, for indemnification under Section 6 hereof, 
shall be referred to J.A.M.S./Endispute, Inc., to be settled by binding 
arbitration in Washington, D.C. in accordance with the arbitration rules of 
such entity. The fees and expenses of the arbitrator shall, as between AmiKa, 
on the one hand, and Buyer, on the other hand, be borne by them in such 
proportions as shall be determined by the arbitrator, or if there is no such 
determination, then such fees and expenses shall be borne equally by AmiKa, 
on the one hand, and Buyer, on the other hand. The determination of the 
arbitrator as to any controversy or dispute shall be conclusive and binding 
upon the parties hereto and judgment may be entered thereon in any court 
having jurisdiction thereof.

         7.5  CONSENT TO JURISDICTION. Solely for the purpose of allowing a 
party to enforce its indemnification and other rights hereunder, each of the 
parties hereby consents to personal jurisdiction, service of process and 
venue in the federal or state courts in which such rights are sought to be 
enforced.

         7.6  FEES AND EXPENSES. Except as otherwise provided in this 
Agreement, the costs and expenses of each party will be borne by each party. 
Any payment owed to Abacus Group or any other broker engaged by AmiKa shall 
be the sole responsibility of AmiKa.

         7.7  SEVERABILITY. In the event that one or more of the provisions 
contained in the Agreement, or the application thereof in any circumstances, 
is held invalid, illegal or unenforceable in any respect for any reason, the 
validity, legality and enforceability of any such provision in every other 
respect and of the remaining provisions contained in this Agreement shall not 
be in any way impaired thereby, it being intended that all of the rights and 
privileges of the parties hereto shall be enforceable to the fullest extent 
possible by law.

         7.8  NOTICES. All notices under this Agreement shall be transmitted 
to the respective parties, shall be in writing and shall be considered to 
have been duly given or served when personally delivered to any individual 
party, or on the first (1st) business day after the date of deposit with an 
overnight courier for next day delivery, postage paid, or on the third (3rd) 
business day after deposit in the United States Mail, certified or 
registered, return receipt requested, postage prepaid, or on the date of 
telecopy, fax or similar telephonic transmission during normal business 
hours, as evidenced by mechanical confirmation of such telecopy, fax or 
telephonic transmission; addressed in all cases to the party at his or its 
address set forth below, or to such other address as such party may hereafter 
designate:

         If to the Buyer:

                                      18


<PAGE>

                  Harvard Apparatus, Inc.
                  84 October Hill Road
                  Holliston, MA 01746
                  Attn:  David Green, President
                  Fax: (508) 429-5732

         with a copy to:

                  Goodwin, Procter & Hoar LLP
                  Exchange Place
                  Boston, MA 02109
                  Attn: H. David Henken, Esq.
                  Fax: (617) 523-1231

         If to the Seller:

                  AmiKa Corporation
                  8980F Route 108
                  Oakland Center
                  Columbia, MD  21045
                  Attn: Ashok Shukla, Ph.D.
                  Fax:  (410) 997-6962

         with a copy to:

                  Blum, Yumkas, Mailman, Gutman & Denick, P.A.
                  1200 Mercantile Bank & Trust Building
                  2 Hopkins Plaza
                  Baltimore, MD 21201
                  Attn: Bernard S. Denick, Esq.
                  Fax: (410) 385-4070

         7.9  ASSIGNABILITY; EFFECT. This Agreement shall be binding upon and 
enforceable by, and shall inure to the benefit of, the parties hereto and 
their respective heirs, successors and permitted assigns. This Agreement may 
not be assigned by a party without the prior written consent of the other 
parties hereto; PROVIDED, HOWEVER, that Buyer shall be entitled to assign its 
rights and obligations hereunder after payment of the Purchase Price to 
Seller, without obtaining the prior written consent of the other parties 
hereto, to any successor in interest in the event of a merger, a sale of all 
or substantially all of its assets or a sale of a majority of its capital 
stock.

                            [SIGNATURE PAGES FOLLOW]

                                      19


<PAGE>

         IN WITNESS WHEREOF the parties hereto have caused this Agreement to 
be executed as of the date set forth above by their duly authorized 
representatives.

                                      BUYER:

                                      HARVARD APPARATUS, INC.

                                      By: /s/ David Green
                                          ------------------------------------
                                          Name:   David Green
                                          Title:  President

                                      AMIKA:

                                      AMIKA CORPORATION

                                      By: /s/ Ashok Shukla
                                          ------------------------------------
                                          Name:   Ashok Shukla, Ph.D.
                                          Title:  President

         The undersigned hereby agrees to be bound by the provisions of Section
1.8, Section 2.5(b)(i) and (ii), Section 3.4 and Section 3.5 hereto.

                                      SHAREHOLDER:

                                      /s/ Ashok Shukla
                                          ------------------------------------
                                      Ashok Shukla, Ph.D.,
                                      in his personal capacity

                                      20




<PAGE>

================================================================================


                                                                    Exhibit 4.2



                              AMENDED AND RESTATED
                           SECURITYHOLDERS' AGREEMENT

                                  By and Among

                             HARVARD APPARATUS, INC.
                                 (the "Company")

                      PIONEER VENTURES LIMITED PARTNERSHIP,
                    PIONEER VENTURES LIMITED PARTNERSHIP II,
                             PIONEER CAPITAL CORP.,
                       FIRST NEW ENGLAND CAPITAL, L.P. and
                             CITIZENS CAPITAL, INC.
                    (collectively, the "Outside Investors"),
                                       and
                                 Chane Graziano
                                       and
                                   David Green
                   (collectively, the "Management Investors")





                            Dated as of March 2, 1999







================================================================================


<PAGE>

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
ARTICLE I  DEFINITIONS............................................................................................1
         Section 1.1       Construction of Terms..................................................................1
         Section 1.2       Defined Terms..........................................................................2

ARTICLE II        TERMINATION, AMENDMENT AND RESTATEMENT; WAIVER AND CONSENT......................................5
         Section 2.1       Termination, Amendment and Restatement of Initial Investment Agreement.................5
         Section 2.2       Waiver of Rights; Consent..............................................................5
         Section 2.3       Waiver and Amendment of Warrants.......................................................6

ARTICLE III  REPRESENTATIONS AND WARRANTIES.......................................................................6
         Section 3.1       Representations and Warranties of the Investors........................................6
         Section 3.2       Representations and Warranties of the Company..........................................6

ARTICLE IV   REGISTRATION RIGHTS..................................................................................7
         Section 4.1       "Piggy-Back" Registration Rights.......................................................7
         Section 4.2       Required Registrations of the Outside Investors........................................8
         Section 4.3       Form S-3...............................................................................9
         Section 4.4       Postponement of Registration..........................................................10
         Section 4.5       Registrable Securities................................................................10
         Section 4.6       Further
 Obligations of the Company....................................................10
         Section 4.7       Indemnification; Contribution.........................................................12
         Section 4.8       Rule 144 and 144A Requirements........................................................14
         Section 4.9       Market Stand-Off......................................................................15
         Section 4.10      Transfer of Registration Rights.......................................................15
         Section 4.11      No other Registration Rights..........................................................15

ARTICLE V  RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL AND
                           OBLIGATIONS OF CO-SALE................................................................15
         Section 5.1       Restrictions on Transfer..............................................................15
         Section 5.2       Right of First Refusal................................................................16
         Section 5.3       Co-Sale Option........................................................................18
         Section 5.4       Take-Along............................................................................19
         Section 5.5       Assignment of Rights..................................................................20
         Section 5.6       Prohibited Transfers..................................................................20

ARTICLE VI  RIGHTS TO PURCHASE...................................................................................21
         Section 6.1       Right to Purchase.....................................................................21
         Section 6.2       Procedure.............................................................................21
         Section 6.3       Definitions...........................................................................21
         Section 6.4       Assignment of Rights..................................................................22


                                      (i)

<PAGE>

                                                                                                               Page
                                                                                                               ----

ARTICLE VII  ELECTION OF DIRECTORS OF THE COMPANY................................................................22
         Section 7.1       Voting of Shares for Election of Directors of the Company.............................22
         Section 7.2       Vacancies.............................................................................23
         Section 7.3       Meetings; Expenses....................................................................23
         Section 7.4       No Waiver.............................................................................24
         Section 7.5       Board Control Override................................................................24
         Section 7.6       Compensation Committee................................................................24

ARTICLE VIII  OTHER COVENANTS OF THE COMPANY.....................................................................24
         Section 8.1       Restricted Activities.................................................................24
         Section 8.2       Key Man Life Insurance................................................................26
         Section 8.3       Accounts and Records..................................................................26
         Section 8.4       Insurance.............................................................................26
         Section 8.5       Accounts and Reports..................................................................27
         Section 8.6       Information and Inspection............................................................28
         Section 8.7       Small Business Investment Act.........................................................28

ARTICLE IX  MISCELLANEOUS PROVISIONS.............................................................................29
         Section 9.1       Survival of Representations, Warranties and Covenants.................................29
         Section 9.2       Indemnification.......................................................................29
         Section 9.3       Legend on Securities..................................................................31
         Section 9.4       Amendment and Waiver..................................................................31
         Section 9.5       Notices...............................................................................32
         Section 9.6       Headings..............................................................................33
         Section 9.7       Counterparts..........................................................................33
         Section 9.8       Remedies; Severability................................................................33
         Section 9.9       Entire Agreement......................................................................33
         Section 9.10      Adjustments...........................................................................33
         Section 9.11      Law Governing.........................................................................34
         Section 9.12      Termination of Agreement..............................................................34
         Section 9.13      Cooperation...........................................................................34
         Section 9.14      Expenses..............................................................................34

ARTICLE X EVENTS OF DEFAULT......................................................................................35

ARTICLE XI  FAIR MARKET VALUE....................................................................................37

ARTICLE XII  ARBITRATION.........................................................................................37


ARTICLE XIII  TERMS OF THE SUBORDINATED DEBENTURES...............................................................38

</TABLE>


                                    EXHIBITS
         Exhibit A - Form of Joinder Agreement


                                      (ii)

<PAGE>

                              AMENDED AND RESTATED
                           SECURITYHOLDERS' AGREEMENT


         This Amended and Restated Securityholders' Agreement is made as of
March 2, 1999, by and among Harvard Apparatus, Inc., a Massachusetts corporation
(the "Company"), Chane Graziano ("Graziano") and David Green ("Green")
(collectively, the "Management Investors," except such term shall not include
Graziano in his capacity as an Outside Investor) and Pioneer Ventures Limited
Partnership, Pioneer Ventures Limited Partnership II, Pioneer Capital Corp.,
First New England Capital, L.P., Citizens Capital, Inc. and Graziano, but only
to the extent of and with respect to the securities purchased by Graziano on
March 15, 1996 pursuant to the Initial Investment Agreement (as defined below)
and not in his capacity as a Management Investor (collectively, the "Outside
Investors" and, together with the Management Investors, the "Investors" and each
individually, an "Investor").

                              W I T N E S S E T H:

         WHEREAS, reference is made to the Investment and Stockholders'
Agreement dated as of March 15, 1996 by and among the Company and certain of the
Investors (the "Initial Investment Agreement"), pursuant to which certain of the
Investors purchased shares of Common Stock, the Warrants, shares of Series A
Preferred Stock and other securities of the Company, and the parties thereto set
forth the terms of such investment and certain other matters.

         WHEREAS, concurrently herewith, the Company is selling, and certain of
the Outside Investors are purchasing, shares of Series B Preferred Stock of the
Company pursuant to the terms of that certain Securities Purchase Agreement of
even date herewith (the "Securities Purchase Agreement").

         WHEREAS, in connection with such sale and purchase of the Series B
Preferred Stock, the parties to the Initial Investment Agreement wish to amend
and restate their agreement with respect to the Company, the Series A Preferred
Stock, the Warrants and the Subordinated Debentures and provide for the issuance
of the Series B Preferred Stock so as to set forth their agreement with respect
to all of their shares of capital stock of the Company.

         NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:


ARTICLE I  DEFINITIONS

         SECTION 1.1 CONSTRUCTION OF TERMS. As used herein, the masculine,
feminine or neuter gender, and the singular or plural number, shall be deemed to
be or to include the other genders or number, as the case may be, whenever the
context so indicates or requires.




<PAGE>

         SECTION 1.2 DEFINED TERMS. Capitalized terms used but not defined
herein have the meanings ascribed thereto in the Securities Purchase Agreement.
The following capitalized terms, as used in this Agreement, shall have the
meanings set forth below.

         An "Affiliate" of any 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. A Person shall be deemed
to control another Person if such first Person possesses directly or indirectly
the power to direct, or cause the direction of, the management and policies of
the second Person, whether through the ownership of voting securities, by
contract or otherwise.

         "Articles of Organization" means the Amended and Restated Articles of
Organization of the Company in substantially the form attached as EXHIBIT A to
the Securities Purchase Agreement.

         "Bank Documents" shall mean the Amended and Restated Loan and Security
Agreement by and among the Company, as borrower, and Brown Brothers Harriman &
Co. as agent; and the lending institutions from time to time parties thereto and
the other documentation in connection with a loan to the Company in the
aggregate amount of $5,850,000, as the same may be amended from time to time.

         "Buyer" has the meaning set forth in Section 5.4.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the Common Stock, par value $0.01 per share, of
the Company issued in accordance with and subject to the terms of the Articles
of Organization, and any other common equity securities now or hereafter issued
by the Company (but not including the Preferred Stock), together with any other
shares of stock issued or issuable with respect thereto (whether by way of a
stock dividend, stock split or in exchange for or upon conversion of such shares
or otherwise in connection with a combination of shares, recapitalization,
merger, consolidation or other corporate reorganization).

         "Company" means Harvard Apparatus, Inc., a Massachusetts corporation,
and its successors and assigns, whether by way of merger, consolidation or
otherwise.

         "Compliance Certificate" has the meaning set forth in Section 8.5(a).

         "Controlling Person" has the meaning set forth in Section 4.7.

         "Co-Sale Option" has the meaning set forth in Section 5.3.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.



                                       2

<PAGE>

         "Graziano" has the meaning set forth in the preamble to this Agreement.

         "Green" has the meaning set forth in the preamble to this Agreement.

         "Holder" has the meaning set forth in Section 4.1.

         "Initial Investment Agreement" has the meaning set forth in the
preamble to this Agreement.

         "Investors" has the meaning set forth in the preamble to this
Agreement.

         "Management Investors" has the meaning set forth in the preamble to
this Agreement except such term shall not include Graziano in his capacity as an
Outside Investor.

         "Management Investor Shares" means the shares of Common Stock owned by
the Management Investors from time to time, together with (i) those securities
purchased by Graziano pursuant to Sections 2.1, 2.2, 2.5. 2.6, 2.7 and 2.8 of
the Initial Investment Agreement and (ii) any other shares of Common Stock or
other securities of the Company from time to time held by the Management
Investors.

         "New Stock" has the meaning set forth in Section 6.3.

         "New Stock Offer" has the meaning set forth in Section 6.2.

         "Offeror" has the meaning set forth in Section 5.2.

         "Offer Notice" has the meaning set forth in Section 5.2.

         "Outside Investor" has the meaning set forth in the preamble to this
Agreement, except such term shall include Graziano only to the extent of and
with respect to the securities purchased by him pursuant to the Initial
Investment Agreement and not in his capacity as a Management Investor.

         "Outside Investor Shares" means the shares of Preferred Stock and the
shares of Common Stock to be received by the Outside Investors upon exercise of
the Warrants or conversion of the Series B Preferred Stock, together with any
other shares of Common Stock, Preferred Stock and other securities of the
Company held by the Outside Investors from time to time.

         "Percentage Ownership" has the meaning set forth in Section 6.3.

         "Permitted Transfer" has the meaning set forth in Section 5.1.



                                       3

<PAGE>

         "Permitted Transferee" means, with respect to the Outside Investors,
any Transferee thereof, and, with respect to either Management Investor, has the
meaning set forth in Section 5.1.

         "Person" means an individual, a corporation, an association, a
partnership, a limited liability company, an estate, a trust, and any other
entity or organization, governmental or otherwise.

         "Preferred Stock" means, collectively, the Series A Preferred Stock and
the Series B Preferred Stock.

         "Pro Rata Share" has the meaning set forth in Section 5.2.

         "Registrable Securities" shall have the meaning set forth in Section
4.5.

         "Required Outside Investors" means a majority-in-interest of the
Outside Investors, based upon holdings of Common Stock and assuming the exercise
of all outstanding Warrants and conversion of all outstanding shares of Series B
Preferred Stock (but excluding any securities purchased or acquired by Graziano
other than pursuant to the Initial Investment Agreement).

         "Right of First Refusal" has the meaning set forth in Section 5.2.

         "Sale" has the meaning set forth in Section 5.4.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder.

         "Securities Purchase Agreement" means the Securities Purchase Agreement
of even date herewith by and among the Company and certain of the Investors.

         "Selling Holder" has the meaning set forth in Section 4.7.

         "Series A Preferred Stock" means the Series A Redeemable Preferred 
Stock of the Company, par value $0.01 per share, purchased by certain of the 
Investors pursuant to the Initial Investment Agreement, with the terms set 
forth in the Articles of Organization, together with any other shares issued 
or issuable with respect thereto (whether by way of a stock dividend, stock 
split or in exchange for or in replacement or upon conversion of such shares 
or otherwise in connection with a combination of shares, recapitalization, 
merger, consolidation or other corporate reorganization).

         "Series B Preferred Stock" means the Series B Convertible Preferred
Stock of the Company, par value $0.01 per share, purchased by certain of the
Investors pursuant to the Securities Purchase Agreement, with the terms set
forth in the Articles of Organization, together with any other shares issued or
issuable with respect thereto (whether by way of a 



                                       4

<PAGE>

stock dividend, stock split or in exchange for or in replacement or upon 
conversion of such shares or otherwise in connection with a combination of 
shares, recapitalization, merger, consolidation or other corporate 
reorganization).

         "Stock" means collectively, Preferred Stock and Common Stock, Common
Stock issued or to be issued upon conversion of convertible securities or
exercise of warrants or options, regardless of whether or not the convertible
securities are converted or the warrants or options are exercised, and other
equity securities of the Company.

         "Subordinated Debentures" means the Subordinated Debentures purchased
by certain of the Investors pursuant to Section 2.7 of the Initial Investment
Agreement.

         "Transaction Offer" has the meaning set forth in Section 5.2.

         "Transfer" means any direct or indirect offer, transfer, donation,
sale, assignment, pledge, hypothecation, grant of a security interest in,
conveyance of a beneficial ownership or other right in, or other disposal or
attempted disposal of all or any portion of a security or of any rights.
"Transferred" means the accomplishment of a Transfer, and "Transferee" means the
recipient of a Transfer.

         "Transferring Investor" has the meaning set forth in Section 5.2.

         "Warrants" means the warrants to purchase shares of Common Stock
purchased by certain of the Outside Investors and Graziano pursuant to the
Initial Investment Agreement.


ARTICLE II TERMINATION, AMENDMENT AND RESTATEMENT; WAIVER AND CONSENT

         SECTION 2.1 TERMINATION, AMENDMENT AND RESTATEMENT OF INITIAL
INVESTMENT AGREEMENT. In accordance with Section 12.5 of the Initial Investment
Agreement, by execution of this Agreement, the parties hereto hereby amend and
restate the Initial Investment Agreement in its entirety and replace such
Agreement with this Agreement, intending to be bound in accordance with the
terms hereof. The provisions of this Agreement shall replace and be in
substitution for the Initial Investment Agreement. To the extent that any other
agreement or document that was executed or delivered in connection with the
Initial Investment Agreement referred to or incorporated by reference the
Initial Investment Agreement, such agreements and documents shall be deemed to
be modified to the extent necessary to refer to or incorporate by reference the
provisions set forth in this Agreement.

         SECTION 2.2 WAIVER OF RIGHTS; CONSENT. In connection with the purchase
and sale of the Series B Preferred Stock on the date hereof pursuant to the
Securities Purchase Agreement, the purchase of certain assets of Pharmacia
Biotech (Biochrom) Limited pursuant to the Asset Purchase Agreement and the
borrowings incurred in connection therewith under the Bank Documents, each of
the Investors hereby grants its consent to and waives any and all rights 



                                       5

<PAGE>

that such Investor may have on the date hereof under the Initial Investment
Agreement, as amended and restated by this Agreement, as a result of such
transactions. Without limitation of the foregoing, each Outside Investor who is
a party to the Initial Investment Agreement hereby waives any right to purchase
additional securities pursuant to Article VIII thereof as a result of the sale
by the Company of the Series B Preferred Stock pursuant to the Securities
Purchase Agreement, and each Investor hereby grants its consent under Article X
of the Initial Investment Agreement and Article VIII of this Agreement to the
execution, delivery and performance by the Company of this Agreement, the
Securities Purchase Agreement, the Asset Purchase Agreement, the Bank Documents
and each other agreement, document or instrument contemplated hereby and
thereby.

         SECTION 2.3 WAIVER AND AMENDMENT OF WARRANTS. The parties hereto, in
their capacity as holders of all of the issued and outstanding Warrants, hereby
amend the terms of the Warrants as follows: (i) the defined term "Repurchase
Price" as used in Section 2(a) of the Warrants, is amended to refer to the
"Series A Redemption Price" as defined in the Articles of Organization and (ii)
the parties hereby agree that it shall not be a breach of, or an event of
default under, the Warrants or any promissory note issued pursuant to Section 3
thereof if the Company does not repurchase, redeem or otherwise make any payment
in respect of the Warrants or such notes in accordance with the terms thereof as
a result of (i) any prohibition thereof set forth herein or in the Articles of
Organization or (ii) any failure to grant consent thereto by the holders of the
Series A Preferred Stock and/or the Series B Preferred Stock.


ARTICLE III REPRESENTATIONS AND WARRANTIES

         SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of
the Investors, individually as to itself, severally and not jointly, hereby
represents, warrants and covenants to the Company as follows: (a) such Investor
has full authority, power and capacity, under its charter, by-laws, governing
partnership agreement or comparable constituent organizational documents (if
such Investor is a legal entity) to enter into this Agreement; (b) this
Agreement constitutes the valid and binding obligation of such Investor; and (c)
the execution, delivery and performance by such Investor of this Agreement: (i)
does not and will not violate any laws, rules or regulations of the United
States or any state or other jurisdiction applicable to such Investor, or
require such Investor to obtain any approval, consent or waiver of, or to make
any filing with, any Person that has not been obtained or made; and (ii) does
not and will not result in a breach of, constitute a default under, accelerate
any obligation under or give rise to a right of termination of any indenture or
loan or credit agreement or any other agreement, contract, instrument, mortgage,
lien, lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Investor is a party or by which
the property of such Investor is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the assets or properties of such Investor.

         SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents, warrants and covenants to the Investors as follows:
(a) the Company has full 



                                       6

<PAGE>

corporate authority, power and capacity under its Articles of Organization and
Bylaws to enter into this Agreement; (b) this Agreement constitutes the valid
and binding obligation of the Company enforceable against it in accordance with
its terms; and (c) the execution, delivery and performance by the Company of
this Agreement: (i) does not and will not violate any laws, rules or regulations
of the United States or any state or other jurisdiction applicable to the
Company, or require the Company to obtain any approval, consent or waiver of, or
to make any filing with, any Person that has not been obtained or made; and (ii)
does not and will not result in a breach of, constitute a default under,
accelerate any obligation under or give rise to a right of termination of any
indenture or loan or credit agreement or any other agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which the Company is a
party or by which the property of the Company is bound or affected, or result in
the creation or imposition of any mortgage, pledge, lien, security interest or
other charge or encumbrance on any of the assets or properties of the Company.


ARTICLE IV  REGISTRATION RIGHTS

         SECTION 4.1 "PIGGY-BACK" REGISTRATION RIGHTS. If at any time or times
after the Closing Date, the Company shall determine or be required to register
any shares of its Common Stock for sale under the Securities Act (whether in
connection with a public offering of securities by the Company (a "primary
offering"), a public offering of securities by stockholders of the Company (a
"secondary offering"), or both, but not in connection with a registration
effected solely to implement an employee benefit plan or a transaction to which
Rule 145 or any other similar rule of the Commission under the Securities Act is
applicable), the Company will promptly give written notice thereof to the
Investors and any other Person to whom the Company has granted "piggy-back"
registration rights with respect to the Common Stock (including Common Stock
issued or issuable upon exercise of any Warrants or conversion of any shares of
Series B Preferred Stock) (referred to for purposes of this Article IV
collectively as the "Holders" and individually as a "Holder," subject to Section
4.10 below). If within 30 days after the delivery of such notice by the Company,
one or more Holders of Registrable Securities (as hereinafter defined) requests
in a writing delivered to the Company the inclusion of some or all of the
Registrable Securities (but not any other securities) held by them in such
registration, the Company will use its best efforts to effect the registration
under the Securities Act of all such Registrable Securities. In the case of the
registration of shares of Common Stock by the Company in connection with an
underwritten public offering, (i) the Company shall not be required to include
any Registrable Securities in such underwriting unless the Holders thereof
accept the terms of the underwriting as agreed upon between the Company and the
underwriter or underwriters selected by it (provided the same is not
inconsistent with the terms of this Agreement), and (ii) if the underwriter(s)
determines that marketing factors require a limitation on the number of
Registrable Securities to be offered, the Company shall not be required to
register Registrable Securities of the Holders in excess of the amount, if any,
of shares of the capital stock which the principal underwriter of such
underwritten offering shall reasonably and in good faith agree to include in
such offering in excess of any amount to be registered for the Company. In the
event of any 



                                       7

<PAGE>

such limitation, the first shares to be included in such registration shall be
any shares to be registered for the benefit of the Company, and thereafter the
priority of the remaining securities to be included in such registration shall
be as follows: (1) for so long as there are any shares of Series B Preferred
Stock outstanding, any Registrable Securities to be registered for the holders
thereof upon conversion of such Series B Preferred Stock shall be included on a
pro rata basis based on their relative ownership of Series B Preferred Stock;
(2) until the Subordinated Debentures and Series A Preferred Stock held by the
Outside Investors (or their transferees) have been paid in full or redeemed, as
applicable, any Registrable Securities to be registered for the benefit of the
Outside Investors (or their transferees) (other than as provided in clause (1)
above) shall be included on a pro rata basis based on their relative ownership
of such Registrable Securities (excluding for this purpose (i) any shares of
Series B Preferred Stock or Common Stock issued upon conversion thereof and (ii)
any securities purchased or acquired by Graziano other than pursuant to the
Initial Investment Agreement); and (3) thereafter any Registrable Securities
which any other Holders have requested to be registered shall be included, based
upon their respective holdings of Registrable Securities. After such time as the
Subordinated Debentures and Series A Preferred Stock held by the Outside
Investors (or their transferees) have been paid in full or redeemed, as
applicable, Registrable Securities which any Holders under clauses (2) and (3)
above have requested to be registered shall be included on a pro rata basis
(subject to any shares with priority pursuant clause (1) above), based upon
their respective holdings of Registrable Securities. All expenses relating to
the registration and offering of Registrable Securities pursuant to this Section
4.1 (including the reasonable fees and expenses of not more than one independent
counsel for the Holders) shall be borne by the Company, except that the Holders
shall bear underwriting and selling commissions attributable to their
Registrable Securities being registered and any transfer taxes on shares being
sold by such Holders.

         SECTION 4.2 REQUIRED REGISTRATIONS OF THE OUTSIDE INVESTORS. If on any
two (2) occasions, Outside Investors holding 30% or more of the then outstanding
Registrable Securities held by all Outside Investors shall notify the Company in
writing that they intend to offer or cause to be offered for public sale all or
any portion of their Registrable Securities, the Company shall notify all of the
Holders of Registrable Securities who are entitled to notice of a proposed
registration under or as contemplated by Section 4.1 above, if any, of its
receipt of such notification. Upon the written request of any such Holder
delivered to the Company within 30 days after delivery by the Company of such
notification, the Company will, at its election, either (i) elect to make a
primary offering or (ii) use its best efforts to cause such of the Registrable
Securities as may be requested by any Holders (including the Holder or Holders
giving the initial notice of intent to register) to be registered under the
Securities Act in accordance with the terms of this Section 4.2; PROVIDED,
HOWEVER, that if such registration is underwritten and the underwriter
determines that a limitation on the number of shares to be underwritten is
required, the first shares to be excluded from such registration shall be any
shares to be registered for the benefit of the Company, thereafter any shares to
be registered for the benefit of any Holders other than the Outside Investors
based upon their respective holdings of Registrable Securities and thereafter
any shares to be registered for the benefit of the Outside Investors; PROVIDED,
HOWEVER, that in the event less than 70% of the Registrable Securities desired
to be registered by the Outside Investors initiating the registration pursuant



                                       8

<PAGE>

to the first sentence of this Section 4.2 are registered in such registration,
such registration may be terminated by a majority-in-interest of such Outside
Investors (based upon holdings of Common Stock on an as-converted basis), in
which event such registration shall not count as one of the two (2) demand
registrations pursuant to such sentence, notwithstanding that the Company may
determine to proceed with such registration. If so requested by the Outside
Investors requesting registration under this Section 4.2, the Company shall take
such steps as are required to register the relevant Holders' Registrable
Securities for sale on a delayed or continuous basis under Rule 415, and to keep
such registration effective for 180 days (or 120 days in the case of a
registration on Form S-3, if applicable) or until all of such Holders'
Registrable Securities registered thereunder are sold, whichever is shorter. All
expenses of such registrations and offerings (other than underwriting and
selling commissions attributable to the Registrable Securities) and the
reasonable fees and expenses of not more than one independent counsel for the
Holders in connection with any registration pursuant to this Section 4.2 shall
be borne by the Company. Any registration effected pursuant to this Section 4.2
and so designated by the Outside Investors shall be subject to this Section 4.2,
regardless of the form in which such registration is effected. Notwithstanding
anything contained herein to the contrary, at any time after a notice by the
Outside Investors has been sent pursuant to the first sentence of this Section
4.2 (the "Election Notice"), the Required Outside Investors may send a notice
rescinding such Election Notice and thereafter no Holder shall have any right to
have any Registrable Securities offered or registered in connection with such
Election Notice.

         SECTION 4.3 FORM S-3. If the Company becomes eligible to use Form S-3
under the Securities Act or a comparable successor form, the Company shall use
its best efforts to continue to qualify at all times for registration of its
capital stock on Form S-3 or such successor form. In addition to their rights
under Section 4.2 hereof, the Outside Investors shall have the right to request
and have effected registrations of Registrable Securities on Form S-3 or such
successor form for a public offering of shares of Registrable Securities having
an aggregate proposed offering price of not less than $2,000,000 (such requests
shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended method of disposition of such
shares by the Outside Investors). The Company shall give notice to all of the
Holders of Registrable Securities of the receipt of a request for registration
pursuant to this Section 4.3 and upon the written request of any such Holder
delivered to the Company within 20 days after receipt from the Company, the
Company shall use its best efforts to cause such of the Registrable Securities
as may be required by any Holder to be registered under the Securities Act on
Form S-3 (or any successor form). If so requested by the Holders initiating the
demand under this Section 4.3, the Company shall take such steps as are required
to register the requesting Holders' Registrable Securities for sale on a delayed
or continuous basis under Rule 415 and to keep such registration effective for
120 days or until all of such Holders' Registrable Securities registered
thereunder are sold, whichever is shorter. All expenses incurred in connection
with a registration requested pursuant to this Section 4.3 (other than
underwriting and selling commissions attributable to the Registrable Securities)
and the reasonable fees and expenses of not more than one independent counsel
for the Holders shall be borne by the Company.



                                       9


<PAGE>

         SECTION 4.4 POSTPONEMENT OF REGISTRATION.

                           (a) The Company may postpone the filing of any
         registration statement required under Section 4.2 or 4.3 for a
         reasonable period of time, not to exceed 60 days during any
         twelve-month period, if the Company has been advised by legal counsel
         that such filing would require a special audit or the disclosure of a
         material impending transaction or other matter and the Company
         determines reasonably and in good faith that such disclosure would have
         a material adverse effect on the Company. The Company shall not be
         required to cause a registration statement requested pursuant to
         Section 4.2 or 4.3 to become effective prior to 90 days following the
         effective date of a registration statement initiated by the Company if
         the request for registration has been received by the Company
         subsequent to the delivery of written notice by the Company, made in
         good faith, to the Holders of Registrable Securities to the effect that
         the Company is commencing to prepare a Company-initiated registration
         statement (other than a registration effected solely to implement an
         employee benefit plan or a transaction to which Rule 145 or any other
         similar rule of the Commission under the Securities Act is applicable);
         PROVIDED, HOWEVER, that the Company shall use its best efforts to cause
         such Company-initiated registration statement to become effective
         promptly.

                           (b) In the event that the Company notifies the
         Holders of Registrable Securities of any postponement of registration
         pursuant to the foregoing subparagraph (a), such Holders shall keep all
         information regarding such postponement confidential.

         SECTION 4.5 REGISTRABLE SECURITIES. For the purposes of this Article
IV, the term "Registrable Securities" and any and all references to Registrable
Securities held by any Person shall mean any shares of Common Stock purchased by
or issued to an Investor prior to, at or after the Closing, and shall also mean
shares of Common Stock issuable pursuant to the conversion of Series B Preferred
Stock, the exercise of Warrants and, to the extent then vested, options,
notwithstanding that any such shares of Series B Preferred Stock have not been
converted or such Warrants or options have not been exercised; PROVIDED,
HOWEVER, that any Common Stock that is sold in a registered sale pursuant to an
effective registration statement under the Securities Act or pursuant to Rule
144 thereunder, or that may be sold without restriction pursuant to Rule 144(k)
under the Securities Act (as confirmed by an unqualified opinion of counsel to
the Company), shall not be deemed Registrable Securities.

         SECTION 4.6 FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the
preceding Sections of this Article IV the Company is required hereunder to
register any Registrable Securities, it agrees that it shall also do the
following:

                           (a) Pay all expenses of such registrations and
         offerings (exclusive of underwriting discounts and commissions) and the
         reasonable fees and expenses of not more than one independent counsel
         for the Holders satisfactory to a majority-in-interest of the Holders
         (based upon holdings of Common Stock on an as-converted basis);


                                       10

<PAGE>

                           (b) Use its best efforts (with due regard to the
         management of the ongoing business of the Company) diligently to
         prepare and file with the Commission a registration statement and such
         amendments and supplements to said registration statement and the
         prospectus used in connection therewith as may be necessary to keep
         said registration statement effective and to comply with the provisions
         of the Securities Act with respect to the sale of securities covered by
         said registration statement for the lesser of (i) 180 days (or 120 days
         in the case of registration or Form S-3) or (ii) the period necessary
         to complete the proposed public offering;

                           (c) Furnish to each selling Holder such number of
         copies of each preliminary and final prospectus and such other
         documents as such Holder may reasonably request to facilitate the
         public offering of its or his Registrable Securities;

                           (d) Enter into any reasonable underwriting agreement
         required by the proposed underwriter for the selling Holders, if any,
         in such form and containing such terms as are customary and not
         inconsistent with the terms of this Agreement; PROVIDED, HOWEVER, that
         no Holder shall be required to make any representations or warranties
         other than with respect to its title to the Registrable Securities and
         any written information provided by the Holders to the Company, and if
         the underwriter requires that representations or warranties be made,
         the Company shall make all such representations and warranties relating
         to the Company;

                           (e) Use its best efforts to register or qualify the
         securities covered by said registration statement under the securities
         or "blue-sky" laws of such jurisdictions as any selling Holders may
         reasonably request; PROVIDED that the Company shall not be required to
         register or qualify securities in any jurisdictions which require it to
         qualify to do business or subject itself to general service of process
         therein;

                           (f) Immediately notify each selling Holder, at any
         time when a prospectus relating to such Holder's Registrable Securities
         is required to be delivered under the Securities Act, of the happening
         of any event as a result of which such prospectus contains an untrue
         statement of a material fact or omits any material fact necessary to
         make the statements therein not misleading, and, at the request of any
         such selling Holder, prepare a supplement or amendment to such
         prospectus so that, as thereafter delivered to the purchasers of such
         Registrable Securities, such prospectus will not contain any untrue
         statement of a material fact or omit to state any material fact
         necessary to make the statements therein not misleading;

                           (g) Cause all such Registrable Securities to be
         listed on each securities exchange or quoted in each quotation system
         on which similar securities issued by the Company are then listed or
         quoted (or, in the case of the Company's initial public offering, such
         exchange or quotation system as the Company may determine);


                                       11

<PAGE>

                           (h) Otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission and make generally
         available to its security holders, in each case as soon as practicable,
         but not later than 45 days after the close of the period covered
         thereby (90 days in case the period covered corresponds to a fiscal
         year of the Company), an earnings statement of the Company which will
         satisfy the provisions of Section 9(a) of the Securities Act;

                           (i) Obtain and furnish to each selling Holder,
         immediately prior to the effectiveness of the registration statement
         (and, in the case of an underwritten offering, at the time of delivery
         of any Registrable Securities sold pursuant thereto), a cold comfort
         letter from the Company's independent public accountants in the same
         form and covering the same matters as is typically delivered to
         underwriters and, in the event that an underwriter or underwriters have
         been retained in connection with such registration, such cold comfort
         letter to be provided to the selling Holders shall be the same cold
         comfort letter delivered to such underwriter or underwriters; and

                           (j) Otherwise cooperate with the underwriter or
         underwriters, the Commission and other regulatory agencies and take all
         actions and execute and deliver or cause to be executed and delivered
         all documents necessary to effect the registration of any Registrable
         Securities under this Article IV.

         SECTION 4.7 INDEMNIFICATION; CONTRIBUTION.

                           (a) Incident to any registration statement referred
         to in this Article IV and subject to applicable law, the Company will
         indemnify and hold harmless each underwriter, each Holder who offers or
         sells any such Registrable Securities in connection with such
         registration statement (including its partners (including partners of
         partners and stockholders of any such partners), and directors,
         officers, employees and agents of any of them (a "Selling Holder"), and
         each person who controls any of them within the meaning of Section 15
         of the Securities Act or Section 20 of the Exchange Act (a "Controlling
         Person") (each, an "Indemnified Party"), from and against any and all
         losses, claims, damages, expenses and liabilities, joint or several
         (including any investigation, legal and other expenses incurred in
         connection with, and any amount paid in settlement of, any action, suit
         or proceeding or any claim asserted), to which they, or any of them,
         may become subject under the Securities Act, the Exchange Act or other
         federal or state statutory law or regulation, at common law or
         otherwise, insofar as such losses, claims, damages, expenses or
         liabilities arise out of or are based on (i) any untrue statement or
         alleged untrue statement of a material fact contained in such
         registration statement (including any related preliminary or definitive
         prospectus, or any amendment or supplement to such registration
         statement or prospectus), (ii) any omission or alleged omission to
         state in such document a material fact required to be stated in it or
         necessary to make the statements in it not misleading, or (iii) any
         violation by the Company of the Securities Act, any state securities or
         "blue sky" laws or any rule or regulation thereunder in connection with
         such registration; PROVIDED, HOWEVER, that the Company will not be
         liable to any Indemnified Party to the extent that 


                                       12

<PAGE>

         such loss, claim, damage, expense or liability arises from and is based
         on an untrue statement or omission or alleged untrue statement or
         omission made in reliance on and in conformity with information
         furnished in writing to the Company by such Indemnified Party expressly
         for use in such registration statement (in such Person's capacity as a
         shareholder of the Company and not in its capacity as an officer or
         director of the Company and which such information relates to such
         Person's capacity as a shareholder). With respect to (but only with
         respect to) such untrue statement or omission or alleged untrue
         statement or omission in the information furnished in writing to the
         Company by such Selling Holder expressly for use in such registration
         statement (in such Person's capacity as a shareholder of the Company
         and not in its capacity as an officer or director of the Company and
         which such information relates to such Person's capacity as a
         shareholder), such Selling Holder will indemnify and hold harmless each
         underwriter, the Company (including its directors, officers, employees
         and agents), each other Investor (including its partners (including
         partners of partners and stockholders of such partners) and directors,
         officers, employees and agents of any of them) so registered, and each
         Controlling Person thereof, from and against any and all losses,
         claims, damages, expenses and liabilities, joint or several, to which
         they, or any of them, may become subject under the Securities Act, the
         Exchange Act or other federal or state statutory law or regulation, at
         common law or otherwise to the same extent provided in the immediately
         preceding sentence. In no event, however, shall the aggregate liability
         of a Selling Holder for indemnification and/or contribution under this
         Section 4.7 in its capacity as such (and not in its capacity as an
         officer or director of the Company) exceed the lesser of (i) that
         proportion of the total of such losses, claims, damages or liabilities
         indemnified against equal to the proportion of the total securities
         sold under such registration statement which is being sold by such
         Selling Holder or (ii) the net cash proceeds received by such Selling
         Holder from its sale of Registrable Securities under such registration
         statement.

                           (b) If the indemnification provided for in Section
         4.7(a) above for any reason is held by a court of competent
         jurisdiction to be unavailable to an indemnified party in respect of
         any losses, claims, damages, expenses or liabilities referred to
         therein, then each indemnifying party under this Section 4.7, in lieu
         of indemnifying such indemnified party thereunder, shall contribute to
         the amount paid or payable by such indemnified party as a result of
         such losses, claims, damages, expenses or liabilities (i) in such
         proportion as is appropriate to reflect the relative benefits received
         by the Company, the Selling Holders and the underwriters from the
         offering of the Registrable Securities or (ii) if the allocation
         provided by clause (i) above is not permitted by applicable law, in
         such proportion as is appropriate to reflect not only the relative
         benefits referred to in clause (i) above but also the relative fault of
         the Company, the Selling Holders and the underwriters in connection
         with the statements or omissions which resulted in such losses, claims,
         damages, expenses or liabilities, as well as any other relevant
         equitable considerations. The relative benefits received by the
         Company, the Selling Holders and the underwriters shall be deemed to be
         in the same respective proportions that the net proceeds from the
         offering (before deducting expenses) received by the Company and the
         Selling Holders and the underwriting 


                                       13

<PAGE>

         discount received by the underwriters, in each case as set forth in the
         table on the cover page of the applicable prospectus, bear to the
         aggregate public offering price of the Registrable Securities. The
         relative fault of the Company, the Selling Holders and the underwriters
         shall be determined by reference to, among other things, whether the
         untrue or alleged untrue statement of a material fact or the omission
         or alleged omission to state a material fact relates to information
         supplied by the Company, the Selling Holders or the underwriters and
         the parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement or omission.

                  The Company, the Selling Holders, and the underwriters agree
         that it would not be just and equitable if contribution pursuant to
         this Section 4.7(b) were determined by pro rata or per capita
         allocation or by any other method of allocation which does not take
         account of the equitable considerations referred to in the immediately
         preceding paragraph. In no event, however, shall a Selling Holder be
         required to make any indemnification payment under Section 4.7(a)
         and/or contribute any amount under this Section 4.7(b) in excess, in
         the aggregate, of the lesser of (i) that proportion of the total of
         such losses, claims, damages or liabilities indemnified against equal
         to the proportion of the total Registrable Securities sold under such
         registration statement which are being sold by such Selling Holder or
         (ii) the net cash proceeds received by such Selling Holder from its
         sale of Registrable Securities under such registration statement. No
         person found guilty of fraudulent misrepresentation (within the meaning
         of Section 11(f) of the Securities Act) shall be entitled to
         contribution from any person who was not found guilty of such
         fraudulent misrepresentation.

                           (c) The amount paid by an indemnifying party or
         payable to an indemnified party as a result of the losses, claims,
         damages and liabilities referred to in this Section 4.7 shall be deemed
         to include, subject to the limitations set forth above, any legal or
         other expenses reasonably incurred by such indemnified party in
         connection with investigating or defending any such action or claim,
         payable as the same are incurred. The indemnification and contribution
         provided for in this Section 4.7 will remain in full force and effect
         regardless of any investigation made by or on behalf of the indemnified
         parties or any officer, director, employee, agent or controlling person
         of the indemnified parties.

         SECTION 4.8 RULE 144 AND 144A REQUIREMENTS. If the Company becomes
subject to the reporting requirements of either Section 13 or 15(d) of the
Exchange Act, the Company will use its best efforts thereafter to file with the
Commission such information as is specified under either of said Sections for so
long as there are Holders of Registrable Securities; and in such event, the
Company shall use its best efforts to take all action as may be required as a
condition to the availability of Rule 144 or Rule 144A under the Securities Act
(or any successor or similar exemptive rules hereafter in effect). The Company
shall furnish to any Holder of Registrable Securities upon request a written
statement executed by the Company as to the steps it has taken to comply with
the current public information requirement of Rule 144 or Rule 144A or such
successor rules.


                                       14

<PAGE>

         SECTION 4.9 MARKET STAND-OFF. Each Holder agrees, if requested by the
Company and an underwriter of Common Stock of the Company (provided that all
Holders have been so requested), not to publicly sell or otherwise publicly
transfer or dispose of any Common Stock held by it for such period, not to
exceed 180 days following the effective date of any registration statement
(other than a registration effected solely to implement an employee benefit plan
or a transaction to which Rule 145 or any other similar rule of the Commission
under the Securities Act is applicable) of the Company filed under the
Securities Act as the Company or such underwriter shall specify reasonably and
in good faith (a "Lock-up Agreement"), and each Holder shall require any
transferee of Common Stock by a private sale or transfer, as a condition to such
private sale or transfer, to enter into a Lock-up Agreement.

         SECTION 4.10 TRANSFER OF REGISTRATION RIGHTS. The registration rights
and related obligations under this Article IV of each Outside Investor with
respect to its Registrable Securities may be assigned to any transferee of
Registrable Securities held by it, and upon such Transfer, the relevant
Transferee shall be deemed to be included within the definition of an "Outside
Investor" and a "Holder" solely for purposes of this Article IV. Each Outside
Investor shall notify the Company at the time of such Transfer. The registration
rights and related obligations under this Article IV of each Management Investor
may not be assigned or transferred (except to their Permitted Transferees),
until such time as the Subordinated Debentures and Series A Preferred Stock held
by the Outside Investors (or their transferees) have been paid in full,
redeemed, or converted in to Common Stock, as applicable, and if permitted to be
so transferred, only in compliance with and subject to all other terms and
conditions of this Agreement.

         SECTION 4.11 NO OTHER REGISTRATION RIGHTS. Other than the rights
provided in this Article IV to the Investors and their Permitted Transferees,
without the prior written consent of holders of at least a majority of the
outstanding shares of Series B Preferred Stock, the Company shall not grant to
any other Person(s) any right to register, or require the Company to register,
capital stock of the Company under the Securities Act.


ARTICLE V  RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL AND
           OBLIGATIONS OF CO-SALE

         SECTION 5.1 RESTRICTIONS ON TRANSFER. Neither Management Investor shall
Transfer any Stock, except (subject to Section 5.1(b) below) for Permitted
Transfers as defined in Section 5.1(a).

                           (a) For purposes of this Article V, a "Permitted
         Transfer" by a Management Investor means:

                                    (i) Transfers by any Management Investor
                  pursuant to Sections 5.2, 5.3 or 5.4, in each case made in
                  accordance with the procedures set forth therein;


                                       15

<PAGE>

                                    (ii) Transfers by any Management Investor
                  pursuant to a public offering of the Company's Common Stock
                  registered under the Securities Act, subject to the
                  limitations and procedures set forth in Article IV hereof or,
                  following a public offering, sold pursuant to Rule 144
                  promulgated under the Securities Act;

                                    (iii) Transfers by any Management Investor
                  to his spouse or children or to a trust of which he is the
                  settlor and a trustee for the benefit of his spouse or
                  children; PROVIDED, HOWEVER, that any such trust does not
                  require or permit distribution of such Stock during the term
                  of this Agreement;

                                    (iv) Transfers by any Management Investor
                  upon the death of such Management Investor to his heirs,
                  executors or administrators or to a trust under his will or
                  Transfers between such Management Investor and his guardian or
                  conservator;

                                    (v) Transfers by any Management Investor to
                  satisfy such Management Investor's obligations under Section
                  5.3 of the Initial Investment Agreement.

Any Transferee of a Permitted Transfer by a Management Investor described in the
preceding clauses (iii) and (iv) shall be referred to herein as a "Permitted
Transferee" thereof.

                           (b) Notwithstanding the foregoing, no Transfer of
         Stock or rights pursuant to Sections 5.1(a)(iii) or (iv) shall be
         deemed to be a Permitted Transfer unless the Transferee shall have
         entered into a Joinder Agreement, in substantially the form attached
         hereto as EXHIBIT A, for the benefit of the other Investors, as a
         condition to such Transfer, pursuant to which such Transferee shall
         agree to be bound by all of the provisions of this Agreement, to the
         same extent as was the transferor hereunder; and PROVIDED, FURTHER,
         that any such Transferee shall take all such Stock and rights subject
         to all the provisions of this Agreement as if such Stock or rights were
         still held by the Investor who made the Transfer, whether or not they
         so agree with the Company, the Investor who makes the Transfer or with
         the other Investors.

         SECTION 5.2 RIGHT OF FIRST REFUSAL. In the event that either of the
Management Investors, including any Permitted Transferee thereof, receives a
bona fide offer to purchase all or any portion of the shares of Stock held by
such Management Investor (a "Transaction Offer") from a party other than a
Permitted Transferee (the "Offeror") and such Management Investor desires to
accept such Transaction Offer, such Management Investor (a "Transferring
Investor") may, subject to the provisions of Section 5.3 hereof, Transfer such
shares pursuant to and in accordance with the following provisions of this
Section 5.2:

                           (a) Such Transferring Investor shall notify the
         Company, with a copy to the Outside Investors (enclosing a description,
         in reasonable detail, including, without limitation, the consideration
         to be received and the name and address of the 


                                       16

<PAGE>

         Offeror, of the Transaction Offer), of his wish to accept the
         Transaction Offer and otherwise comply with the provisions of this
         Section 5.2 and, if applicable, Section 5.3 (such notice, the "Offer
         Notice").

                           (b) The Company shall have the right, exercisable
         upon written notice to the Transferring Investor within thirty (30)
         days after it receives the Offer Notice, to purchase all or any portion
         of the shares of Stock proposed to be sold, at the price set forth in
         the Offer Notice and upon the other terms and conditions set forth
         below (the "Company Right of First Refusal"). In the event that the
         price set forth in the Offer Notice is stated in consideration other
         than cash or cash equivalents, the fair market value of such
         consideration shall be determined substantially as provided in Article
         XI hereof, and the Company may exercise its Right of First Refusal by
         payment of such fair market value in cash or cash equivalents.

                           (c) In the event the Company does not elect to
         purchase all of the shares of Stock in accordance with the terms of
         Section 5.2(b) above, each of the Outside Investors shall have the
         right, exercisable upon written notice to the Transferring Investor
         within thirty (30) days after the Outside Investors have received
         notice from the Transferring Investor (i) that the Company has not
         elected to exercise the Company Right of First Refusal with respect to
         all or a portion of shares of Stock proposed to be sold and (ii)
         offering to sell all or such portion, as the case may be, not so
         elected to be purchased by the Company pursuant to 5.2(b) of the shares
         of Stock proposed to be sold, to purchase at the price set forth in the
         Offer Notice and upon the other terms and conditions set forth below to
         purchase its Pro Rata Share (as defined below) (the "Outside Investors'
         Right of First Refusal," and collectively with the Company Right of
         First Refusal, the "Right of First Refusal"). In the event that the
         price set forth in the Offer Notice is stated in consideration other
         than cash or cash equivalents, any of the Outside Investors may request
         that the fair market value of such consideration be determined as
         provided in Article XI hereof, and any of the Outside Investors may
         exercise its Outside Investors' Right of First Refusal by payment of
         such fair market value in cash or cash equivalents. An Outside
         Investor's Pro Rata Share shall equal the product obtained by
         multiplying (i) the total number of shares of Stock subject to the
         Offer Notice and not to be purchased by the Company pursuant to Section
         5.2(b) by (ii) a fraction, the numerator of which is the total number
         of shares of Stock owned by such Outside Investor on the date of the
         Offer Notice, and the denominator of which is the total number of
         shares of Stock then held by all Outside Investors on the date of the
         Offer Notice (in each case, calculated on a fully diluted basis). To
         the extent one or more Outside Investors elects not to purchase, or
         fails to exercise its right to purchase, the full amount of such shares
         of Stock which it is entitled to purchase pursuant to this Section 5.2,
         the other Outside Investors' rights to purchase shares of Stock shall
         be increased proportionately and such other Outside Investors shall
         have an additional five (5) days from the date upon which they are
         notified of such election or failure to exercise in which to increase
         the number of shares of Stock to be purchased by them hereunder. For
         purposes of this Section 5.2, any Warrants held by an Outside Investor
         which are exercisable for shares of Common Stock shall be treated as so


                                       17

<PAGE>

         exercised, and any shares Series B Preferred Stock held by an Outside
         Investor which are convertible into shares of Common Stock shall be
         treated as so converted.

                           (d) The closing for any purchase of shares of Stock
         by the Company or the Outside Investors shall take place at the place
         and on a date specified in the applicable notice of exercise within
         sixty (60) days of such notice of exercise.

                           (e) In the event that the Company or the Outside
         Investors do not elect to exercise the Right of First Refusal with
         respect to all or part of the shares of Stock proposed to be sold, the
         Transferring Investor may sell the remaining shares of such Stock
         proposed to be sold to the Offeror on the terms and conditions set
         forth in the Offer Notice, subject to the provisions of Section 5.3. If
         the Transaction Offer is not consummated within the later of (i) thirty
         (30) days after the expiration of the Outside Investors' Right of First
         Refusal and the Co-Sale Option set forth in Section 5.3 below, if
         applicable, and (ii) ten (10) days after the satisfaction of all
         governmental approval or filing requirements, the Transaction Offer
         shall be deemed to lapse, and any Transfers of shares of Stock pursuant
         to such Transaction Offer shall be deemed to be in violation of the
         provisions of this Agreement unless the Company and the Outside
         Investors are once again afforded the Right of First Refusal provided
         for herein with respect to such Transaction Offer.

         SECTION 5.3 CO-SALE OPTION. In the event that the Right of First
Refusal is not exercised with respect to all or part of the shares of Stock
proposed to be sold by any Transferring Investor, such Transferring Investor may
Transfer such shares only pursuant to and in accordance with the following
provisions of this Section 5.3:

                           (a) Each of the Outside Investors shall have the
         right to participate in the Transaction Offer on the terms and
         conditions herein stated, which right shall be exercisable upon written
         notice to the Transferring Investor within thirty (30) days after the
         Outside Investors receive notice from the Transferring Investor that
         the Company has not elected to exercise the Company Right of First
         Refusal with respect to all of the shares of Stock proposed to be sold
         (the "Co-Sale Option").

                           (b) Each of the Outside Investors shall have the
         right to sell a portion of its Stock pursuant to the Transaction Offer
         which is equal to or less than the product obtained by multiplying (i)
         the total number of shares of Stock subject to the Transaction Offer by
         (ii) a fraction, the NUMERATOR of which is the total number of shares
         of Stock owned by such Outside Investor on the date of the Offer
         Notice, and the DENOMINATOR of which is the total number of shares of
         Stock then held by all Outside Investors and the Transferring Investor
         on the date of the Offer Notice (in each case, calculated on a fully
         diluted basis). To the extent one or more Outside Investors elects not
         to sell, or fails to exercise its right to sell, the full amount of
         such shares of Stock which it is entitled to sell pursuant to this
         Section 5.3, the other Outside Investors' rights to sell shares of
         Stock shall be increased proportionately and such other Outside
         Investors shall have an additional five (5) days from the date upon
         which they are 


                                       18

<PAGE>

         notified of such election or failure to exercise in which to increase
         the number of shares of Stock to be sold by them hereunder. For
         purposes of this Section 5.3, any Warrants held by an Outside Investor
         which are exercisable for shares of Common Stock shall be treated as so
         exercised, and any shares Series B Preferred Stock held by an Outside
         Investor which are convertible into shares of Common Stock shall be
         treated as so converted. In addition, any Outside Investor that holds
         Warrants or shares of Series B Preferred Stock shall be permitted to
         sell to the relevant purchaser shares of Common Stock acquired upon
         exercise or conversion thereof or, at its election, (i) an option to
         acquire such Common Stock when it receives the same upon such exercise
         or conversion of the Warrants or Series B Preferred Stock, as the case
         may be, or (ii) the Warrants (net of the exercise price thereof) or the
         shares of Series B Preferred Stock (on an as-converted basis), in each
         case, with the same effect as if Common Stock were being conveyed.

                           (c) Within ten (10) days after the date by which the
         Outside Investors were first required to notify the Transferring
         Investor of their intent to participate, the Transferring Investor
         shall notify each participating Outside Investor of the number of
         shares of Stock held by such Investor that will be included in the sale
         and the date on which the Transaction Offer will be consummated, which
         shall be no later than the later of (i) thirty (30) days after the date
         by which the Investors were required to notify the Management Investor
         of their intent to participate and (ii) ten (10) days after the
         satisfaction of any governmental approval or filing requirements, if
         any.

                           (d) Each of the participating Outside Investors may
         effect its participation in any Transaction Offer hereunder by delivery
         to the Offeror, or to the Transferring Investor for delivery to the
         Offeror, of one or more instruments or certificates, properly endorsed
         for transfer, representing the shares of Stock it elects to sell
         therein, together with executed copies of any purchase agreement or
         related documents that (i) accompanied the original Offer Notice and
         (ii) are also executed by the Transferring Investors. At the time of
         consummation of the Transaction Offer, the Offeror shall remit directly
         to each Outside Investor that portion of the sale proceeds to which
         such Outside Investor is entitled by reason of its participation
         therein.

                           (e) In the event that the Transaction Offer is not
         consummated within the period required by subsection (c) hereof or the
         Offeror fails to remit timely to each Outside Investor its portion of
         the sale proceeds, the Transaction Offer shall be deemed to lapse, and
         any Transfers of shares of Stock pursuant to such Transaction Offer
         shall be deemed to be in violation of the provisions of this Agreement
         unless the Transferring Investor once again complies with the
         provisions of Section 5.2 and this Section 5.3 hereof with respect to
         such Transaction Offer.

         SECTION 5.4 TAKE-ALONG.

                           (a) In the event that the Required Outside Investors
         determine to sell or otherwise dispose of all or substantially all of
         the assets of the Company or all of the 


                                       19

<PAGE>

         capital stock of the Company owned by such Outside Investors to any
         non-Affiliate(s) of the Company or of the Outside Investors, or to
         cause the Company to merge with or into or consolidate with any
         non-Affiliate(s) of the Company or of the Outside Investors in a
         transaction in which the Outside Investors and their Affiliates
         following such transaction own less than 51% in the aggregate of the
         securities of the Company they owned prior to such transaction (in each
         case, the "Buyer") in a bona fide negotiated transaction (a "Sale") and
         in which such Sale the actual or implied sale price per share of Common
         Stock is not less than $13.00, each of the Management Investors,
         including any of their respective Permitted Transferees, shall be
         obligated to and shall upon the written request of the Outside
         Investors: (i) sell, transfer and deliver, or cause to be sold,
         transferred and delivered, to the Buyer, his or its shares of Stock on
         the same terms applicable to the Outside Investors (with appropriate
         adjustments to reflect the conversion of convertible securities and the
         exercise of exercisable securities); and (ii) execute and deliver such
         instruments of conveyance and transfer and take such other action,
         including voting such shares of Stock in favor of any Sale proposed by
         the Outside Investors and executing any purchase agreements, merger
         agreements, indemnity agreements, escrow agreements or related
         documents, as the Outside Investors or the Buyer may reasonably require
         in order to carry out the terms and provisions of this Section 5.4.

                           (b) Not less than thirty (30) days prior to the date
         proposed for the closing of any Sale, the Outside Investors shall give
         written notice to each Management Investor, setting forth in reasonable
         detail the name or names of the Buyer, the terms and conditions of the
         Sale, including the purchase price, and the proposed closing date. In
         furtherance of the provisions of this Section 5.4, each Management
         Investor hereby (i) irrevocably appoints the Outside Investors as his
         attorney-in-fact (with full power of substitution) to execute all
         agreements, instruments and certificates and take all actions necessary
         or desirable to effectuate any Sale hereunder; and (ii) grants to the
         Outside Investors a proxy (which shall be deemed to be coupled with an
         interest and irrevocable) to vote the shares of Stock held by such
         Management Investor and exercise any consent rights applicable thereto
         in favor of any Sale hereunder; PROVIDED, HOWEVER, that the Outside
         Investors shall not exercise such powers-of-attorney or proxies with
         respect to either of the Management Investors unless such Management
         Investor is in breach of his obligations under this Section 5.4.

         SECTION 5.5 ASSIGNMENT OF RIGHTS. Each Outside Investor may assign his
or its rights under this Article V in connection with the sale by such Outside
Investor of any Stock or Warrants.

         SECTION 5.6 PROHIBITED TRANSFERS. If any Transfer is made or attempted
contrary to the provisions of this Agreement, such purported Transfer shall be
void AB INITIO; the Company and the other Investors shall have, in addition to
any other legal or equitable remedies which they may have, the right to enforce
the provisions of this Agreement by actions for specific performance (to the
extent permitted by law); and the Company shall have the right to refuse to
recognize any Transferee as one of its Investors for any purpose. Without
limitation to the 


                                       20

<PAGE>

foregoing, each of the Management Investors further agrees that the provisions
of Section 9.7 shall apply in the event of any violation or threatened violation
of this Agreement.


ARTICLE VI  RIGHTS TO PURCHASE

         SECTION 6.1 RIGHT TO PURCHASE. The Company hereby grants to the
Outside Investors (for purposes of this Article VI including any assignees under
Section 6.4), the right, from and after the date hereof, to purchase such
quantity of any class or classes of New Stock (as hereinafter defined) that the
Company may, from time to time, propose to sell and issue to any Person as shall
be necessary to ensure that, after giving effect to such purchase, the Outside
Investor's Percentage Ownership (as hereinafter defined) is at least equal to
its Percentage Ownership immediately prior to such sale and issuance of New
Stock.

         SECTION 6.2 PROCEDURE. The Company shall give each Outside Investor
written notice of such proposed sale of New Stock, describing the amount, type
and class of New Stock and the price and the other terms upon which the Company
proposes to issue the same (the "New Stock Offer"). Each of the Outside
Investors shall have thirty (30) days from the date of delivery of any such
written notice to agree to exercise its purchase right hereunder for the price
and upon the terms specified in the New Stock Offer by giving written notice to
the Company and stating therein the maximum quantity of each class of New Stock
that it is willing to purchase. In the event any Outside Investor fails to
exercise the right granted herein within said thirty-day period, the right to
exercise its purchase right shall expire with respect to such issuance of New
Stock. The closing of the purchase of New Stock by the Outside Investors shall
take place within fifteen (15) business days after the expiration of said
thirty-day period. The Company shall have fifteen (15) days from the closing of
the purchase of New Stock by the Outside Investors to sell the unsold portion of
the New Stock to other purchasers, but only upon terms and conditions that are
in all respects no more favorable to such purchasers or less favorable to the
Company than those set forth in the New Stock Offer.

         SECTION 6.3 DEFINITIONS. For purposes of this Agreement, "New Stock"
means any equity securities of the Company (whether common stock, preferred or
otherwise), or any warrants, options, convertible securities or rights to
purchase any equity securities of the Company, in each case issued after the
Closing Date; PROVIDED, HOWEVER, that "New Stock" does not include: (i)
securities issued upon exercise of the Warrants or conversion of the Series B
Preferred Stock, (ii) securities issued as a result of any stock split, stock
dividend, reclassification or reorganization of the Company's Stock,
distributable on a pro rata basis to all holders of such Stock (excluding
options and warrants) and (iii) up to 206,620 shares of Common Stock, or options
to purchase such shares, granted to employees, consultants and advisers,
officers or directors of the Company pursuant to the Company's stock plan (and
the Common Stock acquired upon the exercise of any such options); PROVIDED
FURTHER, that the Company covenants and agrees that of such 206,620 shares of
Common Stock (or options to purchase such shares), 104,362 of which remain
available for grant, 57,862 shares shall be allocated to the general pool of
awards to be granted to current and future employees of the Company other than
Green and Graziano, and 46,500 shares will be allocated to awards for 


                                       21

<PAGE>

Green and Graziano (23,250 shares each), with such restricted stock or options
granted to Green and Graziano to have vesting provisions consistent with all
other awards granted to employees of the Company, but such restricted stock or
options granted to Green and Graziano shall only be vested and/or exercisable
upon the closing of an underwritten public offering of the Company's Common
Stock at a price per share to the public of not less than $41.23 per share
(appropriately adjusted for stock dividends, stock splits, and other
recapitalization transactions) and gross proceeds to the Company of at least
$15.0 million.

         An Outside Investor's "Percentage Ownership" shall mean as of the date
of determination, such Outside Investor's percentage ownership of the Common
Stock of the Company determined on a fully diluted basis assuming exercise of
all then outstanding Warrants and stock options described in Section 6.3(i) and
the conversion of all then outstanding shares of Series B Preferred Stock
purchased pursuant to the Securities Purchase Agreement; PROVIDED, HOWEVER, that
any securities purchased by Graziano other than pursuant to the Initial
Investment Agreement and any stock options issued to Graziano shall not be
counted in the numerator in determining Graziano's percentage ownership of the
Company.

         SECTION 6.4      ASSIGNMENT OF RIGHTS.  Each Outside Investor may 
assign its rights under this Article VI to any Person.


ARTICLE VII  ELECTION OF DIRECTORS OF THE COMPANY

         SECTION 7.1      VOTING OF SHARES FOR ELECTION OF DIRECTORS OF THE
COMPANY. Except as provided in Section 7.5 hereof, with respect to each election
or removal of members of the Board of Directors of the Company (including,
without limitation, any replacement members), whether at an annual or special
meeting of stockholders or by written consent of stockholders, each of the
Investors and their Permitted Transferees agrees to vote its Stock (and any
shares of Stock over which it exercises voting control) and to take such other
action as may be necessary to fix the number of Directors of the Company at five
(5) or seven (7), as indicated below, and to cause and maintain the nomination
and election to the Board of Directors of the Company and to keep in office as
such:

                                    (i) two (2) persons designated from time to
                  time by the Required Outside Investors, which shall initially
                  be C.W. Dick, and Richard C. Klaffky, and during such time as
                  there shall be four (4) directors designated pursuant to
                  clauses (ii) and (iii) below, three (3) persons designated
                  from time to time by the Outside Investors (any such director
                  designated under this clause (i), an "Outside Director" and
                  collectively, the "Outside Directors");

                                    (ii) three (3) persons designated from time
                  to time by Graziano and Green (the "Other Directors"), who
                  shall initially be Paul Grindle, Chane Graziano and David
                  Green; provided, however, in the event: (a) Graziano (I)
                  ceases to be employed by the Company for any reason or (II)
                  ceases, together with his Permitted Transferees, to own fifty
                  percent (50%) 


                                       22

<PAGE>

                  or more of the shares of Common Stock held of record by him as
                  of the Closing, the number of Other Directors shall (unless
                  otherwise consented to by the Outside Investors) be reduced by
                  one (1) and Graziano shall have no further rights under this
                  clause (ii), and/or (b) in the event Green (I) ceases to be
                  employed by the Company for any reason or (II) ceases,
                  together with his Permitted Transferees, to own fifty percent
                  (50%) or more of the shares of Common Stock held of record by
                  him as of the Closing, the number of Other Directors shall
                  (unless otherwise consented to by the Outside Investors) be
                  reduced by one (1) and Green shall have no further rights
                  under this clause (ii); and

                                    (iii) up to one (1) person mutually
                  agreeable to the Required Outside Investors and a majority of
                  the Other Directors (the "Independent Director").

If, pursuant to clauses (i), (ii) and (iii) above, no representative of Citizens
Capital, Inc. is elected as a member of the Board of Directors, for as long as
Citizens Capital, Inc. owns any shares of Series B Preferred Stock or shares of
Common Stock issued upon conversion thereof, a representative of Citizens
Capital, Inc. shall be entitled to receive: (i) notice of all meetings of the
Board of Directors and all committees thereof and (ii) all information provided
to Directors by the Company at the same time and in the same manner as all
members of the Board of Directors receive such notice and/or information, and
such representative of Citizens Capital, Inc., or his or her designee, shall be
entitled to attend in person, or at his or her option, by telephone, and have
observation rights (but not vote at) all meetings of the Board of Directors and
all committees thereof (excluding the Compensation Committee).

         SECTION 7.2 VACANCIES. Except as provided in Section 7.5 hereof, each
of the Investors and its Permitted Transferees, if any, agrees to vote its Stock
(and any shares of stock over which it exercises voting control), to the extent
required by Section 7.1, in such manner as shall be necessary or appropriate so
as to ensure that any vacancy occurring for any reason in the Board of Directors
of the Company shall be filled so as to constitute the Board in accordance with
Section 7.1 above.

         SECTION 7.3 MEETINGS; EXPENSES. The Board of Directors shall hold not
less than six (6) meetings per year, or such fewer numbers as shall be agreed to
by a majority of the Outside Investor Directors. All Directors and the
representative of Citizens Capital Inc. referred to in Section 7.1 above shall,
subject to reasonable substantiation and documentation, be entitled to
reimbursement of out-of-pocket expenses incurred in attending each meeting of
the Board of Directors or any committee thereof or otherwise incurred in
performing his duties as a director of the Company (including, without
limitation, reasonable travel, lodging, meals and communication expenses). In
addition, each Director not affiliated with any Investor shall be entitled to
reasonable compensation when if and as from time to time (if at all) determined
by the Board (including without limitation, stock options under the Company's
stock option plan).


                                       23

<PAGE>

         SECTION 7.4 NO WAIVER. Any failure by any of the Investors to fully
exercise its rights to designate Directors under this Article VII at any time
shall not be construed to waive or limit its rights to designate such
Director(s) hereunder at any time thereafter.

         SECTION 7.5 BOARD CONTROL OVERRIDE. Notwithstanding anything
contained herein to the contrary, in the event an Event of Default (as defined
in the Articles of Organization, which such definition is incorporated by
reference herein with the same force and effect as if stated herein in full)
shall occur, each of the Investors and their Permitted Transferees agrees to
vote its Stock (and any shares of Stock over which it exercises voting control)
and to take such other action as may be necessary so that the Required Outside
Investors (other than Graziano) shall be entitled to elect the smallest number
of directors which shall constitute a majority of the authorized number of
directors of the Company at such time.

         SECTION 7.6 COMPENSATION COMMITTEE. The Company shall maintain a
Compensation Committee (the "Compensation Committee") which shall have authority
over all compensation matters. The Compensation Committee shall initially have
two (2) members consisting of Graziano and C.W. Dick (so long as each such
person is a member of the Board of Directors) and shall have three (3) members,
which third member shall be the Independent Director, at such time as such
Director is so designated.


ARTICLE VIII  OTHER COVENANTS OF THE COMPANY.

         SECTION 8.1 RESTRICTED ACTIVITIES. Without the written approval of a
majority-in-interest of the Outside Investors (other than Graziano) (based upon
holdings of Common Stock and assuming the exercise of all outstanding Warrants
and conversion of all outstanding shares of Series B Preferred Stock), the
Company agrees and covenants that neither the Company nor its subsidiaries
shall, together or alone:

                           (a) borrow, guarantee or otherwise incur any
         indebtedness or commit itself to pay in excess of $250,000 in any
         transaction or series of similar transactions (other than under the
         Bank Documents in connection with the Asset Purchase Agreement);

                           (b) lease, purchase, sell or otherwise acquire or
         dispose of any property or services having a value in excess of
         $250,000 in any transaction or series of similar transactions;

                           (c) assign, mortgage, pledge, hypothecate, grant a
         security interest in, or otherwise encumber or permit any lien on any
         assets having a value of more than $100,000 (other than under the Bank
         Documents in connection with the Asset Purchase Agreement);

                           (d) disclose any proprietary information to any
         Person other than as shall be necessary to the conduct of the ordinary
         business of the Company unless the 


                                       24

<PAGE>

         Company has the written agreement of the party to whom the disclosure
         is made to retain the confidentiality of the Company's proprietary
         information and not to disclose it to others;

                           (e) enter into any employment, consulting or similar
         agreement which the Company or its subsidiaries shall be unable to
         cancel, without penalty or other cost, upon notice of one month or
         less, or any collective bargaining agreement;

                           (f) make any loan or extend any credit to, guaranty
         any indebtedness of, pledge or hypothecate any asset to secure the
         indebtedness of, or forgive or otherwise change the terms of any
         indebtedness of any director, officer or holder of securities of the
         Company or its subsidiaries;

                           (g) make any loan, extend any credit or guaranty any
         indebtedness, or forgive or otherwise change the terms of any
         indebtedness, in excess of $250,000, or pledge or hypothecate any asset
         worth more than $250,000 to secure any indebtedness (other than under
         the Bank Documents in connection with the Asset Purchase Agreement);

                           (h) make an investment in, or purchase or otherwise
         acquire the securities or assets of any other corporation, partnership
         or other entity or enter into any partnership, joint venture or other
         similar agreement; PROVIDED, HOWEVER, that investments in short-term
         U.S. government securities, bank certificates of deposit or other
         similar investments shall not be deemed a breach of this covenant;

                           (i) merge or consolidate the Company with, or sell,
         assign, lease or otherwise dispose of or voluntarily part with the
         control of (whether in one transaction or in a series of transactions)
         all, or substantially all, of its assets or capital stock (whether now
         owned or hereinafter acquired) or sell, assign or otherwise dispose of
         (whether in one transaction or in a series of transactions) any asset
         or group of assets which is material to the business or operations of
         the Company and its subsidiaries, taken as a whole, or permit any
         subsidiary to do any of the foregoing, except for sales or other
         dispositions of assets in the ordinary course of business and except
         that (1) any subsidiary may merge into or consolidate with or transfer
         assets to any other subsidiary and (2) any subsidiary may merge into or
         transfer assets to the Company;

                           (j) amend the Company's Articles of Organization or
         By-laws;

                           (k) repurchase or otherwise make any distributions
         with respect to any outstanding Stock (other than with respect to
         redemption, repurchase or payments in respect of shares of Series A
         Preferred Stock, Series B Preferred Stock, Warrants or options granted
         under the Company's 1996 Stock Option and Grant Plan in accordance with
         the terms hereof, thereof and the Articles of Organization);


                                       25

<PAGE>

                           (l) issue to any Person any capital stock of the
         Company, unless in connection with such issuance, such Person enters
         into an agreement reasonably satisfactory to the Outside Investors
         agreeing to be bound by all of the voting restrictions contained
         herein, including, without limitation, Article VII hereof;

                           (m) issue to any Person any capital stock of any of
         the Company's subsidiaries from time to time existing;

                           (n) without the approval of the Compensation
         Committee, increase salaries or benefits of any officer of the Company
         or any of its subsidiaries;

                           (o) terminate the employment of either Graziano
         or Green;

                           (p) amend the Bank Documents in any way that is not
         permitted under the terms of that certain Amended and Restated
         Subordination Agreement dated as of the date hereof by and among the
         Company, the Investors and Brown Brothers Harriman & Co., as agent;

                           (q) issue shares of Common Stock (or options or
         convertible securities exchangeable for or convertible into shares of
         Common Stock) for a price that is less than fair market value.


         SECTION 8.2 KEY MAN LIFE INSURANCE. The Company shall maintain key
man life insurance payable to the Company (i.e. with the Company named as the
beneficiary) on the lives of each of Graziano and Green in the amount of
$1,000,000 each so long as each such person remains an employee of the Company.
The Company will not cause or permit any assignment of the proceeds of the life
insurance policies specified above, and will not borrow against any of such
policies. Such policies shall not be cancelable by the Company except upon sixty
(60) days prior written notice to, and upon the consent of the Required Outside
Investors.

         SECTION 8.3 ACCOUNTS AND RECORDS. The Company shall keep true books
of accounts and records in which full, true and correct entries will be made of
all dealings or transactions in relation to its business and affairs in
accordance (to the extent applicable) with generally accepted accounting
principles applied on a consistent basis. These books and records shall be
available for inspection by any of the Outside Investors during regular business
upon reasonable advance notice to the Company.

         SECTION 8.4 INSURANCE. The Company and each of its subsidiaries will
keep its insurable properties insured with fire, broad form extended coverage
insurance policies by financially sound and reputable insurers satisfactory to
the Required Outside Investors for amounts not less than the full replacement
value of such properties. The Company and each of its subsidiaries will maintain
in full force and effect public liability insurance, business interruption
insurance, and a so-called "umbrella" policy in such amounts as is customary in


                                       26

<PAGE>

its industry or as reasonably required by the Outside Investors against claims
for bodily injury, death or physical property damages occurring upon, in, about,
or in connection with the use of any properties occupied or controlled by it,
through the operation of any motor vehicles by its agents or employees, or
arising in any other manner out of its business. Each such insurance policy
shall contain a provision requiring at least 30 days' written notice to the
Outside Investors prior to the cancellation or modification of such policy. The
Outside Investors shall have the additional right, exercisable by other written
election of the Required Outside Investors at any point in time, in their
reasonable judgment, to require additional insurance coverage.

         SECTION 8.5 ACCOUNTS AND REPORTS. The Company will furnish, or cause
to be furnished, to the Outside Investors (or any transferee of Outside Investor
Shares) the following reports:

         (a) ANNUAL REPORTS. As soon as available and in any event within ninety
(90) days after the end of each fiscal year, (i) audited consolidated and
consolidating financial statements of the Company and its subsidiaries together
with all notes thereto, prepared in reasonable detail and in accordance with
generally accepted accounting principles consistently applied, such statements
to be duly certified by certified, independent public accountants selected by
the Company and reasonably acceptable to the Required Outside Investors and (ii)
an officer's certificate demonstrating compliance with all of the covenants
contained in this Agreement ("Compliance Certificate"). The financial statements
referred to in clause (i) above shall be accompanied by a statement of such
certified, independent public accountants that the examination made in
certifying such statements did not disclose the existence of any condition or
event which constitutes an Event of Default under the Articles of Organization
or which, after the giving of notice or the lapse of time or both, would
constitute such an Event of Default, or a statement specifying the nature and
period of existence of any such condition or event disclosed by such
examination.

         (b) MONTHLY AND QUARTERLY REPORTS. As soon as available, and in any
event within twenty (20) days after the end of each monthly and quarterly
accounting period, as the case may be, in each fiscal year, (i) unaudited
consolidated and consolidating financial statements of the Company and its
subsidiaries (including balance sheet, income statement and source and
application of funds (compared to budget on a monthly, quarterly and year to
date basis)), prepared in accordance with generally accepted accounting
principles consistently applied and certified by the chief financial officer,
chief accounting officer or treasurer of the Company, which statements shall
also contain a balance sheet as of the end of such accounting period and a
statement of profit and loss for the period from the beginning of such fiscal
year to the end of such accounting period, and (ii) a Compliance Certificate.

         (c) AUDITOR'S LETTERS. Promptly after receipt by the Company or any of
its subsidiaries, copies of any written communications concerning the
management, finances, internal controls or operation of the Company and its
subsidiaries by the independent certified public accountants who audit the
Company's and its subsidiaries' annual financial statements.


                                       27

<PAGE>

         (d) ACCOUNTING PRINCIPLES. Reports furnished to the Outside Investors
under this Agreement shall be prepared in accordance with generally accepted
accounting principles used in the United States except that unaudited statements
need not contain notes thereto and may be subject to normal year-end
adjustments. Compliance with the covenants set forth in this Agreement will be
determined on the basis of accounting principles used in the preparation of the
financial statements. In the event that any subsequent reports shall have been
prepared in accordance with accounting principles different than those used in
the financial statements, the Company shall inform the Outside Investors of such
changes in accounting principles and shall provide to the Outside Investors,
with such subsequent reports, such supplemental reconciling financial
information as may be required to ascertain performance by the Company and its
subsidiaries with the covenants contained in this Agreement.

         (e) BUDGET AND PROJECTIONS. At least thirty (30) days prior to the end
of each fiscal year of the Company, a budget (the "Budget") and projections for
the next fiscal year indicating each of the Company's and its subsidiaries'
expected operating results (on a consolidated and consolidating basis), and
proposed expenditures, including without limitation, and subject to the approval
of the Compensation Committee, management compensation. The Budget and
projections shall be made on a month-by-month basis. The Budget shall be subject
to the approval of the holders of two-thirds of the shares of Preferred Stock.

         SECTION 8.6 INFORMATION AND INSPECTION. The Company will furnish to
the Outside Investors upon request full information pertinent to any covenant,
provision or condition hereof or to any matter in connection with its business
and that of its subsidiaries and, at all reasonable times and as often as the
Outside Investors shall reasonably request, permit any authorized representative
designated by the Outside Investors to visit and inspect any of its and its
subsidiaries' properties, including its books (and to make extracts therefrom),
and to discuss their affairs, finances and accounts with their officers. The
Company will, in addition, promptly furnish to the Outside Investors such
financial information as the Outside Investors shall reasonably request. The
Investors agree to treat all material non-public information provided to them by
the Company as confidential and use all commercially reasonable efforts to
protect the confidentiality of such information at least to the same extent as
such Investors protect their own confidential information.

         SECTION 8.7 SMALL BUSINESS INVESTMENT ACT. Promptly after request
made by any holder of Stock or Subordinated Debentures that is a small business
investment company licensed under the Small Business Investment Act of 1958, as
amended, the Company shall furnish to such holder or permit such holder access
to such information as such holder may request to enable such holder to comply
with its record keeping, reporting and other obligations under such Act or under
any rule or regulation of the Small Business Administration thereunder.

         SECTION 8.8 RELATED PARTY TRANSACTIONS. The Company covenants that
it shall not, and will not permit any of its subsidiaries to enter into any
transaction (including without limitation the purchase, sale, rental or exchange
of any property or services, or any loans, advances or guarantees) with any
stockholder, director, officer, agent, partner, employee or 


                                       28

<PAGE>

Affiliate of the Company or any of its stockholders, other than upon fair and
reasonable terms no less favorable to the Company and its subsidiaries than
would be obtained in a comparable arms-length transaction with any other Person
not so affiliated with the Company.


ARTICLE IX  MISCELLANEOUS PROVISIONS

         SECTION 9.1      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each of the parties hereto agrees that the representations, warranties,
covenants and agreements made by each of them in this Agreement, the Securities
Purchase Agreement and in other agreements entered into in connection herewith
or therewith, or in any certificate, instrument or other document delivered
pursuant to this Agreement or in other agreements entered into in connection
herewith or therewith are material, shall be deemed to have been relied upon by
the other parties and shall remain operative and in full force and effect after
the date hereof regardless of any investigation. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties hereto and their respective successors and permitted assigns to the
extent contemplated herein.

         SECTION 9.2      INDEMNIFICATION.

                           (a) The Company agrees to defend, indemnify and hold
         each of the Outside Investors (except with respect to any matter with
         respect to which indemnification is not available to such Outside
         Investor as provided in Section 4.7(a)) and its or his Affiliates and
         its or his direct and indirect partners, directors, officers, employees
         and agents and each person who controls any of them within the meaning
         of Section 15 of the Securities Act or Section 20 of the Exchange Act
         (parties receiving the benefit of the indemnification agreement herein
         shall be referred to collectively as "Indemnified Parties" and
         individually as an "Indemnified Party") harmless from and against any
         and all losses, claims, damages, obligations, liens, assessments,
         judgments, fines, liabilities, and other costs and expenses (including
         without limitation interest, penalties and any investigation, legal and
         other expenses incurred in connection with, and any amount paid in
         settlement of, any action, suit or proceeding or any claim asserted, as
         the same are incurred) of any kind or nature whatsoever which may be
         sustained or suffered by any such Indemnified Party, without regard to
         any investigation by any of the Indemnified Parties, based upon,
         arising out of, by reason of or otherwise in respect of or in
         connection with (a) any inaccuracy in or breach of any representation
         or warranty made by the Company in this Agreement or the Initial
         Investment Agreement or in any agreement or instrument or other
         document delivered pursuant to this Agreement or the Initial Investment
         Agreement (including the Securities Purchase Agreement), (b) any breach
         of any covenant or agreement made by the Company in this Agreement or
         the Initial Investment Agreement or in any agreement or instrument
         delivered pursuant to this Agreement or the Initial Investment
         Agreement and (c) any action taken or omitted to be taken or alleged to
         have been taken or omitted to have been taken by any Indemnified Party
         as shareholder, director, agent, representative or controlling person
         of the Company, including, without limitation, any 


                                       29

<PAGE>

         and all losses, claims, damages, expenses and liabilities, joint or
         several (including any investigation, legal and other expenses incurred
         in connection with, and any amount paid in settlement of, any action,
         suit or proceeding or any claim asserted, as the same may be incurred)
         arising or alleged to arise under the Securities Act, the Exchange Act
         or other federal or state statutory law or regulation, at common law or
         otherwise; PROVIDED, HOWEVER, that the Company will not be liable to
         the extent that such loss, claim, damage, expense or liability arises
         from and is based on (i) an untrue statement or omission or alleged
         untrue statement or omission in a registration statement or prospectus
         which is made in reliance on and in conformity with written information
         furnished to the Company in an instrument duly executed by or on behalf
         of such Indemnified Party specifically stating that it is for use in
         the preparation thereof or (ii) a knowing and willful violation of the
         federal securities laws by a Indemnified Party, as finally determined
         by a court of competent jurisdiction.

                           (b) If the indemnification provided for in Section
         9.2(a) above for any reason is held by a court of competent
         jurisdiction to be unavailable to a Indemnified Party in respect of any
         losses, claims, damages, expenses or liabilities referred to therein,
         then the Company, in lieu of indemnifying such Indemnified Party
         thereunder, shall contribute to the amount paid or payable by such
         Indemnified Party as a result of such losses, claims, damages, expenses
         or liabilities (i) in such proportion as is appropriate to reflect the
         relative benefits received by the Company and the Investors, or (ii) if
         the allocation provided by clause (i) above is not permitted by
         applicable law, in such proportion as is appropriate to reflect not
         only the relative benefits referred to in clause (i) above but also the
         relative fault of the Company and the Investors in connection with the
         action or inaction which resulted in such losses, claims, damages,
         expenses or liabilities, as well as any other relevant equitable
         considerations. In connection with any registration of the Company's
         securities, the relative benefits received by the Company and the
         Outside Investors shall be deemed to be in the same respective
         proportions that the net proceeds from the offering (before deducting
         expenses) received by the Company and the Outside Investors, in each
         case as set forth in the table on the cover page of the applicable
         prospectus, bear to the aggregate public offering price of the
         securities so offered. The relative fault of the Company and the
         Investors shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         the omission or alleged omission to state a material fact relates to
         information supplied by the Company or the Investors and the parties'
         relative intent, knowledge, access to information and opportunity to
         correct or prevent such statement or omission.

                  The Company and the Outside Investors agree that it would not
         be just and equitable if contribution pursuant to this Section 9.2(b)
         were determined by pro rata or per capita allocation or by any other
         method of allocation which does not take account of the equitable
         considerations referred to in the immediately preceding paragraph. In
         connection with the registration of the Company's securities, in no
         event shall an Investor be required to contribute any amount under this
         Section 9.2 in excess of the lesser of (i) that proportion of the total
         of such losses, claims, damages or liabilities 


                                       30

<PAGE>

         indemnified against equal to the proportion of the total securities
         sold under such registration statement which is being sold by such
         Outside Investor or (ii) the proceeds received by such Outside Investor
         from its sale of securities under such registration statement. No
         person found guilty of fraudulent misrepresentation (within the meaning
         of Section 11(f) of the Securities Act) shall be entitled to
         contribution from any person who was not found guilty of such
         fraudulent misrepresentation.

                           (c) The indemnification and contribution provided for
         in this Section 9.2 will remain in full force and effect regardless of
         any investigation made by or on behalf of the Indemnified Parties or
         any officer, director, employee, agent or controlling person of the
         Indemnified Parties.

                           (d) The provisions of this Section 9.2 are in
         addition to and shall supplement (and not derogate) those set forth in
         Section 4.7 which shall apply in the case of the registration and sale
         of Registrable Securities held by any of the Investors registered
         pursuant to Article IV hereof.

         SECTION 9.3 LEGEND ON SECURITIES. The Company and the Investors
acknowledge and agree that the following legend shall be typed on each
certificate evidencing any of the securities issued pursuant to the Securities
Purchase Agreement held at any time by any of the Investors or their Permitted
Transferees:

         THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A
CERTAIN AMENDED AND RESTATED SECURITYHOLDERS' AGREEMENT, DATED AS OF MARCH 2,
1999, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE
AND CORRECT COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT
CHARGE.

         SECTION 9.4 AMENDMENT AND WAIVER. Any party may waive any provision
hereof intended for its benefit in writing. No failure or delay on the part of
any party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof. Except as otherwise expressly provided herein, the
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law or in equity or
otherwise. This Agreement may not be amended without the prior written consent
of (A) the Company, (B) the Required Outside Investors and (C) the Management
Investors, except in the case where the Management Investors are not materially
and adversely affected in a manner different than other Investors, in which such
case, one Management Investor. Except as otherwise expressly provided herein,
neither of the Management Investors may assign any of his or its rights under
this Agreement without the prior written consent of the Company and the Outside
Investors. Notwithstanding the foregoing, (i) any action to be taken, amendment,
waiver or consent by, in connection with, or with respect to the Series A
Preferred Stock, the Series B Preferred Stock, the Subordinated Debentures or
the Warrants, respectively, shall require the holders of a majority-in-interest
of the Series A Preferred Stock, a 


                                       31

<PAGE>

majority-in-interest of the Series B Preferred Stock, a majority-in-interest in
aggregate principal amount of the Subordinated Debentures or the holders of a
majority-in-interest of the Warrants, respectively, (ii) no waiver or amendment
may adversely affect one Investor in a manner different from any other Investor
without the written consent of such first mentioned Investor, (iii) no amendment
of this Section 9.4 shall be binding upon any Investor without the prior written
consent of such Investor, (iv) no amendment of Section 9.2 or 9.14 shall be
binding upon any Investor without the prior written consent of such Investor,
(v) no provision herein which by its terms requires the act or consent of more
than a majority-in-interest of any class or group of Investors may be amended
without the prior written consent of such greater number of such class or group
of Investors as is so specified and (vi) no amendment or waiver of any of the
provisions herein relating to the board visitation rights of Citizens Capital,
Inc. shall be effective without the prior written consent of Citizens Capital,
Inc.

         SECTION 9.5 NOTICES. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given,
delivered and received (a) if delivered personally or (b) if sent by telex or
facsimile, registered or certified mail (return receipt requested) postage
prepaid, or by courier guaranteeing next day delivery, in each case to the party
to whom it is directed at the following addresses (or at such other address for
any party as shall be specified by notice given in accordance with the
provisions hereof, provided that notices of a change of address shall be
effective only upon receipt thereof). Notices delivered personally shall be
effective on the day so delivered, notices sent by registered or certified mail
shall be effective three days after mailing, notices sent by telex shall be
effective when answered back, notices sent by facsimile shall be effective when
receipt is acknowledged, and notices sent by courier guaranteeing next day
delivery shall be effective on the earlier of the second business day after
timely delivery to the courier or the day of actual delivery by the courier:

If to the Company:                 Harvard Apparatus, Inc.
                                   84 October Hill Road
                                   Holliston, MA  01746-1371
                                   Attention:  President
                                   Phone: (508) 893-8999
                                   Fax: (508) 429-5732

with a copy to:                    Goodwin, Procter & Hoar LLP
                                   Exchange Place
                                   Boston,  MA 02109
                                   Attention:  H. David Henken, P.C.
                                   Phone: (617) 570-1672
                                   Fax: (617) 523-1231

If to the Outside Investors:       To the address set forth on the signature 
                                   pages hereto

with a copy to:                    Choate, Hall & Stewart
                                   Exchange Place


                                       32

<PAGE>

                                   Boston, MA 02109
                                   Attention: W. Brewster Lee, P.C.
                                   Phone: (617) 248-5051
                                   Fax: (617) 248-4000

If to the Management Investors:    at the office of the Company set forth above.

         SECTION 9.6 HEADINGS. The Article and Section headings used or
contained in this Agreement are for convenience of the reference only and shall
not affect the construction of this Agreement.

         SECTION 9.7 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.

         SECTION 9.8 REMEDIES; SEVERABILITY. It is specifically understood and
agreed that any breach of the provisions of this Agreement by any Person subject
hereto will result in irreparable injury to the other parties hereto, that the
remedy at law alone will be an inadequate remedy for such breach, and that, in
addition to any other legal or equitable remedies which they may have, such
other parties may enforce their respective rights by actions for specific
performance (to the extent permitted by law) and the Company may refuse to
recognize any unauthorized transferee as one of its stockholders for any
purpose, including, without limitation, for purposes of dividend and voting
rights, until the relevant party or parties have complied with all applicable
provisions of this Agreement.

         In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

         SECTION 9.9 ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter (including without limitation, the Initial Investment Agreement).

         SECTION 9.10 ADJUSTMENTS. All references to share prices and amounts
herein shall be equitably adjusted to reflect stock splits, stock dividends,
recapitalizations and similar changes affecting the capital stock of the
Company.


                                       33

<PAGE>

         SECTION 9.11 LAW GOVERNING. This Agreement shall be construed and
enforced in accordance with and governed by the laws of The Commonwealth of
Massachusetts (without giving effect to principles of conflicts of law). Each
party also waives trial by jury in any action relating to this Agreement and
consents to the jurisdiction of any Massachusetts court (federal or state).

         SECTION 9.12  TERMINATION OF AGREEMENT.

                  (a) With respect to all Investors, this Agreement shall,
except as provided in the following sentence, automatically terminate and be of
no further force or effect upon the closing of a public offering of the
Company's capital stock resulting in gross proceeds to the Company of at least
$10,000,000 and a per share price of Common Stock of $24.29 (appropriately
adjusted for stock dividends, stock splits, and other recapitalization
transactions), provided that the Subordinated Debentures and all amounts owing
in connection therewith have been or will be concurrently with the closing of
any such public offering paid in full. Notwithstanding the preceding sentence,
the agreements contained in Article IV, Section 9.2, Section 9.14 (with respect
only to expenses incurred prior to or in connection with such public offering)
and Sections 9.4, 9.5, 9.8, 9.9, 9.10, 9.11 and 9.13 hereof shall survive such
termination.

                  (b) With respect to each holder of shares of Series B
Preferred Stock in its capacity as such, except as provided in the following
sentence, this Agreement shall automatically terminate and be of no further
force or effect upon the earlier of (i) the events described in subparagraph
9.12(a) above, and (ii) that time when such holder no longer owns at least 30%
of the shares of Series B Preferred Stock purchased by it pursuant to the
Securities Purchase Agreement. Notwithstanding the preceding sentence, the
agreements contained in Article IV, Section 9.2 and Section 9.14 (with respect
only to expenses incurred prior to or in connection any public offering
described in subparagraph 9.12(a) above) and Sections 9.4, 9.5, 9.8, 9.9, 9.10,
9.11 and 9.13 hereof shall survive such termination.

         SECTION 9.13 COOPERATION. Each of the Company, the Outside Investors
and the Management Investors shall cooperate with all reasonable requests of the
others not inconsistent with the terms of this Agreement to consummate more
effectively the transactions contemplated hereby.

         SECTION 9.14 EXPENSES. The Company agrees to pay and hold the Outside
Investors harmless against liability for payment of all costs and expenses
incurred in connection with their investment in the Company, including the
reasonable fees and disbursements of legal counsel and other professionals. The
Company shall not pay or reimburse the Management Investors for any costs or
expenses (including, without limitation, reasonable legal fees or fees of other
professionals) incurred by them in connection with their investment in the
Company.


                                       34

<PAGE>

ARTICLE X EVENTS OF DEFAULT.

         In each case of the happening of any of the following events (each of
which is herein sometimes referred to as an "Event of Default"):

                           (a) if any representation or warranty made herein or
         by the Company in any agreement executed in connection with, or in any
         report, certificate, financial statement or other instrument furnished
         in connection with or pursuant to, this Agreement, the Initial
         Investment Agreement or the Securities Purchase Agreement shall prove
         to have been false or misleading when made in any material respect;

                           (b) if a default occurs in the payment of any
         premium, installment of the principal of, interest or dividends on, or
         other obligation with respect to, the Preferred Stock or the
         Subordinated Debentures, whether at the due date thereof or upon
         acceleration thereof, and, in the case of any such default such default
         continues for fifteen (15) or more days after the due date thereof;

                           (c) if a default occurs in the due observance or
         performance of any material covenant, condition or agreement on the
         part of the Company to be observed or performed pursuant to the
         provisions of this Agreement, the Subordinated Debentures or any other
         agreement entered into in connection herewith or contemplated by this
         Agreement and, if such default is susceptible to cure, such default
         continues for ten (10) days after the occurrence thereof or (ii) if a
         default occurs in the due observance or performance of any covenant,
         condition or agreement on the part of the Company to be observed or
         performed pursuant to the provisions of this Agreement, the
         Subordinated Debentures or any other agreement entered into in
         connection herewith or contemplated by this Agreement other than any
         such default described in clause (b) or clause (c)(i) hereof and, if
         such default is susceptible to cure, such default continues for thirty
         (30) days after the occurrence thereof ;

                           (d) if a default occurs with respect to any other
         indebtedness of the Company for borrowed money which permits the holder
         thereof to accelerate such indebtedness prior to the stated maturity
         thereof;

                           (e) if the Company shall (i) discontinue its
         business, (ii) apply for or consent to the appointment of a receiver,
         trustee, custodian or liquidator of it or any of its property, (iii)
         admit in writing its inability to pay its debts as they mature, (iv)
         make a general assignment for the benefit of creditors, or (v) file a
         voluntary petition in bankruptcy, or a petition or an answer seeking
         reorganization or an arrangement with creditors, or to take advantage
         of any bankruptcy, reorganization, insolvency, readjustment of debt,
         dissolution or liquidation laws or statutes, or an answer admitting the
         material allegations of a petition filed against it in any proceeding
         under any such law, or if corporate action shall be taken for the
         purpose of effecting any of the foregoing;


                                       35

<PAGE>

                           (f) there shall be filed against the Company an
         involuntary petition not stayed or vacated within thirty (30) days
         seeking reorganization of the Company or the appointment of a receiver,
         trustee, custodian or liquidator of the Company or a substantial part
         of its assets, or an involuntary petition under any bankruptcy,
         reorganization or insolvency law of any jurisdiction, whether now or
         hereafter in effect (any of the foregoing petitions being hereinafter
         referred to as an "Involuntary Petition");

                           (g) if final judgment(s) for the payment of money in
         excess of an aggregate of $100,000 shall be rendered against the
         Company and the same shall remain undischarged for a period of thirty
         (30) consecutive days, during which time execution shall not be
         effectively stayed; or

                           (h) if there occurs any attachment of any deposits or
         other property of the Company in an amount exceeding $100,000, which
         shall not be discharged within thirty (30) days of the date of such
         attachment;

then, upon each and every such Event of Default and at any time thereafter
during the continuance of such Event of Default, at the election of the
respective Outside Investor, the Subordinated Debentures and any and all
indebtedness of the Company to such Outside Investor shall immediately become
due and payable, both as to principal and interest, without presentment, demand,
or protest, all of which are hereby expressly waived, anything contained herein
or in the Subordinated Debentures or other evidence of such indebtedness to the
contrary notwithstanding (except in the case of an Event of Default under
paragraphs (e) or (f) of this Article X, in which event such indebtedness shall
automatically become due and payable). In the event of an acceleration of the
Company's indebtedness hereunder as a result of the filing of an Involuntary
Petition as specified in paragraph (f) of this Article X, such acceleration
shall be rescinded, and the Company's rights hereunder reinstated, if, within
forty-five (45) days following the filing of such Involuntary Petition, such
Involuntary Petition shall have been dismissed, and there shall exist no other
Event of Default under this Agreement.

         In case any one or more Events of Default shall occur and be continuing
and acceleration of the Subordinated Debentures or any other indebtedness of the
Company to the Outside Investors shall have occurred, the Outside Investors may
proceed to protect and enforce their rights by an action at law, suit in equity
or other appropriate proceeding, whether for the specific performance of any
agreement contained in this Agreement or the Subordinated Debentures, or for an
injunction against a violation of any of the terms hereof or thereof or in and
of the exercise of any power granted hereby or thereby or by law. No right
conferred upon the Outside Investors hereby or by the Subordinated Debentures
shall be exclusive of any other right referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise.


                                       36

<PAGE>

ARTICLE XI  FAIR MARKET VALUE

         For purposes of this Agreement, "Fair Market Value" with respect to any
security shall mean the fair market value of such security, on a fully-diluted
basis, as of the date of the event giving rise to the necessity of making such
determination, as determined in good faith by the Board of Directors of the
Company and without discount for any lack of control. In making its
determination of Fair Market Value, the Board of Directors shall take into
consideration such factors as it deems appropriate. The Investor for whom such
Fair Market Value determination is being made shall have thirty (30) days
following the date on which the Board of Directors of the Company gives written
notice to such Investor of such Fair Market Value determination to accept such
Fair Market Value determination. Such Investor will be deemed to have accepted
such Fair Market Value determination if he fails to so notify the Company within
the 30-day period. During such 30-day period, the Company shall supply to the
Investor with such information as the Investor shall reasonably request (subject
to executing an appropriate confidentiality agreement) in order that the
Investor can assess the Fair Market Value determination. In the event that such
Investor notifies the Company in writing within such 30-day period that such
Investor disagrees with the determination of Fair Market Value made by the Board
of Directors, the Fair Market Value shall be determined by an accounting or
other firm reasonably satisfactory to the Company and such Investor (the
"Independent Firm"). The Independent Firm shall be instructed to determine Fair
Market Value on a fully-diluted basis, as of the date of the event giving rise
to the necessity of making such determination and without discount for any lack
of control. The expense of such determination of Fair Market Value shall be
borne by the objecting Investor; PROVIDED, HOWEVER, that if the Independent
Firm's determination of Fair Market Value is one hundred twenty-five percent
(125%) or more than the determination of the Company's Board of Directors as
presented to the Investor, the expense of the determination of Fair Market Value
by the Independent Firm shall be borne by the Company.


ARTICLE XII  ARBITRATION

         The parties agree that any controversy or dispute arising under this
Agreement, including without limitation, for indemnification, shall be referred
to the J.A.M.S./Endispute, to be settled by arbitration in Boston, Massachusetts
in accordance with the arbitration rules of such entity. The fees and expenses
of the arbitrator shall, as between the relevant parties, be borne by them in
such proportions as shall be determined by the arbitrator, or if there is no
such determination, then such fees and expenses shall be borne equally by the
relevant parties. The determination of the arbitrator as to any controversy or
dispute shall be conclusive and binding upon the parties hereto and judgment may
be entered thereon in any court having jurisdiction thereof, including, without
limitation, any Superior Court in The Commonwealth of Massachusetts.


                                       37

<PAGE>

ARTICLE XIII  TERMS OF THE SUBORDINATED DEBENTURES

         The terms of the Subordinated Debentures shall be as follows:

                           (a) MATURITY DATE. The Subordinated Debentures shall
         mature and shall be due and payable, together with all accrued but
         unpaid interest on the first to occur of: (i) March 15, 2003; (ii) the
         consummation of the first registered offering of the Company's capital
         stock (the "First Offering") under the Securities Act; (iii) the sale,
         lease or other disposition of all or substantially all of the Company's
         assets (whether in one transaction or a series of related transactions)
         or the merger or consolidation of the Company with another entity where
         the beneficial owners of the Company's outstanding capital stock
         immediately prior to such transaction hold less than fifty-one per cent
         (51%) of the voting power of the outstanding capital stock of the
         combined entity immediately after such transaction; (iv) any sale of a
         material or substantial asset or group of assets of the Company or of
         any subsidiary of the Company other than in the ordinary course of
         business (including, without limitation, any sale of the capital stock
         of any subsidiary of the Company), whether in one transaction or in a
         series of transactions, in which the aggregate consideration paid to
         the Company by the purchaser or purchasers of such asset or group of
         assets exceeds $2,000,000; or (v) the liquidation, dissolution or
         winding up of the Company (the first to occur of the foregoing, the
         "Maturity Date").

                           (b) INTEREST. The Subordinated Debentures shall bear
         interest, contingent upon and limited to the extent of earnings
         ("Debenture Interest"), computed on the basis of twelve 30-day months
         and the actual number of days elapsed, on the unpaid principal amount
         thereof from the date of issuance until the Maturity Date at the per
         annum rate of thirteen percent (13%). Interest on the Subordinated
         Debentures shall be payable quarterly in arrears on each March 31, June
         30, September 30, and December 31 commencing on March 31, 1996.

                           (c) INTEREST AFTER DEFAULT. In the event that any
         Event of Default occurs hereunder, the interest rate on the
         Subordinated Debentures shall increase to fifteen percent (15%) per
         annum ("Debenture Default Interest") (computed as provided above)
         during the period from the occurrence of such Event of Default through
         the earlier of the cure or waiver of such Event of Default or the
         payment in full of all outstanding principal and accrued but unpaid
         interest due thereon; provided, however, notwithstanding the foregoing,
         in no event shall the interest actually paid on a Subordinated
         Debenture exceed, so long as the holder of such Subordinated Debenture
         (a "Debentureholder") is a Small Business Investment Company, the
         maximum amount of interest permitted to be paid by the U.S. SBA
         Regulations as in effect on the date hereof, or such greater amount as
         may be permitted by such regulations as amended from time to time.


                                       38

<PAGE>

                           (d) PRINCIPAL. The Company will pay the principal of,
         and all accrued but unpaid interest on, the Subordinated Debentures
         without set-off, deduction or counterclaim in accordance with the
         following amortization schedule:


<TABLE>
<CAPTION>
              Calendar                                  Percent of Original Principal 
              Quarter                                             Amount of
               Ended                                     Debentures Due and Payable
              -------                                   ----------------------------
<S>                                                     <C>
The issue date - March 31, 1997                                            0.0%
June 30, 1997 - March 31, 1998                                             2.5%
June 30, 1998 - December 31, 1998                                         3.75%
March 31, 1999                                                             0.0%
June 30, 1999  - December 31, 1999                                         2.0%
March 31, 2000 - December 31, 2000                                         2.5%
March 31, 2001 - December 31, 2002                                         5.0%
March 31, 2003                                                           22.75%
</TABLE>


         Payments due under this Section 2.7(d) shall be made not later than
         five (5) business days after the relevant calendar quarter end.

                           (e) PAYMENTS ON THE DEBENTURES. All payments of
         principal and interest on the Subordinated Debentures shall be made by
         the Company in lawful money of the United States of America in
         immediately available funds not later than 12:00 p.m., Boston time, on
         the date such payment is due, or, if such date is not a business day,
         then on the next succeeding business day, at the address of the
         Debentureholder set forth on the signature pages hereto or, at such
         Debentureholder's election, by crediting the Debentureholder's account
         at a bank designated by the Debentureholder in writing to the Company.

                           (f) PREPAYMENT. The outstanding principal amount of
         the Subordinated Debentures may be prepaid, in whole or in part,
         without penalty or premium, but with all accrued but unpaid interest
         thereon, at any time upon not less than ten (10) days' prior written
         notice to the Debentureholders, and shall be paid, in whole, with all
         accrued but unpaid interest thereon, upon the Maturity Date.

                           (g) FINANCIAL COVENANT. The Company at all times
         shall maintain a ratio of Debt to Equity of not more than 2.5 to 1. For
         these purposes, "Debt" shall mean all outstanding indebtedness for
         borrowed money (excluding the Subordinated Debentures) and "Equity"
         shall mean the sum of (A) the Company's consolidated tangible net worth
         as determined in accordance with generally accepted accounting
         principles and (B) the principal amount of the Subordinated Debentures.

                           (h) TRANSFERABILITY. The Subordinated Debentures
         shall be freely transferable.


                                       39

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY
                                   HARVARD APPARATUS, INC.


                                   By: /S/ David Green
                                      -----------------------------------------
                                        Name: David Green
                                        Title: President

OUTSIDE INVESTORS
                                   PIONEER VENTURES LIMITED PARTNERSHIP

ADDRESS:                                By:   Pioneer SBIC Corp.,
c/o Pioneer Capital Corp.               Its:  General Partner
60 State Street
Boston, MA  02109
Attn:  C.W. Dick                        By:   /S/ C.W. Dick
fax:  (617) 742-7315                          ---------------------------------
                                              C. W. Dick
                                              Vice President

                                   PIONEER VENTURES LIMITED PARTNERSHIP II

                                        By:   Pioneer Ventures Management LP
                                        Its:  General Partner

ADDRESS:                                By:   Pioneer Management SBIC Corp.
c/o Pioneer Capital Corp.               Its:  General Partner
60 State Street
Boston, MA  02109
Attn:  C.W. Dick                        By:   /S/ C.W. Dick
fax:  (617) 742-7315                          ---------------------------------
                                              C. W. Dick
                                              Vice President

ADDRESS:                                PIONEER CAPITAL CORP.
60 State Street
Boston, MA  02109
Attn:  C.W. Dick                        By:   /S/ C.W. Dick
fax:  (617) 742-7315                          ---------------------------------
                                              C. W. Dick



<PAGE>

                                   FIRST NEW ENGLAND CAPITAL, L.P.
ADDRESS:
100 Pearl Street                        By:   FINEC CORP.
Hartford, CT  06103                     Its:  General Partner
Attn: Richard Klaffky
fax:  (860) 293-3338
                                        By:   /S/ Richard C. Klaffky
                                              ---------------------------------
                                              Richard C. Klaffky
                                              President


                                   CITIZENS CAPITAL, INC.
ADDRESS:
28 State Street, 15th Floor
Boston, MA  02109
Attn:  Daniel P. Corcoran, Jr.          By:   /S/ Daniel P. Corcoran, Jr.
fax: (617) 725-5630                           ---------------------------------
                                              Daniel P. Corcoran, Jr.
                                              Title:


                                              /S/ Chane Graziano
                                              ---------------------------------
                                              Chane Graziano, in his capacity as
                                              an Outside Investor


MANAGEMENT INVESTORS


                                              /S/ Chane Graziano
                                              ---------------------------------
                                              Chane Graziano, in his capacity as
                                              a Management Investor


                                              /S/ David Green
                                              ---------------------------------
                                              David Green



<PAGE>

                                    EXHIBIT A

                            FORM OF JOINDER AGREEMENT


         The undersigned hereby agrees, effective as of the date hereof, to
become a party to that certain Securityholders' Agreement (the "Agreement")
dated as of March 2, 1999 by and among Harvard Apparatus, Inc. (the "Company")
and the other parties named therein and for all purposes of the Agreement, the
undersigned shall be included within the term "Management Investor" (as defined
in the Agreement). As of the date hereof the undersigned makes each of the
representations and warranties set forth in Section 3.1 of the Agreement. The
address and facsimile number to which notices may be sent to the undersigned is
as follows:
_______________________________________________________________________________
Facsimile No.____________________.



                                                  _____________________________
                                                  [Name]



<PAGE>
                                                                   Exhibit 10.1

                            HARVARD APPARATUS, INC.

                       1996 STOCK OPTION AND GRANT PLAN

1.       PURPOSE

         This Stock Option and Grant Plan (the "Plan") is intended as a
performance incentive for officers, employees, directors, consultants and other
key persons of Harvard Apparatus, Inc. (the "Company") or its Subsidiaries (as
hereinafter defined) to enable the persons to whom options are granted (the
"Optionees") or to whom shares of common stock are granted (the "Grantees") to
acquire or increase a proprietary interest in the success of the Company. The
Company intends that this purpose will be effected by the granting of "incentive
stock options" ("Incentive Options") as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), nonqualified stock options
("Nonqualified Options") and outright grants of common stock under the Plan. The
term "Subsidiaries" includes any corporations in which stock possessing fifty
percent or more of the total combined voting power of all classes of stock is
owned directly or indirectly by the Company.

2.       OPTIONS TO BE GRANTED AND ADMINISTRATION

         (a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options, and shall be designated as such at the time of grant. To
the
 extent that any option intended to be an Incentive Option shall fail to
qualify as an "incentive stock option" under the Code, such option shall be
deemed to be a Nonqualified Option.

         (b) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Board of Directors") or such other
committee as may from time to time be chosen by the Board of Directors (the
"Option Committee").


<PAGE>

         (c) Subject to the terms and conditions of the Plan, the Option
Committee shall have the power:

                  (i) To determine from time to time the options or stock to be
         granted to eligible persons under the Plan, to prescribe the terms and
         provisions (which need not be identical) of options or stock granted
         under the Plan to such persons and to approve the grant of options or
         stock, as the case may be;

                  (ii) To construe and interpret the Plan and grants thereunder
         and to establish, amend, and revoke rules and regulations for
         administration of the Plan. In this connection, the Option Committee
         may correct any defect or supply any omission, or reconcile any
         inconsistency in the Plan, in any option agreement, or in any related
         agreements, in the manner and to the extent it shall deem necessary or
         expedient to make the Plan fully effective. All decisions and
         determinations by the Option Committee in the exercise of this power
         shall be final and binding upon the Company, the Optionees and the
         Grantees;

                  (iii) to condition the grant of any award (or, in the case of
         stock options, the exercise of any stock option) on the entering into
         of an agreement by the recipient thereof, which such agreement may
         contain such terms and conditions as the Option Committee shall
         determine, including, without limitation, the granting of rights of
         first refusal, drag-along rights and voting requirements with respect
         to any Stock underlying any such award; and


                                       2

<PAGE>

                  (iv) Generally, to exercise such powers and to perform such
         acts as are deemed necessary or expedient to promote the best interests
         of the Company with respect to the Plan.

3.       STOCK

         (a) The stock granted under the Plan, or subject to the options granted
under the Plan, shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share (the "Common Stock"). The total number of shares
that may be issued under the Plan shall not exceed an aggregate of 113,620
shares of Common Stock (such number shall be subject to adjustment as provided
in Section 7 hereof).

         (b) Whenever any outstanding option under the Plan expires, is
cancelled or is otherwise terminated (other than by exercise), the shares of
Common Stock allocable to the unexercised portion of such option may again be
the subject of options under the Plan or grants of Common Stock.

4.       ELIGIBILITY

         (a) Incentive Options may be granted only to officers or other
employees of the Company or its Subsidiaries, including members of the Board of
Directors who are also employees of the Company or its Subsidiaries.
Nonqualified Options may be granted to officers or other employees of the
Company or its Subsidiaries, members of the Board of Directors and consultants
and other key persons who provide services to the Company or its Subsidiaries
(regardless of whether they are also employees). Grants of Common Stock may be
made to any officer, director, employee, consultant or other key person of the
Company.


                                       3

<PAGE>

         (b) No person shall be eligible to receive any Incentive Option under
the Plan if, at the date of grant, such person beneficially owns stock
representing in excess of 10% of the voting power of all outstanding capital
stock of the Company (a "Ten Percent Stockholder") unless notwithstanding
anything in this Plan to the contrary (i) the purchase price for the Common
Stock subject to such option is at least 110% of the fair market value of such
stock at the time of the grant and (ii) the option by its terms is not
exercisable more than five (5) years from the date of grant thereof.

         (c) Notwithstanding any other provision of the Plan, to the extent that
the aggregate fair market value of the stock with respect to which Incentive
Options are exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its parent and Subsidiaries) exceeds
$100,000, the options attributable to the excess over $100,000 shall be treated
as Nonqualified Options under the Plan. Such annual limitation shall be applied
by taking Incentive Options into account in the order in which they were
granted.

5.       TERMS OF THE OPTION AGREEMENTS

         Subject to the terms and conditions of the Plan, each option agreement
shall contain such provisions as the Option Committee shall from time to time
deem appropriate. Option agreements need not be identical, but each option
agreement by appropriate language shall include the substance of all of the
following provisions:

         (a) EXPIRATION; TERMINATION OF EMPLOYMENT. Notwithstanding any other
provision of the Plan or of any option agreement, each option shall expire on
the date specified in the option agreement, which date in the case of any
Incentive Option shall not be later than the tenth (10th) anniversary of the
date on which the option was granted; provided, however, that 


                                       4

<PAGE>

if such Incentive Option is held by a Ten Percent Stockholder, the expiration
date of such Incentive Option shall not be later than five (5) years from the
date of grant thereof. If an Optionee's employment or service as a director with
the Company and its Subsidiaries terminates for any reason, the Option Committee
may (in addition to any terms and provisions contained in an option grant) in
its sole and absolute discretion provide, at any time, that any outstanding
option granted to such Optionee under the Plan shall be exercisable for not more
than three (3) months following termination of employment, subject to the
expiration date of such option.

         (b) MINIMUM SHARES EXERCISABLE. The minimum number of shares with
respect to which an option may be exercised at any one time shall be one hundred
(100) shares, or such lesser number as is subject to exercise under the option
at the time, provided that no fractional shares may be issued.

         (c) EXERCISE. Each option shall be exercisable in such installments
(which need not be equal) and at such times as may be designated by the Option
Committee. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the option expires.

         (d) PURCHASE PRICE. The purchase price per share of Common Stock
subject to each option shall be determined by the Option Committee; provided,
however, that the purchase price per share of Common Stock subject to each
Incentive Option shall be not less than the fair market value of the Common
Stock on the date such Incentive Option is granted. For the purposes of the
Plan, the fair market value of the Common Stock shall be determined in good
faith by the Option Committee; provided, however, that (i) if the Common Stock
is admitted to 


                                       5

<PAGE>

quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") on the date the option is granted, the fair market value shall
not be less than the average of the highest bid and lowest asked prices of the
Common Stock on NASDAQ reported for such date, or (ii) if the Common Stock is
admitted to trading on a national securities exchange or the NASDAQ National
Market System on the date the option is granted, the fair market value shall not
be less than the closing price reported for the Common Stock on such exchange or
system for such date or, if no sales were reported for such date, for the last
date preceding such date for which a sale was reported.

         (e) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any option unless and
until (i) the option shall have been exercised pursuant to the terms thereof,
(ii) all requirements under applicable law and regulations shall have been
complied with to the satisfaction of the Company, (iii) the Company shall have
issued and delivered the shares to the Optionee, and (iv) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such shares of Common Stock.

         (f) TRANSFER. No option granted hereunder shall be transferable by the
Optionee other than by will or by the laws of descent and distribution, and such
option may be exercised during the Optionee's lifetime only by the Optionee, or
his or her guardian or legal representative.


                                       6

<PAGE>

5A.      TERMS OF STOCK GRANT

         Subject to the terms and conditions of this Plan, the Option Committee
may grant (or sell at a purchase price determined by such committee) shares of
Common Stock to eligible participants under this Plan. Such grants or issuances
may be on such terms as the Option Committee may determine, including
restrictions on transfer, rights of first refusal and repurchase provisions
based upon continuing employment and/or the achievement of performance goals or
other conditions. In no event may Common Stock issued or granted under this Plan
(other than as a result of the exercise of Options issued under this Plan) be
transferred or sold within six months of the date of issuance thereof.

6.       METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

         (a) Any option granted under the Plan may be exercised by the Optionee
in whole or, subject to Section 5(b) hereof, in part by delivering to the
Company on any business day a written notice specifying the number of shares of
Common Stock the Optionee then desires to purchase (the "Notice"). As a
condition precedent to the exercise of any option (i) prior to the closing date
of the Company's first underwritten public offering of the Common Stock, on or
prior to the exercise date, the Optionee shall execute and deliver a Joinder
Agreement with substantially the terms attached hereto as EXHIBIT A, which may
be amended from time to time, and/or such other agreement containing such terms
and provisions as any option grant shall require as a condition to exercise, and
(ii) the Optionee shall pay or make arrangements for the payment of all taxes to
be withheld, in accordance with Section 9 of the Plan.

         (b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either: (i) in cash, or by certified or bank
check or other payment 


                                       7

<PAGE>

acceptable to the Company, equal to the option exercise price for the number of
shares specified in the Notice (the "Total Option Price"); (ii) if authorized by
the applicable option agreement and if permitted by law, by delivery of shares
of Common Stock that the optionee may freely transfer having a fair market
value, determined by reference to the provisions of Section 5(d) hereof, equal
to or less than the Total Option Price, plus cash in an amount equal to the
excess, if any, of the Total Option Price over the fair market value of such
shares of Common Stock; or (iii) by the Optionee delivering the Notice to the
Company together with irrevocable instructions to a broker to promptly deliver
the Total Option Price to the Company in cash or by other method of payment
acceptable to the Company; provided, however, that the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity or
other agreements as the Company shall prescribe as a condition of payment under
this clause (iii).

         (c) The delivery of certificates representing shares of Common Stock to
be purchased pursuant to the exercise of an option will be contingent upon the
Company's receipt of the Total Option Price and of any written representations
from the Optionee required by the Option Committee, and the fulfillment of any
other requirements contained in the option agreement or applicable provisions of
law.

7.       ADJUSTMENT UPON CHANGES IN CAPITALIZATION

         (a) If the shares of the Company's Common Stock as a whole are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change 


                                       8

<PAGE>

in corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares subject to the Plan, and in the
number, kind, and per share exercise price of shares subject to unexercised
options or portions thereof granted prior to any such change. In the event of
any such adjustment in an outstanding option, the Optionee thereafter shall have
the right to purchase the number of shares under such option at the per share
price, as so adjusted, which the Optionee could purchase at the total purchase
price applicable to the option immediately prior to such adjustment.

         (b) Adjustments under this Section 7 shall be determined by the Option
Committee and such determinations shall be conclusive and binding on all
persons. The Option Committee shall have the discretion and power in any such
event to determine and to make effective provision for acceleration of the time
or times at which any option or portion thereof shall become exercisable. No
fractional shares of Common Stock shall be issued under the Plan on account of
any adjustment specified above.

8.       EFFECT OF CERTAIN TRANSACTIONS

         In the case of (i) the dissolution or liquidation of the Company, (ii)
a reorganization, merger, consolidation or other business combination in which
the Company is acquired by another entity (other than a holding company formed
by the Company) or in which the Company is not the surviving entity, or (iii)
the sale of all or substantially all of the assets of the Company to another
entity, the Plan and the options issued hereunder shall terminate upon the
effectiveness of any such transaction or event, unless provision is made in
connection with such transaction for the assumption of options theretofore
granted, or the substitution for such options of new options of the successor
entity or parent thereof, with appropriate adjustment as 


                                       9

<PAGE>

to the number and kind of shares and the per share exercise price, as provided
in Section 7. In the event of such termination, all outstanding vested options
shall be exercisable for at least fifteen (15) days prior to the date of such
termination.

9.       TAX WITHHOLDING

         Each Optionee shall, no later than the exercise date of any option, pay
to the Company, or make arrangements satisfactory to the Option Committee
regarding payment of any Federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Company and its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Optionee.

10.      CONDITION TO GRANTS OF COMMON STOCK

         As a condition precedent to the grant of Common Stock to any Grantee
under the Plan prior to the closing date of the Company's first underwritten
public offering of the Common Stock, the Grantee shall execute and deliver a
Joinder Agreement with substantially the terms attached hereto as EXHIBIT A,
which may be amended from time to time, and/or such other agreement containing
such terms and provisions as the Option Committee shall require as a condition
to the grant. The Option Committee may also impose such other terms and
conditions on the grant of any Common Stock under the Plan as it may determine.

11.      AMENDMENT OF THE PLAN

         The Board of Directors may discontinue the Plan or amend the Plan at
any time, and from time to time, subject to any required regulatory approval and
the limitation that, except as provided in Sections 7 and 8 hereof, no amendment
shall be effective unless approved by the stockholders of the Company in
accordance with applicable law and regulations at an annual or 


                                       10

<PAGE>

special meeting held within twelve months before or after the date of adoption
of such amendment, where such amendment will:

         (a)      increase the number of shares of Common Stock as to which
options may be granted under the Plan;

         (b)      change in substance Section 4 hereof relating to eligibility
to participate in the Plan;

         (c)      change the minimum option exercise price; or

         (d)      otherwise materially increase the benefits accruing to
participants under the Plan.

         Except as provided in Sections 7 and 8 hereof, rights and obligations
under any option granted before any amendment of the Plan shall not be altered
or impaired by such amendment, except with the consent of the Optionee.

12.      NONEXCLUSIVITY OF THE PLAN

         Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock or stock options otherwise than under
the Plan, and such arrangements may be either applicable generally or only in
specific cases. Neither the Plan nor any option granted hereunder shall be
deemed to confer upon any employee any right to continued employment with the
Company or its Subsidiaries.


                                       11

<PAGE>

13.      GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW

         (a) The obligation of the Company to sell and deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Option Committee.

         (b) The Plan shall be governed by Massachusetts law, except to the
extent that such law is preempted by federal law.

14.      EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL

         The Plan shall become effective upon the date that it is approved by
the Board of Directors of the Company; provided, however, that the Plan shall be
subject to the approval of the Company's stockholders in accordance with
applicable laws and regulations at an annual or special meeting held within
twelve (12) months of such effective date. No options granted under the Plan
prior to such stockholder approval may be exercised until such approval has been
obtained. No options may be granted under the Plan after the tenth anniversary
of the effective date of the Plan.

                                      * * *

Approved by Board of Directors:   May 29, 1996

Approved by Stockholders:   May, 1996


                                       12



<PAGE>

                                                                    Exhibit 10.8


                        FORM OF INDEMNIFICATION AGREEMENT


         This Agreement made and entered into this ____ day of ______ 2000,
("Agreement"), by and between Harvard Bioscience, Inc., a Delaware corporation
(the "Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and
____________ ("Indemnitee"):

         WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;

         WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;

         WHEREAS, the Company's Certificate of Incorporation, as amended from
time to time, and By-laws, as amended from time to time, require it to indemnify
its directors to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements;

         WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among
 other things, of any amendment
to or revocation of any such Certificate of Incorporation or By-laws or any
change in the ownership of the Company or the composition of its Board of
Directors);

         WHEREAS, the Company intends that this Agreement provide Indemnitee
with greater protection than that which is provided by the Company's Certificate
of Incorporation or Bylaws; and

         WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company:

         NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

         1.       DEFINITIONS.

                  (a)      "Corporate Status" describes the status of a person
                  who is serving or has served (i) as a director of the Company,
                  (ii) in any capacity with respect to any employee benefit plan
                  of the Company, or (iii) as a director, partner, trustee,
                  officer, employee, or agent of any other Entity at the request
                  of the Company.


<PAGE>

                  For purposes of subsection (iii) of this Section 1(a), if
                  Indemnitee is serving or has served as a director, partner,
                  trustee, officer, employee or agent of a Subsidiary,
                  Indemnitee shall be deemed to be serving at the request of the
                  Company.

                  (b)      "Entity" shall mean any corporation, partnership,
                  limited liability company, joint venture, trust, foundation,
                  association, organization or other legal entity.

                  (c)      "Expenses" shall mean all fees, costs and expenses
                  incurred by Indemnitee in connection with any Proceeding (as
                  defined below), including, without limitation, attorneys"
                  fees, disbursements and retainers (including, without
                  limitation, any such fees, disbursements and retainers
                  incurred by Indemnitee pursuant to Sections 10 and 11(c) of
                  this Agreement), fees and disbursements of expert witnesses,
                  private investigators and professional advisors (including,
                  without limitation, accountants and investment bankers), court
                  costs, transcript costs, fees of experts, travel expenses,
                  duplicating, printing and binding costs, telephone and fax
                  transmission charges, postage, delivery services, secretarial
                  services, and other disbursements and expenses.

                  (d)      "Indemnifiable Expenses," "Indemnifiable Liabilities"
                  and "Indemnifiable Amounts" shall have the meanings ascribed
                  to those terms in Section 3(a) below.

                  (e)      "Liabilities" shall mean judgments, damages,
                  liabilities, losses, penalties, excise taxes, fines and
                  amounts paid in settlement.

                  (f)      "Proceeding" shall mean any threatened, pending or
                  completed claim, action, suit, arbitration, alternate dispute
                  resolution process, investigation, administrative hearing,
                  appeal, or any other proceeding, whether civil, criminal,
                  administrative, arbitrative or investigative, whether formal
                  or informal, including a proceeding initiated by Indemnitee
                  pursuant to Section 10 of this Agreement to enforce
                  Indemnitee's rights hereunder.

                  (g)      "Subsidiary" shall mean any corporation, partnership,
                  limited liability company, joint venture, trust or other
                  Entity of which the Company owns (either directly or through
                  or together with another Subsidiary of the Company) either (i)
                  a general partner, managing member or other similar interest
                  or (ii) (A) 50% or more of the voting power of the voting
                  capital equity interests of such corporation, partnership,
                  limited liability company, joint venture or other Entity, or
                  (B) 50% or more of the outstanding voting capital stock or
                  other voting equity interests of such corporation,
                  partnership, limited liability company, joint venture or other
                  Entity.

         2.       SERVICES OF INDEMNITEE.  In consideration of the Company's
covenants and


<PAGE>

commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

         3.       AGREEMENT TO INDEMNIFY. The Company agrees to indemnify
Indemnitee as follows:

                  (a)      Subject to the exceptions contained in Section 4(a)
                  below, if Indemnitee was or is a party or is threatened to be
                  made a party to any Proceeding (other than an action by or in
                  the right of the Company) by reason of Indemnitee's Corporate
                  Status, Indemnitee shall be indemnified by the Company against
                  all Expenses and Liabilities incurred or paid by Indemnitee in
                  connection with such Proceeding (referred to herein as
                  "Indemnifiable Expenses" and "Indemnifiable Liabilities,"
                  respectively, and collectively as "Indemnifiable Amounts").

                  (b)      Subject to the exceptions contained in Section 4(b)
                  below, if Indemnitee was or is a party or is threatened to be
                  made a party to any Proceeding by or in the right of the
                  Company to procure a judgment in its favor by reason of
                  Indemnitee's Corporate Status, Indemnitee shall be indemnified
                  by the Company against all Indemnifiable Expenses.

         4.       EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:

                  (a)      If indemnification is requested under Section 3(a)
                  and it has been adjudicated finally by a court of competent
                  jurisdiction that, in connection with the subject of the
                  Proceeding out of which the claim for indemnification has
                  arisen, Indemnitee failed to act (i) in good faith and (ii) in
                  a manner Indemnitee reasonably believed to be in or not
                  opposed to the best interests of the Company, or, with respect
                  to any criminal action or proceeding, Indemnitee had
                  reasonable cause to believe that Indemnitee's conduct was
                  unlawful, Indemnitee shall not be entitled to payment of
                  Indemnifiable Amounts hereunder.

                  (b)      If indemnification is requested under Section 3(b)
                  and

                                    (i) it has been adjudicated finally by a
                                    court of competent jurisdiction that, in
                                    connection with the subject of the
                                    Proceeding out of which the claim for
                                    indemnification has arisen, Indemnitee
                                    failed to act (A) in good faith and (B) in a
                                    manner Indemnitee reasonably believed to be
                                    in or not opposed to the best interests of
                                    the Company, Indemnitee shall not be
                                    entitled to payment of Indemnifiable
                                    Expenses hereunder; or

                                    (ii) it has been adjudicated finally by a
                                    court of competent


<PAGE>

                                    jurisdiction that Indemnitee is liable to
                                    the Company with respect to any claim, issue
                                    or matter involved in the Proceeding out of
                                    which the claim for indemnification has
                                    arisen, including, without limitation, a
                                    claim that Indemnitee received an improper
                                    personal benefit, no Indemnifiable Expenses
                                    shall be paid with respect to such claim,
                                    issue or matter unless the Court of Chancery
                                    or another court in which such Proceeding
                                    was brought shall determine upon application
                                    that, despite the adjudication of liability,
                                    but in view of all the circumstances of the
                                    case, Indemnitee is fairly and reasonably
                                    entitled to indemnity for such Indemnifiable
                                    Expenses which such court shall deem proper.

         5.       PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee
shall submit to the Company a written request specifying the Indemnifiable
Amounts for which Indemnitee seeks payment under Section 3 of this Agreement and
the basis for the claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee within sixty (60) calendar days of receipt of the request. At the
request of the Company, Indemnitee shall furnish such documentation and
information as are reasonably available to Indemnitee and necessary to establish
that Indemnitee is entitled to indemnification hereunder.

         6.       INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, and
without limiting any such provision, to the extent that Indemnitee is, by reason
of Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.

         7.       EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or
termination of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable shall create an
adverse presumption that Indemnitee is not entitled to indemnification
hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not create a presumption that Indemnitee did not act in good faith and in
a manner which Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee's action was
unlawful.

         8.       AGREEMENT TO ADVANCE EXPENSES; UNDERTAKING. The Company shall
advance all Expenses incurred by or on behalf Indemnitee in connection with any
Proceeding, including


<PAGE>

a Proceeding by or in the right of the Company, in which Indemnitee is involved
by reason of such Indemnitee's Corporate Status within thirty (30) days after
the receipt by the Company of a written statement from Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. To the extent required by Delaware law,
Indemnitee hereby undertakes to repay the amount of Indemnifiable Expenses paid
to Indemnitee if it is finally determined by a court of competent jurisdiction
that Indemnitee is not entitled under this Agreement to indemnification with
respect to such Expenses. This undertaking is an unlimited general obligation of
Indemnitee.

         9.       PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Expenses
for which Indemnitee seeks an advancement under Section 8 of this Agreement,
together with documentation evidencing that Indemnitee has incurred such
Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall
be made no later than thirty (30) calendar days after the Company's receipt of
such request.

         10.      REMEDIES OF INDEMNITEE.

                  (a)      RIGHT TO PETITION COURT. In the event that Indemnitee
                  makes a request for payment of Indemnifiable Amounts under
                  Sections 3 and 5 above or a request for an advancement of
                  Indemnifiable Expenses under Sections 8 and 9 above and the
                  Company fails to make such payment or advancement in a timely
                  manner pursuant to the terms of this Agreement, Indemnitee may
                  petition the Court of Chancery to enforce the Company's
                  obligations under this Agreement.

                  (b)      BURDEN OF PROOF. In any judicial proceeding brought
                  under Section 10(a) above, the Company shall have the burden
                  of proving that Indemnitee is not entitled to payment of
                  Indemnifiable Amounts hereunder.

                  (c)      EXPENSES. If Indemnitee is successful in whole or in
                  part in connection with any action brought by Indemnitee under
                  Section 10(a) above, the Company agrees to reimburse
                  Indemnitee in full for any Expenses incurred by Indemnitee in
                  connection with investigating, preparing for, litigating,
                  defending or settling any such action, or in connection with
                  any claim or counterclaim brought by the Company in connection
                  therewith.

                  (d)      VALIDITY OF AGREEMENT. The Company shall be precluded
                  from asserting in any Proceeding, including, without
                  limitation, an action under Section 10(a) above, that the
                  provisions of this Agreement are not valid, binding and
                  enforceable or that there is insufficient consideration for
                  this Agreement and shall stipulate in court that the Company
                  is bound by all the provisions of this Agreement.

                  (e)      FAILURE TO ACT NOT A DEFENSE. The failure of the
                  Company (including its Board of Directors or any committee
                  thereof, independent legal counsel, or


<PAGE>

                  stockholders) to make a determination concerning the
                  permissibility of the payment of Indemnifiable Amounts or the
                  advancement of Indemnifiable Expenses under this Agreement
                  shall not be a defense in any action brought under Section
                  10(a) above, and shall not create a presumption that such
                  payment or advancement is not permissible.

         11.      DEFENSE OF THE UNDERLYING PROCEEDING.

                  (a)      NOTICE BY INDEMNITEE. Indemnitee agrees to notify the
                  Company promptly upon being served with any summons, citation,
                  subpoena, complaint, indictment, information, or other
                  document relating to any Proceeding which may result in the
                  payment of Indemnifiable Amounts or the advancement of
                  Indemnifiable Expenses hereunder; provided, however, that the
                  failure to give any such notice shall not disqualify
                  Indemnitee from the right to receive payments of Indemnifiable
                  Amounts or advancements of Indemnifiable Expenses unless the
                  Company's ability to defend in such Proceeding is materially
                  and adversely prejudiced thereby.

                  (b)      DEFENSE BY COMPANY. Subject to the provisions of the
                  last sentence of this Section 11(b) and of Section 11(c)
                  below, the Company shall have the right to defend Indemnitee
                  in any Proceeding which may give rise to the payment of
                  Indemnifiable Amounts hereunder; provided, however that the
                  Company shall notify Indemnitee of any such decision to defend
                  within ten (10) days of receipt of notice of any such
                  Proceeding under Section 11(a) above. The Company shall not,
                  without the prior written consent of Indemnitee, consent to
                  the entry of any judgment against Indemnitee or enter into any
                  settlement or compromise which (i) includes an admission of
                  fault of Indemnitee or (ii) does not include, as an
                  unconditional term thereof, the full release of Indemnitee
                  from all liability in respect of such Proceeding, which
                  release shall be in form and substance reasonably satisfactory
                  to Indemnitee. This Section 11(b) shall not apply to a
                  Proceeding brought by Indemnitee under Section 10(a) above or
                  pursuant to Section 19 below.

                  (c)      INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding the
                  provisions of Section 11(b) above, if in a Proceeding to which
                  Indemnitee is a party by reason of Indemnitee's Corporate
                  Status, Indemnitee reasonably concludes that it may have
                  separate defenses or counterclaims to assert with respect to
                  any issue which may not be consistent with the position of
                  other defendants in such Proceeding, or if the Company fails
                  to assume the defense of such proceeding in a timely manner,
                  Indemnitee shall be entitled to be represented by separate
                  legal counsel of Indemnitee's choice at the expense of the
                  Company. In addition, if the Company fails to comply with any
                  of its obligations under this Agreement or in the event that
                  the Company or any other person takes any action to declare
                  this Agreement void or unenforceable, or institutes any
                  action, suit or proceeding to deny or to recover from
                  Indemnitee the benefits intended to be 


<PAGE>

                  provided to Indemnitee hereunder, Indemnitee shall have the 
                  right to retain counsel of Indemnitee's choice, at the expense
                  of the Company, to represent Indemnitee in connection with any
                  such matter.

         12.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Indemnitee as follows:

                  (a)      AUTHORITY. The Company has all necessary power and
                  authority to enter into, and be bound by the terms of, this
                  Agreement, and the execution, delivery and performance of the
                  undertakings contemplated by this Agreement have been duly
                  authorized by the Company.

                  (b)      ENFORCEABILITY. This Agreement, when executed and
                  delivered by the Company in accordance with the provisions
                  hereof, shall be a legal, valid and binding obligation of the
                  Company, enforceable against the Company in accordance with
                  its terms, except as such enforceability may be limited by
                  applicable bankruptcy, insolvency, moratorium, reorganization
                  or similar laws affecting the enforcement of creditors' rights
                  generally.

         13.      INSURANCE. The Company shall, from time to time, make the good
faith determination whether or not it is practicable for the Company to obtain
and maintain a policy or policies of insurance with a reputable insurance
company providing the Indemnitee with coverage for losses from wrongful acts,
and to ensure the Company's performance of its indemnification obligations under
this Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's officers and directors. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.

         14.      CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights which
Indemnitee may have at any time under applicable law, the Company's By-laws or
Certificate of Incorporation, or any other agreement, vote of stockholders or
directors (or a committee of directors), or otherwise, both as to action in
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's serving as a director of the Company.

         15.      SUCCESSORS. This Agreement shall be (a) binding upon all
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business,


<PAGE>

stock and/or assets of the Company and any direct or indirect successor by
merger or consolidation or otherwise by operation of law) and (b) binding on and
shall inure to the benefit of the heirs, personal representatives, executors and
administrators of Indemnitee. This Agreement shall continue for the benefit of
Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate Status.

         16.      SUBROGATION. In the event of any payment of Indemnifiable
Amounts under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of contribution or recovery of Indemnitee
against other persons, and Indemnitee shall take, at the request of the Company,
all reasonable action necessary to secure such rights, including the execution
of such documents as are necessary to enable the Company to bring suit to
enforce such rights.

         17.      CHANGE IN LAW. To the extent that a change in Delaware law
(whether by statute or judicial decision) shall permit broader indemnification
or advancement of expenses than is provided under the terms of the by-laws of
the Company and this Agreement, Indemnitee shall be entitled to such broader
indemnification and advancements, and this Agreement shall be deemed to be
amended to such extent.

         18.      SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement, or any clause
thereof, shall be determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable, in whole or in part, such provision or clause shall be
limited or modified in its application to the minimum extent necessary to make
such provision or clause valid, legal and enforceable, and the remaining
provisions and clauses of this Agreement shall remain fully enforceable and
binding on the parties.

         19.      INDEMNITEE AS PLAINTIFF. Except as provided in Section 10(c)
of this Agreement and in the next sentence, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with
respect to any Proceeding brought by Indemnitee against the Company, any Entity
which it controls, any director or officer thereof, or any third party, unless
the Board of Directors of the Company has consented to the initiation of such
Proceeding. This Section shall not apply to counterclaims or affirmative
defenses asserted by Indemnitee in an action brought against Indemnitee.

         20.      MODIFICATIONS AND WAIVER. Except as provided in Section 17
above with respect to changes in Delaware law which broaden the right of
Indemnitee to be indemnified by the Company, no supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by each
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions of this
Agreement (whether or not similar), nor shall such waiver constitute a
continuing waiver.


<PAGE>

         21.      GENERAL NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:

                  (i)      If to Indemnitee, to:



                  (ii)     If to the Company, to:

                           Harvard Bioscience, Inc.
                           84 October Hill Road
                           Holliston, Massachusetts 01746-1371
                           Facsimile: (508) 429-8478
                           Attention: President

                           with a copy to:
                                 Goodwin, Procter and Hoar LLP
                                 One Exchange Place
                                 Boston, Massachusetts 02109-2881
                                 Facsimile: (617) 523-1231
                                 Attention: H. David Henken P.C.

or to such other address as may have been furnished in the same manner by any
party to the others.

         22.      GOVERNING LAW; CONSENT TO JURISDICTION; SERVICE OF PROCESS.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware without regard to its rules of conflict of laws. Each of
the Company and the Indemnitee hereby irrevocably and unconditionally consents
to submit to the exclusive jurisdiction of the Court of Chancery of the State of
Delaware and the courts of the United States of America located in the State of
Delaware (the "Delaware Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process, and (b)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (a) or (b)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware. For purposes of implementing the
parties' agreement to appoint and maintain an agent for service of process in
the State of Delaware, each 


<PAGE>

such party does hereby appoint [__________________________], as such agent 
and each such party hereby agrees to complete all actions necessary for such 
appointment.

                  [Remainder of page intentionally left blank.]


<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                            HARVARD BIOSCIENCE, INC.


                                            By:
                                               ---------------------------------
                                                 Name:
                                                 Title:


                                            INDEMNITEE


                                            ------------------------------------



<PAGE>

                                                                    Exhibit 21.1

                         SUBSIDIARIES OF THE REGISTRANT




Harvard Apparatus, Limited (United Kingdom)
Biochrom, Ltd. (United Kingdom)
Ealing Scientific Ltd. Canada (doing business as Harvard Apparatus, Canada) 
 (Canada) 
Harvard Apparatus, S.A.R.L. (France)
Hugo Sachs Elektronik - Harvard Apparatus GmbH (Germany)
Harvard Apparatus FSC, Inc. (U.S. Virgin Islands)






<PAGE>
                                                                        EX. 23.2
 
                         INDEPENDENT AUDITORS' CONSENT
 
The Board of Directors
Harvard Apparatus, Inc.:
 
   
    We consent to the inclusion of our report dated October 19, 2000, except as
to note 20 which is as of October 25, 2000, with respect to the consolidated
balance sheets of Harvard Apparatus, Inc. and subsidiaries as of September 30,
2000, December 31, 1999 and 1998 and the related consolidated statements of
operations, stockholders' equity (deficit) and comprehensive income (loss), and
cash flows for the nine months ended September 30, 2000 and for each of the
years in the three-year period ended December 31, 1999 which report appears in
this Registration Statement, and to the reference to our firm under the heading
"Experts" in this Registration Statement.
    
 
/s/ KPMG LLP
 
   
Boston, Massachusetts
October 25, 2000
    





<PAGE>
                                                                    EXHIBIT 23.3
 
                       CONSENT OF INDEPENDENT ACCOUNTANTS
 
    We hereby consent to the use in this Registration Statement on Form S-1 of
our reports dated February 26, 1998 (for the year ended December 31, 1997) and
April 9, 1999 (for the year ended December 31, 1998), except for the US GAAP
reconciliation as described in Note 24 which is at September 15, 2000, relating
to the financial statements and financial statement schedules of Pharmacia &
Upjohn (Cambridge) Limited, which appear in the Registration Statement. We also
consent to the references to us under the heading "Experts" in such Registration
Statement.
 
/s/ PricewaterhouseCoopers
 
PRICEWATERHOUSECOOPERS
Cambridge, England
October 25, 2000





<TABLE> <S> <C>


<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AT DECEMBER 31, 1999 AND SEPTEMBER 30, 2000 AND CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE NINE MONTHS
ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>                     <C>
<PERIOD-TYPE>                   YEAR                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1999             DEC-31-2000
<PERIOD-START>                             JAN-01-1999             JAN-01-2000
<PERIOD-END>                               DEC-31-1999             SEP-30-2000
<DEBT-HELD-FOR-SALE>                                 0                       0
<DEBT-CARRYING-VALUE>                                0                       0
<DEBT-MARKET-VALUE>                                  0                       0
<EQUITIES>                                           0                       0
<MORTGAGE>                                           0                       0
<REAL-ESTATE>                                        0                       0
<TOTAL-INVEST>                                       0                       0
<CASH>                                           2,396                   2,149
<RECOVER-REINSURE>                                   0                       0
<DEFERRED-ACQUISITION>                               0                       0
<TOTAL-ASSETS>                                  20,610                  23,236
<POLICY-LOSSES>                                      0                       0
<UNEARNED-PREMIUMS>                                  0                       0
<POLICY-OTHER>                                       0                       0
<POLICY-HOLDER-FUNDS>                                0                       0
<NOTES-PAYABLE>                                  5,867                   7,287
<PREFERRED-MANDATORY>                            2,500                   2,500
<PREFERRED>                                          0                       0
<COMMON>                                             5                       7
<OTHER-SE>                                    (25,711)                (97,018)
<TOTAL-LIABILITY-AND-EQUITY>                    20,610                  23,236
<PREMIUMS>                                           0                       0
<INVESTMENT-INCOME>                                  0                       0
<INVESTMENT-GAINS>                                   0                       0
<OTHER-INCOME>                                     (5)                      62
<BENEFITS>                                           0                       0
<UNDERWRITING-AMORTIZATION>                          0                       0
<UNDERWRITING-OTHER>                                 0                       0
<INCOME-PRETAX>                               (29,282)                (82,507)
<INCOME-TAX>                                       137                   1,354
<INCOME-CONTINUING>                                  0                       0
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                            0                       0
<NET-INCOME>
                                  (29,420)                (83,862)
<EPS-BASIC>                                     (5.28)                 (13.11)
<EPS-DILUTED>                                   (5.28)                 (13.11)
<RESERVE-OPEN>                                       0                       0
<PROVISION-CURRENT>                                  0                       0
<PROVISION-PRIOR>                                    0                       0
<PAYMENTS-CURRENT>                                   0                       0
<PAYMENTS-PRIOR>                                     0                       0
<RESERVE-CLOSE>                                      0                       0
<CUMULATIVE-DEFICIENCY>                              0                       0
        

</TABLE>




<PAGE>


                                                                  Exhibit 99.1


         CONSENT TO BE NAMED AS A DIRECTOR OF HARVARD BIOSCIENCE, INC.

     I hereby consent to be named as a person to become a director of Harvard 
Bioscience, Inc., a Delaware corporation (the "Company"), in the registration 
statement on Form S-1 filed by the Company with the Securities and Exchange 
Commission with respect to the public offering of Common Stock of the Company.


                                                      /s/ Robert Dishman
                                                      ----------------------
                                                      Name: Robert Dishman
                                                      Date: October 23, 2000







<PAGE>


                                                                  Exhibit 99.2


         CONSENT TO BE NAMED AS A DIRECTOR OF HARVARD BIOSCIENCE, INC.

     I hereby consent to be named as a person to become a director of Harvard 
Bioscience, Inc., a Delaware corporation (the "Company"), in the registration 
statement on Form S-1 filed by the Company with the Securities and Exchange 
Commission with respect to the public offering of Common Stock of the Company.


                                                      /s/ Earl Lewis
                                                      ----------------------
                                                      Name: Earl Lewis
                                                      Date: October 23, 2000