<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
 
                              WASHINGTON, DC 20549
 
                            ------------------------
 
                                   FORM 10-K
 
(MARK ONE)
 

<TABLE>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

 
                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR
                                       OR
 

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

 
        FOR THE TRANSITION PERIOD FROM ______________ TO ______________
 
                        COMMISSION FILE NUMBER 000-31923
 
                            ------------------------
 
                            HARVARD BIOSCIENCE, INC.
 
             (Exact Name of Registrant as Specified in Its Charter)
 

<TABLE>
<S>                     <C>                                        <C>
    DELAWARE                      (508) 893-8999                       04-3306140
(State or Other               (Registrant's telephone                 (IRS Employer
Jurisdiction of            number, including area code)            Identification No.)
Incorporation or
 Organization)
 
                        84 OCTOBER HILL ROAD, HOLLISTON, MA               01746
                          (Address of Principal Executive              (Zip Code)
                                     Offices)
</TABLE>

 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                     Common Stock, $.01 par value per share
                                (TITLE OF CLASS)
 
    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /
 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
 
    The aggregate market value of 10,859,119 shares of voting stock held by
non-affiliates of the registrant as of March 23, 2001 was approximately
$77,371,000 based on the last sale price of such stock on such date.
 
    Common Stock Outstanding as of March 23, 2001: 25,720,581 shares.
 
                      DOCUMENTS INCORPORATED BY REFERENCE.
 
    Portions of the Company's definitive Proxy Statement in connection with the
2001 Annual Meeting of Stockholders to be held on May 24, 2001 are incorporated
by reference into Part III of this Form 10-K.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>

                                     PART I
 
    THIS ANNUAL REPORT ON FORM 10-K CONTAINS STATEMENTS THAT ARE NOT STATEMENTS
OF HISTORICAL FACT AND ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934. THE FORWARD-LOOKING STATEMENTS ARE PRINCIPALLY CONTAINED
IN "ITEM 1: BUSINESS" AND "ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS." THESE STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL
RESULTS, PERFORMANCE 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,
STATEMENTS ABOUT OUR BUSINESS STRATEGY, THE MARKET OPPORTUNITY FOR OUR PRODUCTS,
OUR ESTIMATES REGARDING OUR CAPITAL REQUIREMENTS, THE TIMING OF FUTURE PRODUCT
INTRODUCTIONS, OUR EXPECTATIONS IN CONNECTION WITH CURRENT LITIGATION, AND OUR
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS 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 DETAIL UNDER THE HEADING
"IMPORTANT FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS" BEGINNING ON
PAGE 25. YOU SHOULD CAREFULLY REVIEW ALL OF THESE FACTORS, AND YOU SHOULD BE
AWARE THAT THERE MAY BE OTHER FACTORS, INCLUDING FACTORS OF WHICH WE ARE NOT
CURRENTLY AWARE, THAT COULD CAUSE THESE DIFFERENCES. ALSO, THESE FORWARD-LOOKING
STATEMENTS REPRESENT OUR ESTIMATES AND ASSUMPTIONS ONLY AS OF THE DATE OF THIS
REPORT. 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.
 

ITEM 1. 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 (absorption, distribution, metabolism, elimination and toxicology)
screening bottlenecks in drug discovery.
 
    To address these two critical bottlenecks in protein purification and ADMET
screening, we have 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, ScanTox in vitro toxicology screening instruments and
MitoScan high throughput toxicology assays.
 
    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. We also have an established product base in ADMET
screening which includes precision infusion pumps, organ testing systems and
ventilators.
 
    The names Harvard Bioscience and Harvard Apparatus and our logo are names
and trademarks that we believe belong to us. We have the rights to numerous
trademarks and trade names including AmiKa, Biochrom, CPK, GeneQuant,
GeneQuantPro, MitoScan, NaviCyte, NovaSpec, PrepTip, PureTip, ScanTox,
Stronghold and UltroSpec. This Annual Report on Form 10-K also contains the
trademarks and trade names of other entities that are the property of their
respective owners.
 
                                       2

<PAGE>
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. Through
December 31, 2000, we have completed six 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.
 
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 introduced several new
innovative products designed to reduce the cost and time associated with protein
purification and ADMET screening in drug discovery. Our strategy is to increase
the market acceptance of our proteomics and ADMET screening 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 there is a
demand for 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 our efforts to identify, develop and introduce
new tools to alleviate bottlenecks in all stages of the drug discovery process.
 
    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, provide us with a competitive advantage in
bringing new products to market quickly and cost effectively.
 
                                       3

<PAGE>
    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 that 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 four technology acquisition or licensing transactions.
In the future, we may pursue acquisitions of new products and technologies
through business acquisitions, partnerships or licensing arrangements.
 
                                       4

<PAGE>
OUR PRODUCTS
 
    Our products consist of both proprietary and non-proprietary products. Our
broad array of proprietary products consist of the products set forth in the
table below and the products described in the "Other Proprietary Products"
section below the table:
 

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

 
*   We acquired all of these products in March 1999 through our acquisition of
    Biochrom.
 
                                       5

<PAGE>
    The "Year of Introduction for Product Areas Introduced by Us or One of Our
Predecessors" column set forth in the table above represents the year in which
we or one of our predecessor companies introduced the first generation product
in this area.
 
    PROTEOMICS PRODUCTS-PROTEIN PURIFICATION
 
    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 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. Our PureTip pipette tip uses a pipette tip that is
similar to the PrepTip but is loaded with a gel rather than coated and is well
suited for performing DNA purification.
 
    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.
 
                                       6

<PAGE>
    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. 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. Plate
readers use light to detect chemical interactions. We plan to introduce a range
of these products in 2001 beginning with absorbance readers and followed by
luminescence and fluorescence readers 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
 
    The goal of ADMET screening is to identify compounds that have toxic side
effects or undesirable pharmacological properties. These pharmacological
properties consist of absorption, distribution, metabolism, elimination which,
together with toxicology, form the acronym ADMET. 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.
 
                                       7

<PAGE>
    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
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 the lens
environment, the lens reacts by defocusing. The extent of defocusing is measured
and analyzed by the instrument.
 
    MITOSCAN HIGH THROUGHPUT TOXICOLOGY SCREENING
 
    Our proprietary MitoScan high throughput in vitro toxicology assay uses
submitochondrial particles, or SMP, which are part of the inner membrane of
mitochondria. Mitochondria are evolutionarily conserved across the entire animal
kingdom and are extremely vulnerable to toxic insult. The SMP, processed from
mitochondria, retain this sensitivity and when used in toxicity assays provide a
highly relevant toxicologic endpoint indicative of mitochondrial and whole
organism responses.
 
    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 PROPRIETARY 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.
 
                                       8

<PAGE>
    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. These relationships are conducted
through purchase orders and are not contractual. 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.
 
    DISTRIBUTED PRODUCTS
 
    In addition to the proprietary, 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 represented more than
two percent of our revenues for the year ended December 31, 2000. Distributed
products accounted for approximately 18% of our revenues for the year ended
December 31, 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 that do not have our extensive distribution and marketing
capabilities.
 
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 revenues for
the fiscal year ended December 31, 2000, and 44% of our revenues 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 revenues 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 ordered from our catalog through our worldwide
subsidiaries. Our manufactured products accounted for approximately 82% of our
revenues for the fiscal year ended December 31, 2000. The complete catalog is
also available as a CD-ROM and can be accessed on our website,
www.harvardbioscience.com. Our
 
                                       9

<PAGE>
significant positions in many of our manufactured products create traffic to the
catalog and web site that enables cross-selling and facilitates the introduction
of new products. In addition to the comprehensive catalog, we create and mail
abridged catalogs that 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 a minimum number of our products for an annual amount of
$12.5 million, subject to adjustment for price increases and product sales
volume. 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. This agreement does not have a finite term, but
remains in effect until terminated in accordance with its terms by either us or
APBiotech.
 
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 $1.5 million, $1.2 million and $325,000 in
2000, 1999 and 1998, respectively. 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 five 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 MitoScan
toxicology assay is manufactured in Madison, Wisconsin. Our manufacturing of
spectrophotometers and amino acid analysis systems takes place in Cambridge,
 
                                       10

<PAGE>
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 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 that 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 MitoScan high throughput 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 Ultra Micro 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
 
                                       11

<PAGE>
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.
 
    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 December 31, 2000, we had 131 full-time employees and 8 part-time
employees, 46 of whom resided in the United States, 74 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.
 
                                       12

<PAGE>

I
TEM 2. PROPERTIES.
 
    Our five 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,
 
    - a leased 9,000 square foot facility in March-Hugstetten, Germany, and
 
    - a leased 1,400 square foot facility in Madison, Wisconsin.
 
    We lease additional facilities for sales and administrative support in Les
Ulix, Paris, France and Montreal, Quebec Canada.
 

ITEM 3. LEGAL PROCEEDINGS.
 
    On December 26, 2000, Harvard University filed a lawsuit in U.S. District
Court, District of Massachusetts alleging that our use of the "Harvard
Bioscience" and "Harvard Apparatus" names infringes on Harvard University's
trademarks. Harvard University is seeking both injunctive relief and monetary
damages. We believe that these claims are without merit, and we are vigorously
defending against such claims. We believe that the defense of these claims could
involve significant litigation-related expenses, but that it will not have a
material adverse effect on our business, financial condition or results of
operations.
 
    From time to time, we may be involved in various other claims and legal
proceedings arising in the ordinary course of business. We are not currently a
party to any other 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.
 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
    On October 25, 2000, the sole stockholder of Harvard Bioscience, Inc.
approved the merger of our predecessor Harvard Apparatus, Inc., a Massachusetts
corporation, with and into Harvard Bioscience, Inc., a Delaware corporation.
 
    On November 29, 2000, the sole stockholder of Harvard Bioscience, Inc.
consented to the adoption of the following resolutions without meeting:
 
    - to approve and adopt Harvard Bioscience, Inc.'s Amended and Restated
      Certificate of Incorporation,
 
    - to approve and adopt Harvard Bioscience, Inc.'s Second Amended and
      Restated Certificate of Incorporation,
 
    - to approve and adopt Harvard Bioscience, Inc.'s 2000 Stock Option and
      Incentive Plan,
 
    - to approve and adopt Harvard Bioscience, Inc.'s Employee Stock Purchase
      Plan,
 
    - to approve and adopt the conversion, on a one-for-one basis, of all
      outstanding warrants to purchase common stock of Harvard Apparatus, Inc.
      into warrants to purchase common stock of Harvard Bioscience, Inc., and
 
                                       13

<PAGE>
    - to accept the assignment of the Amended and Restated Securityholders'
      Agreement, by and among Harvard Apparatus, Inc., certain outside investors
      and certain management investors from Harvard Apparatus, Inc. to Harvard
      Bioscience, Inc.
 

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT.
 
    The following table shows information about our executive officers as of
December 31, 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
                                                       Vice President of Finance and
Susan Luscinski...........................     44      Administration
</TABLE>

 
    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 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 LUSCINSKI 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.
 
                                       14

<PAGE>

                                    PART II
 

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
 
PRICE RANGE OF COMMON STOCK.
 
    Our common stock has been quoted on the Nasdaq National Market since our
initial public offering on December 7, 2000 and currently trades under the
symbol "HBIO." The following table sets forth the high and low sales prices per
share of our common stock as reported on the Nasdaq National Market for the
periods indicated.
 

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31, 2000                             HIGH       LOW
-----------------------------------                           --------   --------
<S>                                                           <C>        <C>
  Fourth Quarter (from December 7, 2000 through
    December 31, 2000)......................................   $13.50     $8.00
</TABLE>

 
    On March 23, 2001, the closing sale price of our common stock on the Nasdaq
National Market was $7.13 per share. The number of record holders of our common
stock as of March 23, 2001 was approximately 23. We believe that the number of
beneficial owners of our common stock at that date was substantially greater.
 
DIVIDEND POLICY.
 
    We have never declared or paid dividends on our common stock in the past and
do not intend to pay dividends 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.
 
RECENT SALES OF UNREGISTERED SECURITIES.
 
    During the fiscal year ended December 31, 2000, we issued and sold
unregistered securities as set forth below. There was no public offering in any
such transaction and we believe that each transaction 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 option issuances to, and option
exercises by, our employees were exempt from the registration requirements of
the Securities Act of 1933 by reason of Section 4(2) thereof or Rule 701
promulgated thereunder.
 
(1) In March 2000, we issued an aggregate of 1,091,716 shares of our common
    stock upon the exercise by certain employees of previously granted stock
    options at an aggregate exercise price of $1,792.14.
 
(2) In September 2000, we issued an aggregate of 2,376,236 shares of our common
    stock upon the exercise by certain employees of previously granted stock
    options at an aggregate exercise price of $1,549,155.40.
 
(3) In December 2000, we issued an aggregate of 955,935 shares of our common
    stock to Ascent Venture Partners, L.P. and Citizens Captial Incorporated in
    connection with the automatic conversion of our outstanding series B
    convertible preferred stock into common stock upon the closing of our
    initial public offering. No consideration was received by us in connection
    with this automatic conversion.
 
(4) In December 2000, we issued an aggregate of 8,509,337 shares of our common
    stock to Chane Graziano, Ascent Venture Partners, L.P., Ascent Venture
    Partners II, L.P. and First New England Capital, L.P. upon the cashless
    exercise of previously issued warrants to acquire common stock. In
 
                                       15

<PAGE>
    connection with this cashless exercise, the number of shares issuable upon
    exercise of the warrants was reduced by an aggregate of 572 shares.
 
(5) As of December 31, 2000, options to purchase 599,096 shares of our common
    stock were outstanding under our 1996 Stock Option and Grant Plan. All such
    options were granted between March 1996 and October 2000 to our officers,
    directors, employees and consultants.
 
(6) In December 2000, Messrs. Kennedy, Lewis and Dishman, our newly appointed
    directors, were each granted an option to purchase 10,000 shares of our
    common stock under our 2000 Stock Option and Incentive Plan. These options
    vest in three equal installments on each of the first three anniversaries of
    the grant date and have an exercise price of $8.00 per share.
 
USE OF PROCEEDS FROM REGISTERED SECURITIES.
 
(1) The effective date of the Securities Act registration statement for which
    the use of proceeds information is being disclosed was December 6, 2000, and
    the Commission file number assigned to the registration statement is
    333-45996.
 
(2) The offering commenced as of December 7, 2000.
 
(3) The offering did not terminate before any securities were sold.
 
(4) (i)  As of the date of the filing of this report, the offering has
         terminated, and all securities registered were sold.
 
    (ii) The names of the managing underwriters are Thomas Weisel Partners LLC,
         Dain Rauscher Incorporated and ING Barings LLC.
 
   (iii) Our common stock, par value $0.01 per share, was the class of
         securities registered.
 
    (iv) 7,359,950 shares of our common stock (which includes 937,500 shares
         solely to cover over-allotments) were registered at an aggregate
         offering price of $58,879,600. As of the date of the filing of this
         report, 7,359,950 of the shares registered have been sold at an
         aggregate offering price of $58,879,600, of which 172,450 shares were
         sold by a selling stockholder at an aggregate offering price of
         $1,379,600.
 
    (v) From December 7, 2000 to the date hereof, the amount of expenses
        incurred by us in connection with the issuance and distribution of the
        securities totaled $5.7 million, which consisted of direct payments of:
        (i) $1.4 million in legal, accounting and printing fees;
        (ii) $4.0 million in underwriting discount, fees and commissions; and
        (iii) $300,000 in miscellaneous expenses. No payments for such expenses
        were made to (i) any of our directors, officers, general partners or
        their associates, (ii) any person(s) owning 10% or more of any class of
        our equity securities or (iii) any of our affiliates.
 
    (vi) Our net offering proceeds after deducting our total expenses were
         $51.8 million.
 
   (vii) We used the net proceeds as follows: (i) approximately $665,000 was
         used to repay subordinated debt; (ii) approximately $9.6 million was
         used to repay amounts outstanding under our credit facility;
         (iii) approximately $1.5 million was used to redeem our series A
         redeemable preferred stock; and (iv) approximately $370,000 was used to
         fund the acquisition of substantially all of the assets of MitoScan
         Corporation in December 2000. No payments were made to (i) any of our
         directors, officers, general partners or their associates, (ii) any
         person(s) owning 10% or more of any class of our equity securities or
         (iii) any of our affiliates.
 
  (viii) The uses of proceeds described do not represent a material change in
         the use of proceeds described in our prospectus.
 
                                       16

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.
 

<TABLE>
<CAPTION>
                                                                                                                 PREDECESSOR
                                                                                         FOR THE PERIOD            COMPANY
                                              YEARS ENDED DECEMBER 31,                   FROM INCEPTION         FOR THE PERIOD
                                  -------------------------------------------------      MARCH 15, 1996      FROM JANUARY 1, 1996
                                     2000         1999         1998         1997      TO DECEMBER 31, 1996    TO MARCH 14, 1996
                                  ----------   ----------   ----------   ----------   --------------------   --------------------
                                                                                                                 (UNAUDITED)
                                                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                               <C>          <C>          <C>          <C>          <C>                    <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................  $   30,575   $   26,178   $   12,154   $   11,464       $     8,198            $     1,989
Cost of goods sold..............      15,833       13,547        5,351        5,128             4,080                  1,059
Stock compensation expense......         264           --           --           --                --                     --
                                  ----------   ----------   ----------   ----------       -----------            -----------
  Gross profit..................      14,478       12,631        6,803        6,336             4,118                    930
General and administrative
  expense.......................       5,181        4,147        2,317        2,338             1,834                    487
Sales and marketing expense.....       3,186        2,448        1,722        1,672             1,058                    232
Research and development........       1,533        1,188          325          207               249                     91
Stock compensation expense......      14,412        3,284           --           --                --                     --
Amortization of goodwill........         604          368           27           --                --                     --
                                  ----------   ----------   ----------   ----------       -----------            -----------
Operating income (loss).........     (10,438)       1,196        2,412        2,119               977                    120
                                  ----------   ----------   ----------   ----------       -----------            -----------
Other (expense) income:
Foreign currency (loss) gain....        (324)         (48)          21          (96)              108                     (4)
Common stock warrant interest
  expense.......................     (36,885)     (29,694)      (1,379)        (117)               --                     --
Interest expense, net...........        (756)        (657)        (210)        (223)             (177)                   (90)
Amortization of deferred
  financing costs...............        (153)         (63)          --           --                --                     --
Other...........................          45          (17)          10          106               (10)                  (135)
                                  ----------   ----------   ----------   ----------       -----------            -----------
  Other expense, net............     (38,073)     (30,479)      (1,558)        (330)              (79)                  (229)
  (Loss) income before income
    taxes.......................     (48,511)     (29,283)         854        1,789               898                   (109)
Income taxes....................       1,359          137          783          682               362                     --
                                  ----------   ----------   ----------   ----------       -----------            -----------
    Net (loss) income...........     (49,870)     (29,420)          71        1,107               536                   (109)
Preferred stock dividends.......        (136)        (157)        (122)        (122)              (97)                    --
    Net (loss) income available
      to common shareholders....  $  (50,006)  $  (29,577)  $      (51)  $      985       $       439            $      (109)
                                  ==========   ==========   ==========   ==========       ===========            ===========
(Loss) income per share:
Basic...........................  $    (6.25)  $    (5.28)  $    (0.01)  $     0.13       $      0.04            $     (0.01)
                                  ==========   ==========   ==========   ==========       ===========            ===========
Diluted.........................  $    (6.25)  $    (5.28)  $    (0.01)  $     0.06       $      0.02            $     (0.01)
                                  ==========   ==========   ==========   ==========       ===========            ===========
Weighted average common shares:
Basic...........................   8,005,386    5,598,626    5,598,626    7,406,486        10,259,410             10,259,410
                                  ==========   ==========   ==========   ==========       ===========            ===========
Diluted.........................   8,005,386    5,598,626    5,598,626   17,500,194        20,241,145             10,259,410
                                  ==========   ==========   ==========   ==========       ===========            ===========
</TABLE>

 

<TABLE>
<CAPTION>
                                                                                        AS OF DECEMBER 31,
                                                                 ----------------------------------------------------------------
                                                                   2000          1999          1998          1997          1996
                                                                 --------      --------      --------      --------      --------
                                                                                          (IN THOUSANDS)
<S>                                                              <C>           <C>           <C>           <C>           <C>
BALANCE SHEET DATA:
Cash and cash equivalents..................................      $35,817       $ 2,396        $ 957         $ 707         $1,088
Working capital............................................       40,552         3,783        2,205         1,698          1,677
Total assets...............................................       58,809        20,610        7,220         6,161          6,397
Long-term obligations, net of current portion..............            1         5,073          638           829          1,112
Preferred stock............................................           --         2,500        1,500         1,621          1,504
Common stock warrants......................................           --        31,194        1,500            --             --
Stockholders' equity (deficit).............................       52,335       (25,711)         678           737            516
</TABLE>

 
                                       17

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.
 
FORWARD-LOOKING STATEMENTS
 
    THE FOLLOWING SECTION OF THIS ANNUAL REPORT ON FORM 10-K ENTITLED
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" CONTAINS STATEMENTS THAT ARE NOT STATEMENTS OF HISTORICAL FACT AND
ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF FEDERAL SECURITIES LAWS.
THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY THE 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. WE DISCUSS MANY OF THESE RISKS IN DETAIL
UNDER THE HEADING "IMPORTANT FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS"
BEGINNING ON PAGE 25. YOU SHOULD CAREFULLY REVIEW ALL OF THESE FACTORS, AS WELL
AS THE COMPREHENSIVE DISCUSSION OF FORWARD-LOOKING STATEMENTS ON PAGE 2 OF THIS
ANNUAL REPORT ON FORM 10-K.
 
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 in 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 $730,000 in cash,
 
    - In May 2000, we acquired certain assets of Biotronik, consisting primarily
      of products for amino acid analysis, for $469,000 in cash,
 
                                       18

<PAGE>
    - 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, and
 
    - In December 2000, we acquired substantially all the assets and certain
      liabilities of MitoScan Corporation, a company that produces tools for
      toxicity testing for $370,000 in cash and future milestone payments and
      royalties.
 
    REVENUES.  We generate revenues by selling instruments, devices and
consumables through our catalog, our distributors and our website. Every one to
three years, we intend to distribute a new, comprehensive catalog initially in a
series of bulk mailings, first to our existing customers, followed by mailings
to targeted markets of potential customers. Distribution will then be made
periodically to potential and existing customers through direct mail and trade
shows and in response to telephone inquiries over the life of the catalog. From
time to time, we also intend to distribute catalog supplements that promote
selected areas of our catalog or new products to targeted subsets of our
customer base. Future distributions of our comprehensive catalog and our catalog
supplements will be determined primarily by the incidence of new product
introductions, which cannot be predicted. Our customers are end user research
scientists at pharmaceutical and biotechnology companies, universities and
government laboratories. 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. For the year ended
December 31, 2000, approximately 82% of our revenues were derived from products
we manufacture. The remaining 18% of our revenues were derived from
complementary products we distribute in order to provide the researcher with a
single source for all equipment needed to conduct a particular experiment. For
the year ended December 31, 2000, approximately one-half of our revenues were
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 year ended December 31,
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 year ended December 31, 2000 than if we had
shipped our products directly to our 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 higher cost of goods sold because the profit is effectively
shared with the original manufacturer. We anticipate that our manufactured
products will continue to have a lower cost of goods sold as a percentage of
revenues from such products as compared with our manufactured products for the
foreseeable 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
 
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site. We may from time to time 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.
 
    COMMON STOCK WARRANT INTEREST EXPENSE.  On March 15, 1996, in connection
with the issuance of redeemable preferred stock and subordinated debentures,
8,509,905 common stock warrants were issued. The related common stock warrant
interest expense represents accrual of a liability to 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 our initial public offering of common stock in
December 2000, the warrants were exercised for common stock and, as a result,
the right to be paid cash terminated.
 
    Our business has historically been affected by a number of factors that
cause revenue and earnings to vary from quarter to quarter, including catalog
mailings, new product introductions, acquisitions and our substantial European
business, which in summer months defers purchases. As a result, we believe that
revenue and earnings in one quarter of the year may not be indicative of revenue
and earnings in a subsequent quarter.
 
RESULTS OF OPERATIONS
 
YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999
 
    REVENUES.  Revenues increased $4.4 million, or 17%, to $30.6 million in 2000
from $26.2 million in 1999. Approximately $2.2 million of the $4.4 million
increase, or 50%, was attributable to the full period effect of revenues from
the acquisition of our Hugo Sachs subsidiary in November 1999. Approximately
$1.9 million of the increase was from existing business revenue growth and the
balance was from product line acquisitions made in the second half of 1999.
Revenues for 2000 would have been approximately $31.8 million if our sales
denominated in foreign currencies were translated into U.S. dollars using 1999
exchange rates, an increase of 22% over 1999.
 
    COST OF GOODS SOLD.  Cost of goods sold increased $2.3 million, or 17%, to
$15.8 million in 2000 from $13.5 million in 1999. As a percentage of revenues,
cost of goods sold was virtually unchanged for 2000 compared to 1999.
 
    GENERAL AND ADMINISTRATIVE EXPENSE.  General and administrative expense
increased $1.0 million, or 25%, to $5.2 million in 2000 from $4.2 million in
1999 due primarily to increased headcount and additional expenses related to
being a public company and the full period effect of the Biochrom subsidiary
which was acquired in March 1999. As a percentage of revenues, general and
administrative expense increased to 17% in 2000 from 16% in 1999.
 
                                       20

<PAGE>
    SALES AND MARKETING EXPENSE.  Sales and marketing expense increased
$737,000, or 30%, to $3.2 million in 2000 from $2.5 million in 1999. The
increase was primarily due to additional sales and marketing expenses incurred
in acquired businesses and to a lesser extent the addition of marketing
personnel and additional catalog costs. As a percentage of revenues, sales and
marketing expense was 10% in 2000 compared to 9% in 1999. This increasing
percentage also 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. These activities, if
undertaken, could increase sales and marketing expense as a percentage of
revenues.
 
    RESEARCH AND DEVELOPMENT EXPENSE.  Research and development spending
increased $345,000, or 29%, to $1.5 million in 2000 from $1.2 million in 1999.
The increase in research and development expense resulted from additional
research and development expenses incurred in acquired businesses, 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 5% in each of 2000 and 1999.
 
    STOCK COMPENSATION EXPENSE.  We recorded $14.7 million of stock compensation
expense in the twelve months ended December 31, 2000. In connection with the
grant of stock options to employees in 2000, we recorded deferred compensation
of approximately $4.6 million and will recognize approximately $5.2 million of
additional expense over the remaining vesting life of the options. In addition,
in 2000, we also recorded $10.0 million of non-recurring stock compensation
expense in connection with options granted in 1996 and 1999. In 1999, we
recorded $3.3 million of stock compensation expense related to these 1996 and
1999 option grants.
 
    AMORTIZATION OF GOODWILL.  Amortization of goodwill was $604,000 in 2000 and
$368,000 in 1999. This increase of $236,000, or 64%, was the result of
amortizing additional goodwill incurred in connection with our acquisitions in
2000 and the full year effect of our 1999 acquisitions.
 
    OTHER EXPENSE, NET.  Other expense, net, was $38.1 million in 2000 compared
to $30.5 million in 1999. Other expense, net, included a non-cash charge for
common stock warrant interest expense of $36.9 million in 2000 and
$29.7 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 represented 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 our initial public offering in December 2000, the
warrants were exercised for common stock and the right to be paid cash
terminated. The liability previously recorded became part of common stock and
additional-paid-in capital. Net interest expense increased $100,000, or 15%, to
$756,000 in 2000 from $656,000 in 1999. The increase resulted primarily from
higher debt balances in 2000, which were incurred to finance acquisitions,
partially offset by interest income on proceeds from the initial public
offering. Currency loss increased $276,000 to $324,000 due primarily to dollar
denominated debt in a foreign subsidiary.
 
    INCOME TAXES.  The Company's effective income tax rates were 36% for 2000
and 33% for 1999 notwithstanding the impact for common stock warrant interest
expense that is not deductible for income tax purposes. The increase in the rate
was principally due to increased taxable income in certain foreign jurisdictions
that have higher statutory income tax rates.
 
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
 
                                       21

<PAGE>
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 $1.8 million, or 79%, to $4.4 million in 1999 from $2.3 million in
1998. Biochrom accounted for $1.1 million, or 60%, 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, expenses 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 decreased to 16% 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 1998. 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 were 33% for 1999
and 35% for 1998 notwithstanding the impact for common stock warrant interest
expense which is not deductible for
 
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<PAGE>
income tax purposes. The decrease in the rate was principally due to certain
lower foreign statutory jurisdiction income tax rates, specifically the result
of the acquisition of a United Kingdom subsidiary.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Historically, we have financed our business through cash provided by
operating activities, the issuance of common stock, 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 December 31, 2000, we had cash of $35.8 million. Since our reorganization
in March 1996, we have raised $59.0 million, consisting of $2.5 million of
preferred and common stock issued in private placements or upon exercise of
stock options and warrants, $11.7 million of debt and $44.8 million from
issuance of common stock in our initial public offering in December 2000. Upon
receipt of the initial public offering proceeds on December 12, 2000, we repaid
all debt and redeemed all outstanding preferred stock. In January 2001, we
issued additional common stock upon the underwriters' exercise of the
over-allotment option from our initial public offering which resulted in an
additional $7.0 million in net proceeds to us.
 
    Our operating activities generated cash of $2.1 million in 2000,
$2.9 million in 1999 and $1.8 million in 1998. 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 $5.3 million in 2000, $8.5 million in
1999 and $1.4 million in 1998. Cash has been used in the following technology
and business acquisitions:
 
    - $370,000 for substantially all the assets of MitoScan Corporation in
      December 2000,
 
    - $3.1 million for substantially all the assets of AmiKa Corporation in
      July 2000,
 
    - $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,
 
    - $730,000 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, and
 
    - $1.0 million for Medical Systems Corporation's cell injection systems
      business in June 1998.
 
    Our financing activities have consisted of borrowings under a revolving
credit facility, long-term debt and the issuance of preferred stock and common
stock, including in our initial public offering. Financing activities provided
cash of $36.5 million in 2000 and $7.0 million in 1999, and used cash of
$105,000 in 1998. 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 initial public offering, the convertible preferred stock was
converted into common stock, and we used $1.5 million of the offering proceeds
to redeem our series A redeemable preferred stock and $10.4 million to repay the
bank term loan, the subordinated debt and the revolving credit facility.
 
                                       23

<PAGE>
    Based on our operating plans, we expect that proceeds from the initial
public offering, available cash and cash generated from operations will be
sufficient to finance operations and capital expenditures for at least two years
from December 31, 2000, however, we may use substantial amounts of capital to
accelerate product development, expand our sales and marketing activities or
make acquisitions. We may need to raise additional capital to the extent that we
exhaust our available capital through these activities in the next two years.
Additional capital raising activities may be dilutive to existing stockholders
to the extent we raise capital by issuing equity securities. Moreover,
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. For fiscal years 2000 and 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 $324,000 in 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 $2.8 million as of December 31, 2000 and
$2.1 million as of December 31, 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
typically ship all of our backlog at any given time within 90 days thereafter.
 
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 was adopted on January 1, 2001. The adoption of
this statement did not have a significant impact on our financial position,
results of operations or cash flows.
 
IMPACT OF INFLATION
 
    We believe that our revenues and results of operations have not been
significantly impacted by inflation during the past three years.
 
                                       24

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IMPORTANT FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
 
    Our operating results may vary significantly from quarter to quarter
depending on a number of factors, including:
 
    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 that
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 that 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 THAT 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 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
 
                                       25

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OF OUR PRODUCTS AND RESULT IN LOST REVENUES.  For the year ended December 31,
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
under some circumstances, including in the event of a breach of a material term
by us. This agreement has a perpetual term; however, it may be terminated in
accordance with its terms 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.
 
    WE MAY BE ADVERSELY AFFECTED BY LITIGATION INVOLVING HARVARD UNIVERSITY.  On
December 26, 2000, Harvard University filed a lawsuit in U.S. District Court,
District of Massachusetts alleging that our use of the "Harvard Bioscience" and
"Harvard Apparatus" names infringes on Harvard University's trademarks. Harvard
University is seeking both injunctive relief and monetary damages. We believe
that these claims are without merit, and we are vigorously defending against
such claims. We believe that the defense of these claims could involve
significant litigation-related expenses, but that it will not have a material
adverse effect on our business, financial condition or results of operations. If
claims for injunctive relief or other damages are decided against us, we could
suffer monetary damages, lose our ability to use the names "Harvard Bioscience"
and "Harvard Apparatus," lose the reputation and goodwill associated with these
names and ultimately experience decreased revenues and earnings in subsequent
periods.
 
    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 that 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.
 
                                       26

<PAGE>
    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 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
 
                                       27

<PAGE>
activity, or obtain a license to or design around the intellectual property in
question. If we are unable to obtain a required license 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, 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 reply on June 7, 2000 in which AmiKa stated that it
did not believe it was infringing on this competitor's patents, 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 December 31, 2000, we had
unamortized goodwill of $9.6 million, or 16.3% of total assets. 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. In addition, we continually
evaluate whether any portion of the remaining balance of goodwill may not be
recoverable. If it is determined in the future that a portion of our goodwill is
impaired, we may be required to write off that portion of our goodwill which
would have an adverse effect on our net income for the period in which the write
off occurs.
 
    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. While we do not currently derive a material portion of our revenue from
products that depend on these licensed technologies, we may in the future. If
our license 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 that use these
licensed technologies. 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.
 
                                       28

<PAGE>
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 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 year ended December 31, 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 resulted in a foreign
      currency loss of $324,000 for the year ended December 31, 2000,
 
    - changes in a specific country's or region's political or economic
      conditions, including Western Europe, in particular,
 
    - potentially negative consequences from changes in tax laws affecting our
      ability to expatriate profits,
 
    - difficulty in staffing and managing widespread operations, and
 
    - unfavorable labor regulations applicable to our European operations, such
      as the unenforceability of non-competition agreements in the United
      Kingdom.
 
    OUR QUARTERLY REVENUES WILL LIKELY BE AFFECTED BY VARIOUS FACTORS, INCLUDING
THE SEASONAL NATURE OF PURCHASING IN EUROPE.  Our revenues may vary from quarter
to quarter due to a number of factors, including the timing of catalog mailings
and new product introductions, future acquisitions and our substantial sales to
European customers, who in summer months often defer purchases. Therefore, we
expect our revenues from European sales to be lower during the summer season and
as a result our quarter-to-quarter revenues will likely experience fluctuations.
 
    WE MAY LOSE MONEY WHEN WE EXCHANGE FOREIGN CURRENCY RECEIVED FROM
INTERNATIONAL REVENUES INTO U.S. DOLLARS.  For the year ended December 31, 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. 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
 
                                       29

<PAGE>
reduce our stockholders' 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.
 
    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.
 
    CERTAIN OF OUR STOCKHOLDERS HAVE SUBSTANTIAL INFLUENCE OVER MATTERS
REQUIRING A STOCKHOLDER VOTE.  The holders of our stock prior to our initial
public offering, beneficially own or control approximately 71% 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 MAY BECOME 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 may become volatile and could decline,
perhaps substantially, 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 fluctuating or 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,
 
                                       30

<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 that 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 our initial public 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.
 
    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.
 
    CASH DIVIDENDS WILL NOT BE PAID ON OUR COMMON STOCK.  We intend to retain
all of our earnings to finance the expansion and development of our business and
do not anticipate paying any cash dividends in the foreseeable future. As a
result, capital appreciation, if any, of our common stock will be our
stockholders' sole source of gain for the foreseeable future.
 
                                       31

<PAGE>
    AN ACTIVE TRADING MARKET FOR OUR COMMON STOCK MAY NOT BE
SUSTAINED.  Although our common stock is quoted on the Nasdaq National Market,
an active trading market for our shares may not be sustained.
 

I
TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
    We manufacture and test the majority of products in research centers in the
United States, the United Kingdom and Germany. We sell our products globally
through our direct catalog sales and indirect distributor channel. As a result,
our financial results are affected by factors such as changes in foreign
currency exchange rates and weak economic conditions in foreign markets.
 
    We collect amounts representing a substantial portion of our revenues and
pay amounts representing a substantial portion of our operating expenses in
foreign currencies. As a result, changes in currency exchange rates from time to
time may affect our operating results. 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 currency risks and we may enter into
foreign exchange contracts from time to time to mitigate foreign currency
exposure.
 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
    The financial statements filed as part of this Annual Report on Form 10-K
are listed under Item 14 below.
 

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
  DISCLOSURE.
 
    None.
 
                                       32

<PAGE>

                                    PART III
 

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
 
    Incorporated by reference to the Company's definitive Proxy Statement to be
filed pursuant to Regulation 14A, in connection with the 2001 Annual Meeting of
Stockholders. Information concerning executive officers of the Registrant is
included in Part I of this Report as Item 4.A.
 

ITEM 11. EXECUTIVE COMPENSATION.
 
    Incorporated by reference to the Company's definitive Proxy Statement to be
filed pursuant to Regulation 14A, in connection with the 2001 Annual Meeting of
Stockholders.
 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
 
    Incorporated by reference to the Company's definitive Proxy Statement to be
filed pursuant to Regulation 14A, in connection with the 2001 Annual Meeting of
Stockholders.
 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
 
    Incorporated by reference to the Company's definitive Proxy Statement to be
filed pursuant to Regulation 14A, in connection with the 2001 Annual Meeting of
Stockholders.
 

                                    PART IV
 

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
 
    (a) (1) Financial Statements.
 
    The following documents are filed as part of this report:
 
       1.  Independent Auditors Report.
 
       2.  Consolidated Balance Sheets as of December 31, 2000 and 1999.
 
       3.  Consolidated Statements of Operations for each of the years ended
           December 31, 2000, 1999 and 1998.
 
       4.  Consolidated Statements of Stockholders' Equity (Deficit) and
           Comprehensive Income (Loss) for each of the years ended December 31,
           2000, 1999 and 1998.
 
       5.  Consolidated Statements of Cash Flows for each of the years ended
           December 31, 2000, 1999 and 1998.
 
       6.  Notes to Financial Statements.
 
    (a) (2) Financial Statement Schedules.
 
    None required.
 
                                       33

<PAGE>
    (a) (3) Exhibits.
 
    The following exhibits are filed as part of this report. Where such filing
is made by incorporation by reference to a previously filed document, such
document is identified.
 

<TABLE>
<CAPTION>
   *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.
<C>      <S>
   *2.2  Asset Purchase Agreement dated July 14, 2000 by and between Harvard Apparatus, Inc.,
          AmiKa Corporation and Ashok Shukla.
    3.1  Second Amended and Restated Certificate of Incorporation of the Registrant.
    3.2  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 Partnership II, Pioneer Capital Corp., First
          New England Capital, L.P. and Citizens Capital, Inc. and Chane Graziano and David
          Green.
  *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 between Harvard Bioscience and Chane Graziano.
   10.6  Employment Agreement between Harvard Bioscience and David Green.
   10.7  Employment Agreement between Harvard Bioscience and James L. Warren.
  *10.8  Form of Director Indemnification Agreement.
  *10.9  Lease Agreement dated December 16, 1996 between Seven October Hill LLC and Harvard
          Apparatus, Inc.
 *10.10  First Amendment to Lease dated November 13, 1998 to Lease Agreement dated
          December 16, 1996 between Seven October Hill LLC and Harvard Apparatus, Inc.
 *10.11  Lease of Unit 22 Phase I Cambridge Science Park, Milton Road, Cambridge dated
          March 3, 1999 between The Master Fellows and Scholars of Trinity College Cambridge,
          Biochrom Limited and Harvard Apparatus, Inc.
 *10.12  Lease Agreement for Commercial Premises dated November 6, 1999 made between
          Mr. Heinz Dehnert, Grunstrabe 1, 79232 March-Hugstetten, Lessor and the Company of
          Harvard Appartus GmbH, Lessee.
 *10.13  Amended and Restated Loan and Security Agreement dated March 2, 1999 between Brown
          Brothers Harriman & Co., BankBoston N.A. and Harvard Apparatus, Inc.
 *10.14  Amendment and Waiver dated December 31, 1999 to Amended and Restated Loan and
          Security Agreement between Brown Brothers Harriman & Co., Fleet National Bank
          (formerly known as BankBoston N.A.) and Harvard Apparatus, Inc.
 *10.15  Second Amendment dated July 14, 2000 to Amended and Restated Loan and Security
          Agreement between Brown Brothers Harriman & Co., Fleet National Bank (formerly known
          as BankBoston N.A.) and Harvard Apparatus, Inc.
 *10.16  Third Amendment dated October 25, 2000 to Amended and Restated Loan and Security
          Agreement between Brown Brothers Harriman & Co., Fleet National Bank (formerly known
          as BankBoston N.A.) and Harvard Apparatus, Inc.
   21.1  Subsidiaries of the Registrant.
   23.1  Consent of KPMG LLP.
</TABLE>

 
------------------------
 
*   Previously filed as an exhibit to the Company's Registration Statement on
    Form S-1 (File No. 333-45996) and incorporated by reference thereto.
 
+  Confidential treatment granted as to this previously filed exhibit.
 
The Company will furnish to stockholders a copy of any exhibit without charge
upon written request.
 
    (b) Reports on Form 8-K.
 
    On January 3, 2001, the Company filed a report on Form 8-K reporting in Item
5 the lawsuit described above in Item 3 of this Annual Report on Form 10-K.
 
                                       34

<PAGE>

                          INDEPENDENT AUDITORS REPORT
 
The Board of Directors
Harvard Bioscience, Inc.:
 
    We have audited the accompanying consolidated balance sheets of Harvard
Bioscience, Inc. and subsidiaries (the "Company") as of December 31, 2000 and
1999, and the related consolidated statements of operations, stockholders'
equity (deficit) and comprehensive income (loss), and cash flows for each of the
years in the three-year period ended December 31, 2000. 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 Bioscience, Inc. and subsidiaries at December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.
 
/s/ KPMG LLP
KPMG LLP
 
February 23, 2001

Boston, Massachusetts
 
                                       35

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

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                              -------------------------
                                                                 2000          1999
                                                              -----------   -----------
<S>                                                           <C>           <C>
                   ASSETS (NOTES 6 AND 7)
Current assets:
  Cash and cash equivalents.................................  $35,816,994   $ 2,396,053
  Trade accounts receivable, net of reserve for
    uncollectible accounts of $88,955 and $87,642 at
    December 31, 2000 and 1999, respectively (note 19)......    4,697,663     4,191,850
  Other receivables and other assets........................    1,237,414       201,946
  Inventories (note 4)......................................    3,722,180     2,849,670
  Catalog costs.............................................      453,209        66,829
  Prepaid expenses..........................................      478,562       593,348
  Income tax receivable (note 13)                                 513,458       987,853
                                                              -----------   -----------
    Total current assets....................................   46,919,480    11,287,549
                                                              -----------   -----------
Property, plant and equipment, net (notes 5 and 10).........    1,715,726     1,559,922
                                                              -----------   -----------
Other assets:
  Catalog costs, less current portion.......................      105,182       165,419
  Deferred tax asset (note 13)..............................       57,478       432,797
  Goodwill, net of accumulated amortization of $1,000,087
    and $395,896 at December 31, 2000 and 1999, respectively
    (note 3)................................................    9,562,385     6,583,354
  Other assets (notes 3 and 12) ............................      448,273       580,829
                                                              -----------   -----------
    Total other assets......................................  $10,173,318   $ 7,762,399
                                                              -----------   -----------
                                                              $58,808,524   $20,609,870
                                                              ===========   ===========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       36

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

<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                              ---------------------------
                                                                  2000           1999
                                                              ------------   ------------
<S>                                                           <C>            <C>
Current liabilities:
  Short-term debt (note 6)..................................  $         --   $  2,200,000
  Current installments of long-term debt (note 7)...........         6,644        794,173
  Trade accounts payable....................................     2,117,446      1,880,246
  Accrued income taxes payable..............................       669,788        957,834
  Accrued expenses (note 17)................................     3,305,560      1,399,523
  Other liabilities.........................................       268,075        272,731
                                                              ------------   ------------
    Total current liabilities...............................     6,367,513      7,504,507
                                                              ------------   ------------
  Long-term debt, less current installments (note 7)........         1,142      5,072,941
  Deferred income tax liability (note 13)...................       104,946         48,649
                                                              ------------   ------------
    Total long-term liabilities.............................       106,088      5,121,590
                                                              ------------   ------------
Commitments and contingencies (notes 10, 18 and 22)
Preferred stock, 600,000 shares authorized (note 8);
  Redeemable series "A" 469,300 shares issued and
    outstanding.............................................            --      1,500,000
  Convertible and redeemable series "B" 48,500 shares issued
    and outstanding.........................................            --      1,000,000
Common stock warrants (note 9)..............................            --     31,194,371
                                                              ------------   ------------
    Total redeemable preferred stock and common stock
      warrants..............................................            --     33,694,371
                                                              ------------   ------------
Stockholders' equity (deficit) (notes 9 and 14):
  Common stock, par value $.01 per share, 80,000,000 shares
    authorized; 29,442,632 and 10,259,410 shares issued and
    outstanding at December 31, 2000 and 1999,
    respectively............................................       294,426        102,604
  Accumulated other comprehensive loss......................      (554,573)       (54,690)
  Additional paid-in capital--stock options.................     4,635,949      3,283,164
  Additional paid-in capital--common stock..................   128,594,672             --
  Retained earnings (accumulated deficit)...................   (78,379,867)   (28,373,931)
  Notes receivable..........................................    (1,587,939)            --

  Treasury stock, 4,660,784 common shares, at cost..........      (667,745)      (667,745)
                                                              ------------   ------------
    Total stockholders' equity (deficit)....................    52,334,923    (25,710,598)
                                                              ------------   ------------
                                                              $ 58,808,524   $ 20,609,870
                                                              ============   ============
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       37

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

<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                       -----------------------------------------
                                                           2000           1999          1998
                                                       ------------   ------------   -----------
<S>                                                    <C>            <C>            <C>
Revenues (notes 15 and 19)...........................  $ 30,574,800   $ 26,177,814   $12,154,025
Cost of goods sold...................................    15,833,338     13,546,933     5,351,271
Stock compensation expense (note 14).................       264,054             --            --
                                                       ------------   ------------   -----------
  Gross profit.......................................    14,477,408     12,630,881     6,802,754
General and administrative expense...................     5,181,299      4,146,564     2,317,021
Sales and marketing expense..........................     3,185,340      2,448,505     1,721,606
Research and development.............................     1,532,896      1,187,584       324,792
Stock compensation expense (note 14).................    14,411,245      3,283,164            --
Amortization of goodwill (note 3)....................       604,191        368,235        27,661
                                                       ------------   ------------   -----------
  Operating (loss) income............................   (10,437,563)     1,196,829     2,411,674
                                                       ------------   ------------   -----------
Other (expense) income:
  Foreign currency (loss) gain.......................      (324,153)       (47,982)       21,418
  Common stock warrant interest expense (note 9).....   (36,884,915)   (29,694,019)   (1,379,460)
  Interest expense...................................      (916,210)      (679,122)     (221,932)
  Interest income....................................       159,849         22,767        12,567
  Amortization of deferred financing costs...........      (152,683)       (63,442)           --
  Other..............................................        45,291        (17,468)       10,067
                                                       ------------   ------------   -----------
    Other expense, net...............................   (38,072,821)   (30,479,266)   (1,557,340)
                                                       ------------   ------------   -----------
    (Loss) income before income taxes................   (48,510,384)   (29,282,437)      854,334
Income taxes (note 13)...............................     1,359,401        137,480       783,192
                                                       ------------   ------------   -----------
    Net (loss) income................................   (49,869,785)   (29,419,917)       71,142
Preferred stock dividends............................      (136,151)      (156,586)     (121,666)
                                                       ------------   ------------   -----------
Net (loss) available to common shareholders..........  $(50,005,936)  $(29,576,503)  $   (50,524)
                                                       ============   ============   ===========
(Loss) per share (note 16):
  Basic..............................................  $      (6.25)  $      (5.28)  $     (0.01)
                                                       ============   ============   ===========
  Diluted............................................  $      (6.25)  $      (5.28)  $     (0.01)
                                                       ============   ============   ===========
Weighted average common shares:
  Basic..............................................     8,005,386      5,598,626     5,598,626
                                                       ============   ============   ===========
  Diluted............................................     8,005,386      5,598,626     5,598,626
                                                       ============   ============   ===========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       38

<PAGE>
                   HARVARD BIOSCIENCE, 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      TREASURY
                                STOCK           LOSS          OPTIONS        STOCK         DEFICIT)     RECEIVABLE      STOCK
                             -----------   --------------   -----------   ------------   ------------   -----------   ---------
<S>                          <C>           <C>              <C>           <C>            <C>            <C>           <C>
Balance at December 31,
  1997.....................      102,604       (26,261)              --             --     1,327,922             --    (667,745)
 
  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             --    (667,745)
 
  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
    (loss).................  (29,439,887)
                             -----------     ---------      -----------   ------------   ------------   -----------   ---------
Balance at December 31,
  1999.....................      102,604       (54,690)       3,283,164             --   (28,373,931)            --    (667,745)
 
  Preferred stock
    dividends..............           --            --               --             --      (136,151)            --          --
  Issuance of common
    stock..................      191,822            --      (13,322,514)   128,594,672            --     (1,587,939)         --
  Stock compensation
    expense................           --            --       14,675,299             --            --             --          --
  Comprehensive income
    (loss):
    Net loss...............           --            --               --             --   (49,869,785)            --          --
    Translation
      adjustments..........           --      (499,883)              --             --            --             --          --
  Total comprehensive
    (loss).................
                             -----------     ---------      -----------   ------------   ------------   -----------   ---------
Balance at December 31,
  2000.....................  $   294,426     $(554,573)     $ 4,635,949   $128,594,672   $(78,379,867)  $(1,587,939)  $(667,745)
                             ===========     =========      ===========   ============   ============   ===========   =========
 
<CAPTION>
 
                                 TOTAL
                             STOCKHOLDERS'
                                EQUITY
                               (DEFICIT)
                             -------------
<S>                          <C>
Balance at December 31,
  1997.....................       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.....................       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
    (loss).................
                             ------------
Balance at December 31,
  1999.....................   (25,710,598)
  Preferred stock
    dividends..............      (136,151)
  Issuance of common
    stock..................   113,876,041
  Stock compensation
    expense................    14,675,299
  Comprehensive income
    (loss):
    Net loss...............   (49,869,785)
    Translation
      adjustments..........      (499,883)
  Total comprehensive
    (loss).................   (50,369,668)
                             ------------
Balance at December 31,
  2000.....................  $(52,334,923)
                             ============
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       39

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

<TABLE>
<CAPTION>
                                                                      YEARS ENDED DECEMBER 31,
                                                              -----------------------------------------
                                                                  2000           1999          1998
                                                              ------------   ------------   -----------
<S>                                                           <C>            <C>            <C>
Cash flows from operating activities:
  Net (loss) income.........................................  $(49,869,785)  $(29,419,917)  $    71,142
  Adjustments to reconcile net (loss) income to net cash
    provided by
    operating activities:
    Common stock warrant interest expense...................    36,884,915     29,694,019     1,379,460
    Stock compensation expense..............................    14,675,299      3,283,164            --
    Depreciation............................................       393,357        331,822       154,776
    Amortization of catalog costs...........................       340,037        493,428       525,600
    Loss (gain) on sale of fixed assets.....................        (2,207)         7,584        (4,075)
    Provision for bad debts.................................         2,430         26,877       (41,388)
    Amortization of goodwill................................       604,191        368,235        27,661
    Amortization and write-off of deferred financing
      costs.................................................       152,683         63,442            --
    Deferred income taxes...................................       927,665     (1,310,325)      (16,277)
    Changes in operating assets and liabilities, net of
      effects of business acquisitions:
      (Increase) decrease in accounts receivable............      (737,414)    (2,282,344)       46,214
      (Increase) decrease in other receivables..............    (1,045,776)      (113,949)       57,711
      (Increase) decrease in inventories....................      (737,737)       215,152        80,430
      (Increase) decrease in prepaid expenses and other
        assets..............................................        85,555       (260,285)       (5,514)
      (Increase) decrease in other assets...................      (108,492)      (202,460)     (184,534)
      Increase (decrease) in trade accounts payable.........       324,672        541,065      (115,065)
      Increase (decrease) in accrued income taxes payable...      (225,672)       797,633      (191,013)
      Increase in accrued expense...........................      442,794.        666,637        19,874
      Increase in other liabilities.........................        39,295         26,663         1,388
                                                              ------------   ------------   -----------
        Net cash provided by operating activities...........     2,145,810      2,926,441     1,806,390
                                                              ------------   ------------   -----------
Cash flows from investing activities:
  Additions to property, plant and equipment................      (629,518)      (332,474)      (87,405)
  Additions to catalog costs................................      (673,811)      (121,644)     (250,183)
  Proceeds from sales of fixed assets.......................         2,658         34,566         8,173
  Acquisition of businesses, net of cash acquired...........    (4,031,625)    (8,126,656)   (1,090,553)
                                                              ------------   ------------   -----------
        Net cash used in investing activities...............    (5,332,296)    (8,546,208)   (1,419,968)
                                                              ------------   ------------   -----------
Cash flows from financing activities:
  Proceeds from short-term debt.............................     1,600,000      2,300,000       600,000
  Repayments of short-term debt.............................    (3,800,000)    (1,150,000)     (300,000)
  Proceeds from long-term debt..............................     2,000,000      5,500,000            --
  Repayments of long-term debt..............................    (7,859,328)      (460,663)     (283,433)
  Dividends paid............................................      (171,072)      (121,666)     (121,666)
  Net proceeds from issuance of preferred stock.............            --        925,174            --
  Redemption of preferred stock.............................    (1,500,000)            --            --
  Net proceeds from issuance of common stock................    46,250,994             --            --
                                                              ------------   ------------   -----------
        Net cash provided by (used in) financing
          activities........................................    36,520,594      6,992,845      (105,099)
                                                              ------------   ------------   -----------
Effect of exchange rate changes on cash.....................        86,833         66,204       (31,505)
                                                              ------------   ------------   -----------
Increase (decrease) in cash and cash equivalents............    33,420,941      1,439,282       249,818
Cash and cash equivalents at beginning of period............     2,396,053        956,771       706,953
                                                              ------------   ------------   -----------
Cash and cash equivalents at end of period..................  $ 35,816,994   $  2,396,053   $   956,771
                                                              ============   ============   ===========
Supplemental disclosures of cash flow information:
  Cash paid for interest....................................  $  1,008,673   $    671,452   $   241,002
                                                              ============   ============   ===========
  Cash paid for income taxes................................  $  1,571,192   $    686,675   $ 1,128,929
                                                              ============   ============   ===========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       40

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(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. On November 29, 2000,
Harvard Apparatus, Inc. changed its name to Harvard Bioscience, Inc.
 
    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 (absorption, distribution, metabolism, elimination and toxicology)
screening bottlenecks in drug discovery. We manufacture and distribute 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
       Bioscience, Inc. and its subsidiaries (the "Company"). All intercompany
       balances and transactions have been eliminated in consolidation.
 
    (B)  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.
 
    (C)  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.
 
    (D)  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
 
                                       41

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
       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>

 
    (E)  CATALOG COSTS
 
       Significant costs of product catalog design, development and production
       are capitalized and amortized over the expected useful life of the
       catalog (usually one 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.
 
    (F)  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.
 
    (G)  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 (deficit) in other
       comprehensive income/(loss).
 
    (H)  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.
 
    (I)  USE OF ESTIMATES
 
       The preparation of financial statements in conformity with accounting
       principles generally accepted in the United States of America requires
       the use of management's estimates. Such estimates include the
       determination and establishment of certain accruals and provisions,
 
                                       42

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
       including those for inventory obsolescence, catalog cost amortization and
       reserves for bad debts. Actual results could differ from those estimates.
 
    (J)  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.
 
    (K)  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.
 
    (L)  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.
 
    (M)  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 was adopted on January 1, 2001. Its impact on the
       consolidated financial statements is not material.
 
    (N)  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.
 
                                       43

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(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 $730,000 was
paid for the assets (including approximately $162,000 of acquisition related
expenses), 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 $251,000 to
goodwill and other intangibles.
 
    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 costs 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 $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 $3,100,000 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
$3,015,000 to goodwill and other intangibles. The assets acquired consisted of
approximately $85,000 of inventory. In addition, the
 
                                       44

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(3) ACQUISITION OF BUSINESSES (CONTINUED)
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.
 
    On December 21, 2000, the Company acquired substantially all the assets and
certain liabilities of MitoScan Corporation, a manufacturer of a
submitochondrial particle toxicity testing products for cash and future
contingent payments based on future product revenues. Cash consideration of
approximately $370,000 was paid for the assets (including approximately $70,000
of acquisition related expenses). The cost of the acquisition allocated on the
basis of fair market value of assets acquired and the purchase method of
accounting resulted in an allocation of approximately $386,000 to goodwill and
other intangibles.
 
    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,
                                                              --------------------------
                                                                  1999          1998
                                                              ------------   -----------
                                                                     (UNAUDITED)
<S>                                                           <C>            <C>
Pro forma revenues..........................................  $ 27,590,714   $23,942,973
                                                              ============   ===========
Pro forma net earnings (loss)...............................  $(29,415,046)  $  (120,186)
                                                              ============   ===========
Pro forma basic net earnings (loss) per share:
  Basic.....................................................  $      (5.25)  $     (0.04)
                                                              ============   ===========
  Diluted...................................................  $      (5.25)  $     (0.04)
                                                              ============   ===========
Pro forma weighted average common shares:
  Basic.....................................................     5,598,626     5,598,626
                                                              ============   ===========
  Diluted...................................................     5,598,626     5,598,626
                                                              ============   ===========
</TABLE>

 
                                       45

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(4) INVENTORIES
 
    Inventories consist of the following:
 

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       -----------------------
                                                          2000         1999
                                                       ----------   ----------
<S>                                                    <C>          <C>
Finished goods.......................................  $1,414,951   $  857,202
Work in process......................................     399,064      359,505
Raw materials........................................   1,908,165    1,632,963
                                                       ----------   ----------
                                                       $3,722,180   $2,849,670
                                                       ==========   ==========
</TABLE>

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

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       -----------------------
                                                          2000         1999
                                                       ----------   ----------
<S>                                                    <C>          <C>
Land and buildings...................................  $  588,187   $  636,250
Machinery and equipment..............................   1,051,458      726,933
Computer equipment...................................     535,596      378,400
Furniture and fixtures...............................     356,264      326,978
Automobiles..........................................     139,399      123,113
                                                       ----------   ----------
                                                        2,670,904    2,191,674
Less accumulated depreciation........................     955,178      631,752
                                                       ----------   ----------
                                                       $1,715,726   $1,559,922
                                                       ==========   ==========
</TABLE>

 
(6) SHORT-TERM DEBT
 
    At December 31, 1999 short-term debt consisted of an amount outstanding
under a bank line of credit that was 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 was payable
monthly, in arrears, at the related bank's "base rate" plus 1% (9.5% at
December 31, 1999). Borrowings under the line of credit were limited to an
available amount determined by an accounts receivable and inventory based
formula, $3,750,000 at December 31, 1999. This line of credit was due to mature
on January 29, 2002. At December 31, 1999 borrowings under the line of credit
were $2,200,000. In December 2000, the line of credit including interest was
paid in full.
 
                                       46

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(7) LONG-TERM DEBT
 
    Long-term debt consists of the following:
 

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                          ---------------------
                                                            2000        1999
                                                          --------   ----------
<S>                                                       <C>        <C>
Subordinated debentures, at 13%, payable in
  quarterly installments through March 15, 2003.........   $   --    $  727,500
Notes payable...........................................       --     5,125,000
Capital lease obligations (note 10).....................    7,786        14,614
                                                           ------    ----------
                                                            7,786     5,867,114
Less current installments...............................    6,644       794,173
                                                           ------    ----------
                                                           $1,142    $5,072,941
                                                           ======    ==========
</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). The interest rate as
determined by one of the banks base rate plus 1%, was 9.5% at December 31, 1999.
In December 2000, the subordinated debt and the bank loans including interest
were paid in full.
 
    Financing costs of $221,074 were incurred in 1999. These costs were
capitalized and initially amortized over the term of the loans. As a result of
the loans being paid in full in 2000, any remaining deferred financing costs
were written off.
 
(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 (see
note 3). The net proceeds from this issuance were $925,174. The Company's
Series B convertible redeemable preferred stock had a dividend preference over
the Series A preferred stock, and as a result, no dividends were paid in respect
of shares of Series A preferred stock unless all accrued dividends that became
payable in respect of Series B preferred stock were paid. The Series B
redeemable convertible preferred stock was 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. In December 2000, the convertible preferred stock was converted to
955,935 shares of common stock of the Company simultaneously with the initial
public offering of he Company's common stock.
 
    Redeemable preferred Series A stock paid 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 were payable a year in arrears on March 3, 2001, and
thereafter quarterly in arrears. In December 2000, the redeemable preferred
stock was redeemed in full simultaneously with the initial public offering of
the Company's common stock.
 
                                       47

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(9) COMMON STOCK WARRANTS
 
    At December 31, 1999 and 1998, there were outstanding 8,509,905 warrants,
which enabled 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 have at any
time required 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 have been 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 2000, 1999 and 1998, interest expense of
$36,884,915, $29,694,019, and $1,397,460, respectively, was recorded 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.
 
    In December 2000, the holders of the outstanding common stock warrants
terminated the requirement of the Company to repurchase the warrants.
Accordingly, the outstanding common stock warrants were converted to 8,509,337
shares of the Company's common stock simultaneously with the initial public
offering of the Company's common stock and the liability previously recorded was
reclassified to stockholders' equity.
 
(10) LEASES
 
    The Company leases automobiles under various leases that are classified as
capital leases. The carrying value of automobiles under capital leases at
December 31, 2000, 1999 and 1998 was $7,265, $14,532 and $40,795, respectively,
which is net of $30,735, $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 years ended
December 31, 2000, 1999 and 1998 was approximately $541,000, $484,000 and
$134,000, respectively.
 
    Future minimum lease payments for both capital and operating leases, with
initial or remaining terms in excess of one year at December 31, 2000, are as
follows:
 

<TABLE>
<CAPTION>
                                                          CAPITAL    OPERATING
                                                           LEASES      LEASES
                                                          --------   ----------
<S>                                                       <C>        <C>
2001....................................................   $7,234    $  585,192
2002....................................................    1,157       472,819
2003....................................................       --       426,253
2004....................................................       --       401,673
2005 and thereafter.....................................       --            --
                                                           ------    ----------
  Net minimum lease payments............................    8,391    $1,885,937
                                                                     ==========
Less amount representing interest.......................      605
                                                           ------
Present value of net minimum lease payments.............   $7,786
                                                           ======
</TABLE>

 
                                       48

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(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 for the years ended December 31, 2000, 1999 and
1998 was $294,583, $258,437 and $262,040, 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 years ended December 31, 2000, 1999, and 1998, the Company contributed
approximately $81,000, $67,000, and $41,000, respectively, to the plan.
 
    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 years ended December 31, 2000 and 1999 follow:
 

<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                                                        -------------------------
                                                           2000          1999
                                                        -----------   -----------
<S>                                                     <C>           <C>
Components of net periodic benefit cost:
  Service cost........................................   $ 319,053     $ 288,640
  Interest cost.......................................     347,215       250,437
  Expected return on plan assets......................    (527,397)     (364,684)
  Net amortization gain...............................     (20,769)        6,965
                                                         ---------     ---------
    Net periodic benefit cost.........................   $ 118,102     $ 181,358
                                                         =========     =========
</TABLE>

 
                                       49

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(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 December 31, 2000 and 1999 follow:
 

<TABLE>
<CAPTION>
                                                       YEARS ENDED DECEMBER 31,
                                                       -------------------------
                                                          2000          1999
                                                       -----------   -----------
<S>                                                    <C>           <C>
Change in benefit obligation:
  Balance at beginning of period.....................  $5,829,403    $1,215,000
  Acquisitions.......................................          --     4,848,552
  Service cost.......................................     319,053       288,640
  Interest cost......................................     347,215       250,437
  Participants' contributions........................      81,369        60,745
  Actuarial (gain)/loss..............................   1,158,295      (824,672)
  Benefits paid......................................     (46,058)       (9,299)
  Currency translation adjustment....................    (467,336)           --
                                                       ----------    ----------
    Balance at end of period.........................   7,221,941     5,829,403
                                                       ----------    ----------
Change in fair value of plan assets:
  Balance at beginning of period.....................   7,062,645     1,158,138
  Acquisitions.......................................          --     5,231,470
  Actual return on plan assets.......................     (51,692)      440,606
  Participants' contributions........................      81,369        60,745
  Employer contributions.............................     258,756       180,985
  Benefits paid......................................     (46,058)       (9,299)
  Currency translation adjustment....................    (560,352)           --
                                                       ----------    ----------
    Balance at end of period.........................  $6,744,668    $7,062,645
                                                       ==========    ==========
</TABLE>

 

<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                                                        ------------------------
                                                           2000         1999
                                                        ----------   -----------
<S>                                                     <C>          <C>
Funded status:
  Plan assets greater than benefit obligation.........   (477,273)    1,233,242
  Unrecognized (gain) loss............................    921,611      (881,299)
                                                        ---------    ----------
    Prepaid pension expense in consolidated balance
      sheet...........................................  $ 444,338    $  351,943
                                                        =========    ==========
</TABLE>

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

<TABLE>
<CAPTION>
                                                                       YEARS ENDED
                                                                       DECEMBER 31,
                                                            ----------------------------------
                                                                 2000                1999
                                                            --------------      --------------
<S>                                                         <C>                 <C>
Weighted average assumptions:
  Discount rate...........................................             6.0%                5.5%
  Expected return on assets...............................         7.0-8.0%            7.0-8.0%
  Rate of compensation increase...........................             4.5%            3.8-4.0%
</TABLE>

 
                                       50

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

<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                                                        -------------------------
                                                           2000          1999
                                                        ----------   ------------
<S>                                                     <C>          <C>
Deferred tax assets:
  Accounts receivable.................................   $ 31,755     $   31,755
  Inventory...........................................    185,990        129,097
  Operating loss carryforward.........................    175,998         34,417
  Accrued expenses....................................     82,698      1,196,338
  Goodwill............................................     51,368         37,679
  Catalog costs.......................................         --          8,503
                                                         --------     ----------
  Total deferred tax assets...........................    527,809      1,437,789
                                                         --------     ----------
 
Deferred tax liabilities:
  Catalog costs.......................................     12,141             --
  Pension fund asset..................................     22,010         18,461
  Property, plant and equipment.......................     15,927         42,632
  Other...............................................     11,741          4,695
                                                         --------     ----------
Total deferred tax liabilities........................     61,819         65,788
                                                         --------     ----------
Net deferred tax assets...............................   $465,990     $1,372,001
                                                         ========     ==========
</TABLE>

 
    The amount recorded as net deferred tax assets as of December 31, 2000 and
1999 represents the amount of tax benefits of existing deductible temporary
differences or carryforwards that are more likely than not to be realized
through the generation of sufficient future taxable income within the
carryforward period. The Company believes that the net deferred tax asset of
$465,990 at December 31, 2000 will more likely than not be realized in the
carryforward period. Management reviews the recoverability of deferred tax
assets during each reporting period.
 
    Income tax expense is based on the following pre-tax income (loss) for the
years ended December 31, 2000, 1999 and 1998:
 

<TABLE>
<CAPTION>
                                                YEARS ENDED DECEMBER 31,
                                         --------------------------------------
                                             2000           1999         1998
                                         ------------   ------------   --------
<S>                                      <C>            <C>            <C>
Domestic...............................  $(51,098,496)  $(32,040,219)  $115,418
Foreign................................     2,588,112      2,757,782    738,916
                                         ------------   ------------   --------
                                         $(48,510,384)  $(29,282,437)  $854,334
                                         ============   ============   ========
</TABLE>

 
                                       51

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

<TABLE>
<CAPTION>
                                                 YEARS ENDED DECEMBER 31,
                                            -----------------------------------
                                               2000         1999         1998
                                            ----------   -----------   --------
<S>                                         <C>          <C>           <C>
Current income tax expense:
  Federal and state.......................  $ (560,364)  $   403,149   $579,152
  Foreign.................................     992,100     1,043,539    214,112
                                            ----------   -----------   --------
                                               431,736     1,446,688    793,264
                                            ----------   -----------   --------
Deferred income tax (benefit) expense:
  Federal and state.......................     903,168    (1,238,399)   (19,380)
  Foreign.................................      24,497       (70,809)     9,308
                                            ----------   -----------   --------
                                               927,665    (1,309,208)   (10,072)
                                            ----------   -----------   --------
Total income tax expense..................  $1,359,401   $   137,480   $783,192
                                            ==========   ===========   ========
</TABLE>

 
    Income tax expense for the years ended December 31, 2000, 1999 and 1998
differed from the amount computed by applying the U.S. federal income tax rate
of 34% to pretax income/(loss) as a result of the following:
 

<TABLE>
<CAPTION>
                                                YEARS ENDED DECEMBER 31,
                                          -------------------------------------
                                              2000          1999         1998
                                          ------------   -----------   --------
<S>                                       <C>            <C>           <C>
Computed "expected" income tax (benefit)
  expense...............................  $(16,493,531)  $(9,956,029)  $290,474
Increase (decrease) in income taxes
  resulting from:
  Foreign tax rate and regulation
    differential........................       112,097        35,804    (27,811)
  State income taxes, net of federal
    income tax benefit..................        63,600      (154,569)    86,068
  Interest expense (common stock
    warrants)...........................    12,539,403    10,254,946    469,002
  Foreign Sales Corporation tax
    benefits............................       (32,596)      (28,761)   (27,804)
  Other.................................       (26,721)      (13,911)    (6,737)
  Stock compensation expense in excess
    of allowable tax benefits on
    exercise of options.................     5,197,149            --         --
                                          ------------   -----------   --------
    Total...............................  $  1,359,401   $   137,480   $783,192
                                          ============   ===========   ========
</TABLE>

 
    Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $5,297,594, $2,992,805 and $1,565,000 at December 31, 2000, 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
(less foreign tax credits) and withholding taxes in the various foreign
countries.
 
                                       52

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(14) STOCK COMPENSATION PLANS
 
    In 2000, the Company approved a stock purchase plan allowing employees to
purchase the Company's common stock at 85% of the lesser of beginning or ending
fair market value at six month intervals. Under this plan, 500,000 shares of
common stock are authorized for issuance of which no shares were issued as of
December 31, 2000.
 
    In 1996, the Company adopted the 1996 Stock Option and Grant Plan (the "1996
Plan") and in 2000, the Company adopted the 2000 Stock Option and Incentive Plan
(the "2000 Plan" and, together with the 1996 Plan, the "Plans") pursuant to
which the Company's Board of Directors can grant stock options to employees. The
Plans authorize grants of options to purchase up to 4,349,096 shares of
authorized but unissued stock.
 
    As of December 31, 2000, 1999 and 1998, 1,582,910, 1,119,725 and 1,119,725
"Incentive Stock Options," and 2,519,576, 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 Stock Options granted prior to 1999 became vested during 2000 as
the fair market value of the Company's common stock was determined to be, on a
fully diluted basis, not less than $1.42 per common share. For non-qualified
options granted under the 1996 Plan during 1999, prior to an amendment to the
1996 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 were 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
resulted in a per share valuation, on a fully diluted basis, of not less than
$2.09 per share. As a result of the 1996 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 Plans. 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 year ended December 31, 2000, 1,140,466 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, for the year ended December 31, 2000, compensation expense
of $4,635,949 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 were considered variable awards as the number of shares to be
acquired by the employees was indeterminable at the date of grant. Accordingly,
for the year ended December 31, 1999 the Company recognized compensation expense
of $3,283,164 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 year ended
December 31, 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
 
                                       53

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(14) STOCK COMPENSATION PLANS (CONTINUED)
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 $3,217,154 has been recognized as stock compensation expense
for the year ended December 31, 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.
 
    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, 1997......................   2,015,505          0.02
  Options granted.................................          --            --
                                                    ----------         -----
Balance at December 31, 1998......................   2,015,505          0.02
  Options granted.................................     916,515          1.05
                                                    ----------         -----
Balance at December 31, 1999......................   2,932,020          0.33
  Options exercised...............................  (3,467,955)         0.45
  Options forfeited...............................      (5,421)         1.05
  Options granted.................................   1,170,466          1.23
                                                    ----------         -----
Balance at December 31, 2000......................     629,110         $1.33
                                                    ==========         =====
</TABLE>

 
    During 2000, 1999 and 1998, there were no other additional options
exercised, canceled, expired or forfeited, or changes in any option terms,
including exercise prices. The weighted average fair value of options granted
during 2000 and 1999 was $9.70, and $1.05, respectively. No options were granted
during 1998.
 
    The following is a summary of information relating to stock options
outstanding at December 31, 2000 (no options were exercisable at December 31,
2000):
 

<TABLE>
<CAPTION>
                                   OPTIONS OUTSTANDING
                      ---------------------------------------------
                          NUMBER                           WEIGHTED
                      OUTSTANDING AT       WEIGHTED-       AVERAGE
     RANGE OF          DECEMBER 31,    AVERAGE REMAINING   EXERCISE
  EXERCISE PRICE           2000        CONTRACTUAL LIFE     PRICE
  --------------      --------------   -----------------   --------
<S>                   <C>              <C>                 <C>
       $0.01              28,008         6.0 years          $0.01
       $1.05             571,102         9.3 years          $1.05
       $8.00              30,000         9.9 years          $8.00
-------------------      -------         -------------      -----
    $0.01-$8.00          629,110         9.2 years          $1.33
</TABLE>

 
                                       54

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(14) STOCK COMPENSATION PLANS (CONTINUED)
    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,
                                          --------------------------------------
                                              2000           1999         1998
                                          ------------   ------------   --------
<S>                                       <C>            <C>            <C>
Net income (loss) as reported...........  $(49,869,785)  $(29,419,917)  $71,142
                                          ------------   ------------   -------
Pro forma net income (loss).............  $(50,021,589)  $(29,420,033)  $70,922
                                          ------------   ------------   -------
Basic net income (loss) per share.......  $      (6.25)  $      (5.28)  $ (0.01)
                                          ------------   ------------   -------
Pro forma basic net income (loss) per
  share.................................  $      (6.26)  $      (5.28)  $ (0.01)
                                          ------------   ------------   -------
Diluted net income (loss) per share.....  $      (6.25)  $      (5.28)  $ (0.01)
                                          ------------   ------------   -------
Diluted pro forma net income (loss) per
  share.................................  $      (6.26)  $      (5.28)  $ (0.01)
                                          ------------   ------------   -------
</TABLE>

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

<TABLE>
<CAPTION>
                                                                YEARS ENDED
                                                               DECEMBER 31,
                                                            -------------------
                                                              2000       1999
                                                            --------   --------
<S>                                                         <C>        <C>
Risk free interest rates..................................    5.9%       5.6%
Expected option lives.....................................  2 years    7 years
Expected dividend yields..................................     0%         0%
Expected volatility.......................................   80.90%       0%
</TABLE>

 
(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 DECEMBER 31,
                                        ---------------------------------------
                                           2000          1999          1998
                                        -----------   -----------   -----------
<S>                                     <C>           <C>           <C>
United States.........................  $ 9,379,986   $ 8,169,470   $ 7,347,907
United Kingdom........................   15,828,225    15,353,761     2,458,772
Canada and Europe.....................    5,366,589     2,654,583     2,347,346
                                        -----------   -----------   -----------
                                        $30,574,800   $26,177,814   $12,154,025
                                        ===========   ===========   ===========
</TABLE>

 
                                       55

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(15) SEGMENT AND RELATED INFORMATION (CONTINUED)
    Long lived assets by geographic area consists of the following:
 

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                             ----------------------------------
                                                2000         1999        1998
                                             ----------   ----------   --------
<S>                                          <C>          <C>          <C>
United States..............................  $  448,243   $  307,286   $260,977
United Kingdom.............................   1,204,981    1,189,269    677,889
Canada and Europe..........................      62,502       63,367     31,039
                                             ----------   ----------   --------
                                             $1,715,726   $1,559,922   $969,905
                                             ==========   ==========   ========
</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 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 DECEMBER 31,
                                         ---------------------------------------
                                             2000           1999         1998
                                         ------------   ------------   ---------
<S>                                      <C>            <C>            <C>
Net income (loss) available to common
  shareholders.........................  $(50,005,936)  $(29,576,503)  $ (50,524)
Effect of dilutive securities:
Common stock warrants..................            --             --          --
                                         ------------   ------------   ---------
Net income (loss), assuming dilution...  $(50,005,936)  $(29,576,503)  $ (50,524)
                                         ============   ============   =========
Weighted average common shares
  outstanding during the year..........     8,005,386      5,598,626   5,598,626
Effect of dilutive securities:
Common stock warrants..................            --             --          --
Common stock options...................            --             --          --
                                         ------------   ------------   ---------
                                            8,005,386      5,598,626   5,598,626
                                         ============   ============   =========
</TABLE>

 
    For the years ended December 31, 2000, 1999 and 1998,common equivalent
shares of 7,456,010, 11,378,110, and 9,688,766 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.
 
                                       56

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(17) ACCRUED EXPENSES
 
    Accrued expenses consist of:
 

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       -----------------------
                                                          2000         1999
                                                       ----------   ----------
<S>                                                    <C>          <C>
Accrued compensation and payroll.....................  $1,188,553   $  736,021
Accrued interest.....................................          --      158,101
Accrued legal and professional fees..................   1,843,644      251,926
Other................................................     273,363      253,475
                                                       ----------   ----------
                                                       $3,305,560   $1,399,523
                                                       ==========   ==========
</TABLE>

 
(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) CONCENTRATIONS OF CREDIT RISK
 
    One commercial customer accounted for 39% and 44% of revenues for the year
ended December 31, 2000 and 1999, respectively. At December 31, 2000 and 1999,
one customer accounted for 39% and 48% of accounts receivable, respectively.
Except as noted above, no other individual customer accounted for more than 10%
of revenues for the years ended December 31, 2000, 1999 and 1998. In addition,
except as noted above, no other individual customer accounted for more than 10%
of accounts receivable at December 31, 2000 and 1999.
 
(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 was exchanged for one share of Harvard Bioscience, Inc. The
Board of Directors of Harvard Bioscience, Inc. approved a 19.71-for-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) INITIAL PUBLIC OFFERING
 
    On December 7, 2000, the Company sold, pursuant to an underwritten initial
public offering, 6,250,000 shares of common stock at a price of $8 per share.
The net proceeds to the Company were $44.8 million. Following the offering,
proceeds were used to repay substantially all of the Company's short term and
long term debt as well as redeem its redeemable preferred stock (see notes 6, 7
and 8). On January 4, 2001, the underwriters exercised their allotment option
whereby the Company sold an additional 937,500 shares of its common stock at a
price of $8 per share. The net proceeds to the Company were approximately
$7.0 million.
 
                                       57

<PAGE>
                   HARVARD BIOSCIENCE, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(22) ASSERTED LEGAL CLAIM
 
    On December 26, 2000 Harvard University filed a lawsuit against the Company
in U.S. District Court, District of Massachusetts alleging that the Company's
use of the "Harvard Bioscience" and "Harvard Apparatus" names infringes on
Harvard University's trademarks. Harvard University is seeking both injunctive
relief and monetary damages. Management denies the allegations contained in the
lawsuit and is defending the Company against such claims.
 
                                       58

<PAGE>

 
                                  SIGNATURES
 
    Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 

<TABLE>
<S>                                                    <C>  <C>
                                                       HARVARD BIOSCIENCE, INC.
 
                                                       By:              /s/ CHANE GRAZIANO
                                                            -----------------------------------------
                                                                          Chane Graziano
DATE: APRIL 2, 2001                                                  CHIEF EXECUTIVE OFFICER
</TABLE>

 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
 

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <S>                               <C>
                 /s/ CHANE GRAZIANO                    Chief Executive Officer
     -------------------------------------------         and Director                    April 2, 2001
                   Chane Graziano                        (Principal Executive Officer)
 
                                                       Chief Financial Officer
                 /s/ JAMES L. WARREN                     (Principal Financial Officer
     -------------------------------------------         and                             April 2, 2001
                   James L. Warren                       Principal Accounting Officer)
 
                   /s/ DAVID GREEN
     -------------------------------------------       President and Director            April 2, 2001
                     David Green
 
               /s/ CHRISTOPHER W. DICK
     -------------------------------------------       Director                          April 2, 2001
                 Christopher W. Dick
 
             /s/ RICHARD C. KLAFFKY, JR.
     -------------------------------------------       Director                          April 2, 2001
               Richard C. Klaffky, Jr.
 
                 /s/ ROBERT DISHMAN
     -------------------------------------------       Director                          April 2, 2001
                   Robert Dishman
 
                 /s/ JOHN F. KENNEDY
     -------------------------------------------       Director                          April 2, 2001
                   John F. Kennedy
 
                  /s/ EARL R. LEWIS
     -------------------------------------------       Director                          April 2, 2001
                    Earl R. Lewis
</TABLE>

 
                                       59





<PAGE>

                                                                  Exhibit 3.1

                           SECOND AMENDED AND RESTATED


                          CERTIFICATE OF INCORPORATION

                                       OF

                            HARVARD BIOSCIENCE, INC.

         Harvard Bioscience, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:

         1. The name of the Corporation is Harvard Bioscience, Inc. The date of
the filing of its original Certificate of Incorporation with the Secretary of
State of the State of Delaware was September 8, 2000 (the "Original
Certificate"). The name under which the Corporation filed the Original
Certificate was Harvard Bioscience, Inc.

         2. This Second Amended and Restated Certificate of Incorporation (the
"Certificate") amends, restates and integrates the provisions of the Amended and
Restated Certificate of Incorporation that was filed with the Secretary of State
of the State of Delaware on November 28, 2000 (the "Amended and Restated
Certificate"), and was duly adopted in accordance with the provisions of
Sections 242 and 245 of the Delaware General Corporation Law (the "DGCL").

         3. The text of the Amended and Restated Certificate is hereby amended 
and restated in its entirety to provide as herein set forth in full.

                                    ARTICLE I

         The name of the Corporation is Harvard Bioscience,
 Inc.

                                   ARTICLE II

         The address of the Corporation's registered office in the State of
Delaware is c/o The Corporation Trust Company, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

                                   ARTICLE III

         The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.



<PAGE>


                                   ARTICLE IV

                                  CAPITAL STOCK

         The total number of shares of capital stock which the Corporation shall
have authority to issue is eighty-five million (85,000,000) shares, of which (i)
eighty million (80,000,000) shares shall be a class designated as common stock,
par value $.01 per share (the "Common Stock"), and (ii) five million (5,000,000)
shares shall be a class designated as undesignated preferred stock, par value
$.01 per share (the "Undesignated Preferred Stock").

         The number of authorized shares of the class of Undesignated Preferred
Stock may from time to time be increased or decreased (but not below the number
of shares outstanding) by the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote, without a vote of the
holders of the Undesignated Preferred Stock (except as otherwise provided in any
certificate of designations of any series of Undesignated Preferred Stock).

         The powers, preferences and rights of, and the qualifications,
limitations and restrictions upon, each class or series of stock shall be
determined in accordance with, or as set forth below in, this Article IV.

                                 A. COMMON STOCK

         Subject to all the rights, powers and preferences of the Undesignated
Preferred Stock and except as provided by law or in this Article IV (or in any
certificate of designations of any series of Undesignated Preferred Stock):

                  (a) the holders of the Common Stock shall have the exclusive
right to vote for the election of directors of the Corporation (the "Directors")
and on all other matters requiring stockholder action, each outstanding share
entitling the holder thereof to one vote on each matter properly submitted to
the stockholders of the Corporation for their vote; PROVIDED, HOWEVER, that,
except as otherwise required by law, holders of Common Stock, as such, shall not
be entitled to vote on any amendment to this Certificate (or on any amendment to
a certificate of designations of any series of Undesignated Preferred Stock)
that alters or changes the powers, preferences, rights or other terms of one or
more outstanding series of Undesignated Preferred Stock if the holders of such
affected series are entitled to vote, either separately or together with the
holders of one or more other such series, on such amendment pursuant to this
Certificate (or pursuant to a certificate of designations of any series of
Undesignated Preferred Stock) or pursuant to the DGCL;

                  (b) dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the Corporation
legally available for the payment of dividends, but only when and as declared by
the Board of Directors of the Corporation (the "Board of Directors") or any
authorized committee thereof; and


                                       2


<PAGE>


                  (c) upon the voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the net assets of the Corporation shall be
distributed pro rata to the holders of the Common Stock.

                         B. UNDESIGNATED PREFERRED STOCK

         The Board of Directors or any authorized committee thereof is expressly
authorized, to the fullest extent permitted by law, to provide for the issuance
of the shares of Undesignated Preferred Stock in one or more series of such
stock, and by filing a certificate pursuant to applicable law of the State of
Delaware, to establish or change from time to time the number of shares of each
such series, and to fix the designations, powers, including voting powers, full
or limited, or no voting powers, preferences and the relative, participating,
optional or other special rights of the shares of each series and any
qualifications, limitations and restrictions thereof.

                                    ARTICLE V

                               STOCKHOLDER ACTION

         1. ACTION WITHOUT MEETING. Except as otherwise provided herein, any
action required or permitted to be taken by the stockholders of the Corporation
at any annual or special meeting of stockholders of the Corporation must be
effected at a duly called annual or special meeting of stockholders and may not
be taken or effected by a written consent of stockholders in lieu thereof.

         2. SPECIAL MEETINGS. Except as otherwise required by statute and
subject to the rights, if any, of the holders of any series of Undesignated
Preferred Stock, special meetings of the stockholders of the Corporation may be
called only by the Board of Directors acting pursuant to a resolution approved
by the affirmative vote of a majority of the Directors then in office. Only
those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of stockholders of the Corporation.

                                   ARTICLE VI

                                    DIRECTORS

         1. GENERAL. The business and affairs of the Corporation shall be 
managed by or under the direction of the Board of Directors except as otherwise
provided herein or required by law.

         2. ELECTION OF DIRECTORS. Election of Directors need not be by written
ballot unless the By-laws of the Corporation (the "By-laws") shall so provide.

                                       3


<PAGE>


         3. NUMBER OF DIRECTORS; TERM OF OFFICE. The number of Directors of the
Corporation shall be fixed solely and exclusively by resolution duly adopted
from time to time by the Board of Directors. The Directors, other than those who
may be elected by the holders of any series of Undesignated Preferred Stock,
shall be classified, with respect to the term for which they severally hold
office, into three classes, as nearly equal in number as reasonably possible.
The initial Class I Directors of the Corporation shall be Christopher W. Dick,
Robert Dishman and Richard C. Klaffky, Jr.; the initial Class II Directors of
the Corporation shall be David Green and John F. Kennedy; and the initial Class
III Directors of the Corporation shall be Chane Graziano and Earl R. Lewis. The
initial Class I Directors shall serve for a term expiring at the annual meeting
of stockholders to be held in 2001, the initial Class II Directors shall serve
for a term expiring at the annual meeting of stockholders to be held in 2002,
and the initial Class III Directors shall serve for a term expiring at the
annual meeting of stockholders to be held in 2003. At each annual meeting of
stockholders, Directors elected to succeed those Directors whose terms expire
shall be elected for a term of office to expire at the third succeeding annual
meeting of stockholders after their election. Notwithstanding the foregoing, the
Directors elected to each class shall hold office until their successors are
duly elected and qualified or until their earlier resignation or removal.

         Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate, the holders of any one or more series of
Undesignated Preferred Stock shall have the right, voting separately as a series
or together with holders of other such series, to elect Directors at an annual
or special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate and any certificate of designations applicable
thereto.

         4. VACANCIES. Subject to the rights, if any, of the holders of any
series of Undesignated Preferred Stock to elect Directors and to fill vacancies
in the Board of Directors relating thereto, any and all vacancies in the Board
of Directors, however occurring, including, without limitation, by reason of an
increase in size of the Board of Directors, or the death, resignation,
disqualification or removal of a Director, shall be filled solely and
exclusively by the affirmative vote of a majority of the remaining Directors
then in office, even if less than a quorum of the Board of Directors, and not by
the stockholders. Any Director appointed in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
Directors in which the new directorship was created or the vacancy occurred and
until such Director's successor shall have been duly elected and qualified or
until his or her earlier resignation or removal. Subject to the rights, if any,
of the holders of any series of Undesignated Preferred Stock to elect Directors,
when the number of Directors is increased or decreased, the Board of Directors
shall, subject to Article VI.3 hereof, determine the class or classes to which
the increased or decreased number of Directors shall be apportioned; PROVIDED,
HOWEVER, that no decrease in the number of Directors shall shorten the term of
any incumbent Director. In the event of a vacancy in the Board of Directors, the
remaining Directors, except as otherwise provided by law, shall exercise the
powers of the full Board of Directors until the vacancy is filled.


                                       4


<PAGE>


         5. REMOVAL. Subject to the rights, if any, of any series of
Undesignated Preferred Stock to elect Directors and to remove any Director whom
the holders of any such stock have the right to elect, any Director (including
persons elected by Directors to fill vacancies in the Board of Directors) may be
removed from office (i) only with cause and (ii) only by the affirmative vote of
the holders of 75% or more of the shares then entitled to vote at an election of
Directors. At least forty-five (45) days prior to any meeting of stockholders at
which it is proposed that any Director be removed from office, written notice of
such proposed removal and the alleged grounds thereof shall be sent to the
Director whose removal will be considered at the meeting.

                                   ARTICLE VII

                             LIMITATION OF LIABILITY

         A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (a) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the DGCL or (d) for any transaction
from which the Director derived an improper personal benefit. If the DGCL is
amended after the effective date of this Certificate to authorize corporate
action further eliminating or limiting the personal liability of Directors, then
the liability of a Director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so amended.

         Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.

                                  ARTICLE VIII

                              AMENDMENT OF BY-LAWS

         1. AMENDMENT BY DIRECTORS. Except as otherwise provided by law, the
By-laws of the Corporation may be amended or repealed by the Board of Directors
by the affirmative vote of a majority of the Directors then in office.

         2. AMENDMENT BY STOCKHOLDERS. The By-laws of the Corporation may be
amended or repealed at any annual meeting of stockholders, or special meeting of
stockholders called for such purpose as provided in the By-laws, by the
affirmative vote of at least 75% of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class; PROVIDED, HOWEVER, that if the Board of


                                       5


<PAGE>

Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of the majority of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class.

                                   ARTICLE IX

                    AMENDMENT OF CERTIFICATE OF INCORPORATION

         The Corporation reserves the right to amend or repeal this Certificate
in the manner now or hereafter prescribed by statute and this Certificate, and
all rights conferred upon stockholders herein are granted subject to this
reservation. Whenever any vote of the holders of voting stock is required to
amend or repeal any provision of this Certificate, and in addition to any other
vote of holders of voting stock that is required by this Certificate or by law,
such amendment or repeal shall require the affirmative vote of the majority of
the outstanding shares entitled to vote on such amendment or repeal, and the
affirmative vote of the majority of the outstanding shares of each class
entitled to vote thereon as a class, at a duly constituted meeting of
stockholders called expressly for such purpose; PROVIDED, HOWEVER, that the
affirmative vote of not less than 75% of the outstanding shares entitled to vote
on such amendment or repeal, and the affirmative vote of not less than 75% of
the outstanding shares of each class entitled to vote thereon as a class, shall
be required to amend or repeal any provision of Article V, Article VI, Article
VII or Article IX of this Certificate.

                                  [End of Text]


                                       6


<PAGE>



         THIS SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION is
executed as of this 12th day of December, 2000.

                                         HARVARD BIOSCIENCE, INC.


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



<PAGE>


                                                                   Exhibit 3.2

                              AMENDED AND RESTATED

                                     BY-LAWS

                                       OF

                            HARVARD BIOSCIENCE, INC.
                               (the "Corporation")

                                    ARTICLE I

                                  STOCKHOLDERS

         SECTION 1. ANNUAL MEETING. The annual meeting of stockholders (any such
meeting being referred to in these By-laws as an "Annual Meeting") shall be held
at the hour, date and place within or without the United States which is fixed
by the Board of Directors, which time, date and place may subsequently be
changed at any time by vote of the Board of Directors. If no Annual Meeting has
been held for a period of thirteen months after the Corporation's last Annual
Meeting, a special meeting in lieu thereof may be held, and such special meeting
shall have, for the purposes of these By-laws or otherwise, all the force and
effect of an Annual Meeting. Any and all references hereafter in these By-laws
to an Annual Meeting or Annual Meetings also shall be deemed to refer to any
special meeting(s) in lieu thereof.

         SECTION 2.  NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.

         (a) ANNUAL MEETINGS OF STOCKHOLDERS.

                  (1) Nominations of persons for election to the Board of
         Directors of the Corporation and the proposal of business to be
         considered by the stockholders may be made at an Annual Meeting (a)
         pursuant to the Corporation's notice
 of meeting, (b) by or at the
         direction of the Board of Directors or (c) by any stockholder of the
         Corporation who was a stockholder of record at the time of giving of
         notice provided for in this By-law, who is entitled to vote at the
         meeting, who is present (in person or by proxy) at the meeting and who
         complies with the notice procedures set forth in this By-law. In
         addition to the other requirements set forth in this By-law, for any
         proposal of business to be considered at an Annual Meeting, it must be
         a proper subject for action by stockholders of the Corporation under
         Delaware law.

                  (2) For nominations or other business to be properly brought
         before an Annual Meeting by a stockholder pursuant to clause (c) of
         paragraph (a)(1) of this By-law, the stockholder must have given timely
         notice thereof in writing to the Secretary of the Corporation. To be
         timely, a stockholder's notice shall be delivered to the Secretary at
         the principal executive offices of the Corporation not later than the
         close of 




<PAGE>

         business on the 90th day nor earlier than the close of business on the
         120th day prior to the first anniversary of the preceding year's
         Annual Meeting; provided, however, that in the event that the date of
         the Annual Meeting is advanced by more than 30 days before or delayed
         by more than 60 days after such anniversary date, notice by the
         stockholder to be timely must be so delivered not earlier than the
         close of business on the 120th day prior to such Annual Meeting and
         not later than the close of business on the later of the 90th day
         prior to such Annual Meeting or the 10th day following the day on
         which public announcement of the date of such meeting is first made.
         Notwithstanding anything to the contrary provided herein, for the
         first Annual Meeting following the initial public offering of common
         stock of the Corporation, a stockholder's notice shall be timely if
         delivered to the Secretary at the principal executive offices of the
         Corporation not later than the close of business on the later of the
         90th 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 first made or sent by the Corporation. Such
         stockholder's notice shall set forth (a) as to each person whom the
         stockholder proposes to nominate for election or reelection as a
         director, all information relating to such person that is required to
         be disclosed in solicitations of proxies for election of directors in
         an election contest, or is otherwise required, in each case pursuant
         to Regulation 14A under the Securities Exchange Act of 1934, as
         amended (the "Exchange Act") and Rule 14a-11 thereunder (including
         such person's written consent to being named in the proxy statement as
         a nominee and to serving as a director if elected); (b) as to any
         other business that the stockholder proposes to bring before the
         meeting, a brief description of the business desired to be brought
         before the meeting, the reasons for conducting such business at the
         meeting, any material interest in such business of such stockholder
         and the beneficial owner, if any, on whose behalf the proposal is
         made, and the names and addresses of other stockholders known by the
         stockholder proposing such business to support such proposal, and the
         class and number of shares of the Corporation's capital stock
         beneficially owned by such other stockholders; and (c) as to the
         stockholder giving the notice and the beneficial owner, if any, on
         whose behalf the nomination or proposal is made (i) the name and
         address of such stockholder, as they appear on the Corporation's
         books, and of such beneficial owner, and (ii) the class and number of
         shares of the Corporation which are owned beneficially and of record
         by such stockholder and such beneficial owner.

                  (3) Notwithstanding anything in the second sentence of
         paragraph (a)(2) of this By-law to the contrary, in the event that the
         number of directors to be elected to the Board of Directors of the
         Corporation is increased and there is no public announcement naming all
         of the nominees for director or specifying the size of the increased
         Board of Directors made by the Corporation at least 85 days prior to
         the first anniversary of the preceding year's Annual Meeting, a
         stockholder's notice required by this By-law shall also be considered
         timely, but only with respect to nominees for any new positions created
         by such increase, if it shall be delivered to the Secretary at the
         principal 


                                       2


<PAGE>

         executive offices of the Corporation not later than the close of
         business on the 10th day following the day on which such public
         announcement is first made by the Corporation.

         (b) GENERAL.

                  (1) Only such persons who are nominated in accordance with the
         provisions of this By-law shall be eligible for election and to serve
         as directors and only such business shall be conducted at an Annual
         Meeting as shall have been brought before the meeting in accordance
         with the provisions of this By-law. The Board of Directors or a
         designated committee thereof shall have the power to determine whether
         a nomination or any business proposed to be brought before the meeting
         was made in accordance with the provisions of this By-law. If neither
         the Board of Directors nor such designated committee makes a
         determination as to whether any stockholder proposal or nomination was
         made in accordance with the provisions of this By-law, the presiding
         officer of the Annual Meeting shall have the power and duty to
         determine whether the stockholder proposal or nomination was made in
         accordance with the provisions of this By-law. If the Board of
         Directors or a designated committee thereof or the presiding officer,
         as applicable, determines that any stockholder proposal or nomination
         was not made in accordance with the provisions of this By-law, such
         proposal or nomination shall be disregarded and shall not be presented
         for action at the Annual Meeting.

                  (2) For purposes of this By-law, "public announcement" shall
         mean disclosure in a press release reported by the Dow Jones News
         Service, Associated Press or comparable national news service or in a
         document publicly filed by the Corporation with the Securities and
         Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
         Act.

                  (3) Notwithstanding the foregoing provisions of this By-law, a
         stockholder shall also comply with all applicable requirements of the
         Exchange Act and the rules and regulations thereunder with respect to
         the matters set forth in this By-law. Nothing in this By-law shall be
         deemed to affect any rights of (i) stockholders to request inclusion of
         proposals in the Corporation's proxy statement pursuant to Rule 14a-8
         under the Exchange Act or (ii) the holders of any series of
         Undesignated Preferred Stock to elect directors under specified
         circumstances.

         SECTION 3. SPECIAL MEETINGS. Except as otherwise required by statute
and subject to the rights, if any, of the holders of any series of Undesignated
Preferred Stock, special meetings of the stockholders of the Corporation may be
called only by the Board of Directors acting pursuant to a resolution approved
by the affirmative vote of a majority of the Directors then in office. Only
those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of stockholders of the Corporation.



                                       3


<PAGE>



         SECTION 4. NOTICE OF MEETINGS; ADJOURNMENTS. A written notice of each
Annual Meeting stating the hour, date and place of such Annual Meeting shall be
given not less than 10 days nor more than 60 days before the Annual Meeting, to
each stockholder entitled to vote thereat by delivering such notice to such
stockholder or by mailing it, postage prepaid, addressed to such stockholder at
the address of such stockholder as it appears on the Corporation's stock
transfer books. Such notice shall be deemed to be given when hand delivered to
such address or deposited in the mail so addressed, with postage prepaid.

         Notice of all special meetings of stockholders shall be given in the
same manner as provided for Annual Meetings, except that the written notice of
all special meetings shall state the purpose or purposes for which the meeting
has been called.

         Notice of an Annual Meeting or special meeting of stockholders need not
be given to a stockholder if a written waiver of notice is signed before or
after such meeting by such stockholder or if such stockholder attends such
meeting, unless such attendance was for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
was not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any Annual Meeting or special meeting of stockholders need
be specified in any written waiver of notice.

         The Board of Directors may postpone and reschedule any previously
scheduled Annual Meeting or special meeting of stockholders and any record date
with respect thereto, regardless of whether any notice or public disclosure with
respect to any such meeting has been sent or made pursuant to Section 2 of this
Article I of these By-laws or otherwise. In no event shall the public
announcement of an adjournment, postponement or rescheduling of any previously
scheduled meeting of stockholders commence a new time period for the giving of a
stockholder's notice under Section 2 of this Article I of these By-laws.

         When any meeting is convened, the presiding officer may adjourn the
meeting if (a) no quorum is present for the transaction of business, (b) the
Board of Directors determines that adjournment is necessary or appropriate to
enable the stockholders to consider fully information which the Board of
Directors determines has not been made sufficiently or timely available to
stockholders, or (c) the Board of Directors determines that adjournment is
otherwise in the best interests of the Corporation. When any Annual Meeting or
special meeting of stockholders is adjourned to another hour, date or place,
notice need not be given of the adjourned meeting other than an announcement at
the meeting at which the adjournment is taken of the hour, date and place to
which the meeting is adjourned; provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote thereat and each stockholder who, by
law or under the Certificate of Incorporation of the Corporation (as the same
may hereafter be amended and/or restated, the "Certificate") or these By-laws,
is entitled to such notice.



                                       4


<PAGE>



         SECTION 5. QUORUM. A majority of the shares entitled to vote, present
in person or represented by proxy, shall constitute a quorum at any meeting of
stockholders. If less than a quorum is present at a meeting, the holders of
voting stock representing a majority of the voting power present at the meeting
or the presiding officer may adjourn the meeting from time to time, and the
meeting may be held as adjourned without further notice, except as provided in
Section 5 of this Article I. At such adjourned meeting at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. The stockholders present at a duly constituted
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

         SECTION 6. VOTING AND PROXIES. Stockholders shall have one vote for
each share of stock entitled to vote owned by them of record according to the
stock ledger of the Corporation, unless otherwise provided by law or by the
Certificate. Stockholders may vote either (i) in person, (ii) by written proxy
or (iii) by a transmission permitted by Section 212(c) of the Delaware General
Corporation Law ("DGCL"). Any copy, facsimile telecommunication or other
reliable reproduction of the writing or transmission permitted by Section212(c)
of the DGCL may be substituted for or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission. Proxies shall be filed in accordance with the
procedures established for the meeting of stockholders. Except as otherwise
limited therein or as otherwise provided by law, proxies authorizing a person to
vote at a specific meeting shall entitle the persons authorized thereby to vote
at any adjournment of such meeting, but they shall not be valid after final
adjournment of such meeting. A proxy with respect to stock held in the name of
two or more persons shall be valid if executed by or on behalf of any one of
them unless at or prior to the exercise of the proxy the Corporation receives a
specific written notice to the contrary from any one of them.

         SECTION 7. ACTION AT MEETING. When a quorum is present at any meeting
of stockholders, any matter before any such meeting (other than an election of a
director or directors) shall be decided by a majority of the votes properly cast
for and against such matter, except where a larger vote is required by law, by
the Certificate or by these By-laws. Any election of directors by stockholders
shall be determined by a plurality of the votes properly cast on the election of
directors. The Corporation shall not directly or indirectly vote any shares of
its own stock; provided, however, that the Corporation may vote shares which it
holds in a fiduciary capacity to the extent permitted by law.

         SECTION 8. STOCKHOLDER LISTS. The Secretary or an Assistant Secretary
(or the Corporation's transfer agent or other person authorized by these By-laws
or by law) shall prepare and make, at least 10 days before every Annual Meeting
or special meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares 


                                       5


<PAGE>

registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the hour, date and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present.

         SECTION 9. PRESIDING OFFICER. The Chairman of the Board, if one is
elected, or if not elected or in his or her absence, the President, shall
preside at all Annual Meetings or special meetings of stockholders and shall
have the power, among other things, to adjourn such meeting at any time and from
time to time, subject to Sections 5 and 6 of this Article I. The order of
business and all other matters of procedure at any meeting of the stockholders
shall be determined by the presiding officer.

         SECTION 10. INSPECTORS OF ELECTIONS. The Corporation shall, in advance
of any meeting of stockholders, appoint one or more inspectors to act at the
meeting and make a written report thereof. The Corporation may designate one or
more persons as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at a meeting of stockholders, the
presiding officer shall appoint one or more inspectors to act at the meeting.
Any inspector may, but need not, be an officer, employee or agent of the
Corporation. Each inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall perform such duties as are required by the DGCL,
including the counting of all votes and ballots. The inspectors may appoint or
retain other persons or entities to assist the inspectors in the performance of
the duties of the inspectors. The presiding officer may review all
determinations made by the inspectors, and in so doing the presiding officer
shall be entitled to exercise his or her sole judgment and discretion and he or
she shall not be bound by any determinations made by the inspectors. All
determinations by the inspectors and, if applicable, the presiding officer,
shall be subject to further review by any court of competent jurisdiction.

                                   ARTICLE II

                                    DIRECTORS

         SECTION 1. POWERS. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors except as otherwise
provided by the Certificate or required by law.


                                       6


<PAGE>

         SECTION 2. NUMBER AND TERMS. The number of directors of the Corporation
shall be fixed solely and exclusively by resolution duly adopted from time to
time by the Board of Directors. The directors shall hold office in the manner
provided in the Certificate.

         SECTION 3. QUALIFICATION. No director need be a stockholder of the 
Corporation.

         SECTION 4. VACANCIES. Vacancies in the Board of Directors shall be 
filled in the manner provided in the Certificate.

         SECTION 5. REMOVAL. Directors may be removed from office in the manner
provided in the Certificate.

         SECTION 6. RESIGNATION. A director may resign at any time by giving 
written notice to the Chairman of the Board, if one is elected, the President or
the Secretary. A resignation shall be effective upon receipt, unless the
resignation otherwise provides.

         SECTION 7. REGULAR MEETINGS. The regular annual meeting of the Board of
Directors shall be held, without notice other than this Section 7, on the same
date and at the same place as the Annual Meeting following the close of such
meeting of stockholders. Other regular meetings of the Board of Directors may be
held at such hour, date and place as the Board of Directors may by resolution
from time to time determine and publicize by means of reasonable notice given to
any director who is not present at the meeting at which such resolution is
adopted.

         SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called, orally or in writing, by or at the request of a majority of the
directors, the Chairman of the Board, if one is elected, or the President. The
person calling any such special meeting of the Board of Directors may fix the
hour, date and place thereof.

         SECTION 9. NOTICE OF MEETINGS. Notice of the hour, date and place of
all special meetings of the Board of Directors shall be given to each director
by the Secretary or an Assistant Secretary, or in case of the death, absence,
incapacity or refusal of such persons, by the Chairman of the Board, if one is
elected, or the President or such other officer designated by the Chairman of
the Board, if one is elected, or the President. Notice of any special meeting of
the Board of Directors shall be given to each director in person, by telephone,
or by facsimile, electronic mail or other form of electronic communication, sent
to his or her business or home address, at least 24 hours in advance of the
meeting, or by written notice mailed to his or her business or home address, at
least 48 hours in advance of the meeting. Such notice shall be deemed to be
delivered when hand delivered to such address, read to such director by
telephone, deposited in the mail so addressed, with postage thereon prepaid if
mailed, dispatched or transmitted if faxed, telexed or telecopied, or when
delivered to the telegraph company if sent by telegram.


                                       7


<PAGE>



         A written waiver of notice signed before or after a meeting by a
director and filed with the records of the meeting shall be deemed to be
equivalent to notice of the meeting. The attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because such meeting is not lawfully
called or convened. Except as otherwise required by law, by the Certificate or
by these By-laws, neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Directors need be specified in the notice or waiver
of notice of such meeting.

         SECTION 10. QUORUM. At any meeting of the Board of Directors, a
majority of the total number of directors shall constitute a quorum for the
transaction of business, but if less than a quorum is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time, and
the meeting may be held as adjourned without further notice, except as provided
in Section 9 of this Article II. Any business which might have been transacted
at the meeting as originally noticed may be transacted at such adjourned meeting
at which a quorum is present. For purposes of this section, the total number of
directors includes any unfilled vacancies on the Board of Directors.

         SECTION 11. ACTION AT MEETING. At any meeting of the Board of Directors
at which a quorum is present, the vote of a majority of the directors present
shall constitute action by the Board of Directors, unless otherwise required by
law, by the Certificate or by these By-laws.

         SECTION 12. ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent thereto in writing. Such written
consent shall be filed with the records of the meetings of the Board of
Directors and shall be treated for all purposes as a vote at a meeting of the
Board of Directors.

         SECTION 13. MANNER OF PARTICIPATION. Directors may participate in
meetings of the Board of Directors by means of conference telephone or similar
communications equipment by means of which all directors participating in the
meeting can hear each other, and participation in a meeting in accordance
herewith shall constitute presence in person at such meeting for purposes of
these By-laws.

         SECTION 14. COMMITTEES. The Board of Directors, by vote of a majority
of the directors then in office, may elect from its number one or more
committees, including, without limitation, an Executive Committee, a
Compensation Committee, a Stock Option Committee and an Audit Committee, and may
delegate thereto some or all of its powers except those which by law, by the
Certificate or by these By-laws may not be delegated. Except as the Board of
Directors may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Board of Directors
or in such rules, its business shall be conducted so far as possible in the same
manner as is provided by 


                                       8


<PAGE>


these By-laws for the Board of Directors. All members of such committees shall
hold such offices at the pleasure of the Board of Directors. The Board of
Directors may abolish any such committee at any time. Any committee to which the
Board of Directors delegates any of its powers or duties shall keep records of
its meetings and shall report its action to the Board of Directors.

         SECTION 15. COMPENSATION OF DIRECTORS. Directors shall receive such
compensation for their services as shall be determined by a majority of the
Board of Directors, or a designated committee thereof, provided that directors
who are serving the Corporation as employees and who receive compensation for
their services as such, shall not receive any salary or other compensation for
their services as directors of the Corporation.

                                   ARTICLE III

                                    OFFICERS

         SECTION 1. ENUMERATION. The officers of the Corporation shall consist
of a President, a Treasurer, a Secretary and such other officers, including,
without limitation, a Chairman of the Board of Directors, a Chief Executive
Officer and one or more Vice Presidents (including Executive Vice Presidents or
Senior Vice Presidents), Assistant Vice Presidents, Assistant Treasurers and
Assistant Secretaries, as the Board of Directors may determine.

         SECTION 2. ELECTION. At the regular annual meeting of the Board of
Directors following the Annual Meeting, the Board of Directors shall elect the
President, the Treasurer and the Secretary. Other officers may be elected by the
Board of Directors at such regular annual meeting of the Board of Directors or
at any other regular or special meeting.

         SECTION 3. QUALIFICATION. No officer need be a stockholder or a
director. Any person may occupy more than one office of the Corporation at any
time. Any officer may be required by the Board of Directors to give bond for the
faithful performance of his or her duties in such amount and with such sureties
as the Board of Directors may determine.

         SECTION 4. TENURE. Except as otherwise provided by the Certificate or
by these By-laws, each of the officers of the Corporation shall hold office
until the regular annual meeting of the Board of Directors following the next
Annual Meeting and until his or her successor is elected and qualified or until
his or her earlier resignation or removal.

         SECTION 5. RESIGNATION. Any officer may resign by delivering his or her
written resignation to the Corporation addressed to the President or the
Secretary, and such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.


                                       9


<PAGE>


         SECTION 6. REMOVAL. Except as otherwise provided by law, the Board of
Directors may remove any officer with or without cause by the affirmative vote
of a majority of the directors then in office.

         SECTION 7. ABSENCE OR DISABILITY. In the event of the absence or
disability of any officer, the Board of Directors may designate another officer
to act temporarily in place of such absent or disabled officer.

         SECTION 8. VACANCIES. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors.

         SECTION 9. PRESIDENT. The President shall, subject to the direction of
the Board of Directors, have general supervision and control of the
Corporation's business. If there is no Chairman of the Board or if he or she is
absent, the President shall preside, when present, at all meetings of
stockholders and of the Board of Directors. The President shall have such other
powers and perform such other duties as the Board of Directors may from time to
time designate.

         SECTION 10. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
elected, shall preside, when present, at all meetings of the stockholders and of
the Board of Directors. The Chairman of the Board shall have such other powers
and shall perform such other duties as the Board of Directors may from time to
time designate.

         SECTION 11. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, if
one is elected, shall have such powers and shall perform such duties as the
Board of Directors may from time to time designate.

         SECTION 12. VICE PRESIDENTS AND ASSISTANT VICE PRESIDENTS. Any Vice
President (including any Executive Vice President or Senior Vice President) and
any Assistant Vice President shall have such powers and shall perform such
duties as the Board of Directors or the Chief Executive Officer may from time to
time designate.

         SECTION 13. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall,
subject to the direction of the Board of Directors and except as the Board of
Directors or the Chief Executive Officer may otherwise provide, have general
charge of the financial affairs of the Corporation and shall cause to be kept
accurate books of account. The Treasurer shall have custody of all funds,
securities, and valuable documents of the Corporation. He or she shall have such
other duties and powers as may be designated from time to time by the Board of
Directors or the Chief Executive Officer.

         Any Assistant Treasurer shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.


                                       10


<PAGE>



         SECTION 14. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
record all the proceedings of the meetings of the stockholders and the Board of
Directors (including committees of the Board) in books kept for that purpose. In
his or her absence from any such meeting, a temporary secretary chosen at the
meeting shall record the proceedings thereof. The Secretary shall have charge of
the stock ledger (which may, however, be kept by any transfer or other agent of
the Corporation). The Secretary shall have custody of the seal of the
Corporation, and the Secretary, or an Assistant Secretary, shall have authority
to affix it to any instrument requiring it, and, when so affixed, the seal may
be attested by his or her signature or that of an Assistant Secretary. The
Secretary shall have such other duties and powers as may be designated from time
to time by the Board of Directors or the Chief Executive Officer. In the absence
of the Secretary, any Assistant Secretary may perform his or her duties and
responsibilities.

         Any Assistant Secretary shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.

         SECTION 15. OTHER POWERS AND DUTIES. Subject to these By-laws and to
such limitations as the Board of Directors may from time to time prescribe, the
officers of the Corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the Board of Directors or the Chief Executive
Officer.

                                   ARTICLE IV

                                  CAPITAL STOCK

         SECTION 1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to
a certificate of the capital stock of the Corporation in such form as may from
time to time be prescribed by the Board of Directors. Such certificate shall be
signed by the Chairman of the Board of Directors, the President or a Vice
President and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary. The Corporation seal and the signatures by the
Corporation's officers, the transfer agent or the registrar may be facsimiles.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the time of its issue. Every certificate
for shares of stock which are subject to any restriction on transfer and every
certificate issued when the Corporation is authorized to issue more than one
class or series of stock shall contain such legend with respect thereto as is
required by law.

         SECTION 2. TRANSFERS. Subject to any restrictions on transfer and
unless otherwise provided by the Board of Directors, shares of stock may be
transferred only on the books of


                                       11



<PAGE>

the Corporation by the surrender to the Corporation or its transfer agent of the
certificate theretofore properly endorsed or accompanied by a written assignment
or power of attorney properly executed, with transfer stamps (if necessary)
affixed, and with such proof of the authenticity of signature as the Corporation
or its transfer agent may reasonably require.

         SECTION 3. RECORD HOLDERS. Except as may otherwise be required by law,
by the Certificate or by these By-laws, the Corporation shall be entitled to
treat the record holder of stock as shown on its books as the owner of such
stock for all purposes, including the payment of dividends and the right to vote
with respect thereto, regardless of any transfer, pledge or other disposition of
such stock, until the shares have been transferred on the books of the
Corporation in accordance with the requirements of these By-laws.

         SECTION 4. RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date: (a) in the case of
determination of stockholders entitled to vote at any meeting of stockholders,
shall, unless otherwise required by law, not be more than sixty nor less than
ten days before the date of such meeting and (b) in the case of any other
action, shall not be more than sixty days prior to such other action. If no
record date is fixed: (i) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (ii) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

         SECTION 5. REPLACEMENT OF CERTIFICATES. In case of the alleged loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms as the Board of Directors may
prescribe.


                                       12


<PAGE>




                                    ARTICLE V

                                 INDEMNIFICATION

         SECTION 1. DEFINITIONS. For purposes of this Article:

         (a) "Corporate Status" describes the status of a person who is serving
or has served (i) as a Director of the Corporation, (ii) as an Officer of the
Corporation, or (iii) as a director, partner, trustee, officer, employee or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the
request of the Corporation. For purposes of this Section 1(a), an Officer or
Director of the Corporation who is serving or has served as a director, partner,
trustee, officer, employee or agent of a Subsidiary shall be deemed to be
serving at the request of the Corporation;

         (b) "Director" means any person who serves or has served the 
Corporation as a director on the Board of Directors of the Corporation;

         (c) "Disinterested Director" means, with respect to each Proceeding in
respect of which indemnification is sought hereunder, a Director of the
Corporation who is not and was not a party to such Proceeding;

         (d) "Expenses" means all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants and investment
bankers), travel expenses, duplicating costs, printing and binding costs, costs
of preparation of demonstrative evidence and other courtroom presentation aids
and devices, costs incurred in connection with document review, organization,
imaging and computerization, telephone charges, postage, delivery service fees,
and all other disbursements, costs or expenses of the type customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, settling or otherwise
participating in, a Proceeding;

         (e) "Non-Officer Employee" means any person who serves or has served as
an employee or agent of the Corporation, but who is not or was not a Director or
Officer;

         (f) "Officer" means any person who serves or has served the Corporation
as an officer appointed by the Board of Directors of the Corporation;

         (g) "Proceeding" means any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, inquiry,
investigation, administrative hearing or other proceeding, whether civil,
criminal, administrative, arbitrative or investigative; and


                                       13


<PAGE>


         (h) "Subsidiary" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other entity of which the Corporation
owns (either directly or through or together with another Subsidiary of the
Corporation) 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.

         SECTION 2. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Subject to the
operation of Section 4 of this Article V of these By-laws, each Director and
Officer shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the DGCL, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to such amendment) against any and
all Expenses, judgments, penalties, fines and amounts reasonably paid in
settlement that are incurred by such Director or Officer or on such Director's
or Officer's behalf in connection with any threatened, pending or completed
Proceeding or any claim, issue or matter therein, which such Director or Officer
is, or is threatened to be made, a party to or participant in by reason of such
Director's or Officer's Corporate Status, if such Director or Officer acted in
good faith and in a manner such Director or Officer reasonably believed to be in
or not opposed to the best interests of the Corporation and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The rights of indemnification provided by this Section 2 shall
continue as to a Director or Officer after he or she has ceased to be a Director
or Officer and shall inure to the benefit of his or her heirs, executors,
administrators and personal representatives. Notwithstanding the foregoing, the
Corporation shall indemnify any Director or Officer seeking indemnification in
connection with a Proceeding initiated by such Director or Officer only if such
Proceeding was authorized by the Board of Directors of the Corporation, unless
such Proceeding was brought to enforce an Officer or Director's rights to
Indemnification or, in the case of Directors, advancement of Expenses under
these By-laws in accordance with the provisions set forth herein.

         SECTION 3. INDEMNIFICATION OF NON-OFFICER EMPLOYEES. Subject to the
operation of Section 4 of this Article V of these By-laws, each Non-Officer
Employee may, in the discretion of the Board of Directors of the Corporation, be
indemnified by the Corporation to the fullest extent authorized by the DGCL, as
the same exists or may hereafter be amended, against any or all Expenses,
judgments, penalties, fines and amounts reasonably paid in settlement that are
incurred by such Non-Officer Employee or on such Non-Officer Employee's behalf
in connection with any threatened, pending or completed Proceeding, or any
claim, issue or matter therein, which such Non-Officer Employee is, or is
threatened to be made, a party to or participant in by reason of such
Non-Officer Employee's Corporate Status, if such Non-Officer Employee acted in
good faith and in a manner such Non-Officer Employee reasonably believed to be
in or not opposed to the best interests of the Corporation and, with


                                       14


<PAGE>

respect to any criminal proceeding, had no reasonable cause to believe his or
her conduct was unlawful. The rights of indemnification provided by this Section
3 shall exist as to a Non-Officer Employee after he or she has ceased to be a
Non-Officer Employee and shall inure to the benefit of his or her heirs,
personal representatives, executors and administrators. Notwithstanding the
foregoing, the Corporation may indemnify any Non-Officer Employee seeking
indemnification in connection with a Proceeding initiated by such Non-Officer
Employee only if such Proceeding was authorized by the Board of Directors of the
Corporation.

         SECTION 4. GOOD FAITH. Unless ordered by a court, no indemnification
shall be provided pursuant to this Article V to a Director, to an Officer or to
a Non-Officer Employee unless a determination shall have been made that such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the Corporation and, with respect to
any criminal Proceeding, such person had no reasonable cause to believe his or
her conduct was unlawful. Such determination shall be made by (a) a majority
vote of the Disinterested Directors, even though less than a quorum of the Board
of Directors, (b) a committee comprised of Disinterested Directors, such
committee having been designated by a majority vote of the Disinterested
Directors (even though less than a quorum), (c) if there are no such
Disinterested Directors, or if a majority of Disinterested Directors so directs,
by independent legal counsel in a written opinion, or (d) by the stockholders of
the Corporation.

         SECTION 5. ADVANCEMENT OF EXPENSES TO DIRECTORS PRIOR TO FINAL
DISPOSITION.

         (a) The Corporation shall advance all Expenses incurred by or on behalf
of any Director in connection with any Proceeding in which such Director is
involved by reason of such Director's Corporate Status within ten (10) days
after the receipt by the Corporation of a written statement from such Director
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by such Director and shall be preceded
or accompanied by an undertaking by or on behalf of such Director to repay any
Expenses so advanced if it shall ultimately be determined that such Director is
not entitled to be indemnified against such Expenses.

         (b) If a claim for advancement of Expenses hereunder by a Director is
not paid in full by the Corporation within 10 days after receipt by the
Corporation of documentation of Expenses and the required undertaking, such
Director may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and if successful in whole or in part,
such Director shall also be entitled to be paid the expenses of prosecuting such
claim. The failure of the Corporation (including its Board of Directors or any
committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of such advancement of Expenses
under this Article V shall not be a defense to the action and shall not create a
presumption that such advancement is not permissible. The 


                                       15


<PAGE>

burden of proving that a Director is not entitled to an advancement of expenses
shall be on the Corporation.

         (c) In any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that the Director
has not met any applicable standard for indemnification set forth in the DGCL.

         SECTION 6. ADVANCEMENT OF EXPENSES TO OFFICERS AND NON-OFFICER
EMPLOYEES PRIOR TO FINAL DISPOSITION.

         (a) The Corporation may, at the discretion of the Board of Directors of
the Corporation, advance any or all Expenses incurred by or on behalf of any
Officer and Non-Officer Employee in connection with any Proceeding in which such
is involved by reason of the Corporate Status of such Officer or Non-Officer
Employee upon the receipt by the Corporation of a statement or statements from
such Officer or Non-Officer Employee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
such Officer and Non-Officer Employee and shall be preceded or accompanied by an
undertaking by or on behalf of such to repay any Expenses so advanced if it
shall ultimately be determined that such Officer or Non-Officer Employee is not
entitled to be indemnified against such Expenses.

         (b) In any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that the Officer or
Non-Officer Employee has not met any applicable standard for indemnification set
forth in the DGCL.

         SECTION 7. CONTRACTUAL NATURE OF RIGHTS.

         (a) The foregoing provisions of this Article V shall be deemed to be a
contract between the Corporation and each Director and Officer entitled to the
benefits hereof at any time while this Article V is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any
Proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.

         (b) If a claim for indemnification of Expenses hereunder by a Director
or Officer is not paid in full by the Corporation within 60 days after receipt
by the Corporation of a written claim for indemnification, such Director or
Officer may at any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim, and if successful in whole or in part, such
Director or Officer shall also be entitled to be paid the expenses of
prosecuting 


                                       16


<PAGE>

such claim. The failure of the Corporation (including its Board of Directors or
any committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of such indemnification under this
Article V shall not be a defense to the action and shall not create a
presumption that such indemnification is not permissible. The burden of proving
that a Director or Officer is not entitled to indemnification shall be on the
Corporation.

         (c) In any suit brought by a Director or Officer to enforce a right to
indemnification hereunder, it shall be a defense that such Director or Officer
has not met any applicable standard for indemnification set forth in the DGCL.

         SECTION 8. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and
advancement of Expenses set forth in this Article V shall not be exclusive of
any other right which any Director, Officer, or Non-Officer Employee may have or
hereafter acquire under any statute, provision of the Certificate or these
By-laws, agreement, vote of stockholders or Disinterested Directors or
otherwise.

         SECTION 9. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, Officer or Non-Officer Employee
against any liability of any character asserted against or incurred by the
Corporation or any such Director, Officer or Non-Officer Employee, or arising
out of any such person's Corporate Status, whether or not the Corporation would
have the power to indemnify such person against such liability under the DGCL or
the provisions of this Article V.

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

         SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.

         SECTION 2. SEAL. The Board of Directors shall have power to adopt and
alter the seal of the Corporation.

         SECTION 3. EXECUTION OF INSTRUMENTS. All deeds, leases, transfers,
contracts, bonds, notes and other obligations to be entered into by the
Corporation in the ordinary course of its business without director action may
be executed on behalf of the Corporation by the Chairman of the Board, if one is
elected, the President or the Treasurer or any other officer, employee or agent
of the Corporation as the Board of Directors or Executive Committee may
authorize.


         SECTION 4. VOTING OF SECURITIES. Unless the Board of Directors
otherwise provides, the Chairman of the Board, if one is elected, the President
or the Treasurer may waive notice of and act on behalf of this Corporation, or
appoint another person or persons to act as proxy

                                       17


<PAGE>

or attorney in fact for this Corporation with or without discretionary power
and/or power of substitution, at any meeting of stockholders or shareholders of
any other corporation or organization, any of whose securities are held by this
Corporation.

         SECTION 5. RESIDENT AGENT. The Board of Directors may appoint a
resident agent upon whom legal process may be served in any action or proceeding
against the Corporation.

         SECTION 6. CORPORATE RECORDS. The original or attested copies of the
Certificate, By-laws and records of all meetings of the incorporators,
stockholders and the Board of Directors and the stock transfer books, which
shall contain the names of all stockholders, their record addresses and the
amount of stock held by each, may be kept outside the State of Delaware and
shall be kept at the principal office of the Corporation, at the office of its
counsel or at an office of its transfer agent or at such other place or places
as may be designated from time to time by the Board of Directors.

         SECTION 7. CERTIFICATE. All references in these By-laws to the
Certificate shall be deemed to refer to the Amended and Restated Certificate of
Incorporation of the Corporation, as amended and in effect from time to time.

         SECTION 8. AMENDMENT OF BY-LAWS.

         (a) AMENDMENT BY DIRECTORS. Except as provided otherwise by law, these
By-laws may be amended or repealed by the Board of Directors by the affirmative
vote of a majority of the directors then in office.

         (b) AMENDMENT BY STOCKHOLDERS. These By-laws may be amended or repealed
at any Annual Meeting, or special meeting of stockholders called for such
purpose, by the affirmative vote of at least 75% of the shares present in person
or represented by proxy at such meeting and entitled to vote on such amendment
or repeal, voting together as a single class; provided, however, that if the
Board of Directors recommends that stockholders approve such amendment or repeal
at such meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of the majority of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class. Notwithstanding the foregoing, stockholder
approval shall not be required unless mandated by the Certificate, these
By-laws, or other applicable law.


Adopted October 26, 2000 and effective as of December 6, 2000.



                                       18




<PAGE>

                                                                    EXHIBIT 10.5

                            HARVARD BIOSCIENCE, INC.
                              EMPLOYMENT AGREEMENT

         This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
6th day of December, 2000, between Harvard Bioscience, Inc., a Delaware
corporation (the "Company"), and Chane Graziano ("Executive"). For purposes of
this Agreement the "Company" shall refer to the Company and any of its
predecessors.

         WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1. EMPLOYMENT. The term of this Agreement shall extend from December 6, 2000
(the "Commencement Date") until the second anniversary of the Commencement Date;
provided, however, that the term of this Agreement shall automatically be
extended for two additional years on each second anniversary of the Commencement
Date unless, not less than 90 days prior to each such date, either party shall
have given notice to the other that it does not wish to extend this Agreement;
provided, further, that if a Change in Control
 occurs during the original or
extended term of this Agreement, the term of this Agreement shall,
notwithstanding anything in this sentence to the contrary, continue in effect
for a period of not less than eighteen (18) months beyond the month in which the
Change in Control occurred. The term of this Agreement shall be subject to
termination as provided in Paragraph 6 and may be referred to herein as the
"Period of Employment."

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the Chief Executive Officer and member of the Board of Directors of the
Company, and shall have supervision and control over and responsibility for the
day-to-day business and affairs of those functions and operations of the Company
and shall have such other powers and duties as may from time to time be
prescribed by the Board of Directors of the Company (the "Board"), provided that
such duties are consistent with Executive's position or other positions that he
may hold from time to time. Executive shall devote his full working time and
efforts to the business and affairs of the Company. Notwithstanding the
foregoing, Executive may serve on other boards of directors, with the approval
of the Board, or engage in religious, charitable or other community activities
as long as such services and activities are disclosed to the Board and do not
materially interfere with Executive's performance of his duties to the Company
as provided in this Agreement.



<PAGE>

3. COMPENSATION AND RELATED MATTERS.

         (a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be Two Hundred Seventy-Five Thousand ($275,000) Dollars.
Executive's base salary shall be redetermined annually by the Board or a
Committee thereof. The base salary in effect at any given time is referred to
herein as "Base Salary." The Base Salary shall be payable in substantially equal
bi-weekly installments. In addition to Base Salary, Executive shall be eligible
to receive cash incentive compensation as determined by the Board or a Committee
thereof from time to time, and shall also be eligible to participate in such
incentive compensation plans as the Board or a Committee thereof shall determine
from time to time for employees of the same status within the hierarchy of the
Company.

         (b) EXPENSES. Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him in performing services
hereunder during the Period of Employment, in accordance with the policies and
procedures then in effect and established by the Company for its senior
executive officers.

         (c) OTHER BENEFITS. During the Period of Employment, Executive shall be
entitled to continue to participate in or receive benefits under all of the
Company's Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide no less favorable treatment to the Executive then the
Employee Benefit Plans provided to other members of the Company's senior
management. As used herein, the term "Employee Benefit Plans" includes, without
limitation, each pension and retirement plan; supplemental pension, retirement
and deferred compensation plan; savings and profit-sharing plan; stock ownership
plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company on the date hereof for employees of
the same status within the hierarchy of the Company. During the Period of
Employment, Executive shall be entitled to an automobile or to a lease for an
automobile (the "Company Car") for up to $1,500.00 per month and the cost of
automobile insurance for such Company Car. To the extent that the scope or
nature of benefits described in this section is determined under the policies of
the Company based in whole or in part on the seniority or tenure of an
employee's service, Executive shall be deemed to have a tenure with the Company
equal to the actual time of Executive's service with the Company. During the
Period of Employment, Executive shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement which may, in the
future, be made available by the Company to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement. Any payments or benefits
payable to Executive under a plan or arrangement referred to in this
Subparagraph 3(c) in respect of any calendar year during which Executive is
employed by the Company for less than the whole of such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.


                                       2


<PAGE>


         (d) VACATIONS. Executive shall be entitled to twenty (20) paid
vacation days in each calendar year, which shall be accrued ratably during the
calendar year. Executive shall also be entitled to all paid holidays given by
the Company to its executives. To the extent that the scope or nature of
benefits described in this section are determined under the policies of the
Company based in whole or in part on the seniority or tenure of an employee's
service, Executive shall be deemed to have a tenure with the Company equal to
the actual time of Executive's service with Company.

4.       UNAUTHORIZED DISCLOSURE.

         (a) CONFIDENTIAL INFORMATION. Executive acknowledges that in the course
of his employment with the Company (and, if applicable, its predecessors), he
has been allowed to become, and will continue to be allowed to become,
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other
confidential information and knowledge (collectively the "Confidential
Information") concerning the Company's and its affiliates' and predecessors'
business. The Company agrees to provide on an ongoing basis such Confidential
Information as the Company deems necessary or desirable to aid Executive in the
performance of his duties. Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such
Confidential Information to anyone outside the Company except to the extent that
(i) Executive deems such disclosure or use reasonably necessary or appropriate
in connection with performing his duties on behalf of the Company; (ii)
Executive is required by order of a court of competent jurisdiction (by subpoena
or similar process) to disclose or discuss any Confidential Information,
provided that in such case, Executive shall promptly inform the Company of such
event, shall cooperate with the Company in attempting to obtain a protective
order or to otherwise restrict such disclosure, and shall only disclose
Confidential Information to the minimum extent necessary to comply with any such
court order; (iii) such Confidential Information becomes generally known to and
available for use in the Company's industry (the "laboratory analytical
instruments industry"), other than as a result of any action or inaction by
Executive; or (iv) such information has been rightfully received by a member of
the laboratory analytical instruments industry or has been published in a form
generally available to the laboratory analytical instruments industry prior to
the date Executive proposes to disclose or use such information. Executive
further agrees that he will not during employment and/or at any time thereafter
use such Confidential Information in competing, directly or indirectly, with the
Company. At such time as Executive shall cease to be employed by the Company, he
will immediately turn over to the Company all Confidential Information,
including papers, documents, writings, electronically stored information, other
property, and all copies of them provided to or created by him during the course
of his employment with the Company.


                                       3


<PAGE>


         (b) HEIRS, SUCCESSORS, AND LEGAL REPRESENTATIVES. The foregoing
provisions of this Paragraph 4 shall be binding upon Executive's heirs,
successors, and legal representatives. The provisions of this Paragraph 4 shall
survive the termination of this Agreement for any reason.

5. COVENANT NOT TO COMPETE. In consideration for Executive's employment by the
Company under the terms provided in this Agreement and as a means to aid in the
performance and enforcement of the terms of the provisions of Paragraph 4,
Executive agrees that

         (a) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, as an
owner, director, principal, agent, officer, employee, partner, consultant,
servant, or otherwise, carry on, operate, manage, control, or become involved in
any manner with any business, operation, corporation, partnership, association,
agency, or other person or entity which is engaged in a business that produces
products that compete directly with any of the Company's products which are
produced by the Company or any affiliate of the Company or which the Company or
any affiliate of the Company has active plans to produce as of the date of
Executive's termination of employment with the Company, in any area or territory
in which the Company or any affiliate of the Company conducts or has active
plans to conduct operations as of the date of the Executive's termination of
employment with the Company; provided, however, that the foregoing shall not
prohibit Executive from owning up to one percent (1%) of the outstanding stock
of a publicly held company engaged in the laboratory analytical instruments
industry; and

         (b) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not hire or employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to hire or employ
any present or future employee of the Company.

         Should Executive violate any of the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Company at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.

6. TERMINATION. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:

         (a) DEATH. Executive's employment hereunder shall terminate upon his 
death.

         (b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for one 


                                       4


<PAGE>

hundred eighty (180) calendar days in the aggregate in any twelve (12) month
period, the Company may terminate Executive's employment hereunder.


         (c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board at a
meeting of the Board called and held for such purpose. For purposes of this
Agreement, "Cause" shall mean: (A) conduct by Executive constituting a material
act of willful misconduct in connection with the performance of his duties,
including, without limitation, misappropriation of funds or property of the
Company or any of its affiliates other than the occasional, customary and de
minimis use of Company property for personal purposes; (B) criminal or civil
conviction of Executive, a plea of nolo contendere by Executive or conduct by
Executive that would reasonably be expected to result in material injury to the
reputation of the Company if he were retained in his position with the Company,
including, without limitation, conviction of a felony involving moral turpitude;
(C) continued, willful and deliberate non-performance by Executive of his duties
hereunder (other than by reason of Executive's physical or mental illness,
incapacity or disability) which has continued for more than thirty (30) days
following written notice of such non-performance from the Board; (D) a breach by
Executive of any of the provisions contained in Paragraphs 4 and 5 of this
Agreement; or (E) a violation by Executive of the Company's employment policies
which has continued following written notice of such violation from the Board.

         (d) TERMINATION WITHOUT CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Board at a meeting of
the Board called and held for such purpose. Any termination by the Company of
Executive's employment under this Agreement which does not constitute a
termination for Cause under Subparagraph 6(c) or result from the death or
disability of the Executive under Subparagraph 6(a) or (b) shall be deemed a
termination without Cause. If the Company provides notice to Executive under
Paragraph 1 that it does not wish to extend the Period of Employment, such
action shall be deemed a termination without Cause.


         (e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean that Executive has complied with the "Good Reason Process" (hereinafter
defined) following the occurrence of any of the following events: (A) a
substantial diminution or other substantive adverse change, not consented to by
Executive, in the nature or scope of Executive's responsibilities, authorities,
powers, functions or duties; (B) any removal, during the Period of Employment,
from Executive of his title of Chief Executive Officer; (C) an involuntary
reduction in Executive's Base Salary except for across-the-board reductions
similarly affecting all or substantially all management employees; (D) a breach
by the Company of any of its other material obligations under this Agreement and
the failure of the Company to cure such breach 


                                       5


<PAGE>

within thirty (30) days after written notice thereof by Executive; (E) the
involuntary relocation of the Company's offices at which Executive is
principally employed or the involuntary relocation of the offices of Executive's
primary workgroup to a location more than 30 miles from such offices, or the
requirement by the Company that Executive be based anywhere other than the
Company's offices at such location on an extended basis, except for required
travel on the Company's business to an extent substantially consistent with
Executive's business travel obligations; or (F) the failure of the Company to
obtain the agreement from any successor to the Company to assume and agree to
perform this Agreement as required by Paragraph 10. "Good Reason Process" shall
mean that (i) Executive reasonably determines in good faith that a "Good Reason"
event has occurred; (ii) Executive notifies the Company in writing of the
occurrence of the Good Reason event; (iii) Executive cooperates in good faith
with the Company's efforts, for a period not less than ninety (90) days
following such notice, to modify Executive's employment situation in a manner
acceptable to Executive and Company; and (iv) notwithstanding such efforts, one
or more of the Good Reason events continues to exist and has not been modified
in a manner acceptable to Executive. If the Company cures the Good Reason event
in a manner acceptable to Executive during the ninety (90) day period, Good
Reason shall be deemed not to have occurred.

         (f) NOTICE OF TERMINATION. Except for termination as specified in
Subparagraph 6(a), any termination of Executive's employment by the Company or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.

         (g) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
6(b) or by the Company for Cause under Subparagraph 6(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 6(d), sixty (60) days after the date on which a
Notice of Termination is given; and (D) if Executive's employment is terminated
by Executive under Subparagraph 6(e), thirty (30) days after the date on which a
Notice of Termination is given.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

         (a) DEATH. If Executive's employment terminates by reason of his death,
the Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of his death, plus his accrued and unpaid
incentive compensation, if any, under Subparagraph 3(a). Upon the death of
Executive, all unvested stock options shall immediately vest in Executive's
estate or other legal representatives and become exercisable. All other
stock-based grants and awards held by Executive shall vest or be canceled upon
the death of Executive in accordance with their terms. For a period of one (1)
year following the Date of Termination, the Company shall pay such 


                                       6


<PAGE>

health insurance premiums as may be necessary to allow Executive's spouse and
dependents to receive health insurance coverage substantially similar to
coverage they received prior to the Date of Termination. In addition to the
foregoing, any payments to which Executive's spouse, beneficiaries, or estate
may be entitled under any employee benefit plan shall also be paid in accordance
with the terms of such plan or arrangement. Such payments, in the aggregate,
shall fully discharge the Company's obligations hereunder.

         (b) DISABILITY. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness,
Executive shall continue to receive his accrued and unpaid Base Salary and
accrued and unpaid incentive compensation, if any, under Subparagraph 3(a),
until Executive's employment is terminated due to disability in accordance with
Subparagraph 6(b) or until Executive terminates his employment in accordance
with Subparagraph 6(e), whichever first occurs. Upon the Date of Termination,
all unvested stock options shall immediately vest and become exercisable. All
other stock-based grants and awards held by Executive shall vest or be canceled
upon the Date of Termination in accordance with their terms. For a period of one
(1) year following the Date of Termination, the Company shall pay such health
insurance premiums as may be necessary to allow Executive and Executive's spouse
and dependents to receive health insurance coverage substantially similar to
coverage they received prior to the Date of Termination. Upon termination due to
death prior to the termination first to occur as specified in the preceding
sentence, Subparagraph 7(a) shall apply.

         (c) TERMINATION OTHER THAN FOR GOOD REASON. If Executive's employment
is terminated by Executive other than for Good Reason as provided in
Subparagraph 6(e), then the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary at the rate in effect at the time
Notice of Termination is given. Thereafter, the Company shall have no further
obligations to Executive except as otherwise expressly provided under this
Agreement, provided any such termination shall not adversely affect or alter
Executive's rights under any employee benefit plan of the Company in which
Executive, at the Date of Termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto. In addition, all vested but unexercised stock options held by
Executive as of the Date of Termination must be exercised by Executive within
three (3) months following the Date of Termination or by the end of the option
term, if earlier. All other stock-based grants and awards held by Executive
shall vest or be canceled upon the Date of Termination in accordance with their
terms.

         (d) TERMINATION FOR GOOD REASON. If Executive terminates his employment
for Good Reason as provided in Subparagraph 6(e) or if Executive's employment is
terminated by the Company without Cause as provided in Subparagraph 6(d), then
the Company shall, through the Date of Termination, pay Executive his accrued
and unpaid Base Salary at the rate in effect at the time Notice of Termination
is given and his accrued and unpaid incentive compensation, if any, under
Subparagraph 3(a). In addition, subject to signing by Executive of a general
release of claims in a form and manner satisfactory to the Company,


                                       7


<PAGE>


                  (i) the Company shall pay Executive an amount equal to two (2)
         times the sum of Executive's Average Base Salary and his Average
         Incentive Compensation (the "Severance Amount"). The Severance Amount
         shall be paid out in substantially equal bi-weekly installments over
         twelve (12) months, in arrears or in a lump sum. For purposes of this
         Agreement, "Average Base Salary" shall mean the average of the annual
         Base Salary received by Executive for each of the three (3) immediately
         preceding fiscal years or such fewer number of complete fiscal years as
         Executive may have been employed by the Company or the amount of Base
         Salary for the prior fiscal year, whichever is higher. For purposes of
         this Agreement, "Average Incentive Compensation" shall mean the average
         of the annual incentive compensation under Subparagraph 3(a) received
         by Executive for the three (3) immediately preceding fiscal years or
         such fewer number of complete fiscal years as Executive may have been
         employed by the Company or the amount of incentive compensation for the
         prior fiscal year, whichever is higher. In no event shall "Average
         Incentive Compensation" include any sign-on bonus, retention bonus or
         any other special bonus. Notwithstanding the foregoing, if the
         Executive breaches any of the provisions contained in Paragraphs 4 and
         5 of this Agreement, all payments of the Severance Amount shall
         immediately cease. Furthermore, in the event Executive terminates his
         employment for Good Reason as provided in Subparagraph 6(e), he shall
         be entitled to the Severance Amount only if he provides the Notice of
         Termination provided for in Subparagraph 6(f) within thirty (30) days
         after the occurrence of the event or events which constitute such Good
         Reason as specified in clauses (A), (B), (C), (D) and (E) of
         Subparagraph 6(e); and

                  (ii) upon the Date of Termination, each unvested stock option
         that would otherwise vest during the next twenty-four (24) months
         shall accelerate and immediately vest. All other stock-based grants
         and awards held by Executive that would otherwise vest during the next
         twenty-four (24) months shall accelerate and immediately vest upon the
         Date of Termination; and

                  (iii) in addition to any other benefits to which Executive may
         be entitled in accordance with the Company's then existing severance
         policies, the Company shall, for a period of one (1) year commencing on
         the Date of Termination, pay such health insurance premiums as may be
         necessary to allow Executive and Executive's spouse and dependents to
         continue to receive health insurance coverage.

         (e) TERMINATION FOR CAUSE. If Executive's employment is terminated by
the Company for Cause as provided in Subparagraph 6(c), then the Company shall,
through the Date of Termination, pay Executive his accrued and unpaid Base
Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as
otherwise expressly provided under this Agreement, provided any such termination
shall not adversely affect or alter Executive's rights under any employee
benefit plan of the Company in which Executive, at the Date of Termination, has
a vested interest, unless otherwise provided in such employee benefit plan or
any agreement or other instrument attendant thereto. In addition, all stock
options held by Executive as of the Date of Termination shall 


                                       8


<PAGE>

immediately terminate and be of no further force and effect, and all other
stock-based grants and awards shall be canceled or terminated in accordance with
their terms.

         (f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.

8. CHANGE IN CONTROL PAYMENT. The provisions of this Paragraph 8 set forth
certain terms of an agreement reached between Executive and the Company
regarding Executive's rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are intended to assure and encourage in
advance Executive's continued attention and dedication to his assigned duties
and his objectivity during the pendency and after the occurrence of any such
event. These provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d)(i) regarding severance pay upon a termination of
employment, if such termination of employment occurs within eighteen (18) months
after the occurrence of the first event constituting a Change of Control,
provided that such first event occurs during the Period of Employment. These
provisions shall terminate and be of no further force or effect beginning
eighteen (18) months after the occurrence of a Change of Control.

         (a) CHANGE IN CONTROL.

                  (i) If within eighteen (18) months after the occurrence of the
         first event constituting a Change in Control, Executive's employment is
         terminated by the Company without Cause as provided in Subparagraph
         6(d) or Executive terminates his employment for Good Reason as provided
         in Subparagraph 6(e), then the Company shall pay Executive a lump sum
         in cash in an amount equal to three (3) times the sum of (A)
         Executive's current or most recent Base Salary plus (B) Executive's
         most recent annual incentive compensation under Subparagraph 3(a) for
         the most recent fiscal year, excluding any sign-on bonus, retention
         bonus or any other special bonus; and

                  (ii) Notwithstanding anything to the contrary in any
         applicable option agreement or stock-based award agreement, upon a
         Change in Control, all stock options and other stock-based awards
         granted to Executive by the Company shall immediately accelerate and
         become exercisable or non-forfeitable as of the effective date of such
         Change in Control. Executive shall also be entitled to any other rights
         and benefits with respect to stock-related awards, to the extent and
         upon the terms provided in the employee stock option or incentive plan
         or any agreement or other instrument attendant thereto pursuant to
         which such options or awards were granted; and

                  (iii) The Company shall, for a period of one (1) year
         commencing on the Date of Termination, pay such health insurance
         premiums as may be necessary to allow Executive, Executive's spouse and
         dependents to continue to receive health insurance coverage
         substantially similar to the coverage they received prior to the Date
         of Termination.


                                       9


<PAGE>


         (b) GROSS UP PAYMENT.

                  (i) Anything in this Agreement to the contrary
         notwithstanding, in the event it shall be determined that any
         compensation, payment or distribution by the Company to or for the
         benefit of Executive, whether paid or payable or distributed or
         distributable pursuant to the terms of this Agreement or otherwise (the
         "Severance Payments"), would be subject to the excise tax imposed by
         Section 4999 of the Internal Revenue Code of 1986, as amended (the
         "Code"), or any interest or penalties are incurred by Executive with
         respect to such excise tax (such excise tax, together with any such
         interest and penalties, are hereinafter collectively referred to as the
         "Excise Tax"), then Executive shall be entitled to receive an
         additional payment (a "Gross-Up Payment") such that the net amount
         retained by Executive, after deduction of any Excise Tax on the
         Severance Payments, any Federal, state, and local income tax,
         employment tax and Excise Tax upon the payment provided by this
         subsection, and any interest and/or penalties assessed with respect to
         such Excise Tax, shall be equal to the Severance Payments.

                  (ii) Subject to the provisions of Subparagraph 8(b)(iii), all
         determinations required to be made under this Subparagraph 8(b)(ii),
         including whether a Gross-Up Payment is required and the amount of such
         Gross-Up Payment, shall be made by KPMG LLP or any other nationally
         recognized accounting firm selected by the Company (the "Accounting
         Firm"), which shall provide detailed supporting calculations both to
         the Company and Executive within fifteen (15) business days of the Date
         of Termination, if applicable, or at such earlier time as is reasonably
         requested by the Company or Executive. For purposes of determining the
         amount of the Gross-Up Payment, Executive shall be deemed to pay
         federal income taxes at the highest marginal rate of federal income
         taxation applicable to individuals for the calendar year in which the
         Gross-Up Payment is to be made, and state and local income taxes at the
         highest marginal rates of individual taxation in the state and locality
         of Executive's residence on the Date of Termination, net of the maximum
         reduction in federal income taxes which could be obtained from
         deduction of such state and local taxes. The initial Gross-Up Payment,
         if any, as determined pursuant to this Subparagraph 8(b)(iii), shall be
         paid to Executive within five (5) days of the receipt of the Accounting
         Firm's determination. Any determination by the Accounting Firm shall be
         binding upon the Company and Executive. As a result of the uncertainty
         in the application of Section 4999 of the Code at the time of the
         initial determination by the Accounting Firm hereunder, it is possible
         that Gross-Up Payments which will not have been made by the Company
         should have been made (an "Underpayment"). In the event that the
         Company exhausts its remedies pursuant to Subparagraph 8(b)(iii) and
         Executive thereafter is required to make a payment of any Excise Tax,
         the Accounting Firm shall determine the amount of the Underpayment that
         has occurred, consistent with the calculations required to be made
         hereunder, and any such Underpayment, and any interest and penalties
         imposed on the Underpayment and required to be paid by 


                                       10


<PAGE>

          Executive in connection with the proceedings described in Subparagraph
          8(b)(iii), shall be promptly paid by the Company to or for the benefit
          of Executive.

                  (iii) Executive shall notify the Company in writing of any
         claim by the Internal Revenue Service that, if successful, would
         require the payment by the Company of the Gross-up Payment. Such
         notification shall be given as soon as practicable but no later than
         ten (10) business days after Executive knows of such claim and shall
         apprise the Company of the nature of such claim and the date on which
         such claim is requested to be paid. Executive shall not pay such claim
         prior to the expiration of the 30-day period following the date on
         which he gives such notice to the Company (or such shorter period
         ending on the date that any payment of taxes with respect to such claim
         is due). If the Company notifies Executive in writing prior to the
         expiration of such period that it desires to contest such claim,
         provided that the Company has set aside adequate reserves to cover the
         Underpayment and any interest and penalties thereon that may accrue,
         Executive shall:

                           (A) give the Company any information reasonably 
                  requested by the Company relating to such claim,

                           (B) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an attorney
                  selected by the Company,

                           (C) cooperate with the Company in good faith in order
                  to effectively contest such claim, and

                           (D) permit the Company to participate in any
                  proceedings relating to such claim; provided, however, that
                  the Company shall bear and pay directly all costs and expenses
                  (including additional interest and penalties) incurred in
                  connection with such contest and shall indemnify and hold
                  Executive harmless, on an after-tax basis, for any Excise Tax
                  or income tax, including interest and penalties with respect
                  thereto, imposed as a result of such representation and
                  payment of costs and expenses. Without limitation on the
                  foregoing provisions of this Subparagraph 8(b)(iii), the
                  Company shall control all proceedings taken in connection with
                  such contest and, at its sole option, may pursue or forego any
                  and all administrative appeals, proceedings, hearings and
                  conferences with the taxing authority in respect of such claim
                  and may, at its sole option, either direct Executive to pay
                  the tax claimed and sue for a refund or contest the claim in
                  any permissible manner, and Executive agrees to prosecute such
                  contest to a determination before any administrative tribunal,
                  in a court of initial jurisdiction and in one or more
                  appellate courts, as the Company shall determine; provided,
                  however, that if the Company directs Executive to pay such
                  claim and sue for a refund, the Company shall advance the
                  amount of such payment to Executive on 


                                       11


<PAGE>


                  an interest-free basis and shall indemnify and hold
                  Executive harmless, on an after-tax basis, from any Excise
                  Tax or income tax, including interest or penalties with
                  respect thereto, imposed with respect to such advance or
                  with respect to any imputed income with respect to such
                  advance; and further provided that any extension of the
                  statute of limitations relating to payment of taxes for the
                  taxable year of Executive with respect to which such
                  contested amount is claimed to be due is limited solely to
                  such contested amount. Furthermore, the Company's control of
                  the contest shall be limited to issues with respect to which
                  a Gross-Up Payment would be payable hereunder and Executive
                  shall be entitled to settle or contest, as the case may be,
                  any other issues raised by the Internal Revenue Service or
                  any other taxing authority.

                  (iv) If, after the receipt by Executive of an amount advanced
         by the Company pursuant to Subparagraph 8(b)(iii), Executive becomes
         entitled to receive any refund with respect to such claim, Executive
         shall (subject to the Company's complying with the requirements of
         Subparagraph 8(b)(iii)) promptly pay to the Company the amount of such
         refund (together with any interest paid or credited thereon after taxes
         applicable thereto). If, after the receipt by Executive of an amount
         advanced by the Company pursuant to Subparagraph 8(b)(iii), a
         determination is made that Executive shall not be entitled to any
         refund with respect to such claim and the Company does not notify
         Executive in writing of its intent to contest such denial of refund
         prior to the expiration of 30 days after such determination, then such
         advance shall be forgiven and shall not be required to be repaid and
         the amount of such advance shall offset, to the extent thereof, the
         amount of Gross-Up Payment required to be paid.

         (c) DEFINITIONS. For purposes of this Paragraph 8, the following terms
shall have the following meanings:

         "CHANGE IN CONTROL" shall mean any of the following:

                  (a) any "person," as such term is used in Sections 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
         (other than the Company, any of its subsidiaries, or any trustee,
         fiduciary or other person or entity holding securities under any
         employee benefit plan or trust of the Company or any of its
         subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such person, shall
         become the "beneficial owner" (as such term is defined in Rule 13d-3
         under the Act), directly or indirectly, of securities of the Company
         representing twenty-five percent (25%) or more of either (A) the
         combined voting power of the Company's then outstanding securities
         having the right to vote in an election of the Company's Board ("Voting
         Securities") or (B) the then outstanding shares of Company's common
         stock, par value $0.01 per share ("Common Stock") (other than as a
         result of an acquisition of securities directly from the Company); or


                                       12


<PAGE>


                  (b) persons who, as of the Commencement Date, constitute the
         Company's Board (the "Incumbent Directors") cease for any reason,
         including, without limitation, as a result of a tender offer, proxy
         contest, merger or similar transaction, to constitute at least a
         majority of the Board, provided that any person becoming a director of
         the Company subsequent to the Commencement Date shall be considered an
         Incumbent Director if such person's election was approved by or such
         person was nominated for election by a vote of at least a majority of
         the Incumbent Directors; but provided further, that any such person
         whose initial assumption of office is in connection with an actual or
         threatened election contest relating to the election of members of the
         Board or other actual or threatened solicitation of proxies or consents
         by or on behalf of a person other than the Board, including by reason
         of agreement intended to avoid or settle any such actual or threatened
         contest or solicitation, shall not be considered an Incumbent Director;
         or

                  (c) the stockholders of the Company shall approve (A) any
         consolidation or merger of the Company where the stockholders of the
         Company, immediately prior to the consolidation or merger, would not,
         immediately after the consolidation or merger, beneficially own (as
         such term is defined in Rule 13d-3 under the Act), directly or
         indirectly, shares representing in the aggregate more than fifty
         percent (50%) of the voting shares of the Company issuing cash or
         securities in the consolidation or merger (or of its ultimate parent
         corporation, if any), (B) any sale, lease, exchange or other transfer
         (in one transaction or a series of transactions contemplated or
         arranged by any party as a single plan) of all or substantially all of
         the assets of the Company or (C) any plan or proposal for the
         liquidation or dissolution of the Company.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
twenty-five percent (25%) or more of either (A) the combined voting power of all
of the then outstanding Voting Securities or (B) Common Stock; PROVIDED,
HOWEVER, that if any person referred to in this sentence shall thereafter become
the beneficial owner of any additional shares of Voting Securities or Common
Stock (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company) and immediately thereafter beneficially owns twenty-five percent (25%)
or more of either (A) the combined voting power of all of the then outstanding
Voting Securities or (B) Common Stock, then a "Change of Control" shall be
deemed to have occurred for purposes of the foregoing clause (a).

9. NOTICE. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified mail, return
receipt requested, postage prepaid, addressed as follows:


                                       13


<PAGE>


         if to the Executive:

                  At his home address as shown
                  in the Company's personnel records;

         if to the Company:

                  Harvard Bioscience, Inc.
                  84 October Hill Road
                  Holliston, MA 01746-1371
                  Attention:  Board of Directors of Harvard Bioscience, Inc.

         with a copy to:

                  H. David Henken, P.C.
                  Goodwin, Procter & Hoar  LLP
                  Exchange Place
                  Boston, MA 02109

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

10. SUCCESSOR TO COMPANY. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a breach of this Agreement and shall constitute Good
Reason if the Executive elects to terminate employment.

11. MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

12. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this 


                                       14


<PAGE>

Agreement, which shall remain in full force and effect. The invalid portion of
this Agreement, if any, shall be modified by any court having jurisdiction to
the extent necessary to render such portion enforceable.

13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

14. ARBITRATION; OTHER DISPUTES. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first
promptly try in good faith to settle such dispute or controversy by mediation
under the applicable rules of the American Arbitration Association before
resorting to arbitration. In the event such dispute or controversy remains
unresolved in whole or in part for a period of thirty (30) days after it arises,
the parties will settle any remaining dispute or controversy exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding the above,
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
Paragraph 4 or 5 hereof. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as described in Subparagraph 6(b), 6(c)
or 7(b), a doctor selected by Executive and a doctor selected by the Company
shall be entitled to examine Executive. If the opinion of the Company's doctor
and Executive's doctor conflict, the Company's doctor and Executive's doctor
shall together agree upon a third doctor, whose opinion shall be binding.

15. THIRD-PARTY AGREEMENTS AND RIGHTS. Executive represents to the Company that
Executive's execution of this Agreement, Executive's employment with the Company
and the performance of Executive's proposed duties for the Company will not
violate any obligations Executive may have to any employer or other party, and
Executive will not bring to the premises of the Company any copies or other
tangible embodiments of non-public information belonging to or obtained from any
such previous employment or other party.

16. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. Executive's cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after Executive's
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
also provide Executive with compensation on 



                                       15


<PAGE>

an hourly basis at a rate of $147.53 for requested litigation and regulatory
cooperation that occurs after his termination of employment, and reimburse
Executive for all costs and expenses incurred in connection with his performance
under this Paragraph 16, including, but not limited to, reasonable attorneys'
fees and costs.

17. GENDER NEUTRAL. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

                                    HARVARD BIOSCIENCE, INC.

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

                                    EXECUTIVE

                                    /s/ Chane Graziano
                                    -------------------------------------
                                    Chane Graziano






                                       16



<PAGE>

                                                                    EXHIBIT 10.6

                            HARVARD BIOSCIENCE, INC.
                              EMPLOYMENT AGREEMENT

         This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
6th day of December, 2000, between Harvard Bioscience, Inc., a Delaware
corporation (the "Company"), and David Green ("Executive"). For purposes of this
Agreement the "Company" shall refer to the Company and any of its predecessors.

         WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1. EMPLOYMENT. The term of this Agreement shall extend from December 6, 2000
(the "Commencement Date") until the second anniversary of the Commencement Date;
provided, however, that the term of this Agreement shall automatically be
extended for two additional years on each second anniversary of the Commencement
Date unless, not less than 90 days prior to each such date, either party shall
have given notice to the other that it does not wish to extend this Agreement;
provided, further, that if a Change in Control
 occurs during the original or
extended term of this Agreement, the term of this Agreement shall,
notwithstanding anything in this sentence to the contrary, continue in effect
for a period of not less than eighteen (18) months beyond the month in which the
Change in Control occurred. The term of this Agreement shall be subject to
termination as provided in Paragraph 6 and may be referred to herein as the
"Period of Employment."

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the President and member of the Board of Directors of the Company and shall
have such powers and duties as may from time to time be prescribed by the Board
of Directors (the "Board") or the Chief Executive Officer of the Company,
provided that such duties are consistent with Executive's position or other
positions that he may hold from time to time. Executive shall devote his full
working time and efforts to the business and affairs of the Company.
Notwithstanding the foregoing, Executive may serve on other boards of directors,
with the approval of the Board, or engage in religious, charitable or other
community activities as long as such services and activities are disclosed to
the Board and do not materially interfere with Executive's performance of his
duties to the Company as provided in this Agreement.

3. COMPENSATION AND RELATED MATTERS.

         (a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be Two Hundred Twenty-Five Thousand ($225,000) Dollars.
Executive's base salary shall be redetermined annually by the Board or a
Committee thereof. The base salary in effect at any 



<PAGE>


given time is referred to herein as "Base Salary." The Base Salary shall be
payable in substantially equal bi-weekly installments. In addition to Base
Salary, Executive shall be eligible to receive cash incentive compensation as
determined by the Board or a Committee thereof from time to time, and shall also
be eligible to participate in such incentive compensation plans as the Board or
a Committee thereof shall determine from time to time for employees of the same
status within the hierarchy of the Company.

         (b) EXPENSES. Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him in performing services
hereunder during the Period of Employment, in accordance with the policies and
procedures then in effect and established by the Company for its senior
executive officers.

         (c) OTHER BENEFITS. During the Period of Employment, Executive shall be
entitled to continue to participate in or receive benefits under all of the
Company's Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide no less favorable treatment to the Executive then the
Employee Benefit Plans provided to other members of the Company's senior
management. As used herein, the term "Employee Benefit Plans" includes, without
limitation, each pension and retirement plan; supplemental pension, retirement
and deferred compensation plan; savings and profit-sharing plan; stock ownership
plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company on the date hereof for employees of
the same status within the hierarchy of the Company. During the Period of
Employment, Executive shall be entitled to an automobile or to a lease for an
automobile (the "Company Car") for up to $1,500.00 per month and the cost of
automobile insurance for such Company Car. To the extent that the scope or
nature of benefits described in this section is determined under the policies of
the Company based in whole or in part on the seniority or tenure of an
employee's service, Executive shall be deemed to have a tenure with the Company
equal to the actual time of Executive's service with the Company. During the
Period of Employment, Executive shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement which may, in the
future, be made available by the Company to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement. Any payments or benefits
payable to Executive under a plan or arrangement referred to in this
Subparagraph 3(c) in respect of any calendar year during which Executive is
employed by the Company for less than the whole of such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.

         (d) VACATIONS. Executive shall be entitled to twenty (20) paid
vacation days in each calendar year, which shall be accrued ratably during the
calendar year. Executive shall also be entitled to all paid holidays given by
the Company to its executives. To the extent that the scope or nature of
benefits described in this section are determined under the policies of the
Company based in whole or in part on the seniority or tenure of an employee's
service, Executive 


                                       2


<PAGE>

shall be deemed to have a tenure with the Company equal to the actual time of
Executive's service with Company.

4. UNAUTHORIZED DISCLOSURE.

         (a) CONFIDENTIAL INFORMATION. Executive acknowledges that in the course
of his employment with the Company (and, if applicable, its predecessors), he
has been allowed to become, and will continue to be allowed to become,
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other
confidential information and knowledge (collectively the "Confidential
Information") concerning the Company's and its affiliates' and predecessors'
business. The Company agrees to provide on an ongoing basis such Confidential
Information as the Company deems necessary or desirable to aid Executive in the
performance of his duties. Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such
Confidential Information to anyone outside the Company except to the extent that
(i) Executive deems such disclosure or use reasonably necessary or appropriate
in connection with performing his duties on behalf of the Company; (ii)
Executive is required by order of a court of competent jurisdiction (by subpoena
or similar process) to disclose or discuss any Confidential Information,
provided that in such case, Executive shall promptly inform the Company of such
event, shall cooperate with the Company in attempting to obtain a protective
order or to otherwise restrict such disclosure, and shall only disclose
Confidential Information to the minimum extent necessary to comply with any such
court order; (iii) such Confidential Information becomes generally known to and
available for use in the Company's industry (the "laboratory analytical
instruments industry"), other than as a result of any action or inaction by
Executive; or (iv) such information has been rightfully received by a member of
the laboratory analytical instruments industry or has been published in a form
generally available to the laboratory analytical instruments industry prior to
the date Executive proposes to disclose or use such information. Executive
further agrees that he will not during employment and/or at any time thereafter
use such Confidential Information in competing, directly or indirectly, with the
Company. At such time as Executive shall cease to be employed by the Company, he
will immediately turn over to the Company all Confidential Information,
including papers, documents, writings, electronically stored information, other
property, and all copies of them provided to or created by him during the course
of his employment with the Company.

         (b) HEIRS, SUCCESSORS, AND LEGAL REPRESENTATIVES. The foregoing
provisions of this Paragraph 4 shall be binding upon Executive's heirs,
successors, and legal representatives. The provisions of this Paragraph 4 shall
survive the termination of this Agreement for any reason.

5. COVENANT NOT TO COMPETE. In consideration for Executive's employment by the
Company under the terms provided in this Agreement and as a means to aid in the
performance and enforcement of the terms of the provisions of Paragraph 4,
Executive agrees that


                                       3



<PAGE>

         (a) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, as an
owner, director, principal, agent, officer, employee, partner, consultant,
servant, or otherwise, carry on, operate, manage, control, or become involved in
any manner with any business, operation, corporation, partnership, association,
agency, or other person or entity which is engaged in a business that produces
products that compete directly with any of the Company's products which are
produced by the Company or any affiliate of the Company or which the Company or
any affiliate of the Company has active plans to produce as of the date of
Executive's termination of employment with the Company, in any area or territory
in which the Company or any affiliate of the Company conducts or has active
plans to conduct operations as of the date of the Executive's termination of
employment with the Company; provided, however, that the foregoing shall not
prohibit Executive from owning up to one percent (1%) of the outstanding stock
of a publicly held company engaged in the laboratory analytical instruments
industry; and

         (b) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not hire or employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to hire or employ
any present or future employee of the Company.

         Should Executive violate any of the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Company at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.

6. TERMINATION. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:

         (a) DEATH. Executive's employment hereunder shall terminate upon his 
death.

         (b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for one hundred eighty (180) calendar days in the
aggregate in any twelve (12) month period, the Company may terminate Executive's
employment hereunder.

         (c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board at a
meeting of the Board called and held for such purpose. For purposes of this
Agreement, "Cause" shall mean: (A) conduct by Executive constituting a material
act of willful misconduct in connection with the performance of 


                                       4


<PAGE>

his duties, including, without limitation, misappropriation of funds or property
of the Company or any of its affiliates other than the occasional, customary and
de minimis use of Company property for personal purposes; (B) criminal or civil
conviction of Executive, a plea of nolo contendere by Executive or conduct by
Executive that would reasonably be expected to result in material injury to the
reputation of the Company if he were retained in his position with the Company,
including, without limitation, conviction of a felony involving moral turpitude;
(C) continued, willful and deliberate non-performance by Executive of his duties
hereunder (other than by reason of Executive's physical or mental illness,
incapacity or disability) which has continued for more than thirty (30) days
following written notice of such non-performance from the Board; (D) a breach by
Executive of any of the provisions contained in Paragraphs 4 and 5 of this
Agreement; or (E) a violation by Executive of the Company's employment policies
which has continued following written notice of such violation from the Board.

         (d) TERMINATION WITHOUT CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Board at a meeting of
the Board called and held for such purpose. Any termination by the Company of
Executive's employment under this Agreement which does not constitute a
termination for Cause under Subparagraph 6(c) or result from the death or
disability of the Executive under Subparagraph 6(a) or (b) shall be deemed a
termination without Cause. If the Company provides notice to Executive under
Paragraph 1 that it does not wish to extend the Period of Employment, such
action shall be deemed a termination without Cause.

         (e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean that Executive has complied with the "Good Reason Process" (hereinafter
defined) following the occurrence of any of the following events: (A) a
substantial diminution or other substantive adverse change, not consented to by
Executive, in the nature or scope of Executive's responsibilities, authorities,
powers, functions or duties; (B) any removal, during the Period of Employment,
from Executive of his title of President; (C) an involuntary reduction in
Executive's Base Salary except for across-the-board reductions similarly
affecting all or substantially all management employees; (D) a breach by the
Company of any of its other material obligations under this Agreement and the
failure of the Company to cure such breach within thirty (30) days after written
notice thereof by Executive; (E) the involuntary relocation of the Company's
offices at which Executive is principally employed or the involuntary relocation
of the offices of Executive's primary workgroup to a location more than 30 miles
from such offices, or the requirement by the Company that Executive be based
anywhere other than the Company's offices at such location on an extended basis,
except for required travel on the Company's business to an extent substantially
consistent with Executive's business travel obligations; or (F) the failure of
the Company to obtain the agreement from any successor to the Company to assume
and agree to perform this Agreement as required by Paragraph 10. "Good Reason
Process" shall mean that (i) Executive reasonably determines in good faith that
a "Good Reason" event has occurred; (ii) 


                                       5


<PAGE>

Executive notifies the Company in writing of the occurrence of the Good Reason
event; (iii) Executive cooperates in good faith with the Company's efforts, for
a period not less than ninety (90) days following such notice, to modify
Executive's employment situation in a manner acceptable to Executive and
Company; and (iv) notwithstanding such efforts, one or more of the Good Reason
events continues to exist and has not been modified in a manner acceptable to
Executive. If the Company cures the Good Reason event in a manner acceptable to
Executive during the ninety (90) day period, Good Reason shall be deemed not to
have occurred.

         (f) NOTICE OF TERMINATION. Except for termination as specified in
Subparagraph 6(a), any termination of Executive's employment by the Company or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.

         (g) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
6(b) or by the Company for Cause under Subparagraph 6(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 6(d), sixty (60) days after the date on which a
Notice of Termination is given; and (D) if Executive's employment is terminated
by Executive under Subparagraph 6(e), thirty (30) days after the date on which a
Notice of Termination is given.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

         (a) DEATH. If Executive's employment terminates by reason of his death,
the Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of his death, plus his accrued and unpaid
incentive compensation, if any, under Subparagraph 3(a). Upon the death of
Executive, all unvested stock options shall immediately vest in Executive's
estate or other legal representatives and become exercisable. All other
stock-based grants and awards held by Executive shall vest or be canceled upon
the death of Executive in accordance with their terms. For a period of one (1)
year following the Date of Termination, the Company shall pay such health
insurance premiums as may be necessary to allow Executive's spouse and
dependents to receive health insurance coverage substantially similar to
coverage they received prior to the Date of Termination. In addition to the
foregoing, any payments to which Executive's spouse, beneficiaries, or estate
may be entitled under any employee benefit plan shall also be paid in accordance
with the terms of such plan or arrangement. Such payments, in the aggregate,
shall fully discharge the Company's obligations hereunder.

         (b) DISABILITY. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness,
Executive shall continue to receive his accrued and unpaid Base Salary and
accrued and unpaid incentive compensation, if 


                                       6


<PAGE>

any, under Subparagraph 3(a), until Executive's employment is terminated due to
disability in accordance with Subparagraph 6(b) or until Executive terminates
his employment in accordance with Subparagraph 6(e), whichever first occurs.
Upon the Date of Termination, all unvested stock options shall immediately vest
and become exercisable. All other stock-based grants and awards held by
Executive shall vest or be canceled upon the Date of Termination in accordance
with their terms. For a period of one (1) year following the Date of
Termination, the Company shall pay such health insurance premiums as may be
necessary to allow Executive and Executive's spouse and dependents to receive
health insurance coverage substantially similar to coverage they received prior
to the Date of Termination. Upon termination due to death prior to the
termination first to occur as specified in the preceding sentence, Subparagraph
7(a) shall apply.

         (c) TERMINATION OTHER THAN FOR GOOD REASON. If Executive's employment
is terminated by Executive other than for Good Reason as provided in
Subparagraph 6(e), then the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary at the rate in effect at the time
Notice of Termination is given. Thereafter, the Company shall have no further
obligations to Executive except as otherwise expressly provided under this
Agreement, provided any such termination shall not adversely affect or alter
Executive's rights under any employee benefit plan of the Company in which
Executive, at the Date of Termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto. In addition, all vested but unexercised stock options held by
Executive as of the Date of Termination must be exercised by Executive within
three (3) months following the Date of Termination or by the end of the option
term, if earlier. All other stock-based grants and awards held by Executive
shall vest or be canceled upon the Date of Termination in accordance with their
terms.

         (d) TERMINATION FOR GOOD REASON. If Executive terminates his employment
for Good Reason as provided in Subparagraph 6(e) or if Executive's employment is
terminated by the Company without Cause as provided in Subparagraph 6(d), then
the Company shall, through the Date of Termination, pay Executive his accrued
and unpaid Base Salary at the rate in effect at the time Notice of Termination
is given and his accrued and unpaid incentive compensation, if any, under
Subparagraph 3(a). In addition, subject to signing by Executive of a general
release of claims in a form and manner satisfactory to the Company,

                  (i) the Company shall pay Executive an amount equal to two (2)
         times the sum of Executive's Average Base Salary and his Average
         Incentive Compensation (the "Severance Amount"). The Severance Amount
         shall be paid out in substantially equal bi-weekly installments over
         twelve (12) months, in arrears or in a lump sum. For purposes of this
         Agreement, "Average Base Salary" shall mean the average of the annual
         Base Salary received by Executive for each of the three (3) immediately
         preceding fiscal years or such fewer number of complete fiscal years as
         Executive may have been employed by the Company or the amount of Base
         Salary for the prior fiscal year, whichever is higher. For purposes of
         this Agreement, "Average Incentive Compensation" shall mean the average
         of the annual incentive compensation under Subparagraph 3(a) received
         by 


                                       7


<PAGE>

         Executive for the three (3) immediately preceding fiscal years or
         such fewer number of complete fiscal years as Executive may have been
         employed by the Company or the amount of incentive compensation for the
         prior fiscal year, whichever is higher. In no event shall "Average
         Incentive Compensation" include any sign-on bonus, retention bonus or
         any other special bonus. Notwithstanding the foregoing, if the
         Executive breaches any of the provisions contained in Paragraphs 4 and
         5 of this Agreement, all payments of the Severance Amount shall
         immediately cease. Furthermore, in the event Executive terminates his
         employment for Good Reason as provided in Subparagraph 6(e), he shall
         be entitled to the Severance Amount only if he provides the Notice of
         Termination provided for in Subparagraph 6(f) within thirty (30) days
         after the occurrence of the event or events which constitute such Good
         Reason as specified in clauses (A), (B), (C), (D) and (E) of
         Subparagraph 6(e); and

                  (ii) upon the Date of Termination, each unvested stock option
         that would otherwise vest during the next twenty-four (24) months shall
         accelerate and immediately vest. All other stock-based grants and
         awards held by Executive that would otherwise vest during the next
         twenty-four (24) months shall accelerate and immediately vest upon the
         Date of Termination; and

                  (iii) in addition to any other benefits to which Executive may
         be entitled in accordance with the Company's then existing severance
         policies, the Company shall, for a period of one (1) year commencing on
         the Date of Termination, pay such health insurance premiums as may be
         necessary to allow Executive and Executive's spouse and dependents to
         continue to receive health insurance coverage.

         (e) TERMINATION FOR CAUSE. If Executive's employment is terminated by
the Company for Cause as provided in Subparagraph 6(c), then the Company shall,
through the Date of Termination, pay Executive his accrued and unpaid Base
Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as
otherwise expressly provided under this Agreement, provided any such termination
shall not adversely affect or alter Executive's rights under any employee
benefit plan of the Company in which Executive, at the Date of Termination, has
a vested interest, unless otherwise provided in such employee benefit plan or
any agreement or other instrument attendant thereto. In addition, all stock
options held by Executive as of the Date of Termination shall immediately
terminate and be of no further force and effect, and all other stock-based
grants and awards shall be canceled or terminated in accordance with their
terms.

         (f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.

8. CHANGE IN CONTROL PAYMENT. The provisions of this Paragraph 8 set forth
certain terms of an agreement reached between Executive and the Company
regarding Executive's rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are 


                                       8


<PAGE>

intended to assure and encourage in advance Executive's continued attention and
dedication to his assigned duties and his objectivity during the pendency and
after the occurrence of any such event. These provisions shall apply in lieu of,
and expressly supersede, the provisions of Subparagraph 7(d)(i) regarding
severance pay upon a termination of employment, if such termination of
employment occurs within eighteen (18) months after the occurrence of the first
event constituting a Change of Control, provided that such first event occurs
during the Period of Employment. These provisions shall terminate and be of no
further force or effect beginning eighteen (18) months after the occurrence of a
Change of Control.

         (a) CHANGE IN CONTROL.

                  (i) If within eighteen (18) months after the occurrence of the
         first event constituting a Change in Control, Executive's employment is
         terminated by the Company without Cause as provided in Subparagraph
         6(d) or Executive terminates his employment for Good Reason as provided
         in Subparagraph 6(e), then the Company shall pay Executive a lump sum
         in cash in an amount equal to three (3) times the sum of (A)
         Executive's current or most recent Base Salary plus (B) Executive's
         most recent annual incentive compensation under Subparagraph 3(a) for
         the most recent fiscal year, excluding any sign-on bonus, retention
         bonus or any other special bonus; and

                  (ii) Notwithstanding anything to the contrary in any
         applicable option agreement or stock-based award agreement, upon a
         Change in Control, all stock options and other stock-based awards
         granted to Executive by the Company shall immediately accelerate and
         become exercisable or non-forfeitable as of the effective date of such
         Change in Control. Executive shall also be entitled to any other rights
         and benefits with respect to stock-related awards, to the extent and
         upon the terms provided in the employee stock option or incentive plan
         or any agreement or other instrument attendant thereto pursuant to
         which such options or awards were granted; and

                  (iii) The Company shall, for a period of one (1) year
         commencing on the Date of Termination, pay such health insurance
         premiums as may be necessary to allow Executive, Executive's spouse and
         dependents to continue to receive health insurance coverage
         substantially similar to the coverage they received prior to the Date
         of Termination.

         (b) GROSS UP PAYMENT.

                  (i) Anything in this Agreement to the contrary
         notwithstanding, in the event it shall be determined that any
         compensation, payment or distribution by the Company to or for the
         benefit of Executive, whether paid or payable or distributed or
         distributable pursuant to the terms of this Agreement or otherwise (the
         "Severance Payments"), would be subject to the excise tax imposed by
         Section 4999 of the Internal Revenue Code of 1986, as amended (the
         "Code"), or any interest or penalties are incurred by Executive with
         respect to such excise tax (such excise tax, together with


                                       9


<PAGE>

         any such interest and penalties, are hereinafter collectively referred 
         to as the "Excise Tax"), then Executive shall be entitled to receive an
         additional payment (a "Gross-Up Payment") such that the net amount
         retained by Executive, after deduction of any Excise Tax on the
         Severance Payments, any Federal, state, and local income tax,
         employment tax and Excise Tax upon the payment provided by this
         subsection, and any interest and/or penalties assessed with respect to
         such Excise Tax, shall be equal to the Severance Payments.

                  (ii) Subject to the provisions of Subparagraph 8(b)(iii), all
         determinations required to be made under this Subparagraph 8(b)(ii),
         including whether a Gross-Up Payment is required and the amount of such
         Gross-Up Payment, shall be made by KPMG LLP or any other nationally
         recognized accounting firm selected by the Company (the "Accounting
         Firm"), which shall provide detailed supporting calculations both to
         the Company and Executive within fifteen (15) business days of the Date
         of Termination, if applicable, or at such earlier time as is reasonably
         requested by the Company or Executive. For purposes of determining the
         amount of the Gross-Up Payment, Executive shall be deemed to pay
         federal income taxes at the highest marginal rate of federal income
         taxation applicable to individuals for the calendar year in which the
         Gross-Up Payment is to be made, and state and local income taxes at the
         highest marginal rates of individual taxation in the state and locality
         of Executive's residence on the Date of Termination, net of the maximum
         reduction in federal income taxes which could be obtained from
         deduction of such state and local taxes. The initial Gross-Up Payment,
         if any, as determined pursuant to this Subparagraph 8(b)(iii), shall be
         paid to Executive within five (5) days of the receipt of the Accounting
         Firm's determination. Any determination by the Accounting Firm shall be
         binding upon the Company and Executive. As a result of the uncertainty
         in the application of Section 4999 of the Code at the time of the
         initial determination by the Accounting Firm hereunder, it is possible
         that Gross-Up Payments which will not have been made by the Company
         should have been made (an "Underpayment"). In the event that the
         Company exhausts its remedies pursuant to Subparagraph 8(b)(iii) and
         Executive thereafter is required to make a payment of any Excise Tax,
         the Accounting Firm shall determine the amount of the Underpayment that
         has occurred, consistent with the calculations required to be made
         hereunder, and any such Underpayment, and any interest and penalties
         imposed on the Underpayment and required to be paid by Executive in
         connection with the proceedings described in Subparagraph 8(b)(iii),
         shall be promptly paid by the Company to or for the benefit of
         Executive.

                  (iii) Executive shall notify the Company in writing of any
         claim by the Internal Revenue Service that, if successful, would
         require the payment by the Company of the Gross-up Payment. Such
         notification shall be given as soon as practicable but no later than
         ten (10) business days after Executive knows of such claim and shall
         apprise the Company of the nature of such claim and the date on which
         such claim is requested to be paid. Executive shall not pay such claim
         prior to the expiration of the 30-day period following the date on
         which he gives such notice to the Company


                                       10


<PAGE>

         (or such shorter period ending on the date that any payment of taxes
         with respect to such claim is due). If the Company notifies Executive
         in writing prior to the expiration of such period that it desires to
         contest such claim, provided that the Company has set aside adequate
         reserves to cover the Underpayment and any interest and penalties
         thereon that may accrue, Executive shall:

                           (A) give the Company any information reasonably 
                  requested by the Company relating to such claim,

                           (B) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an attorney
                  selected by the Company,

                           (C) cooperate with the Company in good faith in order
                  to effectively contest such claim, and

                           (D) permit the Company to participate in any
                  proceedings relating to such claim; provided, however, that
                  the Company shall bear and pay directly all costs and expenses
                  (including additional interest and penalties) incurred in
                  connection with such contest and shall indemnify and hold
                  Executive harmless, on an after-tax basis, for any Excise Tax
                  or income tax, including interest and penalties with respect
                  thereto, imposed as a result of such representation and
                  payment of costs and expenses. Without limitation on the
                  foregoing provisions of this Subparagraph 8(b)(iii), the
                  Company shall control all proceedings taken in connection with
                  such contest and, at its sole option, may pursue or forego any
                  and all administrative appeals, proceedings, hearings and
                  conferences with the taxing authority in respect of such claim
                  and may, at its sole option, either direct Executive to pay
                  the tax claimed and sue for a refund or contest the claim in
                  any permissible manner, and Executive agrees to prosecute such
                  contest to a determination before any administrative tribunal,
                  in a court of initial jurisdiction and in one or more
                  appellate courts, as the Company shall determine; provided,
                  however, that if the Company directs Executive to pay such
                  claim and sue for a refund, the Company shall advance the
                  amount of such payment to Executive on an interest-free basis
                  and shall indemnify and hold Executive harmless, on an
                  after-tax basis, from any Excise Tax or income tax, including
                  interest or penalties with respect thereto, imposed with
                  respect to such advance or with respect to any imputed income
                  with respect to such advance; and further provided that any
                  extension of the statute of limitations relating to payment of
                  taxes for the taxable year of Executive with respect to which
                  such contested amount is claimed to be due is limited solely
                  to such contested amount. Furthermore, the Company's control
                  of the contest shall be limited to issues with respect to
                  which a Gross-Up Payment would be payable hereunder and


                                       11


<PAGE>

                  Executive shall be entitled to settle or contest, as the case
                  may be, any other issues raised by the Internal Revenue
                  Service or any other taxing authority.

                  (iv) If, after the receipt by Executive of an amount advanced
         by the Company pursuant to Subparagraph 8(b)(iii), Executive becomes
         entitled to receive any refund with respect to such claim, Executive
         shall (subject to the Company's complying with the requirements of
         Subparagraph 8(b)(iii)) promptly pay to the Company the amount of such
         refund (together with any interest paid or credited thereon after taxes
         applicable thereto). If, after the receipt by Executive of an amount
         advanced by the Company pursuant to Subparagraph 8(b)(iii), a
         determination is made that Executive shall not be entitled to any
         refund with respect to such claim and the Company does not notify
         Executive in writing of its intent to contest such denial of refund
         prior to the expiration of 30 days after such determination, then such
         advance shall be forgiven and shall not be required to be repaid and
         the amount of such advance shall offset, to the extent thereof, the
         amount of Gross-Up Payment required to be paid.

         (c) DEFINITIONS. For purposes of this Paragraph 8, the following terms
shall have the following meanings:

         "CHANGE IN CONTROL" shall mean any of the following:

                  (a) any "person," as such term is used in Sections 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
         (other than the Company, any of its subsidiaries, or any trustee,
         fiduciary or other person or entity holding securities under any
         employee benefit plan or trust of the Company or any of its
         subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such person, shall
         become the "beneficial owner" (as such term is defined in Rule 13d-3
         under the Act), directly or indirectly, of securities of the Company
         representing twenty-five percent (25%) or more of either (A) the
         combined voting power of the Company's then outstanding securities
         having the right to vote in an election of the Company's Board ("Voting
         Securities") or (B) the then outstanding shares of Company's common
         stock, par value $0.01 per share ("Common Stock") (other than as a
         result of an acquisition of securities directly from the Company); or

                  (b) persons who, as of the Commencement Date, constitute the
         Company's Board (the "Incumbent Directors") cease for any reason,
         including, without limitation, as a result of a tender offer, proxy
         contest, merger or similar transaction, to constitute at least a
         majority of the Board, provided that any person becoming a director of
         the Company subsequent to the Commencement Date shall be considered an
         Incumbent Director if such person's election was approved by or such
         person was nominated for election by a vote of at least a majority of
         the Incumbent Directors; but provided further, that any such person
         whose initial assumption of office is in connection with an actual or
         threatened election contest relating to the election of members of the
         Board or other actual or threatened solicitation of proxies or consents
         by or on behalf of a person other


                                       12


<PAGE>

         than the Board, including by reason of agreement intended to avoid or
         settle any such actual or threatened contest or solicitation, shall
         not be considered an Incumbent Director; or

                  (c) the stockholders of the Company shall approve (A) any
         consolidation or merger of the Company where the stockholders of the
         Company, immediately prior to the consolidation or merger, would not,
         immediately after the consolidation or merger, beneficially own (as
         such term is defined in Rule 13d-3 under the Act), directly or
         indirectly, shares representing in the aggregate more than fifty
         percent (50%) of the voting shares of the Company issuing cash or
         securities in the consolidation or merger (or of its ultimate parent
         corporation, if any), (B) any sale, lease, exchange or other transfer
         (in one transaction or a series of transactions contemplated or
         arranged by any party as a single plan) of all or substantially all of
         the assets of the Company or (C) any plan or proposal for the
         liquidation or dissolution of the Company.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
twenty-five percent (25%) or more of either (A) the combined voting power of all
of the then outstanding Voting Securities or (B) Common Stock; PROVIDED,
HOWEVER, that if any person referred to in this sentence shall thereafter become
the beneficial owner of any additional shares of Voting Securities or Common
Stock (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company) and immediately thereafter beneficially owns twenty-five percent (25%)
or more of either (A) the combined voting power of all of the then outstanding
Voting Securities or (B) Common Stock, then a "Change of Control" shall be
deemed to have occurred for purposes of the foregoing clause (a).

9. NOTICE. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified mail, return
receipt requested, postage prepaid, addressed as follows:


         if to the Executive:

                  At his home address as shown
                  in the Company's personnel records;


                                       13


<PAGE>


         if to the Company:

                  Harvard Bioscience, Inc.
                  84 October Hill Road
                  Holliston, MA 01746-1371
                  Attention: Board of Directors of Harvard Bioscience, Inc.

         with a copy to:

                  H. David Henken, P.C.
                  Goodwin, Procter & Hoar  LLP
                  Exchange Place
                  Boston, MA 02109

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

10. SUCCESSOR TO COMPANY. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a breach of this Agreement and shall constitute Good
Reason if the Executive elects to terminate employment.

11. MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

12. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. The
invalid portion of this Agreement, if any, shall be modified by any court having
jurisdiction to the extent necessary to render such portion enforceable.


                                       14


<PAGE>


13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

14. ARBITRATION; OTHER DISPUTES. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first
promptly try in good faith to settle such dispute or controversy by mediation
under the applicable rules of the American Arbitration Association before
resorting to arbitration. In the event such dispute or controversy remains
unresolved in whole or in part for a period of thirty (30) days after it arises,
the parties will settle any remaining dispute or controversy exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding the above,
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
Paragraph 4 or 5 hereof. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as described in Subparagraph 6(b), 6(c)
or 7(b), a doctor selected by Executive and a doctor selected by the Company
shall be entitled to examine Executive. If the opinion of the Company's doctor
and Executive's doctor conflict, the Company's doctor and Executive's doctor
shall together agree upon a third doctor, whose opinion shall be binding.

15. THIRD-PARTY AGREEMENTS AND RIGHTS. Executive represents to the Company that
Executive's execution of this Agreement, Executive's employment with the Company
and the performance of Executive's proposed duties for the Company will not
violate any obligations Executive may have to any employer or other party, and
Executive will not bring to the premises of the Company any copies or other
tangible embodiments of non-public information belonging to or obtained from any
such previous employment or other party.

16. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. Executive's cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after Executive's
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
also provide Executive with compensation on an hourly basis at a rate of $120.71
for requested litigation and regulatory cooperation that occurs after his
termination of employment, and reimburse Executive for all costs and expenses
incurred in connection with his performance under this Paragraph 16, including,
but not limited to, reasonable attorneys' fees and costs.


                                       15


<PAGE>


17. GENDER NEUTRAL. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.


                                        HARVARD BIOSCIENCE, INC.

                                        By: /s/ James L. Warren
                                           --------------------------------
                                        Name: James L. Warren
                                        Title: Chief Financial Officer



                                        EXECUTIVE

                                        /s/ David Green
                                        -----------------------------------
                                        David Green
















                                       16



<PAGE>

                                                                    EXHIBIT 10.7

                            HARVARD BIOSCIENCE, INC.
                              EMPLOYMENT AGREEMENT

         This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
6th day of December, 2000, between Harvard Bioscience, Inc., a Delaware
corporation (the "Company"), and James Warren ("Executive"). For purposes of
this Agreement the "Company" shall refer to the Company and any of its
predecessors.

         WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1. EMPLOYMENT. The term of this Agreement shall extend from December 6, 2000
(the "Commencement Date") until the first anniversary of the Commencement Date;
provided, however, that the term of this Agreement shall automatically be
extended for one additional year on each anniversary of the Commencement Date
unless, not less than 90 days prior to each such date, either party shall have
given notice to the other that it does not wish to extend this Agreement;
provided, further, that if a Change in Control occurs during
 the original or
extended term of this Agreement, the term of this Agreement shall,
notwithstanding anything in this sentence to the contrary, continue in effect
for a period of not less than eighteen (18) months beyond the month in which the
Change in Control occurred. The term of this Agreement shall be subject to
termination as provided in Paragraph 6 and may be referred to herein as the
"Period of Employment."

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the Chief Financial Officer and shall have such powers and duties as may from
time to time be prescribed by the Board of Directors (the "Board") or the Chief
Executive Officer of the Company, provided that such duties are consistent with
Executive's position or other positions that he may hold from time to time.
Executive shall devote his full working time and efforts to the business and
affairs of the Company. Notwithstanding the foregoing, Executive may serve on
other boards of directors, with the approval of the Board, or engage in
religious, charitable or other community activities as long as such services and
activities are disclosed to the Board and do not materially interfere with
Executive's performance of his duties to the Company as provided in this
Agreement.

3. COMPENSATION AND RELATED MATTERS.

         (a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be One Hundred Eighty-Five Thousand ($185,000) Dollars.
Executive's base salary shall be redetermined annually by the Board or a
Committee thereof. The base salary in effect at any 



<PAGE>

given time is referred to herein as "Base Salary." The Base Salary shall be
payable in substantially equal bi-weekly installments. In addition to Base
Salary, Executive shall be eligible to receive cash incentive compensation as
determined by the Board or a Committee thereof from time to time, and shall also
be eligible to participate in such incentive compensation plans as the Board or
a Committee thereof shall determine from time to time for employees of the same
status within the hierarchy of the Company.

         (b) EXPENSES. Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him in performing services
hereunder during the Period of Employment, in accordance with the policies and
procedures then in effect and established by the Company for its senior
executive officers.

         (c) OTHER BENEFITS. During the Period of Employment, Executive shall be
entitled to continue to participate in or receive benefits under all of the
Company's Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide no less favorable treatment to the Executive then the
Employee Benefit Plans provided to other members of the Company's senior
management. As used herein, the term "Employee Benefit Plans" includes, without
limitation, each pension and retirement plan; supplemental pension, retirement
and deferred compensation plan; savings and profit-sharing plan; stock ownership
plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company on the date hereof for employees of
the same status within the hierarchy of the Company. To the extent that the
scope or nature of benefits described in this section is determined under the
policies of the Company based in whole or in part on the seniority or tenure of
an employee's service, Executive shall be deemed to have a tenure with the
Company equal to the actual time of Executive's service with the Company. During
the Period of Employment, Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement which may, in
the future, be made available by the Company to its executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plan or arrangement. Any payments
or benefits payable to Executive under a plan or arrangement referred to in this
Subparagraph 3(c) in respect of any calendar year during which Executive is
employed by the Company for less than the whole of such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.

         (d) VACATIONS. Executive shall be entitled to twenty (20) paid
vacation days in each calendar year, which shall be accrued ratably during the
calendar year. Executive shall also be entitled to all paid holidays given by
the Company to its executives. To the extent that the scope or nature of
benefits described in this section are determined under the policies of the
Company based in whole or in part on the seniority or tenure of an employee's
service, Executive shall be deemed to have a tenure with the Company equal to
the actual time of Executive's service with Company.



                                       2


<PAGE>


4. UNAUTHORIZED DISCLOSURE.

         (a) CONFIDENTIAL INFORMATION. Executive acknowledges that in the course
of his employment with the Company (and, if applicable, its predecessors), he
has been allowed to become, and will continue to be allowed to become,
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other
confidential information and knowledge (collectively the "Confidential
Information") concerning the Company's and its affiliates' and predecessors'
business. The Company agrees to provide on an ongoing basis such Confidential
Information as the Company deems necessary or desirable to aid Executive in the
performance of his duties. Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such
Confidential Information to anyone outside the Company except to the extent that
(i) Executive deems such disclosure or use reasonably necessary or appropriate
in connection with performing his duties on behalf of the Company; (ii)
Executive is required by order of a court of competent jurisdiction (by subpoena
or similar process) to disclose or discuss any Confidential Information,
provided that in such case, Executive shall promptly inform the Company of such
event, shall cooperate with the Company in attempting to obtain a protective
order or to otherwise restrict such disclosure, and shall only disclose
Confidential Information to the minimum extent necessary to comply with any such
court order; (iii) such Confidential Information becomes generally known to and
available for use in the Company's industry (the "laboratory analytical
instruments industry"), other than as a result of any action or inaction by
Executive; or (iv) such information has been rightfully received by a member of
the laboratory analytical instruments industry or has been published in a form
generally available to the laboratory analytical instruments industry prior to
the date Executive proposes to disclose or use such information. Executive
further agrees that he will not during employment and/or at any time thereafter
use such Confidential Information in competing, directly or indirectly, with the
Company. At such time as Executive shall cease to be employed by the Company, he
will immediately turn over to the Company all Confidential Information,
including papers, documents, writings, electronically stored information, other
property, and all copies of them provided to or created by him during the course
of his employment with the Company.

         (b) HEIRS, SUCCESSORS, AND LEGAL REPRESENTATIVES. The foregoing
provisions of this Paragraph 4 shall be binding upon Executive's heirs,
successors, and legal representatives. The provisions of this Paragraph 4 shall
survive the termination of this Agreement for any reason.

5. COVENANT NOT TO COMPETE. In consideration for Executive's employment by the
Company under the terms provided in this Agreement and as a means to aid in the
performance and enforcement of the terms of the provisions of Paragraph 4,
Executive agrees that

         (a) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive 


                                       3


<PAGE>

will not, directly or indirectly, as an owner, director, principal, agent,
officer, employee, partner, consultant, servant, or otherwise, carry on,
operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or
entity which is engaged in a business that produces products that compete
directly with any of the Company's products which are produced by the Company or
any affiliate of the Company or which the Company or any affiliate of the
Company has active plans to produce as of the date of Executive's termination of
employment with the Company, in any area or territory in which the Company or
any affiliate of the Company conducts or has active plans to conduct operations
as of the date of the Executive's termination of employment with the Company;
provided, however, that the foregoing shall not prohibit Executive from owning
up to one percent (1%) of the outstanding stock of a publicly held company
engaged in the laboratory analytical instruments industry; and

         (b) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not hire or employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to hire or employ
any present or future employee of the Company.

         Should Executive violate any of the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Company at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.

6. TERMINATION. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:

         (a) DEATH.  Executive's employment hereunder shall terminate upon his 
death.

         (b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for one hundred eighty (180) calendar days in the
aggregate in any twelve (12) month period, the Company may terminate Executive's
employment hereunder.

         (c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board at a
meeting of the Board called and held for such purpose. For purposes of this
Agreement, "Cause" shall mean: (A) conduct by Executive constituting a material
act of willful misconduct in connection with the performance of his duties,
including, without limitation, misappropriation of funds or property of the
Company or any of its affiliates other than the occasional, customary and de
minimis use of Company


                                       4


<PAGE>

property for personal purposes; (B) criminal or civil conviction of Executive, a
plea of nolo contendere by Executive or conduct by Executive that would
reasonably be expected to result in material injury to the reputation of the
Company if he were retained in his position with the Company, including, without
limitation, conviction of a felony involving moral turpitude; (C) continued,
willful and deliberate non-performance by Executive of his duties hereunder
(other than by reason of Executive's physical or mental illness, incapacity or
disability) which has continued for more than thirty (30) days following written
notice of such non-performance from the Board; (D) a breach by Executive of any
of the provisions contained in Paragraphs 4 and 5 of this Agreement; or (E) a
violation by Executive of the Company's employment policies which has continued
following written notice of such violation from the Board.

         (d) TERMINATION WITHOUT CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Board at a meeting of
the Board called and held for such purpose. Any termination by the Company of
Executive's employment under this Agreement which does not constitute a
termination for Cause under Subparagraph 6(c) or result from the death or
disability of the Executive under Subparagraph 6(a) or (b) shall be deemed a
termination without Cause. If the Company provides notice to Executive under
Paragraph 1 that it does not wish to extend the Period of Employment, such
action shall be deemed a termination without Cause.

         (e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean that Executive has complied with the "Good Reason Process" (hereinafter
defined) following the occurrence of any of the following events: (A) a
substantial diminution or other substantive adverse change, not consented to by
Executive, in the nature or scope of Executive's responsibilities, authorities,
powers, functions or duties; (B) any removal, during the Period of Employment,
from Executive of his title of Chief Financial Officer; (C) an involuntary
reduction in Executive's Base Salary except for across-the-board reductions
similarly affecting all or substantially all management employees; (D) a breach
by the Company of any of its other material obligations under this Agreement and
the failure of the Company to cure such breach within thirty (30) days after
written notice thereof by Executive; (E) the involuntary relocation of the
Company's offices at which Executive is principally employed or the involuntary
relocation of the offices of Executive's primary workgroup to a location more
than 30 miles from such offices, or the requirement by the Company that
Executive be based anywhere other than the Company's offices at such location on
an extended basis, except for required travel on the Company's business to an
extent substantially consistent with Executive's business travel obligations; or
(F) the failure of the Company to obtain the agreement from any successor to the
Company to assume and agree to perform this Agreement as required by Paragraph
10. "Good Reason Process" shall mean that (i) Executive reasonably determines in
good faith that a "Good Reason" event has occurred; (ii) Executive notifies the
Company in writing of the occurrence of


                                       5


<PAGE>

the Good Reason event; (iii) Executive cooperates in good faith with the
Company's efforts, for a period not less than ninety (90) days following such
notice, to modify Executive's employment situation in a manner acceptable to
Executive and Company; and (iv) notwithstanding such efforts, one or more of the
Good Reason events continues to exist and has not been modified in a manner
acceptable to Executive. If the Company cures the Good Reason event in a manner
acceptable to Executive during the ninety (90) day period, Good Reason shall be
deemed not to have occurred.

         (f) NOTICE OF TERMINATION. Except for termination as specified in
Subparagraph 6(a), any termination of Executive's employment by the Company or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.

         (g) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
6(b) or by the Company for Cause under Subparagraph 6(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 6(d), sixty (60) days after the date on which a
Notice of Termination is given; and (D) if Executive's employment is terminated
by Executive under Subparagraph 6(e), thirty (30) days after the date on which a
Notice of Termination is given.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

         (a) DEATH. If Executive's employment terminates by reason of his death,
the Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of his death, plus his accrued and unpaid
incentive compensation, if any, under Subparagraph 3(a). Upon the death of
Executive, all unvested stock options shall immediately vest in Executive's
estate or other legal representatives and become exercisable. All other
stock-based grants and awards held by Executive shall vest or be canceled upon
the death of Executive in accordance with their terms. For a period of one (1)
year following the Date of Termination, the Company shall pay such health
insurance premiums as may be necessary to allow Executive's spouse and
dependents to receive health insurance coverage substantially similar to
coverage they received prior to the Date of Termination. In addition to the
foregoing, any payments to which Executive's spouse, beneficiaries, or estate
may be entitled under any employee benefit plan shall also be paid in accordance
with the terms of such plan or arrangement. Such payments, in the aggregate,
shall fully discharge the Company's obligations hereunder.

         (b) DISABILITY. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness,
Executive shall continue to receive his accrued and unpaid Base Salary and
accrued and unpaid incentive compensation, if 


                                       6


<PAGE>

any, under Subparagraph 3(a), until Executive's employment is terminated due to
disability in accordance with Subparagraph 6(b) or until Executive terminates
his employment in accordance with Subparagraph 6(e), whichever first occurs.
Upon the Date of Termination, all unvested stock options shall immediately vest
and become exercisable. All other stock-based grants and awards held by
Executive shall vest or be canceled upon the Date of Termination in accordance
with their terms. For a period of one (1) year following the Date of
Termination, the Company shall pay such health insurance premiums as may be
necessary to allow Executive and Executive's spouse and dependents to receive
health insurance coverage substantially similar to coverage they received prior
to the Date of Termination. Upon termination due to death prior to the
termination first to occur as specified in the preceding sentence, Subparagraph
7(a) shall apply.

         (c) TERMINATION OTHER THAN FOR GOOD REASON. If Executive's employment
is terminated by Executive other than for Good Reason as provided in
Subparagraph 6(e), then the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary at the rate in effect at the time
Notice of Termination is given. Thereafter, the Company shall have no further
obligations to Executive except as otherwise expressly provided under this
Agreement, provided any such termination shall not adversely affect or alter
Executive's rights under any employee benefit plan of the Company in which
Executive, at the Date of Termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto. In addition, all vested but unexercised stock options held by
Executive as of the Date of Termination must be exercised by Executive within
three (3) months following the Date of Termination or by the end of the option
term, if earlier. All other stock-based grants and awards held by Executive
shall vest or be canceled upon the Date of Termination in accordance with their
terms.

         (d) TERMINATION FOR GOOD REASON. If Executive terminates his employment
for Good Reason as provided in Subparagraph 6(e) or if Executive's employment is
terminated by the Company without Cause as provided in Subparagraph 6(d), then
the Company shall, through the Date of Termination, pay Executive his accrued
and unpaid Base Salary at the rate in effect at the time Notice of Termination
is given and his accrued and unpaid incentive compensation, if any, under
Subparagraph 3(a). In addition, subject to signing by Executive of a general
release of claims in a form and manner satisfactory to the Company,

                  (i) the Company shall pay Executive an amount equal to the sum
         of Executive's Average Base Salary and his Average Incentive
         Compensation (the "Severance Amount"). The Severance Amount shall be
         paid out in substantially equal bi-weekly installments over twelve (12)
         months, in arrears or in a lump sum. For purposes of this Agreement,
         "Average Base Salary" shall mean the average of the annual Base Salary
         received by Executive for each of the three (3) immediately preceding
         fiscal years or such fewer number of complete fiscal years as Executive
         may have been employed by the Company or the amount of Base Salary for
         the prior fiscal year, whichever is higher. For purposes of this
         Agreement, "Average Incentive Compensation" shall mean the average of
         the annual incentive compensation under Subparagraph 3(a) received by
  

                                       7


<PAGE>

         Executive for the three (3) immediately preceding fiscal years or such
         fewer number of complete fiscal years as Executive may have been
         employed by the Company or the amount of incentive compensation for the
         prior fiscal year, whichever is higher. In no event shall "Average
         Incentive Compensation" include any sign-on bonus, retention bonus or
         any other special bonus. Notwithstanding the foregoing, if the
         Executive breaches any of the provisions contained in Paragraphs 4 and
         5 of this Agreement, all payments of the Severance Amount shall
         immediately cease. Furthermore, in the event Executive terminates his
         employment for Good Reason as provided in Subparagraph 6(e), he shall
         be entitled to the Severance Amount only if he provides the Notice of
         Termination provided for in Subparagraph 6(f) within thirty (30) days
         after the occurrence of the event or events which constitute such Good
         Reason as specified in clauses (A), (B), (C), (D) and (E) of
         Subparagraph 6(e); and

                  (ii) upon the Date of Termination, each unvested stock option
         that would otherwise vest during the next twenty-four (24) months shall
         accelerate and immediately vest. All other stock-based grants and
         awards held by Executive that would otherwise vest during the next
         twenty-four (24) months shall accelerate and immediately vest upon the
         Date of Termination; and

                  (iii) in addition to any other benefits to which Executive may
         be entitled in accordance with the Company's then existing severance
         policies, the Company shall, for a period of one (1) year commencing on
         the Date of Termination, pay such health insurance premiums as may be
         necessary to allow Executive and Executive's spouse and dependents to
         continue to receive health insurance coverage.

         (e) TERMINATION FOR CAUSE. If Executive's employment is terminated by
the Company for Cause as provided in Subparagraph 6(c), then the Company shall,
through the Date of Termination, pay Executive his accrued and unpaid Base
Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as
otherwise expressly provided under this Agreement, provided any such termination
shall not adversely affect or alter Executive's rights under any employee
benefit plan of the Company in which Executive, at the Date of Termination, has
a vested interest, unless otherwise provided in such employee benefit plan or
any agreement or other instrument attendant thereto. In addition, all stock
options held by Executive as of the Date of Termination shall immediately
terminate and be of no further force and effect, and all other stock-based
grants and awards shall be canceled or terminated in accordance with their
terms.

         (f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.

8. CHANGE IN CONTROL PAYMENT. The provisions of this Paragraph 8 set forth
certain terms of an agreement reached between Executive and the Company
regarding Executive's rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are


                                       8


<PAGE>

intended to assure and encourage in advance Executive's continued attention and
dedication to his assigned duties and his objectivity during the pendency and
after the occurrence of any such event. These provisions shall apply in lieu of,
and expressly supersede, the provisions of Subparagraph 7(d)(i) regarding
severance pay upon a termination of employment, if such termination of
employment occurs within eighteen (18) months after the occurrence of the first
event constituting a Change of Control, provided that such first event occurs
during the Period of Employment. These provisions shall terminate and be of no
further force or effect beginning eighteen (18) months after the occurrence of a
Change of Control.

         (a) CHANGE IN CONTROL.

                  (i) If within eighteen (18) months after the occurrence of the
         first event constituting a Change in Control, Executive's employment is
         terminated by the Company without Cause as provided in Subparagraph
         6(d) or Executive terminates his employment for Good Reason as provided
         in Subparagraph 6(e), then the Company shall pay Executive a lump sum
         in cash in an amount equal to one and a half (1.5) times the sum of (A)
         Executive's current or most recent Base Salary plus (B) Executive's
         most recent annual incentive compensation under Subparagraph 3(a) for
         the most recent fiscal year, excluding any sign-on bonus, retention
         bonus or any other special bonus; and

                  (ii) Notwithstanding anything to the contrary in any
         applicable option agreement or stock-based award agreement, upon a
         Change in Control, all stock options and other stock-based awards
         granted to Executive by the Company shall immediately accelerate and
         become exercisable or non-forfeitable as of the effective date of such
         Change in Control. Executive shall also be entitled to any other rights
         and benefits with respect to stock-related awards, to the extent and
         upon the terms provided in the employee stock option or incentive plan
         or any agreement or other instrument attendant thereto pursuant to
         which such options or awards were granted; and

                  (iii) The Company shall, for a period of one (1) year
         commencing on the Date of Termination, pay such health insurance
         premiums as may be necessary to allow Executive, Executive's spouse and
         dependents to continue to receive health insurance coverage
         substantially similar to the coverage they received prior to the Date
         of Termination.

         (b) GROSS UP PAYMENT.

                  (i) Anything in this Agreement to the contrary
         notwithstanding, in the event it shall be determined that any
         compensation, payment or distribution by the Company to or for the
         benefit of Executive, whether paid or payable or distributed or
         distributable pursuant to the terms of this Agreement or otherwise (the
         "Severance Payments"), would be subject to the excise tax imposed by
         Section 4999 of the Internal Revenue Code of 1986, as amended (the
         "Code"), or any interest or penalties are incurred by Executive with
         respect to such excise tax (such excise tax, together with 


                                       9


<PAGE>


         any such interest and penalties, are hereinafter collectively referred
         to as the "Excise Tax"), then Executive shall be entitled to receive
         an additional payment (a "Gross-Up Payment") such that the net amount
         retained by Executive, after deduction of any Excise Tax on the
         Severance Payments, any Federal, state, and local income tax,
         employment tax and Excise Tax upon the payment provided by this
         subsection, and any interest and/or penalties assessed with respect to
         such Excise Tax, shall be equal to the Severance Payments.


                  (ii) Subject to the provisions of Subparagraph 8(b)(iii), all
         determinations required to be made under this Subparagraph 8(b)(ii),
         including whether a Gross-Up Payment is required and the amount of such
         Gross-Up Payment, shall be made by KPMG LLP or any other nationally
         recognized accounting firm selected by the Company (the "Accounting
         Firm"), which shall provide detailed supporting calculations both to
         the Company and Executive within fifteen (15) business days of the Date
         of Termination, if applicable, or at such earlier time as is reasonably
         requested by the Company or Executive. For purposes of determining the
         amount of the Gross-Up Payment, Executive shall be deemed to pay
         federal income taxes at the highest marginal rate of federal income
         taxation applicable to individuals for the calendar year in which the
         Gross-Up Payment is to be made, and state and local income taxes at the
         highest marginal rates of individual taxation in the state and locality
         of Executive's residence on the Date of Termination, net of the maximum
         reduction in federal income taxes which could be obtained from
         deduction of such state and local taxes. The initial Gross-Up Payment,
         if any, as determined pursuant to this Subparagraph 8(b)(iii), shall be
         paid to Executive within five (5) days of the receipt of the Accounting
         Firm's determination. Any determination by the Accounting Firm shall be
         binding upon the Company and Executive. As a result of the uncertainty
         in the application of Section 4999 of the Code at the time of the
         initial determination by the Accounting Firm hereunder, it is possible
         that Gross-Up Payments which will not have been made by the Company
         should have been made (an "Underpayment"). In the event that the
         Company exhausts its remedies pursuant to Subparagraph 8(b)(iii) and
         Executive thereafter is required to make a payment of any Excise Tax,
         the Accounting Firm shall determine the amount of the Underpayment that
         has occurred, consistent with the calculations required to be made
         hereunder, and any such Underpayment, and any interest and penalties
         imposed on the Underpayment and required to be paid by Executive in
         connection with the proceedings described in Subparagraph 8(b)(iii),
         shall be promptly paid by the Company to or for the benefit of
         Executive.

                  (iii) Executive shall notify the Company in writing of any
         claim by the Internal Revenue Service that, if successful, would
         require the payment by the Company of the Gross-up Payment. Such
         notification shall be given as soon as practicable but no later than
         ten (10) business days after Executive knows of such claim and shall
         apprise the Company of the nature of such claim and the date on which
         such claim is requested to be paid. Executive shall not pay such claim
         prior to the expiration of the 30-day period following the date on
         which he gives such notice to the Company


                                       10


<PAGE>

         (or such shorter period ending on the date that any payment of taxes
         with respect to such claim is due). If the Company notifies Executive
         in writing prior to the expiration of such period that it desires to
         contest such claim, provided that the Company has set aside adequate
         reserves to cover the Underpayment and any interest and penalties
         thereon that may accrue, Executive shall:

                           (A) give the Company any information reasonably 
                  requested by the Company relating to such claim,

                           (B) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an attorney
                  selected by the Company,

                           (C) cooperate with the Company in good faith in order
                  to effectively contest such claim, and

                           (D) permit the Company to participate in any
                  proceedings relating to such claim; provided, however, that
                  the Company shall bear and pay directly all costs and expenses
                  (including additional interest and penalties) incurred in
                  connection with such contest and shall indemnify and hold
                  Executive harmless, on an after-tax basis, for any Excise Tax
                  or income tax, including interest and penalties with respect
                  thereto, imposed as a result of such representation and
                  payment of costs and expenses. Without limitation on the
                  foregoing provisions of this Subparagraph 8(b)(iii), the
                  Company shall control all proceedings taken in connection with
                  such contest and, at its sole option, may pursue or forego any
                  and all administrative appeals, proceedings, hearings and
                  conferences with the taxing authority in respect of such claim
                  and may, at its sole option, either direct Executive to pay
                  the tax claimed and sue for a refund or contest the claim in
                  any permissible manner, and Executive agrees to prosecute such
                  contest to a determination before any administrative tribunal,
                  in a court of initial jurisdiction and in one or more
                  appellate courts, as the Company shall determine; provided,
                  however, that if the Company directs Executive to pay such
                  claim and sue for a refund, the Company shall advance the
                  amount of such payment to Executive on an interest-free basis
                  and shall indemnify and hold Executive harmless, on an
                  after-tax basis, from any Excise Tax or income tax, including
                  interest or penalties with respect thereto, imposed with
                  respect to such advance or with respect to any imputed income
                  with respect to such advance; and further provided that any
                  extension of the statute of limitations relating to payment of
                  taxes for the taxable year of Executive with respect to which
                  such contested amount is claimed to be due is limited solely
                  to such contested amount. Furthermore, the Company's control
                  of the contest shall be limited to issues with respect to
                  which a Gross-Up Payment would be payable hereunder and


                                       11


<PAGE>

                  Executive shall be entitled to settle or contest, as the case
                  may be, any other issues raised by the Internal Revenue
                  Service or any other taxing authority.

                  (iv) If, after the receipt by Executive of an amount advanced
         by the Company pursuant to Subparagraph 8(b)(iii), Executive becomes
         entitled to receive any refund with respect to such claim, Executive
         shall (subject to the Company's complying with the requirements of
         Subparagraph 8(b)(iii)) promptly pay to the Company the amount of such
         refund (together with any interest paid or credited thereon after taxes
         applicable thereto). If, after the receipt by Executive of an amount
         advanced by the Company pursuant to Subparagraph 8(b)(iii), a
         determination is made that Executive shall not be entitled to any
         refund with respect to such claim and the Company does not notify
         Executive in writing of its intent to contest such denial of refund
         prior to the expiration of 30 days after such determination, then such
         advance shall be forgiven and shall not be required to be repaid and
         the amount of such advance shall offset, to the extent thereof, the
         amount of Gross-Up Payment required to be paid.

         (c) DEFINITIONS. For purposes of this Paragraph 8, the following terms
shall have the following meanings:

         "CHANGE IN CONTROL" shall mean any of the following:

                  (a) any "person," as such term is used in Sections 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
         (other than the Company, any of its subsidiaries, or any trustee,
         fiduciary or other person or entity holding securities under any
         employee benefit plan or trust of the Company or any of its
         subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such person, shall
         become the "beneficial owner" (as such term is defined in Rule 13d-3
         under the Act), directly or indirectly, of securities of the Company
         representing twenty-five percent (25%) or more of either (A) the
         combined voting power of the Company's then outstanding securities
         having the right to vote in an election of the Company's Board ("Voting
         Securities") or (B) the then outstanding shares of Company's common
         stock, par value $0.01 per share ("Common Stock") (other than as a
         result of an acquisition of securities directly from the Company); or


                  (b) persons who, as of the Commencement Date, constitute the
         Company's Board (the "Incumbent Directors") cease for any reason,
         including, without limitation, as a result of a tender offer, proxy
         contest, merger or similar transaction, to constitute at least a
         majority of the Board, provided that any person becoming a director of
         the Company subsequent to the Commencement Date shall be considered an
         Incumbent Director if such person's election was approved by or such
         person was nominated for election by a vote of at least a majority of
         the Incumbent Directors; but provided further, that any such person
         whose initial assumption of office is in connection with an actual or
         threatened election contest relating to the election of members of the
         Board or other actual or threatened solicitation of proxies or consents
         by or on behalf of a person other 


                                       12


<PAGE>

          than the Board, including by reason of agreement intended to avoid or
          settle any such actual or threatened contest or solicitation, shall
          not be considered an Incumbent Director; or

                  (c) the stockholders of the Company shall approve (A) any
         consolidation or merger of the Company where the stockholders of the
         Company, immediately prior to the consolidation or merger, would not,
         immediately after the consolidation or merger, beneficially own (as
         such term is defined in Rule 13d-3 under the Act), directly or
         indirectly, shares representing in the aggregate more than fifty
         percent (50%) of the voting shares of the Company issuing cash or
         securities in the consolidation or merger (or of its ultimate parent
         corporation, if any), (B) any sale, lease, exchange or other transfer
         (in one transaction or a series of transactions contemplated or
         arranged by any party as a single plan) of all or substantially all of
         the assets of the Company or (C) any plan or proposal for the
         liquidation or dissolution of the Company.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
twenty-five percent (25%) or more of either (A) the combined voting power of all
of the then outstanding Voting Securities or (B) Common Stock; PROVIDED,
HOWEVER, that if any person referred to in this sentence shall thereafter become
the beneficial owner of any additional shares of Voting Securities or Common
Stock (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company) and immediately thereafter beneficially owns twenty-five percent (25%)
or more of either (A) the combined voting power of all of the then outstanding
Voting Securities or (B) Common Stock, then a "Change of Control" shall be
deemed to have occurred for purposes of the foregoing clause (a).

9. NOTICE. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified mail, return
receipt requested, postage prepaid, addressed as follows:


         if to the Executive:

                  At his home address as shown
                  in the Company's personnel records;


                                       13


<PAGE>


         if to the Company:

                  Harvard Bioscience, Inc.
                  84 October Hill Road
                  Holliston, MA 01746-1371
                  Attention: Board of Directors of Harvard Bioscience, Inc.

         with a copy to:

                  H. David Henken, P.C.
                  Goodwin, Procter & Hoar  LLP
                  Exchange Place
                  Boston, MA 02109

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

10. SUCCESSOR TO COMPANY. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a breach of this Agreement and shall constitute Good
Reason if the Executive elects to terminate employment.

11. MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

12. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. The
invalid portion of this Agreement, if any, shall be modified by any court having
jurisdiction to the extent necessary to render such portion enforceable.



                                       14


<PAGE>


13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

14. ARBITRATION; OTHER DISPUTES. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first
promptly try in good faith to settle such dispute or controversy by mediation
under the applicable rules of the American Arbitration Association before
resorting to arbitration. In the event such dispute or controversy remains
unresolved in whole or in part for a period of thirty (30) days after it arises,
the parties will settle any remaining dispute or controversy exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding the above,
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
Paragraph 4 or 5 hereof. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as described in Subparagraph 6(b), 6(c)
or 7(b), a doctor selected by Executive and a doctor selected by the Company
shall be entitled to examine Executive. If the opinion of the Company's doctor
and Executive's doctor conflict, the Company's doctor and Executive's doctor
shall together agree upon a third doctor, whose opinion shall be binding.

15. THIRD-PARTY AGREEMENTS AND RIGHTS. Executive represents to the Company that
Executive's execution of this Agreement, Executive's employment with the Company
and the performance of Executive's proposed duties for the Company will not
violate any obligations Executive may have to any employer or other party, and
Executive will not bring to the premises of the Company any copies or other
tangible embodiments of non-public information belonging to or obtained from any
such previous employment or other party.

16. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. Executive's cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after Executive's
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
also provide Executive with compensation on an hourly basis at a rate of $99.25
for requested litigation and regulatory cooperation that occurs after his
termination of employment, and reimburse Executive for all costs and expenses
incurred in connection with his performance under this Paragraph 16, including,
but not limited to, reasonable attorneys' fees and costs.


                                       15


<PAGE>


17. GENDER NEUTRAL. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

                                    HARVARD BIOSCIENCE, INC.


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


                                    EXECUTIVE

                                    /s/ James Warren
                                    --------------------------------------
                                    James Warren












                                       16



<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 Electronik - Harvard Apparatus GmbH (Germany)
Harvard Apparatus FSC, Inc. (U.S. Virgin Islands)
HBIO Securities Corp. (Massachusetts)





<PAGE>


                                                                   Exhibit 23.1

                            Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement 
No. 333-53848 of Harvard Bioscience, Inc. on Form S-8 of our report dated 
February 23, 2001, relating to the consolidated balance sheets of Harvard 
Bioscience, Inc. and subsidiaries as of December 31, 2000 and 1999, and the 
related consolidated statements of operations, stockholders' equity (deficit) 
and comprehensive income (loss), and cash flows for each of years in the 
three-year period ended December 31, 2000, which report appears in the 
December 31, 2000 Annual Report on Form 10-K of Harvard Bioscience, Inc.


/s/ KPMG LLP

Boston, Massachusetts
April 2, 2001