In the Court of Chancery of the State of Delaware In

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE CELERA CORPORATION Consolidated SHAREHOLDER LITIGATION C.A. No. 6304-VCP

VERIFIED CONSOLIDATED AMENDED CLASS ACTION COMPLAINT

Plaintiff New Orleans Employees’ Retirement System (“NOERS”) on behalf of itself and all other similarly situated public shareholders of Celera Corporation (hereafter, “Celera” or the

“Company”), bring the following Verified Consolidated Amended Class Action Complaint (the

“Complaint”) against the members of the board of directors of Celera (the “Celera Board” or the

“Board”) for breaching their fiduciary duties, and against Quest Diagnostics Incorporated

(“Quest”) and Spark Acquisition Corporation (“Spark”) for aiding and abetting the same. The allegations of the Complaint are based on the knowledge of Plaintiff as to itself, and on information and belief, including the investigation of counsel and review of publicly available information as to all other matters.

INTRODUCTION

1. This is a case about a corporate board that chose to negotiate an all-cash sale of

the company while operating under the same material conflict of interest that lay at the heart of

the Delaware Supreme Court’s ruling in Revlon, Inc. v. MacAndrews & Forbes, Inc., 506 A.2d

173 (Del. 1986). During the past two years, the Celera Board struggled with a multitude of

improper accounting practices. These practices caused the Company to issue numerous financial

restatements, and resulted in a number of related lawsuits. In the face of mounting personal

liability, the Celera Board struck a deal to sell the Company in exchange for broad

indemnification and lucrative continued employment. 2. On March 17, 2011, Celera entered into an Agreement and Plan of Merger (the

“Merger Agreement”) with Quest, whereby Quest would, within a week of the deal’s

announcement, commence a tender offer (the “Tender Offer”) to acquire all of the issued and

outstanding shares of Celera common stock for $8.00 per share in cash (the “Proposed

Transaction”).

3. At the same time, the Company shocked the market by filing a host of

restatements to its prior Securities and Exchange Commission (“SEC”) financial filings (the

“Restatements”). These Restatements expose the fact that Celera’s management has engaged in a wide-ranging accounting fraud over the past several years, which included improperly classifying and reporting bad debt expenses and unreimbursed and uncollectible charges. These improper accounting practices materially affected Celera’s financial statements, and came on the heels of previous accounting issues which resulted in a securities class action and shareholder derivative lawsuit.

4. The Restatements are so expansive and damning that had they been disclosed

independent of a merger announcement that propped up the stock price, they would have likely

caused a stock drop, exposing the Company’s senior management, and perhaps even the entire

Celera Board, to additional liability for violating the federal securities laws.

5. As the need for the Restatements became apparent, Kathy Ordoñez (“Ordoñez”),

Celera’s Chief Executive Officer (“CEO”), with the assistance of the Celera Board, moved to

finally execute a plan to sell the Company at any price in exchange for broad indemnification

and continuing employment for Celera’s senior management team.

6. To effectuate a sale in advance of the Restatements, Ordoñez and the Celera

Board were forced to accept an offer from the Company’s long-time strategic partner, Quest that -2- was well below what Quest had previously indicated it was prepared to pay for Celera. Quest had previously offered over $10 a share for Celera, but revised its offer significantly downward in light of defendants’ demand for broad indemnification and senior management’s request for continued employment post-closing. This self-interested negotiating cost Celera shareholders maximum value for their shares, as the Celera Board was eventually forced to accept the $8.00 price if they were to (a) strike a deal in advance of the Restatements; and (b) secure the indemnification and future employment for senior management that they sought.

7. Pursuant to the Merger Agreement, Quest will indemnify and hold harmless, to the fullest extent permitted under applicable law, each present and former director, officer, employee and agent of the Company and each Company subsidiary, for the unusually long period of six years from the date of closing.

8. Moreover, the Proposed Transaction will help ensure that Celera’s senior officers and board members will receive a windfall by either receiving lucrative positions with Quest or substantial severance benefits. Indeed, without the Proposed Transaction, these officers and directors would be forced to deal with the pending securities litigation and the Restatements’ negative repercussions, including possible termination, additional lawsuits, and SEC-permitted claw-backs.

9. To ensure consummation of this liability-absolving transaction, the Celera Board gave Quest a panoply of deal protections, including a no-shop provision (the “No-Shop”), unlimited matching rights (the “Matching Rights”), and a $23.45 million termination fee (the

“Termination Fee”), which represents over 10% of the total value Quest is paying to acquire

Celera’s operations (i.e., net of cash and tax assets, both of which have a fixed and objective

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value and therefore should not be considered in assessing the reasonableness of the termination

fee).

10. Celera and Quest structured the Proposed Transaction as a Tender Offer so that it

can close within a month of the deal’s announcement. This effectively eliminates the prospect of

a competing bid because no interested suitor could arrange financing, present a “Superior

Proposal” (as defined in the Merger Agreement) sufficient to allow the Celera Board to provide

it with due diligence, wait through the three business day delay required by the Matching Rights,

complete due diligence, fully digest the Company’s accounting problems and the Restatements,

and finalize the terms of an alternative takeover transaction within this compressed time period.

To be sure the Proposed Transaction can be consummated by short-form merger on an expedited

basis, the Board granted Quest a “Top-Up Option” that helps Defendants avoid the protracted

process of a shareholder vote. Not only would the extended timeframe of a long-form merger increase third parties’ ability to assemble and present a “Superior Proposal,” it would also allow shareholders to fully digest the windfall of information recently disclosed and possibly vote down the Proposed Transaction.

11. While the Celera Board secured its own safe haven in the Proposed Transaction, the Board utterly failed to advance the interests of Celera’s stockholders. In an effort to secure shareholder support for the Proposed Transaction despite the inadequate offer price, the Celera

Board and Quest caused to be filed a misleading Form 14D-9 Solicitation and Recommendation

Statement with the SEC on March 28, 2011 (“the Proxy”). Among other things, the Proxy almost wholly ignores material issues relating to the motivation for, and negotiation of, the

Proposed Transaction, including the Restatements; the ongoing Celera securities class action and

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shareholder derivative lawsuit; and possible civil liability looming over the Celera Board and

senior management.

12. This action seeks to hold the members of the Celera Board accountable for

abandoning their obligation to act in the best interest of the Company’s stockholders and

breaching their duties of care, loyalty and candor. The Proposed Transaction, its timing, its

terms and description represent a transparent and disloyal effort by the Celera Board to escape

personal liability at the expense of Celera’s public shareholders.

THE PARTIES

13. Plaintiff NOERS is a shareholder of Celera and has owned shares of Celera

common stock throughout the relevant time period.

14. Defendant Celera is a healthcare business focusing on the integration of genetic

testing into routine clinical care through a combination of products and services incorporating

proprietary discoveries. Berkeley HeartLab, a subsidiary of Celera, offers services to predict

cardiovascular disease risk and improve patient management. Celera also commercializes a wide

range of molecular diagnostic products through Abbott Laboratories and has licensed other

relevant diagnostic technologies developed to provide personalized disease management in

cancer. Celera is incorporated under the laws of the State of Delaware, with headquarters

located at 1401 Harbor Bay Parkway, Alameda, California 94502. Celera is publicly traded on the NASDAQ under the ticker symbol “CRA.”

15. Defendant Richard H. Ayers (“Ayers”) has served as a member of the Celera

Board since February 2008 and was a director of Applied Biosystems, Inc. (formerly Applera

Corporation and hereinafter referred to as “Applied Biosystems”) from 1988 until 2008.

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16. Defendant Jean-Luc Belingard (“Belingard”) has served as a member of the

Celera Board since February 2008 and was a director of Applied Biosystems from 1993 until

June 2008.

17. Defendant William G. Green (“Green”) has served as a member of the Celera

Board since July 2008.

18. Defendant Peter Barton Hutt (“Hutt”) has served as a member of the Celera Board since August 2008.

19. Defendant Gail K. Naughton (“Naughton”) has served as a member of the Celera

Board since July 2008.

20. Defendant Ordoñez has served as Celera’s CEO and a member of the Board since

February 2008. Ordoñez joined Applied Biosystems in December 2000, and held various positions, including President of Celera Diagnostics LLC, prior to being named to her current position.

21. Defendant Wayne I. Roe (“Roe”) has served as a member of the Celera Board

since December 2008.

22. Defendant Bennett M. Shapiro (“Shapiro”) has served as a member of the Celera

Board since May 2008.

23. The defendants listed in paragraphs 15 through 22 above are collectively referred

to herein as the “Individual Defendants.”

24. Defendant Quest is a leading provider of diagnostic testing, information and

services that patients and doctors need to make better healthcare decisions. The company offers

the broadest access to diagnostic testing services through its network of laboratories and patient

service centers, and provides interpretive consultation through its extensive medical and -6-

scientific staff. Quest is a pioneer in developing innovative diagnostic tests and advanced

healthcare information technology solutions that help improve patient care.

25. Defendant Spark is a Delaware corporation and a wholly-owned subsidiary of

Quest created for the purpose of consummating the Proposed Transaction.

SUBSTANTIVE ALLEGATIONS

I. Background Of The Company

26. Celera was founded in 1998 with the mission to sequence the human genome and

provide clients with early access to the resulting data. Using state-of-the-art sequencing

technology supplied by Applied Biosystems and sophisticated internally-developed information

and algorithms, Celera pioneered the application of “shotgun” sequencing.

27. Celera went on to build a successful database business, providing custom search

tools and software that enabled dozens of pharmaceutical companies and hundreds of academic,

government, and biotech clients to use its findings in biological research. While the Celera

database business ultimately became profitable, it was clear by 2000 that this was not a

sustainable business model, as the parallel publicly funded effort caught up and provided free

access to genome sequences.

28. In June 2000, Celera announced completion of its first draft of the human

genome. In 2001, Celera completed its first assembly of the mouse genome.

29. In 2002, Celera and Quest entered into a joint venture (the “Joint Venture”) in

which the companies would collaborate to identify genetic markers associated with

cardiovascular disease and diabetes. The Joint Venture provided Quest with exclusive access to

markers found to have clinical utility and established Celera as a preferred vendor to Quest for

certain molecular diagnostic products. -7-

30. In 2004, Celera announced the formation of a strategic collaboration with Abbott

Laboratories to discover, develop, and commercialize therapies for the treatment of cancer. The

collaboration encompasses the development of therapeutic antibodies and small molecule drugs.

31. In January 2006, Celera announced its intent to partner its small molecule drug

programs and acquired full rights to Celera Diagnostics, which had previously been run as a joint

venture with Applied Biosystems.

32. In 2008, parent company Applera split Celera and Applied Biosystems into

separate firms, and Celera began trading under its own ticker symbol on the NASDAQ.

II. The Proposed Transaction

33. Beginning in 2008, Celera engaged in fraudulent accounting practices to

artificially boost the Company’s revenues, exposing Celera and its officers and directors to potential securities fraud liability.

34. Under the fraudulent scheme, the Company improperly included certain bad debt expenses as a component of selling, general, and administrative expenses instead of reflecting the bad debt expenses as a reduction of revenues. The errors in classification resulted in a significant overstatement of Celera’s consolidated revenues and of selling, general, and administrative expenses. Additionally, the Company recorded certain uncollectible Berkeley

HeartLab receivables in the second quarter of 2009, when the charges actually related to prior periods.

35. Aware of the negative consequences that would flow from these improprieties, the

Company’s senior management recommended to the Board that the Company seek a commercial partner to address issues of risk and the business generally at an October 2009 Board meeting.

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36. In November 2009, the Company engaged LEK Consulting LLC (“LEK”) to

assist the Company with a preliminary assessment of strategic options as the Board and

management sought to either minimize their potential liability or indemnify themselves

completely.

37. Through March and early April 2010, Celera’s senior management made in-

person presentations to representatives of five potential bidders. Company financial advisors

were present for all of these presentations except the presentations made to Quest.

38. On May 25, 2010, six months into the sales process, the Board finally formed a special committee (the “Special Committee”), consisting of directors Green and Ayers, to evaluate the Company’s strategic alternatives. The Special Committee, however, did not engage in the majority of negotiations and, according to the Proxy, did not control the sales process.

Instead, it was Ordoñez and other members of senior management who were left to negotiate with potential bidders unchecked, increasing the likelihood that their own interests would be advanced over those of Celera’s public shareholders.

39. By the summer of 2010, the Company was entertaining offers and indications of

interest at over $10 per share from Quest and at least one other bidder. Concurrently,

management’s fraudulent accounting practices were becoming increasingly difficult to conceal

from the market. Ordoñez and the Celera Board embarked upon a mission to sell the Company

at any price in exchange for: (a) six years of broad indemnification covering the real risk of

liability stemming from years of fraudulent accounting practices; and (b) continuing employment

for Ordoñez and several of the Company’s most senior executives.

40. On March 8, 2011, the Company’s auditor, PriceWaterhouseCoopers (“PWC”),

advised the Company’s senior management that the impact of the misclassified bad debt -9-

expenses might require a restatement of the Company’s financials. The next day, the Audit

Committee and the Special Committee directed Company management, and not the Special

Committee, to finalize a sale of Celera to Quest.

41. On March 17, 2011, Celera and Quest entered into the Merger Agreement, providing Celera shareholders with $8 per share in cash, significantly less than Quest had previously offered in the summer of 2010.

42. Instead of attempting to negotiate to obtain the highest possible price for Celera’s shareholders, Ordoñez, senior management and the Celera Board obtained for themselves extremely broad indemnification for acts committed while serving in such capacities. Sections

6.8(b) and (c) provides:

(b) From and after the Effective Time, Parent shall and shall cause the Surviving Corporation to, indemnify and hold harmless, to the fullest extent permitted under applicable Law, and, without limiting the foregoing, as required pursuant to any indemnity agreements of the Company or any Company Subsidiary, each present and former director, officer, employee and agent of the Company and each Company Subsidiary (collectively, the “Indemnified Parties”) against any costs or expenses (including attorneys’ fees and expenses), judgments, inquiries, fines, losses, claims, settlements, damages or liabilities incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to (i) the fact that the Indemnified Party is or was an officer, director, employee, fiduciary or agent of the Company or any Company Subsidiary and (ii) any and all matters pending, existing or occurring at or prior to the Effective Time (including this Agreement, the Offer, the Merger and the other transactions contemplated hereby), whether asserted or claimed prior to, at or after the Effective Time. Parent or the Surviving Corporation shall advance expenses (including reasonable legal fees and expenses) incurred in the defense of any Action with respect to matters subject to indemnification pursuant to this Section 6.8 in accordance with the procedures set forth in the Company Certificate, the Company Bylaws, the certificate of incorporation and bylaws, or equivalent organizational or governing documents, of each Company Subsidiary, and indemnification agreements, if any, in existence on the date of this Agreement.

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(c) For a period of six (6) years from and after the Effective Time, the Surviving Corporation shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by the Company and the Company Subsidiaries (the “D&O Insurance”) or provide substitute policies or purchase a “tail policy,” . . . . (emphasis added).

43. The press release (the “Press Release”) accompanying the Proposed Transaction announcement makes clear that Ordoñez and other members of senior management will receive continued lucrative employment with Quest after the deal closes. In the Press Release, Quest

Chairman and CEO, Surya N. Mohapatra, noted, “I am pleased at the prospect of Celera’s CEO

Kathy Ordoñez and key members of her team becoming part of Quest Diagnostics.”

44. Concurrent with the announcement of the Proposed Transaction, Celera also announced the Restatements. Specifically, Celera issued a Form 10-K which:

• restates its Consolidated Statement of Financial Position at December 26, 2009, and its Consolidated Statements of Operations, Stockholders’ Equity and Cash Flows for the year ended June 30, 2008, the six months ended December 27, 2008, and the year ended December 26, 2009;

• restates its Selected Financial Data in Item 6 for the year ended June 30, 2008, the six months ended December 27, 2008, and the years ended December 27, 2008, and December 26, 2009;

• amends its Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) as it relates to the six months ended December 31, 2007 and December 27, 2008, the years ended December 27, 2008, and December 26, 2009, each quarter in the year ended December 26, 2009, and the first three quarters in the year ended December 25, 2010; and

• restates its Unaudited Quarterly Financial Information for each quarter in the year ended December 26, 2009, and the first three quarters in the year ended December 25, 2010.

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45. Under Generally Accepted Accounting Principles (“GAAP”), the restatement of a

previously issued financial statement is a most serious step, reserved only for situations where

material accounting errors or irregularities existed and where no lesser remedy is possible.

III. The Board Agreed To Sell Celera For Inadequate Consideration

46. The merger consideration agreed to by the Board is grossly inadequate.

47. As noted above, the Company was entertaining offers of $10 or more as recently as the summer of 2010.

48. The offered consideration fails to account for the Company’s future performance.

Natixis Bleichroeder analyst Ashim Anand stated that, “the offer price represents a discount of

21 percent to its peers,” given Celera’s promising pipeline, and that “Celera has probably one of the most personalized medicine tests and that’s where all diagnostic companies are going.”

49. The offer price also does not account for Celera’s valuable patent properties.

Indeed, 65% of Celera’s revenue is protected by patents. William Blair & Co analyst Amanda

Murphy noted that, “[t]he proprietary products are patent protected. Obviously there’s going to be higher margins that makes [sic] (clinical diagnostics) a good business.”

50. In short, while Celera’s public shareholders financed the Company’s impressive

growth and development, they will not share in the Company’s future upside.

IV. The Celera Board Impermissibly Protects The Proposed Transaction

51. Not only did the Celera Board fail to maximize shareholder value in agreeing to

the Proposed Transaction, it also took unreasonable steps to ensure the consummation of a deal

with Quest to the detriment of Celera’s shareholders.

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52. First, the timing of the Tender Offer poses an almost insurmountable obstacle to any potential competing bid. Pursuant to the Merger Agreement, Quest will commence the

Tender Offer within seven business days after March 17, 2011.

53. Thus, within roughly one month, Celera may cease to exist as an independent public company. This expedited closing precludes alternative offers for the Company because potential bidders will be unable to conduct meaningful due diligence on Celera or obtain adequate financing in time to make a Superior Proposal that may be considered by the Celera

Board. This time constraint, combined with the other deal protections described below and a provision that prevents the Board from providing information to potential suitors in advance of any firm offer and the time period required by the Matching Rights described below, insulate the

Proposed Transaction from competing bids.

54. The Celera Board has safe-guarded the expediency of the Proposed Transaction by providing Quest a “Top-Up Option” that allows Celera and Quest to avoid the protracted timeframe of a long-form merger. In the event Quest does not secure the requisite number of shares for a short-form merger pursuant to the Tender Offer, Celera may issue up to roughly 220 million additional shares for purchase by Quest in order to close the transaction without a shareholder vote. Section 2.4(a) of the Merger Agreement provides in relevant part:

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55. The Top-Up Option serves no rational purpose other than to facilitate closing of the Proposed Transaction as soon as possible and before shareholders can digest the universe of material information forced upon them in a matter of days. Indeed, within a two week period,

Company will have released its annual report, the Restatements, the Merger Agreement and the related proxy materials. Defendants are well aware that the circumstances, timing and terms of the Proposed Transaction might not withstand shareholder scrutiny, and have therefore taken all steps to avoid a shareholder vote on the Proposed Transaction, including adoption of the Top-Up

Option.

56. Second, reflecting the Celera Board’s haste to insulate themselves and senior management from personal liability, the Celera Board agreed to a prohibitive No-Shop, further limiting the possible emergence of strategic alternatives (which may not offer Defendants the same liability protections). Section 6.4(a) of the Merger Agreement provides:

57. Third, the Celera Board granted Quest the Matching Rights in the Merger

Agreement that provide Quest three business days to revise its proposal or persuade the Celera

Board not to change its recommendation on the merger in the face of a proposal from a third party suitor.

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58. The Matching Rights dissuade interested parties from making an offer for the

Company by providing Quest the opportunity to make a matching bid. The Matching Rights also

impair the Board from offering a competing bidder a reasonable termination or bidding fee in

exchange for a “blowout” price, since any competing bid must be subjected to the Matching

Rights. Due to the Proposed Transaction’s flawed process and wholly inadequate price, no

justification exists for the Board’s decision to agree to the inclusion of the Matching Rights and

other bid advantages in the Merger Agreement.

59. Fourth, the Celera Board further reduced the possibility of maximizing

shareholder value by agreeing to a punitive termination fee of $23.45 million, which represents over 10% of the $226 million Quest is paying for Celera’s actual operations. Specifically,

Celera has $327 million in cash-on-hand and $117 million in deferred tax credits and net operating losses. In this instance, it does not make economic sense to assess the reasonableness of the Termination Fee against Celera’s enterprise value.

60. There is simply no “risk” or cost for Quest in acquiring a sum certain of cash and an objectively established tax asset. Any bidder, whether Quest or otherwise, would pay a sum certain for a defined pile of cash. Thus, Quest has no particular “interest” to protect in acquiring

Celera’s cash or tax asset, and in assessing whether the Termination Fee is reasonable under the circumstances, it should be viewed in relation to the non-fixed component of what Quest is purchasing, which is valued at $226 million after the cash and tax assets are deducted from the reported transaction price. Giving away over 10% of the operating value of Celera is a steep and unreasonable penalty and serves as a significant deterrent for any third party who might otherwise desire to make a competing bid.

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61. The No-Shop, Matching Rights, and the Termination Fee (collectively, the “Deal

Protections”) serve to deter competing parties from making bids and prevent the Celera Board from properly exercising their fiduciary duties to obtain the best available strategic alternative for Celera’s public shareholders. The Deal Protections erect barriers to competing offers and essentially guarantee that the Proposed Transaction will be consummated, leaving Celera shareholders with limited opportunity to consider any superior offer. When viewed collectively, these provisions cannot be justified as reasonable or proportionate measures to protect any perceived threat to Quest’s investment in the Proposed Transaction process.

V. The Board Furthers Serves Its Own And Managements’ Interests By Amending Celera’s Change In Control Severance Plan

62. Without the Proposed Transaction, certain senior officers and directors at the

Company may be terminated as a result of the accounting improprieties revealed by the

Restatements. Instead, by agreeing to a sale of the Company to Quest at a discount, these same directors and officers will be entitled to either lucrative positions with Quest or substantial severance benefits.

63. Specifically, concurrent with signing the Merger Agreement, the Celera Board amended the Company’s Executive Change in Control Plan (the “CIC Amendment”), thus ensuring that Celera’s most senior executives (i.e., CEO, Senior Vice Presidents and Vice

President – Chief Intellectual Property Counsel) receive a windfall, either in the form of new employment contracts with Quest or extensive severance benefits.

64. Thus, the CIC Amendment provides that if a senior executive does not receive an employment contract with Quest, but rather is asked to operate under a prior contract, that person will be entitled to full severance benefits as if they had been terminated.

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65. Any additional cost Quest must incur as a result of the CIC Amendment comes at

the direct expense of Celera’s public shareholders in the form of reduced merger consideration.

Rather than spend negotiating capital on an increased purchase price, the Celera Board instead

negotiated for the CIC Amendment and indemnity from liability.

66. Finally, as the Proxy acknowledges, certain officers and directors will personally

gain from the Proposed Transaction and may have interests that conflict with those of the

shareholders. For example, Defendant Ordoñez will receive a substantial and immediate cash

benefit. First, she will receive $1,051,272 for her shares of the company. Second, stock options

and performance share awards will immediately vest, giving Defendant Ordoñez an additional

$1,332,219. Finally, (in addition to her new employment contract) Defendant Oradanez will

receive $2,286,375 for surrendering her rights under the amended CIC discussed supra. All told,

Defendant Ordoñez will receive more than $4.5 million and a new employment agreement if the

Proposed Transaction closes. Although it is not unusual for executives to benefit from a merger,

when compared with the alternative in this case – potential personal liability in numerous lawsuits – Defendant Ordoñez had substantial motivation to ignore the interests of public shareholders.

67. In short, the relatively small amount of equity held by the majority of directors and officers provided the Board with little incentive to maximize shareholder value. By comparison, job retention and securities fraud liability avoidance provided substantial motivation for the Board to agree to sell the Company at a substantial discount.

VI. Defendants Cause To Be Filed A Deficient And Misleading Proxy Statement

68. On March 28, 2011, the Celera Board and Quest caused to be filed a misleading

Form 14D-9 Solicitation and Recommendation Statement with the SEC relating to the Tender -17-

Offer. As set forth below, the Proxy fails to fully and fairly disclose material information that

significantly alters the total mix of information made available to shareholders asked to consider

the end of Celera’s existence as an independent public company.

69. The “Background of the Offer; Reasons for the Company Board’s

Recommendation” section (the “Background Section”) of the Proxy leaves many material

questions unanswered, and provides misleading information to shareholders.

70. Among other things, the Background Section does not fully explain the genesis

for management’s recommendation that the Board explore the Company’s strategic alternatives,

or whether management was aware of the severity of the Company’s accounting improprieties at

that time.

71. Further, the Background Section does not address why the Company’s financial

advisors were conspicuously absent from management’s initial presentation(s) to Quest

regarding an acquisition of the Company, nor does the Background Section address whether the

presentation(s) made to Quest were materially different than those made to other potential

bidders.

72. Additionally, the Background Section fails to describe the value Quest assigned to

the CIC Amendment and the effect of the CIC Amendment on the consideration offered in the

Proposed Transaction.

73. The Background Section fails to explain why negotiation of the Proposed

Transaction was often left to senior management – those individuals most conflicted in their effort to secure indemnification and the CIC Amendment – rather than the Special Committee.

For example:

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a. Minimal detail is provided about the late June 2010 meetings among

management and Quest, which led to Quest pulling its $10.25 per share

offer. What happened and why it happened is material to any investor

assessing whether today to accept just $8 per share.

b. From the end of July 2010 through October 2010, Defendant Ordonez

contacted and conducted negotiations with senior management of another

company, (“Bidder D”), regarding a potential sale of the Company’s lab

services business segment and BHL, at which point Bidder D withdrew its

interest presumably in the face of Defendant Ordonez’s unreasonable

compensation or severance demands; c. On August 25, 2010, Ordonez held in-person negotiations with a

representative of “Bidder C” regarding a potential transaction involving

the Company’s Products business and the terms at which Celera’s senior

management would be amenable to a deal; d. On September 9, 2010, members of the Company’s senior management

held a second in-person meeting at the facilities of “Bidder A”; e. On November 11, 2010, members of the Company’s senior management,

representatives of Credit Suisse and representatives of “Bidder E”

negotiated a potential transaction in-person at the offices of Credit Suisse;

and f. On March 9, 2011, one week for the deal’s announcement, it was senior

management that was charged with final negotiations with Quest.

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74. The Background Section is also deficient in that it fails to describe what basis

Company management had for advising the Board that a restatement was unlikely as a result of recently identified misclassified bad debt expenses. Specifically, the Proxy states that on

February 4, 2011:

[T]he Company and PWC confirmed that it was not yet possible to determine the extent of any potential impact to the Company’s historical financial information as the required data retrieval and analysis was still ongoing. Company management indicated that based on its preliminary assessment, it believed that any related impact would be of a level of materiality as to require some revision to the Company’s historical financial information, but the impact did not appear to be likely to require a restatement.

75. Further, the Proxy does not explain the following material elements of the claimed “process” leading to the sale of the company to Quest, raising numerous questions about the purported process. For example:

a. What criteria were used to identify the “nine potential parties interested in

pursuing a transaction”;

b. The rationale underlying the decision to only solicit indications of interest

for an acquisition of the Company, rather than a partnership or

collaboration;

c. Why “Bidder B” was not invited to participate in the “second round of the

strategic transaction process”;

d. How Bidder D, contacted at the end of July 2010, was identified, who

identified Bidder D, and why Bidder D was not contacted earlier in the

process;

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e. How the “three additional potential bidders” contacted during September

2010 were identified, who identified them, and why they were not

contacted earlier in the process.

76. The Proxy does not, however, provide any basis for management’s representation

(which was proven wrong weeks later), or explain whether the Celera Board concurred with this position. The Proxy also does not disclose whether Ordoñez was involved in deciding that the misclassified bad debt expenses “did not appear to be likely to require a restatement.”

77. The Proxy is also deficient in its disclosure of material financial information relating to the present and future value of the Company. Although the Proxy discloses certain of

Credit Suisse’s and LEK’s conclusions and recommendations, it omits material information about the assumptions used to support their various analyses. The Proxy completely fails to disclose the underlying methodologies, projections, key inputs and multiples relied upon and observed by Credit Suisse in conducting its analysis in support of the Fairness Opinion concerning the Proposed Transaction. This information is material to shareholders so they can properly assess the credibility of the various analyses performed by Credit Suisse and purportedly relied upon by the Board in recommending the Proposed Transaction.

Offer, or how shareholders should act with respect to any matter relating to the Tender Offer or the Merger Agreement. In addition, the “Selected Companies Analysis” section of the Proxy:

a. Omits individual metrics and multiples of the selected comparable

companies, including the aggregate 2010-2012 revenue, EBITDA, and -21-

earnings per share information relied on to determine the “implied per

share equity reference range;”

b. Omits the specific multiples selected and applied by Credit Suisse to

determine the “implied per share equity reference range” including how

those multiples were selected;

c. Omits the value ranges obtained by applying the various multiple ranges

calculated for the selected companies, i.e. the revenue multiple range,

EBITDA multiple range, and earnings per share multiple range.

Selected Transactions Analysis:

a. Omits the dates of the transactions selected for the analysis and the

individually observed metrics and multiples calculated from the selected

transactions, including aggregate value to last twelve months (“LTM”)

revenue and EBITDA;

b. Omits the specific multiples selected and applied by Credit Suisse to

determine the “implied per share equity reference range” including how

those multiples were selected;

c. Omits the specific multiples selected and applied to each of the business

units comprising Credit Suisse’s sum-of-the-parts analysis.

Discounted Cash Flow Analysis:

a. Omits the forecasts provided by Celera’s management, and relied on by

Credit Suisse, of the Company’s non-commercial, development stage drug

assets;

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b. Omits the “estimated clinical trial success rates” used by Credit Suisse to

further discount the value of the Company’s non-commercial,

development stage drug assets;

c. Omits the present value of the Company’s NOLs, as calculated by Credit

Suisse.

79. Further, the Proxy fails to disclose the financial projections for line items used by

Credit Suisse as part of its discounted cash flow analysis, including, but not limited to:

a. EBITDA;

b. Tax rate;

c. Depreciation and amortization;

d. Capital expenditures;

e. Changes in working capital;

f. Other non-cash expenses.

CLASS ACTION ALLEGATIONS

80. Plaintiff brings this action pursuant to Rule 23 of the Rules of the Court of

Chancery, individually and on behalf of all other shareholders of Celera’s common stock (except

defendants herein and any persons, firm, trust, corporation or other entity related to or affiliated with them and their successors in interest) who are or will be threatened with injury arising from

defendants’ wrongful actions, as more fully described herein (the “Class”).

81. This action is properly maintainable as a class action.

82. The Class is so numerous that joinder of all members is impracticable. The

Company has thousands of shareholders who are scattered throughout the United States. As of

February 25, 2011, there were 82,113,206 shares of Celera’s common stock outstanding. -23-

83. There are questions of law and fact common to the Class including, inter alia,

whether:

a. The Individual Defendants breached their fiduciary duties by failing to review all strategic alternatives in good faith;

b. The Individual Defendants breached their fiduciary duties by allowing

Company executives to negotiate the Proposed Transaction;

c. The Individual Defendants breached their fiduciary duties by failing to extract the highest value possible from Quest in exchange for Celera’s shares;

d. The Individual Defendants breached their fiduciary duties by “locking up” the Proposed Transaction to the detriment of the Class by approving the No-Shop, Matching

Rights, Termination Fee and Top-Up Option without obtaining adequate consideration for Celera shareholders;

e. The Individual Defendants breached their fiduciary duties by favoring their own interests over shareholders and negotiating and agreeing to the CIC Amendment and

indemnity from liability without also attempting to obtain maximum value for Celera’s public

shareholders;

f. Plaintiff and the other members of the Class are being and will continue to

be injured by the wrongful conduct alleged herein and, if so, what is the proper remedy and/or

measure of damages; and

g. Plaintiff and the other members of the Class will be damaged irreparably

by defendants’ conduct.

84. Plaintiff is committed to prosecuting this action and has retained competent

counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the -24-

other members of the Class, and Plaintiff has the same interests as the other members of the

Class. Plaintiff is an adequate representative of the Class.

85. The prosecution of separate actions by individual members of the Class would

create the risk of inconsistent or varying adjudications with respect to individual members of the

Class, which would establish incompatible standards of conduct for defendants, or adjudications

with respect to individual members of the Class, which would as a practical matter be disjunctive

of the interests of the other members not parties to the adjudications or substantially impair or

impede their ability to protect their interests.

86. Defendants have acted, or refused to act, on grounds generally applicable to, and

causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the

Class, as a whole, is appropriate.

COUNT I

BREACH OF FIDUCIARY DUTY AGAINST THE INDIVIDUAL DEFENDANTS

87. Plaintiff repeats and realleges each and every allegation above as if set forth in

full herein.

88. The Individual Defendants, as Celera directors, owe the Class the utmost

fiduciary duties of due care, good faith, candor and loyalty. By virtue of their positions as

directors and/or officers of Celera and/or their exercise of control and ownership over the

business and corporate affairs of the Company, the Individual Defendants have, and at all

relevant times had, the power to control and influence and did control and influence and cause the Company to engage in the practices complained of herein. Each Individual Defendant was required to: (a) use their ability to control and manage Celera in a fair, just and equitable manner;

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(b) act in furtherance of the best interests of Celera and its shareholders and not their own; and

(c) fully disclose the material circumstances, procedures, and terms of the Proposed Transaction so that shareholders can make a fully informed decision.

89. The Individual Defendants failed to fulfill their fiduciary duties in connection with the Proposed Transaction by conducting a sale of the Company for the purpose of avoiding personal liability.

90. As a result of the Celera directors’ breaches of fiduciary duty in agreeing to the

Proposed Transaction and in accordance with the personal interests of the Celera Board and

Company management, the Class will be harmed by receiving the inferior consideration offered in the Proposed Transaction.

91. Furthermore, the Deal Protections adopted by the defendants and contained in the

Merger Agreement impose an excessive and disproportionate impediment to the Board’s ability to entertain any other potentially superior alternative offer.

92. The No-Shop, Matching Rights, Termination Fee and Top-Up Option constitute a breach of fiduciary duty, particularly in light of the Individual Defendants’ failure to obtain additional consideration in exchange for these valuable concessions.

93. The Individual Defendants also failed to fully inform themselves about possible competing proposals, including other strategic alternatives, before agreeing to the Proposed

Transaction, and instead chose to avoid considering whether any alternative transaction provides greater value to the Celera shareholders than the Proposed Transaction.

94. Even if the Board believes the Proposed Transaction is more valuable to the Class than alternative offers, the Board is not excused from taking all possible steps to maximize shareholder value. -26-

95. The Individual Defendants also caused to be filed a false and misleading Proxy

with the SEC in violation of their fiduciary duty to the Class.

96. Plaintiff and the Class have no adequate remedy at law.

COUNT II

AIDING AND ABETTING AGAINST DEFENDANTS QUEST AND CELERA

97. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

98. Defendant Quest knowingly assisted the Individual Defendants in construction of the Proposed Transaction and the related Merger Agreement which unlawfully restricts the

Celera Board from fully informing itself of all of the Company’s strategic alternatives in compliance with its fiduciary duties.

99. Quest, during a period of exclusive negotiations with Celera, constructed a deal that induced the support of the Celera Board and management by way of complete indemnification for past acts and guaranteed full severance in the future.

100. As a result of this conduct by Quest and Celera, Plaintiff and other members of the Class have and will be damaged by being denied the best opportunity to maximize the value of their investment in the Company.

101. Plaintiff and the Class have no adequate remedy at law.

COUNT III

INJUNCTIVE RELIEF AND FILING OF A MISLEADING PROXY STATEMENT AGAINST DEFENDANTS CELERA AND THE INDIVIDUAL DEFENDANTS

102. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

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103. The Proposed Transaction is the product of breaches of fiduciary duties by the

Company’s Board, and, as such, the Company should be enjoined from taking any steps to

consummate the Proposed Transaction, and the Merger Agreement should be subject to

amendment by this Court.

104. Further, Celera, in conjunction with the Individual Defendants, caused to be filed

the false and/or misleading Proxy.

105. Plaintiff and the Class have no adequate remedy at law.

RELIEF REQUESTED

WHEREFORE, Plaintiff demands judgment as follows:

a. Preliminarily and permanently enjoining Celera and any of the Celera

Board members and any and all other employees, agents, or representatives of the Company and persons acting in concert with any one or more of any of the foregoing, during the pendency of this action, from taking any action to consummate the Proposed Transaction until such time as the Celera Board has fully complied with their fiduciary duties and taken all readily available steps to maximize shareholder value;

b. Finding the Celera Board liable for breaching their fiduciary duties to the

Class;

c. Finding the Deal Protections invalid and unenforceable, or, in the alternative, amending the Deal Protections as necessary to ensure a full and fair sale process for the benefit of the Class;

d. Finding Quest liable for aiding and abetting breach of fiduciary duty;

e. Finding the CIC Amendment invalid and unenforceable, or, in the alternative, amending the CIC Amendment as necessary to ensure fairness to the Class; -28-

f. Requiring the defendants to amend or supplement the Proxy to disclose all material information relating to the Proposed Transaction, the CIC Amendment and the

Restatements;

g. Awarding the Class compensatory damages, together with pre- and post- judgment interest;

h. Awarding Plaintiff the costs and disbursements of this action, including attorneys’, accountants’, and experts’ fees; and

i. Awarding such other and further relief as is just and equitable.

Dated: April 1, 2011

/s/ John C. Kairis Stuart M. Grant (Del. ID No. 2526) Michael J. Barry (Del. ID No. 4368) John C. Kairis (Del. ID No. 2752) GRANT & EISENHOFER P.A. 1201 North Market Street, Suite 2100 Wilmington, DE 19801 (302) 622-7000

Plaintiffs’ Co-Lead Counsel William H. Narwold MOTLEY RICE LLC One Corporate Center 20 Church Street, 17th Floor Hartford, Connecticut 06103 (860) 882-1681

Marlon E. Kimpson William S. Norton J. Brandon Walker MOTLEY RICE LLC 28 Bridgeside Boulevard Mt. Pleasant, South Carolina 29464 (843) 216-9205

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Gerald Silk Mark Lebovitch Bruce Bernstein Brett M. Middleton Jeremy Friedman BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP 1285 Avenue of the Americas New York, New York 10019 (212) 554-1400

Plaintiffs’ Co-Lead Counsel

ADDITIONAL COUNSEL:

Christine Azar LABATON SUCHAROW LLP One Commerce Center 1201 N. Orange St., Suite 801 Wilmington, Delaware 19801 (302) 573-2530

Jonathan M. Plasse Jonathan Gardner Michael W. Stocker Nicholas R. Hector LABATON SUCHAROW LLP 140 Broadway New York, New York 10005 (212) 907-0700

Patricia C. Weiser Robert B. Weiser Henry J. Young THE WEISER LAW FIRM, P.C. 121 N. Wayne Avenue, Suite 100 Wayne, Pennsylvania 19087 (610) 225-2677

Richard A. Maniskas RYAN & MANISKAS, LLP 995 Old Eagle School Road, Suite 311 Wayne, Pennsylvania 19087 (484) 588-5516 -30-

Marc I. Gross Jason S. Cowart Gustavo F. Bruckner POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue New York, NY 10017 (212) 661-1100

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Formatted: Left: 90 pt, Right: 90 pt, Top: 90 pt, Bottom: 90 pt

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE CELERA CORPORATION Consolidated Deleted: NEW ORLEANS EMPLOYEES’ RETIREMENT SHAREHOLDER LITIGATION C.A. No. 6304-VCP SYSTEM, on behalf of itself and all other similarly situated shareholders of Celera Corporation,¶ ¶ VERIFIED CONSOLIDATED AMENDED CLASS ACTION COMPLAINT Plaintiff,¶ ¶ v.¶ Plaintiff New Orleans Employees’ Retirement System (“NOERS”) on behalf of ¶ RICHARD H. AYERS, JEAN-LUC BELINGARD, WILLIAM G. GREEN, itself and all other similarly situated public shareholders of Celera Corporation (hereafter, PETER BARTON HUTT, GAIL K. NAUGHTON, KATHY ORDONEZ, WAYNE I. ROE, BENNETT M. “Celera” or the “Company”), bring the following Verified Consolidated Amended Class SHAPIRO, Formatted: Indent: First line: 30.6 Action Complaint (the “Complaint”) against the members of the board of directors of pt Deleted: , QUEST DIAGNOSTICS INCORPORATED, AND SPARK Celera (the “Celera Board” or the “Board”) for breaching their fiduciary duties, and ACQUISITION CORPORATION, Deleted: ¶ against Quest Diagnostics Incorporated (“Quest”) and Spark Acquisition Corporation ¶ ¶ ¶ (“Spark”) for aiding and abetting the same. The allegations of the Complaint are based ¶ ¶ on the knowledge of Plaintiff as to itself, and on information and belief, including the Deleted: ______Formatted: Left, Indent: First line: investigation of counsel and review of publicly available information as to all other 30.6 pt Deleted: ¶ Defendants.¶ matters. Deleted: ¶ Deleted: , INTRODUCTION Deleted: ” or “Plaintiff”), 1. This is a case about a corporate board that chose to negotiate an all-cash Deleted: brings Formatted: Don't keep with next sale of the company while operating under the same material conflict of interest that lay at the heart of the Delaware Supreme Court’s ruling in Revlon, Inc. v. MacAndrews & Deleted: Over Forbes, Inc., 506 A.2d 173 (Del. 1986). During the past two years, the Celera Board Deleted: weeks leading to this action Deleted: faced struggled with a multitude of improper accounting practices. These practices caused the Deleted: clear choice: disclose Company to issue numerous financial restatements, and resulted in a number of related Deleted: material accounting fraud and lawsuits. In the face of mounting personal liability, the Celera Board struck a deal to sell risk the Company in exchange for broad indemnification and lucrative continued Deleted: that would flow from that disclosure, or negotiate a desperate and employment. rushed sale of the company at whatever price a potential bidder would offer in order to insulate themselves from liability 2. On March 17, 2011, Celera entered into an Agreement and Plan of Merger and secure their own financial well-being. In breach of their duty of loyalty, the (the “Merger Agreement”) with Quest, whereby Quest would, within a week of the deal’s Celera Board chose the latter. Deleted: will, less than announcement, commence a tender offer (the “Tender Offer”) to acquire all of the issued Deleted: from and outstanding shares of Celera common stock for $8.00 per share in cash (the

“Proposed Transaction”). Deleted: Concurrently 3. At the same time, the Company shocked the market by filing a host of restatements to its prior Securities and Exchange Commission (“SEC”) financial filings

(the “Restatements”). These Restatements expose the fact that Celera’s management has engaged in a wide-ranging accounting fraud over the past several years, which included improperly classifying and reporting bad debt expenses and unreimbursed and Deleted: fraudulent uncollectible charges. These improper accounting practices materially affected Celera’s financial statements, and came on the heels of previous accounting issues which resulted in a securities class action and shareholder derivative lawsuit. Deleted: . 4. The Restatements are so expansive and damning that had they been disclosed independent of a merger announcement that propped up the stock price, they Deleted: exposed would have likely caused a stock drop, exposing the Company’s senior management, and Deleted: as well as perhaps even the entire Celera Board, to additional liability for violating the federal Deleted: possible securities laws. Deleted: Ordonez (“Ordonez 5. As the need for the Restatements became apparent, Kathy Ordoñez Deleted: rest of the Deleted: - (“Ordoñez”), Celera’s Chief Executive Officer (“CEO”), with the assistance of the Celera Deleted: -¶ ¶

-2-

Deleted: quickly Board, moved to finally execute a plan to sell the Company at any price in exchange for Deleted: indemnity broad indemnification and continuing employment for Celera’s senior management team.

6. To effectuate a sale in advance of the Restatements, Ordoñez and the Deleted: the scheme, Ordonez reached Celera Board were forced to accept an offer from the Company’s long-time strategic out to Celera’s partner, Quest that was well below what Quest had previously indicated it was prepared Deleted: . Recognizing the bright future for clinical diagnostics and to pay for Celera. Quest had previously offered over $10 a share for Celera, but revised wanting to enter this market for several years, and upon learning of the Company’s soon-to-be disclosed its offer significantly downward in light of defendants’ demand for broad indemnification accounting issues, Quest jumped at the opportunity to exploit Ordonez’s and the Celera Board’s inability to negotiate at and senior management’s request for continued employment post-closing. This self- arms’ length Deleted: strategically used this leverage interested negotiating cost Celera shareholders maximum value for their shares, as the to negotiate a cheap transaction price and significant structural deal lockups, in exchange for liability protection and Celera Board was eventually forced to accept the $8.00 price if they were to (a) strike a severance for Celera’s officers and directors. ¶ Instead of deal in advance of the Restatements; and (b) secure the indemnification and future employment for senior management that they sought. Deleted: highest price reasonably available in this all-cash sale, the Celera 7. Pursuant to the Merger Agreement, Quest will indemnify and hold Board – hamstrung by Celera’s accounting problems and potential civil liability – focused their negotiations on harmless, to the fullest extent permitted under applicable law, each present and former broad indemnification. director, officer, employee and agent of the Company and each Company subsidiary, for the unusually long period of six years from the date of closing.

8. Moreover, the Proposed Transaction will help ensure that Celera’s senior Deleted: board officers and Board members will receive a windfall by either receiving lucrative positions with Quest or substantial severance benefits. Indeed, without the Proposed Transaction, these officers and directors would be forced to deal with the pending securities litigation and the Restatements’ negative repercussions, including possible termination, additional Deleted: - lawsuits, and SEC-permitted claw-backs. Deleted: -¶ ¶

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9. To ensure consummation of this liability-absolving transaction, the Celera Deleted: also Board gave Quest a panoply of deal protections, including a no-shop provision (the “No-

Shop”), unlimited matching rights (the “Matching Rights”), and a $23.45 million termination fee (the “Termination Fee”), which represents over 10% of the total value Formatted: Font: Italic Quest is paying to acquire Celera’s operations (i.e., net of cash and tax assets, both of which have a fixed and objective value and therefore should not be considered in assessing the reasonableness of the termination fee).

10. Celera and Quest structured the Proposed Transaction as a Tender Offer so that it can close within a month of the deal’s announcement. This effectively eliminates the prospect of a competing bid because no interested suitor could arrange financing, present a “Superior Proposal” (as defined in the Merger Agreement) sufficient to allow the Celera Board to provide it with due diligence, wait through the three business day delay required by the Matching Rights, complete due diligence, fully digest the

Company’s accounting problems and the Restatements, and finalize the terms of an Deleted: , especially in light of management and the Board’s self-interest alternative takeover transaction within this compressed time period. To be sure the in consummating the Proposed Transaction Proposed Transaction can be consummated by short-form merger on an expedited basis, the Board granted Quest a “Top-Up Option” that helps Defendants avoid the protracted process of a shareholder vote. Not only would the extended timeframe of a long-form merger increase third parties’ ability to assemble and present a “Superior Proposal,” it Deleted: for would also allow shareholders to fully digest the windfall of information recently disclosed and possibly vote down the Proposed Transaction. Deleted: - Deleted: -¶ ¶

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11. While the Celera Board secured its own safe haven in the Proposed

Transaction, the Board utterly failed to advance the interests of Celera’s stockholders. In an effort to secure shareholder support for the Proposed Transaction despite the inadequate offer price, the Celera Board and Quest caused to be filed a misleading Form

14D-9 Solicitation and Recommendation Statement with the SEC on March 28, 2011

(“the Proxy”). Among other things, the Proxy almost wholly ignores material issues Deleted: Currently, Celera is trading relating to the motivation for, and negotiation of, the Proposed Transaction, including the well above the price offered in the

Restatements; the ongoing Celera securities class action and shareholder derivative lawsuit; and possible civil liability looming over the Celera Board and senior management. Deleted: <#>providing strong evidence that the Celera Board failed to maximize 12. This action seeks to hold the members of the Celera Board accountable for value for the Class in this all-cash sale. ¶ Deleted: its abandoning their obligation to act in the best interest of the Company’s stockholders and breaching their duties of care, loyalty and candor. The Proposed Transaction, its timing, Deleted: and its terms and description represent a transparent and disloyal effort by the Celera Board to escape personal liability at the expense of Celera’s public shareholders.

THE PARTIES

13. Plaintiff NOERS is a shareholder of Celera and has owned shares of

Celera common stock throughout the relevant time period.

14. Defendant Celera is a healthcare business focusing on the integration of genetic testing into routine clinical care through a combination of products and services incorporating proprietary discoveries. Berkeley HeartLab, a subsidiary of Celera, offers Deleted: - services to predict cardiovascular disease risk and improve patient management. Celera Deleted: -¶ ¶

-5- also commercializes a wide range of molecular diagnostic products through Abbott

Laboratories and has licensed other relevant diagnostic technologies developed to provide personalized disease management in cancer. Celera is incorporated under the laws of the

State of Delaware, with headquarters located at 1401 Harbor Bay Parkway, Alameda,

California 94502. Celera is publicly traded on the NASDAQ under the ticker symbol

“CRA.”

15. Defendant Richard H. Ayers (“Ayers”) has served as a member of the

Celera Board since February 2008 and was a director of Applied Biosystems, Inc.

(formerly Applera Corporation and hereinafter referred to as “Applied Biosystems”) from

1988 until 2008.

16. Defendant Jean-Luc Belingard (“Belingard”) has served as a member of the Celera Board since February 2008 and was a director of Applied Biosystems from

1993 until June 2008.

17. Defendant William G. Green (“Green”) has served as a member of the

Celera Board since July 2008.

18. Defendant Peter Barton Hutt (“Hutt”) has served as a member of the

Celera Board since August 2008.

19. Defendant Gail K. Naughton (“Naughton”) has served as a member of the

Celera Board since July 2008. Deleted: Ordonez 20. Defendant Ordoñez has served as Celera’s CEO and a member of the Deleted: Ordonez Board since February 2008. Ordoñez joined Applied Biosystems in December 2000, and Deleted: - Deleted: -¶ ¶

-6- held various positions, including President of Celera Diagnostics LLC, prior to being named to her current position.

21. Defendant Wayne I. Roe (“Roe”) has served as a member of the Celera

Board since December 2008.

22. Defendant Bennett M. Shapiro (“Shapiro”) has served as a member of the

Celera Board since May 2008. Deleted: 14 23. The defendants listed in paragraphs 15 through 22 above are collectively Deleted: 21 referred to herein as the “Individual Defendants.”

24. Defendant Quest is a leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its Deleted: extensive medical and scientific staff. Quest is a pioneer in developing innovative diagnostic tests and advanced healthcare information technology solutions that help improve patient care.

25. Defendant Spark is a Delaware corporation and a wholly-owned subsidiary of Quest created for the purpose of consummating the Proposed Transaction.

SUBSTANTIVE ALLEGATIONS

I. Background Of The Company

26. Celera was founded in 1998 with the mission to sequence the human Deleted: genome and provide clients with early access to the resulting data. Using state-of-the-art Deleted: - sequencing technology supplied by Applied Biosystems and sophisticated internally- Deleted: -¶ ¶

-7- developed information and algorithms, Celera pioneered the application of “shotgun” sequencing.

27. Celera went on to build a successful database business, providing custom search tools and software that enabled dozens of pharmaceutical companies and hundreds of academic, government, and biotech clients to use its findings in biological research.

While the Celera database business ultimately became profitable, it was clear by 2000 that this was not a sustainable business model, as the parallel publicly funded effort caught up and provided free access to genome sequences.

28. In June 2000, Celera announced completion of its first draft of the human genome. In 2001, Celera completed its first assembly of the mouse genome.

29. In 2002, Celera and Quest entered into a joint venture (the “Joint

Venture”) in which the companies would collaborate to identify genetic markers associated with cardiovascular disease and diabetes. The Joint Venture provided Quest with exclusive access to markers found to have clinical utility and established Celera as a preferred vendor to Quest for certain molecular diagnostic products.

30. In 2004, Celera announced the formation of a strategic collaboration with

Abbott Laboratories to discover, develop, and commercialize therapies for the treatment of cancer. The collaboration encompasses the development of therapeutic antibodies and small molecule drugs.

31. In January 2006, Celera announced its intent to partner its small molecule drug programs and acquired full rights to Celera Diagnostics, which had previously been Deleted: - run as a joint venture with Applied Biosystems. Deleted: -¶ ¶

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32. In 2008, parent company Applera split Celera and Applied Biosystems into separate firms, and Celera began trading under its own ticker symbol on the

NASDAQ.

II. The Proposed Transaction

33. Beginning in 2008, Celera engaged in fraudulent accounting practices to artificially boost the Company’s revenues, exposing Celera and its officers and directors to potential securities fraud liability.

2009, when the charges actually related to prior periods.

35. Aware of the negative consequences that would flow from these improprieties, the Company’s senior management recommended to the Board that the

Company seek a commercial partner to address issues of risk and the business generally at an October 2009 Board meeting.

36. In November 2009, the Company engaged LEK Consulting LLC (“LEK”) to assist the Company with a preliminary assessment of strategic options as the Board and management sought to either minimize their potential liability or indemnify themselves Deleted: - completely. Deleted: -¶ ¶

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Deleted: By mid- 37. Through March and early April 2010, Celera’s senior management made in-person presentations to representatives of five potential bidders. Company financial advisors were present for all of these presentations except the presentations made to

Quest.

38. On May 25, 2010, six months into the sales process, the Board finally formed a special committee (the “Special Committee”), consisting of directors Green and

Ayers, to evaluate the Company’s strategic alternatives. The Special Committee, however, did not engage in the majority of negotiations and, according to the Proxy, did not control the sales process. Instead, it was Ordoñez and other members of senior management who were left to negotiate with potential bidders unchecked, increasing the likelihood that their own interests would be advanced over those of Celera’s public shareholders.

39. By the summer of 2010, the Company was entertaining offers and indications of interest at over $10 per share from Quest and at least one other bidder.

Concurrently, management’s fraudulent accounting practices were becoming increasingly Deleted: Defendant Ordonez, Celera’s difficult to conceal from the market. Ordoñez and the Celera Board embarked upon a CEO, with the assistance Deleted: /or blind acquiescence of mission to sell the Company at any price in exchange for: (a) six years of broad Deleted: , indemnification covering the real risk of liability stemming from years of fraudulent Deleted: Ordonez accounting practices; and (b) continuing employment for Ordoñez and several of the

Company’s most senior executives.

40. On March 8, 2011, the Company’s auditor, PriceWaterhouseCoopers Deleted: - (“PWC”), advised the Company’s senior management that the impact of the misclassified Deleted: -¶ ¶

-10- bad debt expenses might require a restatement of the Company’s financials. The next day, the Audit Committee and the Special Committee directed Company management, Deleted: To effectuate this scheme, Ordonez reached out to Celera’s long- and not the Special Committee, to finalize a sale of Celera to Quest. time strategic partner Quest for a possible merger transaction. Recognizing the bright future for clinical diagnostics and 41. On March 17, 2011, Celera and Quest entered into the Merger Agreement, having attempted to enter the highly lucrative field of genetic testing for several years, Quest, the $9 billion giant, providing Celera shareholders with $8 per share in cash, significantly less than Quest had eagerly agreed to explore pursuing an acquisition previously offered in the summer of 2010 – an inadequate 28% premium to the

Company’s closing stock price on the day immediately preceding the announcement of the Proposed Transaction, which premium was quickly vanquished by the market upon news of the Proposed Transaction.

42. Instead of attempting to negotiate to obtain the highest possible price for Deleted: Ordonez and the rest of the Celera’s shareholders, Ordoñez, senior management and the Celera Board obtained for Deleted: and the Company’s officers themselves extremely broad indemnification for acts committed while serving in such capacities. Sections 6.8(b) and (c) provides:

(b) From and after the Effective Time, Parent shall and shall cause the Surviving Corporation to, indemnify and hold harmless, to the fullest extent permitted under applicable Law, and, without limiting the foregoing, as required pursuant to any indemnity agreements of the Company or any Company Subsidiary, each present and former director, officer, employee and agent of the Company and each Company Subsidiary (collectively, the “Indemnified Parties”) against any costs or expenses (including attorneys’ fees and expenses), judgments, inquiries, fines, losses, claims, settlements, damages or liabilities incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to (i) the fact that the Indemnified Party is or was an officer, director, employee, fiduciary or agent of the Company or any Company Subsidiary and (ii) any and all matters pending, existing or occurring at or prior to the Effective Time (including this Agreement, the Offer, the Merger and the other transactions contemplated hereby), Deleted: - whether asserted or claimed prior to, at or after the Effective Time. Parent Deleted: -¶ ¶

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or the Surviving Corporation shall advance expenses (including reasonable legal fees and expenses) incurred in the defense of any Action with respect to matters subject to indemnification pursuant to this Section 6.8 in accordance with the procedures set forth in the Company Certificate, the Company Bylaws, the certificate of incorporation and bylaws, or equivalent organizational or governing documents, of each Company Subsidiary, and indemnification agreements, if any, in existence on the date of this Agreement. (c) For a period of six (6) years from and after the Effective Time, the Surviving Corporation shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by the Company and the Company Subsidiaries (the “D&O Insurance”) or provide substitute policies or purchase a “tail policy,” . . . . (emphasis added).

43. The press release (the “Press Release”) accompanying the Proposed Deleted: Ordonez Transaction announcement makes clear that Ordoñez and other members of senior management will receive continued lucrative employment with Quest after the deal closes. In the Press Release, Quest Chairman and CEO, Surya N. Mohapatra, noted, “I Deleted: Ordonez am pleased at the prospect of Celera’s CEO Kathy Ordoñez and key members of her team becoming part of Quest Diagnostics.”

44. Concurrent with the announcement of the Proposed Transaction, Celera also announced the Restatements. Specifically, Celera issued a Form 10-K which:

• restates its Selected Financial Data in Item 6 for the year ended June 30, 2008, the six months ended December 27, 2008, and the years ended December 27, 2008, and December 26, 2009; Deleted: - Deleted: -¶ ¶

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• restates its Unaudited Quarterly Financial Information for each quarter in the year ended December 26, 2009, and the first three quarters in the year ended December 25, 2010.

45. Under Generally Accepted Accounting Principles (“GAAP”), the restatement of a previously issued financial statement is a most serious step, reserved Deleted: when only for situations where material accounting errors or irregularities existed and where no lesser remedy is possible.

III. The Board Agreed To Sell Celera For Inadequate Consideration

46. The merger consideration agreed to by the Board is grossly inadequate. Deleted: Immediately after 47. As noted above, the Company was entertaining offers of $10 or more as Deleted: announcement Deleted: the Proposed Transaction, recently as the summer of 2010. Celera’s stock began trading above the $8 offer price, reflecting that market participants believe Celera is worth 48. The offered consideration fails to account for the Company’s future Deleted: than the offer price. As the speed and locked-up nature performance. Natixis Bleichroeder analyst Ashim Anand stated that, “the offer price Deleted: the Proposed Transaction is digested by the market, however – absent judicial intervention as requested below – represents a discount of 21 percent to its peers,” given Celera’s promising pipeline, and Celera’s stock is likely to return to the offer price, thus demonstrating the harm caused by the Board’s misconduct. that “Celera has probably one of the most personalized medicine tests and that’s where all diagnostic companies are going.”

49. The offer price also does not account for Celera’s valuable patent properties. Indeed, 65% of Celera’s revenue is protected by patents. William Blair & Co analyst Amanda Murphy noted that, “[t]he proprietary products are patent protected. Deleted: - Deleted: -¶ ¶

-13-

Obviously there’s going to be higher margins that makes [sic] (clinical diagnostics) a good business.”

50. In short, while Celera’s public shareholders financed the Company’s impressive growth and development, they will not share in the Company’s future upside. Formatted: Line spacing: Double, IV. The Celera Board Impermissibly Protects The Proposed Transaction Don't keep with next Deleted: the 51. Not only did the Celera Board fail to maximize shareholder value in Deleted: ¶ Formatted: Don't keep with next agreeing to the Proposed Transaction, it also took unreasonable steps to ensure the consummation of a deal with Quest to the detriment of Celera’s shareholders.

52. First, the timing of the Tender Offer poses an almost insurmountable Formatted: Font color: Black obstacle to any potential competing bid. Pursuant to the Merger Agreement, Quest will commence the Tender Offer within seven business days after March 17, 2011. Formatted: Font color: Black 53. Thus, within roughly one month, Celera may cease to exist as an independent public company. This expedited closing precludes alternative offers for the

Company because potential bidders will be unable to conduct meaningful due diligence Deleted: “ on Celera or obtain adequate financing in time to make a Superior Proposal that may be Formatted: Font color: Black Deleted: ” (as defined in the Merger considered by the Celera Board. This time constraint, combined with the other deal Agreement”) Formatted: Font color: Black protections described below and a provision that prevents the Board from providing information to potential suitors in advance of any firm offer and the time period required by the Matching Rights described below, insulate the Proposed Transaction from competing bids.

54. The Celera Board has safe-guarded the expediency of the Proposed Deleted: - Transaction by providing Quest a “Top-Up Option” that allows Celera and Quest to avoid Deleted: -¶ ¶

-14- the protracted timeframe of a long-form merger. In the event Quest does not secure the requisite number of shares for a short-form merger pursuant to the Tender Offer, Celera may issue up to roughly 220 million additional shares for purchase by Quest in order to close the transaction without a shareholder vote. Section 2.4(a) of the Merger Agreement provides in relevant part:

The Company hereby grants to the Purchaser an irrevocable option (the “Top Up Option”), exercisable only after acceptance by the Purchaser of, and payment for, Shares tendered in the Offer and thereafter upon the terms and conditions set forth in this Section 2.4, to purchase, for consideration per Top Up Option Share equal to the Offer Price, up to that number of newly issued Shares (the “Top Up Option Shares”) equal to the number of Shares that, when added to the number of Shares owned by Parent and the Purchaser immediately following the consummation of the Offer, shall constitute one share more than 90% of the Shares then outstanding on a fully diluted basis . . . . Deleted: ….¶ 55. The “Top-Up Option” serves no rational purpose other than to facilitate closing of the Proposed Transaction as soon as possible and before shareholders can digest the universe of material information forced upon them in a matter of days. Indeed, Deleted: that within a two week period, Company will have released its annual report, the

Restatements, the Merger Agreement and the related proxy materials. Defendants are well aware that the circumstances, timing and terms of the Proposed Transaction might not withstand shareholder scrutiny, and have therefore taken all steps to avoid a shareholder vote on the Proposed Transaction, including adoption of the “Top-Up Deleted: . Deleted: Board did not insist upon a “Go-Shop” or even a “Window Shop” Option.” provision (either of which would have made delays in closing a higher 56. Second, reflecting the Celera Board’s haste to insulate themselves and probability). To the contrary, the Deleted: - senior management from personal liability, the Celera Board agreed to a prohibitive No- Deleted: -¶ ¶

-15-

Deleted: Celera Board’s ability to Shop, further limiting the possible emergence of strategic alternatives (which may not entertain superior offer Defendants the same liability protections). Section 6.4(a) of the Merger Agreement provides:

The Company shall, and shall cause each Company Subsidiary and Company Representative to, immediately cease and cause to be terminated any existing discussions or negotiations with any Third Parties (other than the Parent Representatives) that may be ongoing as of the date hereof with respect to a Takeover Proposal. The Company shall not, and shall cause each Company Subsidiary and Company Representative not to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing nonpublic information), any inquiries or the making of any proposal or offer (including any proposal or offer to the Company’s stockholders) that constitutes, or may reasonably be expected to lead to, any Takeover Proposal. Deleted: <#>The No-Shop prevents the Celera Board from even encouraging 57. Third, the Celera Board granted Quest the Matching Rights in the Merger competing bids for the Company; this is the antithesis of maximizing shareholder value. The No-Shop is particularly Agreement that provide Quest three business days to revise its proposal or persuade the inappropriate in light of the limited sale process and the Company’s position as a logical takeover target for numerous Celera Board not to change its recommendation on the merger in the face of a proposal interested third parties, including current strategic partner Abbott Laboratories.¶ from a third party suitor.

58. The Matching Rights dissuade interested parties from making an offer for the Company by providing Quest the opportunity to make a matching bid. The Matching

Rights also impair the Board from offering a competing bidder a reasonable termination or bidding fee in exchange for a “blowout” price, since any competing bid must be Deleted: matching rights subjected to the Matching Rights. Due to the Proposed Transaction’s flawed process and wholly inadequate price, no justification exists for the Board’s decision to agree to the inclusion of the Matching Rights and other bid advantages in the Merger Agreement.

59. Fourth, the Celera Board further reduced the possibility of maximizing Deleted: - shareholder value by agreeing to a punitive termination fee of $23.45 million, which Deleted: -¶ ¶

-16- represents over 10% of the $226 million Quest is paying for Celera’s actual operations.

Specifically, Celera has $327 million in cash-on-hand and $117 million in deferred tax credits and net operating losses. In this instance, it does not make economic sense to assess the reasonableness of the Termination Fee against Celera’s enterprise value.

“interest” to protect in acquiring Celera’s cash or tax asset, and in assessing whether the

Termination Fee is reasonable under the circumstances, it should be viewed in relation to the non-fixed component of what Quest is purchasing, which is valued at $226 million after the cash and tax assets are deducted from the reported transaction price. Giving Deleted: This away over 10% of the operating value of Celera is a steep and unreasonable penalty and Deleted: for the Board’s potential exercise of its fiduciary duties in serves as a significant deterrent for any third party who might otherwise desire to make a endorsing a superior proposal. The unjustifiable Termination Fee competing bid.

61. The No-Shop, Matching Rights, and the Termination Fee (collectively, the

“Deal Protections”) serve to deter competing parties from making bids and prevent the

Celera Board from properly exercising their fiduciary duties to obtain the best available strategic alternative for Celera’s public shareholders. The Deal Protections erect barriers to competing offers and essentially guarantee that the Proposed Transaction will be consummated, leaving Celera shareholders with limited opportunity to consider any superior offer. When viewed collectively, these provisions cannot be justified as Deleted: - Deleted: -¶ ¶

-17- reasonable or proportionate measures to protect any perceived threat to Quest’s investment in the Proposed Transaction process.

V. The Board Furthers Serves Its Own And Managements’ Interests By Formatted: No underline Amending Celera’s Change In Control Severance Plan Deleted: and Formatted: No underline 62. Without the Proposed Transaction, certain senior officers and directors at Deleted: in the Company may be terminated as a result of the accounting improprieties revealed by Deleted: rush the Restatements. Instead, by agreeing to a sale of the Company to Quest at a discount, these same directors and officers will be entitled to either lucrative positions with Quest or substantial severance benefits.

63. Specifically, concurrent with signing the Merger Agreement, the Celera

Board amended the Company’s Executive Change in Control Plan (the “CIC Formatted: Font: Italic Amendment”), thus ensuring that Celera’s most senior executives (i.e., CEO, Senior Vice

Presidents and Vice President – Chief Intellectual Property Counsel) receive a windfall, either in the form of new employment contracts with Quest or extensive severance benefits.

65. Any additional cost Quest must incur as a result of the CIC Amendment comes at the direct expense of Celera’s public shareholders in the form of reduced merger consideration. Rather than spend negotiating capital on an increased purchase price, the Deleted: - Deleted: -¶ ¶ Celera Board instead negotiated for the CIC Amendment and indemnity from liability. -18-

Deleted: while 66. Finally, as the Proxy acknowledges, certain officers and directors will Deleted: may personally gain from the Proposed Transaction and may have interests that conflict with those of the shareholders. For example, Defendant Ordoñez will receive a substantial and immediate cash benefit. First, she will receive $1,051,272 for her shares of the company.

Second, stock options and performance share awards will immediately vest, giving

Defendant Ordoñez an additional $1,332,219. Finally, (in addition to her new employment contract) Defendant Oradanez will receive $2,286,375 for surrendering her rights under the amended CIC discussed supra. All told, Defendant Ordoñez will receive more than $4.5 million and a new employment agreement if the Proposed Transaction closes. Although it is not unusual for executives to benefit from a merger, when compared with the alternative in this case – potential personal liability in numerous lawsuits – Defendant Ordoñez had substantial motivation to ignore the interests of public shareholders. Deleted: (e.g., Defendant Ordonez will have approximately $750,000 worth of 67. In short, the relatively small amount of equity held by the majority of stock options and restricted stock units accelerated following consummation of directors and officers provided the Board with little incentive to maximize shareholder the challenged transaction) value. By comparison, job retention and securities fraud liability avoidance provided substantial motivation for the Board to agree to sell the Company at a substantial discount.

VI. Defendants Cause To Be Filed A Deficient And Misleading Proxy Statement

68. On March 28, 2011, the Celera Board and Quest caused to be filed a misleading Form 14D-9 Solicitation and Recommendation Statement with the SEC Deleted: - relating to the Tender Offer. As set forth below, the Proxy fails to fully and fairly Deleted: -¶ ¶

-19- disclose material information that significantly alters the total mix of information made available to shareholders asked to consider the end of Celera’s existence as an independent public company.

69. The “Background of the Offer; Reasons for the Company Board’s

Recommendation” section (the “Background Section”) of the Proxy leaves many material questions unanswered, and provides misleading information to shareholders.

70. Among other things, the Background Section does not fully explain the genesis for management’s recommendation that the Board explore the Company’s strategic alternatives, or whether management was aware of the severity of the

Company’s accounting improprieties at that time.

71. Further, the Background Section does not address why the Company’s financial advisors were conspicuously absent from management’s initial presentation(s) to Quest regarding an acquisition of the Company, nor does the Background Section address whether the presentation(s) made to Quest were materially different than those made to other potential bidders.

72. Additionally, the Background Section fails to describe the value Quest assigned to the CIC Amendment and the effect of the CIC Amendment on the consideration offered in the Proposed Transaction.

73. The Background Section fails to explain why negotiation of the Proposed

Transaction was often left to senior management – those individuals most conflicted in their effort to secure indemnification and the CIC Amendment – rather than the Special Deleted: - Committee. For example: Deleted: -¶ ¶

-20- a. Minimal detail is provided about the late June 2010 meetings

among management and Quest, which led to Quest pulling its

$10.25 per share offer. What happened and why it happened is

material to any investor assessing whether today to accept just $8

per share. b. From the end of July 2010 through October 2010, Defendant

Ordonez contacted and conducted negotiations with senior

management of another company, (“Bidder D”), regarding a

potential sale of the Company’s lab services business segment and

BHL, at which point Bidder D withdrew its interest presumably in

the face of Defendant Ordonez’s unreasonable compensation or

severance demands; c. On August 25, 2010, Ordonez held in-person negotiations with a

representative of “Bidder C” regarding a potential transaction

involving the Company’s Products business and the terms at which

Celera’s senior management would be amenable to a deal; d. On September 9, 2010, members of the Company’s senior

management held a second in-person meeting at the facilities of

“Bidder A”; e. On November 11, 2010, members of the Company’s senior

management, representatives of Credit Suisse and representatives Deleted: - Deleted: -¶ ¶

-21-

of “Bidder E” negotiated a potential transaction in-person at the

offices of Credit Suisse; and

f. On March 9, 2011, one week for the deal’s announcement, it was

senior management that was charged with final negotiations with

Quest.

74. The Background Section is also deficient in that it fails to describe what basis Company management had for advising the Board that a restatement was unlikely as a result of recently identified misclassified bad debt expenses. Specifically, the Proxy states that on February 4, 2011:

a. What criteria were used to identify the “nine potential parties

interested in pursuing a transaction”;

b. The rationale underlying the decision to only solicit indications of

interest for an acquisition of the Company, rather than a

partnership or collaboration; Deleted: - Deleted: -¶ ¶

-22-

c. Why “Bidder B” was not invited to participate in the “second

round of the strategic transaction process”;

d. How Bidder D, contacted at the end of July 2010, was identified,

who identified Bidder D, and why Bidder D was not contacted

earlier in the process;

e. How the “three additional potential bidders” contacted during

September 2010 were identified, who identified them, and why

they were not contacted earlier in the process.

76. The Proxy does not, however, provide any basis for management’s representation (which was proven wrong weeks later), or explain whether the Celera

Board concurred with this position. The Proxy also does not disclose whether Ordoñez was involved in deciding that the misclassified bad debt expenses “did not appear to be likely to require a restatement.”

77. The Proxy is also deficient in its disclosure of material financial information relating to the present and future value of the Company. Although the Proxy discloses certain of Credit Suisse’s and LEK’s conclusions and recommendations, it omits material information about the assumptions used to support their various analyses.

The Proxy completely fails to disclose the underlying methodologies, projections, key inputs and multiples relied upon and observed by Credit Suisse in conducting its analysis in support of the Fairness Opinion concerning the Proposed Transaction. This information is material to shareholders so they can properly assess the credibility of the Deleted: - Deleted: -¶ ¶

-23- various analyses performed by Credit Suisse and purportedly relied upon by the Board in recommending the Proposed Transaction.

78. Further, the Fairness Opinion was written only for the Celera Board in connection with its consideration of the Proposed Transaction, and does not even purport to provide a recommendation to Celera shareholders as to whether to tender shares pursuant to the Tender Offer, or how shareholders should act with respect to any matter relating to the Tender Offer or the Merger Agreement. In addition, the “Selected

Companies Analysis” section of the Proxy:

a. Omits individual metrics and multiples of the selected comparable

companies, including the aggregate 2010-2012 revenue, EBITDA,

and earnings per share information relied on to determine the

“implied per share equity reference range;”

b. Omits the specific multiples selected and applied by Credit Suisse

to determine the “implied per share equity reference range”

including how those multiples were selected;

c. Omits the value ranges obtained by applying the various multiple

ranges calculated for the selected companies, i.e. the revenue

multiple range, EBITDA multiple range, and earnings per share

multiple range.

Selected Transactions Analysis:

a. Omits the dates of the transactions selected for the analysis and the Deleted: - individually observed metrics and multiples calculated from the Deleted: -¶ ¶

-24-

selected transactions, including aggregate value to last twelve

months (“LTM”) revenue and EBITDA;

b. Omits the specific multiples selected and applied by Credit Suisse

to determine the “implied per share equity reference range”

including how those multiples were selected;

c. Omits the specific multiples selected and applied to each of the

business units comprising Credit Suisse’s sum-of-the-parts

analysis.

Discounted Cash Flow Analysis:

a. Omits the forecasts provided by Celera’s management, and relied

on by Credit Suisse, of the Company’s non-commercial,

development stage drug assets;

b. Omits the “estimated clinical trial success rates” used by Credit

Suisse to further discount the value of the Company’s non-

commercial, development stage drug assets;

c. Omits the present value of the Company’s NOLs, as calculated by

Credit Suisse.

79. Further, the Proxy fails to disclose the financial projections for line items used by Credit Suisse as part of its discounted cash flow analysis, including, but not limited to:

a. EBITDA; Deleted: - b. Tax rate; Deleted: -¶ ¶

-25-

c. Depreciation and amortization;

d. Capital expenditures;

e. Changes in working capital;

f. Other non-cash expenses.

CLASS ACTION ALLEGATIONS

80. Plaintiff brings this action pursuant to Rule 23 of the Rules of the Court of

Chancery, individually and on behalf of all other shareholders of Celera’s common stock

(except defendants herein and any persons, firm, trust, corporation or other entity related to or affiliated with them and their successors in interest) who are or will be threatened with injury arising from defendants’ wrongful actions, as more fully described herein (the

“Class”).

81. This action is properly maintainable as a class action.

82. The Class is so numerous that joinder of all members is impracticable.

The Company has thousands of shareholders who are scattered throughout the United

States. As of February 25, 2011, there were 82,113,206 shares of Celera’s common stock outstanding.

83. There are questions of law and fact common to the Class including, inter alia, whether:

a. The Individual Defendants breached their fiduciary duties by failing to review all strategic alternatives in good faith;

b. The Individual Defendants breached their fiduciary duties by Deleted: - allowing Company executives to negotiate the Proposed Transaction; Deleted: -¶ ¶

-26-

c. The Individual Defendants breached their fiduciary duties by failing to extract the highest value possible from Quest in exchange for Celera’s shares;

d. The Individual Defendants breached their fiduciary duties by Deleted: ” “locking up” the Proposed Transaction to the detriment of the Class by approving the No-

Shop, Matching Rights, Termination Fee and “Top-Up Option” without obtaining adequate consideration for Celera shareholders;

e. The Individual Defendants breached their fiduciary duties by favoring their own interests over shareholders and negotiating and agreeing to the CIC

Amendment and indemnity from liability without also attempting to obtain maximum value for Celera’s public shareholders;

f. Plaintiff and the other members of the Class are being and will continue to be injured by the wrongful conduct alleged herein and, if so, what is the proper remedy and/or measure of damages; and

g. Plaintiff and the other members of the Class will be damaged Deleted: Defendants’ irreparably by defendants’ conduct. Deleted: the 84. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class, and Plaintiff has the same interests as the other members of the Class. Plaintiff is an adequate representative of the Class.

85. The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual Deleted: - members of the Class, which would establish incompatible standards of conduct for Deleted: -¶ ¶

-27-

Deleted: Defendants defendants, or adjudications with respect to individual members of the Class, which would as a practical matter be disjunctive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

86. Defendants have acted, or refused to act, on grounds generally applicable to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the Class, as a whole, is appropriate.

COUNT I

BREACH OF FIDUCIARY DUTY AGAINST THE INDIVIDUAL DEFENDANTS

87. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

88. The Individual Defendants, as Celera directors, owe the Class the utmost fiduciary duties of due care, good faith, candor and loyalty. By virtue of their positions as directors and/or officers of Celera and/or their exercise of control and ownership over the business and corporate affairs of the Company, the Individual Defendants have, and at all relevant times had, the power to control and influence and did control and influence and cause the Company to engage in the practices complained of herein. Each Individual

Defendant was required to: (a) use their ability to control and manage Celera in a fair, just and equitable manner; (b) act in furtherance of the best interests of Celera and its shareholders and not their own; and (c) fully disclose the material circumstances,

Deleted: - Deleted: -¶ ¶

-28- procedures, and terms of the Proposed Transaction so that shareholders can make a fully informed decision.

89. The Individual Defendants failed to fulfill their fiduciary duties in connection with the Proposed Transaction by conducting a sale of the Company for the purpose of avoiding personal liability.

90. As a result of the Celera directors’ breaches of fiduciary duty in agreeing to the Proposed Transaction and in accordance with the personal interests of the Celera

Board and Company management, the Class will be harmed by receiving the inferior consideration offered in the Proposed Transaction.

91. Furthermore, the Deal Protections adopted by the defendants and contained in the Merger Agreement impose an excessive and disproportionate impediment to the Board’s ability to entertain any other potentially superior alternative offer.

92. The No-Shop, Matching Rights, Termination Fee and “Top-Up Option” constitute a breach of fiduciary duty, particularly in light of the Individual Defendants’ failure to obtain additional consideration in exchange for these valuable concessions.

93. The Individual Defendants also failed to fully inform themselves about possible competing proposals, including other strategic alternatives, before agreeing to the Proposed Transaction, and instead chose to avoid considering whether any alternative transaction provides greater value to the Celera shareholders than the Proposed

Transaction. Deleted: - Deleted: -¶ ¶

-29-

94. Even if the Board believes the Proposed Transaction is more valuable to the Class than alternative offers, the Board is not excused from taking all possible steps to maximize shareholder value.

95. The Individual Defendants also caused to be filed a false and misleading

Proxy with the SEC in violation of their fiduciary duty to the Class.

96. Plaintiff and the Class have no adequate remedy at law.

COUNT II

AIDING AND ABETTING AGAINST DEFENDANTS QUEST AND CELERA

97. Plaintiff repeats and realleges each and every allegation above as if set forth in full herein.

98. Defendant Quest knowingly assisted the Individual Defendants in construction of the Proposed Transaction and the related Merger Agreement which unlawfully restricts the Celera Board from fully informing itself of all of the Company’s strategic alternatives in compliance with its fiduciary duties.

-30-

101. Plaintiff and the Class have no adequate remedy at law. Formatted: Don't keep with next, COUNT III Don't keep lines together

INJUNCTIVE RELIEF AND FILING OF A MISLEADING PROXY Deleted: FOR STATEMENT AGAINST DEFENDANTS CELERA AND THE INDIVIDUAL DEFENDANTS Formatted: Space After: 0 pt, Don't keep with next, Don't keep lines together 102. Plaintiff repeats and realleges each and every allegation above as if set Formatted: Don't keep with next, Don't keep lines together forth in full herein.

103. The Proposed Transaction is the product of breaches of fiduciary duties by the Company’s Board, and, as such, the Company should be enjoined from taking any steps to consummate the Proposed Transaction, and the Merger Agreement should be subject to amendment by this Court.

104. Further, Celera, in conjunction with the Individual Defendants, caused to be filed the false and/or misleading Proxy.

105. Plaintiff and the Class have no adequate remedy at law.

RELIEF REQUESTED

WHEREFORE, Plaintiff demands judgment as follows:

a. Preliminarily and permanently enjoining Celera and any of the

Celera Board members and any and all other employees, agents, or representatives of the

Company and persons acting in concert with any one or more of any of the foregoing, Deleted: - during the pendency of this action, from taking any action to consummate the Proposed Deleted: -¶ ¶

-31-

Transaction until such time as the Celera Board has fully complied with their fiduciary duties and taken all readily available steps to maximize shareholder value;

b. Finding the Celera Board liable for breaching their fiduciary duties to the Class;

c. Finding the Deal Protections invalid and unenforceable, or, in the alternative, amending the Deal Protections as necessary to ensure a full and fair sale process for the benefit of the Class;

d. Finding Quest liable for aiding and abetting breach of fiduciary duty;

e. Finding the CIC Amendment invalid and unenforceable, or, in the alternative, amending the CIC Amendment as necessary to ensure fairness to the Class; Deleted: Defendants f. Requiring the defendants to amend or supplement the Proxy to disclose all material information relating to the Proposed Transaction, the CIC

Amendment and the Restatements;

g. Awarding the Class compensatory damages, together with pre- and post-judgment interest;

h. Awarding Plaintiff the costs and disbursements of this action, including attorneys’, accountants’, and experts’ fees; and

Deleted: ¶ i. Awarding such other and further relief as is just and equitable. Formatted: Font color: Black Deleted: March 22 Dated: April 1, 2011 Formatted: Font color: Black Formatted: Font color: Black /s/ John C. Kairis Deleted: - Stuart M. Grant (Del. ID No. 2526) Deleted: -¶ ¶

-32-

Michael J. Barry (Del. ID No. 4368) John C. Kairis (Del. ID No. 2752) GRANT & EISENHOFER P.A. 1201 North Market Street, Suite 2100 Wilmington, DE 19801 (302) 622-7000

Plaintiffs’ Co-Lead Counsel Deleted: Counsel for Plaintiff¶ William H. Narwold ¶ MOTLEY RICE LLC Formatted: Font color: Black One Corporate Center

20 Church Street, 17th Floor Formatted: Font color: Black, Not Hartford, Connecticut 06103 Superscript/ Subscript (860) 882-1681 Formatted: Font color: Black Formatted: Font color: Black, Marlon E. Kimpson Superscript William S. Norton Formatted: Font color: Black J. Brandon Walker MOTLEY RICE LLC 28 Bridgeside Boulevard Mt. Pleasant, South Carolina 29464 (843) 216-9205

Gerald Silk Mark Lebovitch Bruce Bernstein Brett M. Middleton Jeremy Friedman BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP 1285 Avenue of the Americas New York, New York 10019 (212) 554-1400 Formatted: Font color: Black Plaintiffs’ Co-Lead Counsel

ADDITIONAL COUNSEL:

Christine Azar Deleted: - LABATON SUCHAROW LLP Deleted: -¶ ¶

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One Commerce Center 1201 N. Orange St., Suite 801 Wilmington, Delaware 19801 (302) 573-2530

Jonathan M. Plasse Jonathan Gardner Michael W. Stocker Nicholas R. Hector LABATON SUCHAROW LLP 140 Broadway New York, New York 10005 (212) 907-0700

Patricia C. Weiser Robert B. Weiser Henry J. Young THE WEISER LAW FIRM, P.C. 121 N. Wayne Avenue, Suite 100 Wayne, Pennsylvania 19087 (610) 225-2677

Richard A. Maniskas RYAN & MANISKAS, LLP 995 Old Eagle School Road, Suite 311 Wayne, Pennsylvania 19087 (484) 588-5516

Marc I. Gross Jason S. Cowart Gustavo F. Bruckner POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue New York, NY 10017 (212) 661-1100 Deleted: Of Counsel for Plaintiff Formatted: Font color: Black Formatted: Hyphenate, Tabs: Not at 0 pt Formatted: Font color: Black Deleted: - Deleted: -¶ ¶

-34-

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

TN RE CELERA CORPORATION Consolidated SHAREHOLDER LITIGATION C.A. No. 6304-VCP

VERIFICATION AND AFFIDAVIT OF NEW ORLEANS EMPLOYEES' RETIREMENT SYSTEM PURSUAIIT TO COURT OF CHANCERY RULES 23(aa) AND 3(aa)

Jeny D. Davis, being duly sworn, does hereby depose and state as follows:

l. My name is Jerry D. Davis. I have the authority to make material decisions for

New Orleans Employees' Retirement System ('New Orleans") including the authority to make the decisions associated with prosecuting this litigation and approve the Verified Consolidated

Amended Class Action Complaint. In such capacity,I make this Verification and Aff,rdavit pursuant to Court of Chancery Rules 23(n) and 3(aa).

2. New Orleans is a current shareholder of Celera Corporation and has been a

shareholder at all times relevant to the above-captioned Action.

3. New Orleans has retained the law firms of Motley Rice LLC, Bernstein Litowitz

Berger & Grossmann LLP, and Grant & Eisenhofer P.A. in connection with this litigation and

has reviewed and authorized the filing of a class action complaint against the above-listed

defendants. I have read the foregoing Verified Consolidated Amended Class Action Complaint

and know the contents thereof, and the same is true to my own knowledge, except as to the

matters therein stated to be alleged upon information and belief and as to those matters, I believe

them to be true.

4. Neither New Orleans nor anyone else affiliated with it has received, been

promised or offered and will not accept any form of compensation, directly or indirectly, for

prosecuting or serving as a representative party in the above-captioned class action except for (i) such damages or other relief as the Court may award such person as a member of the class; (ii) such fees, costs or other payments as the Court expressly approves to be paid to or on behalf of such person; or (iii) reimbursement, paid by such person's attorneys, of actual and reasonable out-of-pocket expenses incurred directly in connection with prosecution of the action.

D. the Board of Trustees

SUBSCRIBED TO AND SWORN BEFORE MErhis Jgfduy ot

My Commission Expires:

BulN. Vancc Nota4,Public Stf,t6ofJnuisiana 1ny Ornmspgs Issu€d er I& CERTIFICATE OF SERVICE

I, John C. Kairis, hereby certify that on April 1, 2011, the Verified Consolidated

Amended Class Action Complaint was served on the following counsel of record via

LexisNexis File and Serve:

Gregory P. Williams Geoffrey G. Grivner RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 N. King Street Wilmington, DE 19801 [email protected] [email protected]

Kevin G. Abrams Nathan A. Cook ABRAMS &BAYLISS LLP 20 Montchanin Road, Suite 200 Wilmington, Delaware 19807 [email protected] [email protected]

/s/ John C. Kairis______John C. Kairis (Del. ID No. 2752)