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p1 I Jennie Lee Anderson (SBN 203586) ANDRUS ANDERSON LLP " 2 155 Montgomery Street, Suite 900 A San Francisco, California 94104 3 Telephone: (415) 986-1400 Facsimile: (415) 986-1474 4 [email protected] 5 DAVID A. P. BROWER (pro hac vice pending) BRIAN C. KERR (pro hac vice pending) 6 BROWER PP/EN A PROFESSIONAL CORPORATION 7 488 Madison Avenue, Eighth Floor New York, NY 10022 8 Telephone: (212) 501-9000 Facsimile: (212) 501-0300 9 Attorneys for Plaintiff 10 E1nQ 11 UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA

13 ELIZABETH M. ANDAL, Individually and behalf of all others similarly situated, V° iLi 1769 Plaintiff, CLASS ACTION

V. COMPLAINT FOR BREACH OF FIDUCIARY DUTIES AND CELERA CORPORATION, QUEST VIOLATIONS OF SECTIONS DIAGNOSTICS INCORPORATED, SPARK 14(e) AND 20(a). OF THE ACQUISITION CORPORATION, RICHARD SECURITIES EXCHANGE ACT H. AYERS, JEAN-LUC BEL1NGARD, OF 1934 WILLIAM G. GREEN, PETER BARTON 19 HUTT, GAIL K. NAUGHTON, KATHY ORDONEZ, WAYNE I. ROE, AND JURY TRIAL DEMANDED 20 BENNETT M. SHAPiRO, 21

22 Plaintiff, individually and on behalf of all others similarly situated, respectfully brings this 23 shareholder class action for breach of fiduciary duty and violations of Sections 14(e) and 20(a) of 24 the Securities Exchange Act of 1934 ("1934 Act"), and US Securities and Exchange Commission 25 ("SEC") Rule 14a-9 promulgated thereunder against the herein named defendants and alleges the 26 following upon information and belief, except as to those allegations specifically pertaining to 27 plaintiff, which are predicated upon the investigation undertaken by Plaintiff's counsel: 28

COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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1 NATURE OF THE ACTION 2 1. This is a shareholder class action brought by plaintiff on behalf of all similarly

3 situated public shareholders of Celera Corporation ("Celera" or the "Company") against the 4 company and its Board of Directors ("Individual Defendants" or the "Board"), among others, in 5 connection with the proposed buyout of Celera by Quest Diagnostics Incorporated ("Quest"),

6 through its subsidiary Spark Acquisition Corporation ("Merger Sub"), which was formed solely to 7 facilitate the transaction ("Proposed Transaction"). This matter arises out of defendants' 8 dissemination of a false and misleading Solicitation/Recommendation Statement in violation of 9 Sections 14(e) and 20(a) of the 1934 Act and SEC Rule 14a-9 promulgated thereunder, and the 10 Board's breaches of their fiduciary duties owed to Celera's stockholders under state law. 11 2. On March 17, 2011, Celera entered into an Agreement and Plan of Merger 12 ("Merger Agreement") with Quest, whereby Quest would, within a week of the deal's :13 announcement, commence a tender offer ("Tender Offer") to acquire all of the issued and

14 outstanding shares of Celera common stock for $8.00 per share in cash ("Proposed Transaction"). 15 3. At the same time, the Company shocked the market by filing a host of restatements 16 to its prior Securities and Exchange Commission ("SEC"). financial filings ("Restatements"). 17 These Restatements expose the fact that Celera's management has engaged in a wide-ranging

18 accounting fraud over the past several years, which included improperly classifying and reporting 19 bad debt expenses and unreimbursed and uncollectible charges. These fraudulent accounting

20 practices materially affected Celera's financial statements. The Restatements are so expansive and

21, damning that had they been disclosed independent of a merger announcement that propped up the 22 stock price, they would have exposed the Company's senior management, as well as the entire

23 Board, to possible liability for violating the federal securities laws. 24 4. As the need for the Restatements became apparent, Kathy Ordonez, Celera's Chief 25 Executive Officer, with the assistance of the rest of the Board, moved quickly to sell the Company 26 at any price in exchange for broad indemnity and continuing employment for Celera's senior

27 management team. 28 5. To effectuate a sale in advance of the Restatements, Ordonez and the Board were 1 COMPLAINT FOR BREACH OF FIDUCIARY DUTY Case3:11-cv-01769-SC Document1 Filed04/11/11 Page3 of 30

I forced to accept an offer from the Company's long-time strategic partner, Quest that was well

2 below what Quest had previously indicated it was prepared to pay for Celera. Quest had 3 previously offered over $10 a share for Celera, but revised its offer significantly downward in light 4 of defendants' demand for broad indemnification and senior management's request for continued

5 employment post-closing. This self-interested negotiating cost Celera shareholders maximum 6 value for their shares, as the Celera Board was eventually forced to accept the $8.00 price if they

7 were to (a) strike a deal in advance of the Restatements; and (b) secure the indemnification and 8 future employment for senior management that they sought, 9 6. Pursuant to the Merger Agreement, Quest will indemnify and hold harmless, to the

10 fullest extent permitted under applicable law, each present and former director, officer, employee 11 and agent of the Company and each Company subsidiary, for the unusually long period of six

12 years from the date of closing. 13 7. Moreover, the Proposed Transaction will help ensure that Celera's senior officers

14 and board members will receive a windfall by either receiving lucrative positions with Quest or 15 substantial severance benefits. Indeed, without the Proposed Transaction, these officers and 16 directors would be forced to deal with the pending securities litigation and the Restatements'

17 negative repercussions, including possible termination, additional lawsuits, and SEC-permitted 18 claw-backs. 19 8. To ensure consummation of this liability-absolving transaction, the Board also gave 20 Quest a panoply of deal protections, including a no-shop provision ("No-Shop"), unlimited

21 matching rights ("Matching Rights"), and a $23.45 million termination fee ("Termination Fee"), 22 which represents over 10% of the total value Quest is paying to acquire Celera's operations (i.e.,

23 net of cash and tax assets, both of which have a fixed and objective value and therefore should not 24 be considered in assessing the reasonableness of the termination fee). 25 9. Celera and Quest structured the Proposed Transaction as a Tender Offer so that it

26 can close within a month of the deal's announcement. This effectively eliminates the prospect of a 27 competing bid because no interested suitor could arrange financing, present a "Superior Proposal" 28 (as defined in the Merger Agreement) sufficient to allow the Board to provide it with due

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1 1 diligence, wait through the three business day delay required by the Matching Rights, complete 2 due diligence, fully digest the Company's accounting problems and the Restatements, and finalize

3 the terms of an alternative takeover transaction within this compressed time period. To be sure the

4 Proposed Transaction can be consummated by short-form merger on an expedited basis, the Board

5 granted Quest a "Top-Up Option" that helps Defendants avoid the protracted process of a

6 shareholder vote. Not only would the extended timeframe of a long-form merger increase third

7 parties' ability to assemble and present a "Superior Proposal," it would also allow for shareholders

8 to fully digest the windfall of information recently disclosed and possibly vote down the Proposed

9 Transaction. 10 10. In an attempt to secure shareholder approval of this unfair deal, on March 28, 2011,

11 defendants filed a materially misleading Solicitation/Recommendation Statement ("Proxy"). The

12 Proxy recommends that Celera's shareholders accept the offer, tender their shares, and adopt the

13 Merger Agreement. However, the Proxy is misleading because among other things, it almost

14 wholly ignores material issues relating to the motivation for, and negotiation of, the Proposed

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

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

17 senior management. Specifically, the Proxy omits and/or misrepresents the material information

18 set forth below in contravention of Sections 14(e) and 20(a) of the 1934 Act and/or defendants'

19 fiduciary duty of disclosure under state law. 20 11. As explained herein, this information is material to the impending decision of

21 Celera' s shareholders whether to tender their shares and vote in favor of the Proposed Transaction.

22 As such, defendants' violations of Sections 14(e) and 20(a) of the 1934 Act and their breaches of

23 fiduciary duty under state law to maximize shareholder value and disclose all material information

24 in connection with a merger transaction threaten shareholders with irreparable harm for which

25 money damages are not an adequate alternate remedy. Thus, plaintiff seeks injunctive relief to

26 ensure that defendants cure their breaches of fiduciary duty and violations of Sections 14(e) and

27 20(a) before Celera shareholders are asked to tender their shares and vote on the Proposed

281 Transaction, and that defendants are not permitted to seek shareholder support of the Proposed

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1 Transaction without complying with their duty under state law to maximize shareholder value and 2 the federal securities laws and state law to provide shareholders with all material information

3 about the sales process, the merger consideration, and the company's intrinsic value. 4 JURISDICTION AND VENUE

5 12. This Court has jurisdiction over all claims asserted herein pursuant to Section 27 of 6 the 1934 Act for violations of Sections 14(e) and 20(a) of the 1934 Act and SEC Rule 14a-9. 7 13. Venue is proper in this District because Celera has its principal place of business in

8 this District. Plaintiffs claims arose in this District, where most of the actionable conduct took 9 place, where most of the documents are electronically stored and where the evidence exists, and

10 where virtually all of the witnesses are located and available to testify at the jury trial permitted on 11 these claims in this Court. Moreover, each of the Individual Defendants, as Celera officers and/or 12 directors, has extensive contacts in this District.

13 PARTIES 14 14. Plaintiff is and was, at all times relevant hereto, a holder of Celera common stock.

15 Plaintiff's Certification is attached hereto as Exhibit A. 16 13. Defendant Richard H. Ayers has served as a member of the Board since February 17 2008. 18 14. Defendant Jean-Luc Belingard has served as a member of the Board since February

19 2008. 20 15. Defendant William G. Green has served as a member of the Board since July 2008. 21 16. Defendant Peter Barton Hutt has served as a member of the Board since August

22 2008.

23 17. Defendant Gail K. Naughton has served as a member of the Board since July 2008. 24 18. Defendant Ordonez has served as Celera's CEO and a member of the Board since 25 February 2008. 26 19. Defendant Wayne I. Roe has served as a member of the Board since December 27 2008. 28 20. Defendant Bennett M. Shapiro has served as a member of the Board since May

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1 12008. '1 21. Defendants Korngold, Ayers, Belingard, Green, Hutt, Naughton, Ordonez, Roe,

3 and Shapiro are collectively referred to herein as the "Board." 4 22. Defendant Celera is a healthcare business focusing on the integration of genetic

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

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

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

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

9 relevant diagnostic technologies developed to provide personalized disease management in cancer.

10 Celera is incorporated under the laws of the State of Delaware, with headquarters located at 1401

11 Harbor Bay Parkway, Alameda, California 94502. Celera is publicly traded on the NASDAQ

12 under the ticker symbol "CRA." 13 23. Defendant Quest is a leading provider of diagnostic testing, information and

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

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

16 service centers, and provides interpretive consultation through its extensive medical and scientific

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

18 information technology solutions that help improve patient care. 19 24. Defendant Spark is a Delaware corporation and a wholly-owned subsidiary of

20 Quest created for the purpose of consummating the Proposed Transaction, 21 25. The Board, Celera, Quest, and Spark are collectively referred to herein as the

22 "Defendants." 23 FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS. 24 15. Under applicable law, by reason of the Individual Defendants' positions with the

25 Company as officers and/or directors, said individuals are in a fiduciary relationship with Plaintiff

26 and the other shareholders of Celera and owe Plaintiff and the other members of the Class (defined

27 herein) the duties of good faith, fair dealing, loyalty and full and candid disclosure. 28 16. By virtue of their positions as directors and/or officers of Celera, the Individual

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I Defendants, at all relevant times, had the power to control and influence, and did control and 2 influence and cause Celera to engage in the practices complained of herein. 3 17. Each of the Individual Defendants is required to act in good faith, in the best

4 interests of the Company's shareholders and with such care, including reasonable inquiry, as 5 would be expected of an ordinarily prudent person. In a situation where the directors of a publicly 6 traded company undertake a transaction that may result in a change in corporate control, the 7 directors must take all steps reasonably required to maximize the value shareholders will receive

8 rather than use a change of control to benefit themselves, and to disclose all material information

9 concerning the proposed change of control to enable the shareholders to make an informed voting 10 decision. To diligently comply with this duty, the directors of a corporation may not take any

11 action that: 12 a. adversely affects the value provided to the corporation's shareholders; 13 b. contractually prohibits them from complying with or carrying out their fiduciary duties; 14 C. discourages or inhibits alternative offers to purchase control of the 15 corporation or its assets; 16 d. will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the corporation's shareholders; or 17 e. will provide the directors and/or officers with preferential treatment at the 18 expense of, or separate from, the public shareholders.

18. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, violated duties owed to Plaintiff and the other 21 shareholders of Celera, including their duties of loyalty, good faith and independence, insofar as 22 they, among other things, engaged in self-dealing and obtained for themselves personal benefits,

23 including personal financial benefits, not shared equally by Plaintiff or the other shareholders of 24 Celera common stock. 25 19. Furthermore, the Individual Defendants, as directors of Celera, must adequately 26 ensure that no conflict of interest exists between the Individual Defendants' own interests and their 27 fiduciary obligations to maximize shareholder value or, if such conflicts exist, to ensure that all 28 such conflicts will be resolved in the best interests of the Company's stockholders. 6 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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I FURTHER SUBSTANTIVE ALLEGATIONS

2 I. Background 3 20. Celera was founded in 1998 with the mission to sequence the human genome and 4 provide clients with early access to the resulting data. Using state-of-the art sequencing technology 5 supplied by Applied Biosystems and sophisticated internally developed information and 6 algorithms, Celera pioneered the application of "shotgun" sequencing. 7 21. Celera went on to build a successful database business, providing custom search 8 tools and software that enabled dozens of pharmaceutical companies and hundreds of academic, 9 government, and biotech clients to use its findings in biological research. While the Celera

10 database business ultimately became profitable, it was clear by 2000 that this was not a sustainable 11 business model, as the parallel publicly funded effort caught up and provided free access to

12 genome sequences. 13 22. In June 2000, Celera announced completion of its first draft of the human genome. 14 In 2001, Cel era completed its first assembly of the mouse genome. 15 23. In 2002, Celera and Quest entered a joint venture ("Joint Venture") in which the 16 companies would collaborate to identify genetic markers associated with cardiovascular disease

17 and diabetes. The Joint Venture provided Quest with exclusive access to markers found to have

18 clinical utility and established Celera as a preferred vendor to Quest for certain molecular

19 diagnostic products. 20 24. In 2004, Celera announced the formation of a strategic collaboration with Abbott 21 Laboratories to discover, develop, and commercialize therapies for the treatment of cancer. The

22 collaboration encompasses the development of therapeutic antibodies and small molecule drugs. 23 25. In January 2006, Celera announced its intent to partner its small molecule drug 24 programs and acquired full rights to Celera Diagnostics, which had previously been run as a joint

25 venture with Applied Biosystems. 26 26. In 2008, parent company Applera split Celera and Applied Biosystems into

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

28

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II. The Proposed Transaction 2 37. Beginning in 2008, Celera engaged in fraudulent accounting practices to artificially 3 boost the Company's revenues, exposing Celera and its officers and directors to potential 4 securities fraud liability. 5 38. Under the fraudulent scheme, the Company improperly included certain bad debt 6 expenses as a component of selling, general, and administrative expenses instead of reflecting the 7 bad debt expenses as a reduction of revenues. The errors in classification resulted in a significant 8 overstatement of Celera's consolidated revenues and of selling, general, and administrative

9 expenses. Additionally, the Company recorded certain uncollectible Berkeley HeartLab receivables in the second quarter of 2009, when the charges actually related to prior periods, 11 39. By mid-2010, management's fraudulent accounting practices were becoming 12 increasingly difficult to conceal from the market. Defendant Ordonez, Celera's CEO, with the

13 assistance and/or blind acquiescence of the Board, embarked upon a mission to sell the Company 14 at any price in exchange for: (a) six years of broad indemnification covering the real risk of 15 liability stemming from years of fraudulent accounting practices; and (b) continuing employment

16 for Ordonez and several of the Company's most senior executives. 17 40. To effectuate this scheme, Ordonez reached out to Celera's long-time strategic

18 partner Quest for a possible merger transaction. Recognizing the bright future for clinical 19 diagnostics and having attempted to enter the highly lucrative field of genetic testing for several

20 years, Quest, the $9 billion giant, eagerly agreed to explore pursuing an acquisition of Celera. 21 41. On March 17, 2011, Celera and Quest entered into the Merger Agreement, 22 providing Celera shareholders with $8 per share in cash - an inadequate 28% premium to the

23 Company's closing stock price on the day immediately preceding the announcement of the 24 Proposed Transaction, which premium was quickly vanquished by the market upon news of the 25 Proposed Transaction. 26 42. Instead of attempting to negotiate to obtain the highest possible price for Celera's 27 shareholders, Ordonez and the rest of the Board obtained for themselves and the Company's 28 officers extremely broad indemnification for acts committed while serving in such capacities.

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1 11 Sections 6.8(b) and (c) provides: 2 (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 3 applicable Law, and, without limiting the foregoing, as required pursuant to any indemnity agreements of the Company or any Company Subsidiary, each present 4 and former director, officer, employee and a2ent of the Company and each 5 Company Subsidiary (collectively, the "Indemnified Parties") against any costs or expenses (including attorneys' fees and expenses), judgments, inquiries, fines, 6 losses, claims, settlements, damages or liabilities incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, 7 criminal, administrative or investigative, arising out of or Pertaining to (i) the fact 8 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 9 pending, existing or occurring at or prior to the Effective Time (including this Agreement, the Offer, the Merger and the other transactions contemplated hereby), 10 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 11 expenses) incurred in the defense of any Action with respect to matters subject to 12 indemnification pursuant to this Section 6.8 in accordance with the procedures set forth in the Company Certificate, the Company Bylaws, the certificate of 13 incorporation and bylaws, or equivalent organizational or governing documents, of each Company Subsidiary, and indemnification agreements, if any, in existence on 14 the date of this Agreement.

15 (c) For a period of six (6) years from and after the Effective Time, the Surviving 16 Corporation shall cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by the Company and the Company 17 Subsidiaries (the "D&O Insurance") or provide substitute policies or purchase a "tail policy,".... 18

19 (Emphasis added.)

20 43. The press release ("Press Release") accompanying the Proposed Transaction

21 announcement makes clear that Ordonez and other members of senior management will receive 22 continued lucrative employment with Quest after the deal closes. In the Press Release, Quest

23 Chairman and CEO, Surya N. Mohapatra, noted, "I am pleased at the prospect of Celera's CEO 24 Kathy Ordonez and key members of her team becoming part of Quest Diagnostics." 25 44. Concurrent with the announcement of the Proposed Transaction, Celera also

26 announced the Restatements. Specifically, Celera issued a Form 10-K that: 27 restates its Consolidated Statement of Financial Position at December 26, 2009 and

28 its Consolidated Statements of Operations, Stockholders' Equity and Cash Flows for the

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1 year ended June 30, 2008, the six months ended December 27, 2008 and the year ended 2 December 26, 2009; 3 restates its Selected Financial Data in Item 6 for the year ended June 30, 2008, the 4 six months ended December 27, 2008, and the years ended December 27, 2008 and 5 December 26, 2009; 6 • amends its Management's Discussion and Analysis of Financial Condition and 7 Results of Operations (MD&A) as it relates to the six months ended December 31, 2007 8 and December 27, 2008, the years ended December 27, 2008 and December 26, 2009, each 9 quarter in the year ended December 26, 2009 and the first three quarters in the year ended 10 December 25, 2010; and 11 • restates its Unaudited Quarterly Financial Information for each quarter in the year 12 ended December 26, 2009 and the first three quarters in the year ended December 25, 13 2010. 14 45. Under Generally Accepted Accounting Principles, the restatement of a previously

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

16 accounting errors or irregularities existed and where when no lesser remedy is possible

17 III. The Board A2reed to Sell Celera for Inadequate Consideration 18 46. The merger consideration agreed to by the Board is grossly inadequate. First, as set

19 forth above, Celera was entertaining offers of $10 or more as recently as the summer of 2010. 20 47. In addition, Celera's stock continues to trade above the $8 offer price, reflecting

21 that market participants believe Celera is worth more than the offer price. 22 48. The offered consideration fails to account for the Company's future performance.

23 For example, Natixis Bleichroeder analyst Ashim Anand stated that, "the offer price represents a

24 discount of 21 percent to its peers," given Celera's promising pipeline, and that "Celera has

25 probably one of the most personalized medicine tests and that's where all diagnostic companies

26 are going." 27 49. The offer price also does not account for Celera's valuable patent properties.

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

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1 Murphy noted that, "[t]he proprietary products are patent protected. Obviously there's going to be 2 1 higher margins that makes [sic] (clinical diagnostics) a good business." 3 50. In short, while CeTera's public shareholders financed the Company's impressive 4 growth and development, they will not share in the Company's future upside.

IV. The Board Impermissibly Locked Up the Deal 6 51. Not only did the Board fail to maximize shareholder value in agreeing to the 7 Proposed Transaction, it also took unreasonable steps to ensure the consummation of a deal with 8 I Quest to the detriment of Celera's shareholders. 9 52. First, the timing of the Tender Offer poses an almost insurmountable obstacle to 10 I any potential competing bid. Pursuant to the Merger Agreement, Quest commenced the Tender 11 Offer within seven business days after March 17, 2011. 12 53. Thus, within roughly one month, Celera may cease to exist as an independent

13 public company. This expedited closing precludes alternative offers for the Company because 14 potential bidders will be unable to conduct meaningful due diligence on Celera or obtain adequate 15 financing in time to make a "Superior Proposal" (as defined in the Merger Agreement") that may 16 be considered by the Board. This time constraint, combined with the other deal protections 17 described below and a provision that prevents the Board from providing information to potential

18 suitors in advance of any firm offer and the time period required by the Matching Rights described 19 below, insulate the Proposed Transaction from competing bids.

20 54. The Board has safe-guarded the expediency of the Proposed Transaction by 21 providing Quest a "Top-Up Option" that allows Celera and Quest to avoid the protracted

22 timeframe of a long-form merger. In the event Quest does not secure the requisite number of 23 shares for a short-form merger pursuant to the Tender Offer, CeTera may issue up to roughly 220 24 million additional shares for purchase by Quest in order to close the transaction without a 25 shareholder vote. Section 2.4(a) of the Merger Agreement provides in relevant part: 26 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, 27 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 28

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1 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 2 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 3 on a fully diluted basis.... 4 S 55. The "Top-Up Option" serves no rational purpose other than to facilitate closing of

6 the Proposed Transaction as soon as possible and before shareholders can digest the universe of 7 material information forced upon them in a matter of days. Indeed within a two week period, that 8 Company will have released its annual report, the Restatements, the Merger Agreement and the

9 related proxy materials. Defendants are well aware that the circumstances, timing and terms of the 10 Proposed Transaction might not withstand shareholder scrutiny, and have therefore taken all steps 11 to avoid shareholder vote on the Proposed Transaction, including adoption of the "Top-Up

12 Option." 13 56. Second,, reflecting the Board's haste to insulate themselves and senior management

14 from personal liability, the Board did not insist upon a "Go-Shop" or even a "Window Shop" 15 provision (either of which would have made delays in closing a higher probability). To the

16 contrary, the Board agreed to a prohibitive No-Shop, further limiting the Board's ability to 17 entertain superior strategic alternatives. Section 6.4(a) of the Merger Agreement provides:

18 The Company shall, and shall cause each Company Subsidiary and Company Representative to, immediately cease and cause to be terminated any existing 19 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 20 Takeover Proposal. The Company shall not, and shall cause each Company 21 Subsidiary and Company Representative not to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing nonpublic 22 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 23 reasonably be expected to lead to, any Takeover Proposal. 24

25 57. The No-Shop prevents the Board from even encouraging competing bids for the 26 Company; this is the antithesis of maximizing shareholder value. The No-Shop is particularly 27 inappropriate in light of the limited sale process and the Company's position as a logical takeover 28 target for numerous interested third parties, including current strategic partner Abbott

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1 1 Laboratories. 2 58. Third, the Board granted Quest the Matching Rights in the Merger Agreement that

3 provide Quest three business days to revise its proposal or persuade the Board not to change its recommendation on the merger in the face of a proposal from a third party suitor. 5 59. The Matching Rights dissuade interested parties from making an offer for the 6 Company by providing Quest the opportunity to make a matching bid. The Matching Rights also 7 impair the Board from offering a competing bidder a reasonable termination or bidding fee in

8 exchange for a "blowout" price, since any competing bid must be subjected to the matching rights. 9 Due to the Proposed Transaction's flawed process and wholly inadequate price, no justification 10 exists for the Board's decision to agree to the inclusion of the Matching Rights and other .bid

11 advantages in the Merger Agreement. 12 60. Fourth, the Board further reduced the possibility of maximizing shareholder value

13 by agreeing to a punitive termination fee of $23.45 million, which represents over 10% of the 14 $226 million Quest is paying for Celera's actual operations. Specifically, Celera has $327 million 15 in cash-on-hand and $117 million in deferred tax credits and net operating losses. In this instance,

16 it does not make economic sense to assess the reasonableness of the Termination Fee against 17 Celera's enterprise value. 18 61. There is simply no "risk" or cost for Quest in acquiring a sum certain of cash and

19 an objectively established tax asset. Thus, in assessing whether the Termination Fee is reasonable

20 under the circumstances, it should be viewed in relation to the nonfixed component of what Quest

21 is purchasing, which is valued at $226 million after the cash and tax asset are deducted from the

22 reported transaction price. Giving away over 10% of the operating value of Celera is a steep and

23 unreasonable penalty and serves as a significant deterrent for any third party who might otherwise

24 desire to make a competing bid. 25 62. The No-Shop, Matching Rights, and the Termination Fee (collectively, the "Deal

26 Protections") serve to deter competing parties from making bids and prevent the Board from

27 properly exercising their fiduciary duties to obtain the best available strategic alternative for 28 Celera's public shareholders. The Deal Protections erect barriers to competing offers and

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1 essentially guarantee that the Proposed Transaction will be consummated, leaving Clera 2 shareholders with limited opportunity to consider any superior offer. When viewed collectively,

3 these provisions cannot be justified as reasonable or proportionate measures to protect any 4 perceived threat to Quest's investment in the Proposed Transaction process,

5 V. The Board Furthers Serves Its Own and Managements' Interests By Amending Celera's Chance in Control Severance Plan 6

7 63. Without the Proposed Transaction, certain senior officers and directors at the 8 Company may be terminated as a result of the accounting improprieties revealed by the Restatements. Instead, by agreeing to rush a sale of the Company to Quest at a discount, these 10 same directors and officers will be entitled to either lucrative positions with Quest or substartial 11• severance benefits.

12 64. Specifically, concurrent with signing the Merger Agreement, the Board amended 13 the Company's Executive Change in Control Plan ("CIC Amendment"), thus ensuring that 14 Celera's most senior executives (i.e., CEO, Senior Vice Presidents and Vice President - Chief

15 Intellectual Property Counsel) receive a windfall, either in the form of new employment contracts 16 with Quest or extensiveseverance benefits.

17 65. Thus, the CIC Amendment provides that if a senior executive does not receive an 18 employment contract with Quest, but rather is asked to operate under a prior contract, that peron 19 will beentitled to full severance benefits as if they had been terminated.

20 66. Any additional cost Quest must incur as a result of the CIC Amendment comes! at 21 the direct expense of Celera's public shareholders in the form of reduced merger consideration.

22 Rather than spend negotiating capital on an increased purchase price, the Board instead negotiated 23 for the CIC Amendment and indemnity from liability.

24 67. Finally, as the Proxy acknowledges, certain officers and directors will personally 25 gain from the Proposed Transaction and may have interests that conflict with those of the 26 ;hareholders. For example, Defendant Ordonez will receive a substantial and immediate cash 27 enefit. First, she will receive $1,051,272 for her shares of the company. Second, stock options

28 nd performance share awards will immediately vest, giving Defendant Ordonez an additional

14 COMPLAINT FOR BREACH OF FIDUCIARY DUTY -

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$1,332,219. Finally, (in addition to her new employment contract) Defendant Ordonez will receive $2,286,375 for surrendering her rights under the amended CIC discussed supra. All told,

Defendant Ordonez will receive more than $4.5 million and a new employment agreement i the 4 Proposed Transaction closes. Although it is not unusual for executives to benefit from a merger, 5 when compared with the alternative in this case - potential personal liability in numerous lawsuits 6 - Defendant Ordonez had substantial motivation to ignore the interests of public shareholders. 7 68. In short, the relatively small amount of equity held by the majority of directors and S officers provided the Board with little incentive to maximize shareholder value. By comparison, 9 job retention and securities fraud liability avoidance provided substantial motivation for the Bcard 10 to agree to sell the Company at a substantial discount.

11 VI. Defendants Filed a Materially False and Misleading Proxy 12 69. In order to secure shareholder approval for the Proposed Transaction, Defendants 13 issued the Proxy on March 28, 2011. The Proxy, which recommends that Celera shareholders 14 tender their shares and vote in favor of the Proposed Transaction, omits and/or misrepresents 15 material information about the unfair sales process, the unfair consideration, and the true intrinsic

16 value of the company. Specifically, the Proxy omits and/or misrepresents the material informatik,ñ 17 set forth below in contravention of Sections 14(e) and 20(a) of the 1934 Act and/or defendanls' 18 duty of candor and full disclosure under state law. 19 70. The "Background Section" of the Proxy leaves many material questh*is 20 unanswered, and provides misleading information to shareholders. Among other things, the

21 Background Section does not fully explain the genesis for management's recommendation that the 22 Board explore the Company's strategic alternatives, or whether management was aware of the 23 severity of the Company's accounting improprieties at that time. 24 71. Further, the Background Section does not address why the Company's financil 25 idvisors were conspicuously absent from management's initial presentation(s) to Quest regardiig

26 in acquisition of the Company, nor does the Background Section address whether the 27 presentation(s) made to Quest were materially different than those made to other potential bidders. 28 72. Additionally, the Background Section fails to describe the value Quest assigned to

15 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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1 the CIC Amendment and the effect of the CIC Amendment on the consideration offered in the 2 Proposed Transaction. 3 73. The Background Section fails to explain why negotiation of the Proppsed

4 Transaction was often left to senior management - those individuals most conflicted in their effort 5 to secure indemnification and the CIC Amendment - rather than the Special Committee. For 6 IJ example: 7 a. Minimal detail is provided about the late June 2010 meetings among 8 management and Quest, which led to Quest pulling its $10.25 per share offer. What 9 happened and why it happened is material to any investor assessing whether today to 10 accept just $8 per share. 11 b. From the end of July 2010 through October 2010, Defendant Ordonez contacted 12 and conducted negotiations with senior management of another company, ("Bidder D"), 13 regarding a potential sale of the Company's lab services business segment and BHL, at 14 which point Bidder D withdrew its interest presumably in the face of Defendant Ordonez's 15 unreasonable compensation or severance demands. 16 c. On August 25, 2010, Ordonez held in-person negotiations with a representative 17 of "Bidder C" regarding a potential transaction involving the Company's Products business 18 and the terms at which Celera's senior management would be amenable to a deal. 19 d. On September 9, 2010, members of the Company's senior management held a 20 second in-person meeting at the facilities of "Bidder A." 21 e. On November 11, 2010, members of the Company's senior managem4nt, 22 representatives of Credit Suisse and representatives of "Bidder E" negotiated a potential 23 transaction in-person at the offices of Credit Suisse. 24 f. On March 9, 2011, one week for the deal's announcement, it was senior 25 management that was charged with final negotiations with Quest. 26 74. The Background Section is also deficient in that it fails to describe what basis 27 Company management had for advising the Board that a restatement was unlikely as a result of

28 recently identified misclassified bad debt expenses. Specifically, the Proxy states that on February

16 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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1 114,2011:

2 [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 3 the required data retrieval and analysis was still ongoing. Company management indicated that based on its preliminary assessment, it believed that any related 4 impact would be of a level of materiality as to require some revision to the 5 Company's historical financial information, but the impact did not appear to be likely to require a restatement. 6

7 75. Further, the Proxy does not explain the following material elements of the claimed

8 "process" leading to the sale of the company to Quest, raising numerous questions about the purported process. For example:

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

11 pursuing a transaction."

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

13 acquisition of the Company, rather than a partnership or collaboration.

14 c. Why "Bidder B" was not invited to participate in the "second round of the

15 strategic transaction process."

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

17 Bidder D, and why Bidder D was not contacted earlier in the process.

18 e. How the "three additional potential bidders" contacted during September 2010

19 were identified, who identified them, and why they were not contacted earlier in the

20 process.

21 76, The Proxy does not, however, provide any basis for management's representatipn

22 (which was proven wrong weeks later), or explain whether the Board concurred with this positin.

23 The Proxy also does not disclose whether Ordonez was involved in deciding that the misclassified

24 bad debt expenses "did not appear to be likely to require a restatement."

25 77. The Proxy is also deficient in its disclosure of material financial informatitm

26 relating to the present and future value of the Company. Although the Proxy discloses certain of

27 Credit Suisse's and LEK's conclusions and recommendations, it omits material information about

28 Lhe assumptions used to support their various analyses, The Proxy completely fails to disclose the

17 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

Case3:11-cv-01769-SC Document1 Filed04/11/11 Page19 of 30

1 underlying methodologies, projections, key inputs and multiples relied upon and observed by

2 Credit Suisse in conducting its analysis in support of the Fairness Opinion concerning the

3 Proposed Transaction. This information is material to shareholders so they can properly assess the

4 credibility of the various analyses performed by-Credit Suisse and purportedly relied upon by the 5 Board in recommending the Proposed Transaction, 6 78. Further, the Fairness Opinion was written only for the Celera Board in connection 7 with its consideration of the Proposed Transaction, and does not even purport to provide a

8 recommendation to Celera shareholders as to whether to tender shares pursuant to the Tender 9 Offer, or how shareholders should act with respect to any matter relating to the Tender Offer or the 10 Merger Agreement. In addition, the "Selected Companies Analysis" section of the Proxy: 11 a. Omits individual metrics and multiples of the selected comparable companies, 12 including the aggregate 2010-2012 revenue, EBITDA, and earnings per share information 13 relied on to determine the "implied per share equity reference range." 14 b. Omits the specific multiples selected and applied by Credit Suisse to determine 15 the "implied per share equity reference range" including how those multiples were 16 selected. 17 c. Omits the value ranges obtained by applying the various multiple ranges 18 calculated for the selected companies, i.e., the revenue multiple range, EBITDA multiple 19 range, and earnings per share multiple range. 20 79. The "Selected Transactions Analysis": 21 a. Omits the dates of the transactions selected for the analysis and the individually 22 observed metrics and multiples calculated from the selected transactions, including 23 aggregate value to last twelve months ("LTM") revenue and EBITDA; 24 b. Omits the specific multiples selected and applied by Credit Suisse to detennine 25 the "implied per share equity reference range" including how those multiples were 26 selected; 27 c. Omits the specific multiples selected and applied to each of the business units 28 comprising Credit Suisse's sum-of-the-parts analysis.

18 COMPLAINT FOR BREACH OF FIDUCIARY DUTY Case3:11-cv-01769-SC Document1 Filed04/11/11 Page20 of 30

1 80. The "Discounted Cash Flow Analysis":

2 a. Omits the forecasts provided by Celera's management, and relied on by Cedit 3 Suisse, of the Company's non-commercial, development stage drug assets;

4 b. Omits the "estimated clinical trial success rates" used by Credit Suisse to further 5 discount the value of the Company's non-commercial, development stage drug assets; 6 c. Omits the present value of the Company's NOLs, as calculated by Credit Suisse.

7 81. Further, the Proxy fails to disclose the financial projections for line items used by 8 Credit Suisse as part of its discounted cash flow analysis, including, but not limited to: 9 a. EBITDA 10 b. Tax rate 11 c. Depreciation and amortization

12 d. Capital expenditures 13 e. Changes in working capital 14 f. Other non-cash expenses

15 F. The Impending Tender Offer Deadline

16 82. The tender offer will expire on April 25, 2011, at 5:00 p.m. New York City time, 17 unless extended in accordance with the Merger Agreement and the applicable rules and 18 regulations of the Securities and Exchange Commission. Any extension of the tender offer will be

19 followed as promptly as practicable by public announcement thereof, and such announcement will 20 be made no later than 9:00 a.m. New York City time on the next business day after the previously

21 scheduled expiration date. The tender offer is subject to customary conditions, including the tender 22 of a majority of the outstanding Shares (calculated on a fully-diluted basis), as well as the recàipt 23 of certain regulatory approvals and other closing conditions.

24 CLASS ACTION ALLEGATIONS 25 83. Plaintiff brings this action on behalf of himself and all other shareholders of Celera 26 (except the Defendants herein and any persons, firm, trust, corporation, or other entity related to or

27 affiliated with them and their successors in interest), who are, or will be, threatened with injury 28 arising from Defendants' actions, as more fully described herein.

19 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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1 84. This action is properly maintainable as a class action for the following reasons: 2 (a) The Class is so numerous that joinder of all members is 3 impracticable. As of February 25, 2011, there were approximately 82,113,206 shares 4 issued and outstanding of Celera common stock. Upon information and belief, Celera 5 common stock is owned by thousands of shareholders of record nationwide. 6 (b) Plaintiff is committed to prosecuting this action and has retamed 7 competent counsel experienced in litigation of this nature. Plaintiff's claims are typical of 8 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 and will 10 fairly and adequately protect the interests of the Class. 11 (c) The prosecution of separate actions by individual members of the 12 Class would create the risk of inconsistent or varying adjudications with respect to 13 individual members of the Class, which would establish incompatible standards of 14 conduct for Defendants, or adjudications with respect to individual members of the Class 15 that would, as a practical matter, be dispositive of the interests of the other members not 16 parties to the adjudications or substantially members or impede their ability to protect 17 their interests. 18 (d) To the extent Defendants take further steps to effectuate the 19 Proposed Transaction, preliminary and final injunctive relief on behalf of the Class as a 20 whole will be entirely appropriate because Defendants have acted, or refused to act, on 21 grounds generally applicable and causing injury to the Class. 22 85. There are questions of law and fact that are common to the Class and that

23 predominate over questions affecting any individual Class member. The common questions

24 include, among other things, the following: 25 (a) Whether Defendants breached their fiduciary duties of due care, 26 good faith, and loyalty with respect to Plaintiff and the other members of the Class as a 27 result of the conduct alleged herein; 28 (b) Whether the process implemented and set forth by the Defendants

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1 for the Proposed Transaction, including but not limited to, the Merger Agreement; the 2 negotiations concerning the Merger Agreement, and the shareholder approval process 3 provided for the Proposed Transaction, is entirely fair to the members of the Class; 4 (c) Whether the Individual Defendants have breached their fiduciary 5 duty of candor by failing to disclose all material facts related to the Proposed Transactiøn; 6 (d) Whether Celera, Quest, and Merger Sub have aided and abetted the 7 Individual Defendants' breaches of fiduciary duties of candor, due care, good faith, and 8 loyalty with respect to Plaintiff and the other members of the Class as a result of the 9 conduct alleged herein; and 10 (e) Whether Plaintiff and the other members of the Class would be 11 irreparably harmed if Defendants are not enjoined from effectuating the conduct described 12 herein. 13 CAUSES OF ACTION 14 COUNT I 15 Breach of Fiduciary Duties (Against the Individual Defendants) 16 17 86. Plaintiff repeats and realleges each and every allegation set forth herein. 18 87. The Individual Defendants have violated the fiduciary duties owed to the public

19 shareholders of Celera and have acted to put their personal interests ahead of the interests of

20 Celera shareholders or acquiesced in those actions by fellow Defendants. These Defendants have

21 failed to take adequate measures to ensure that the interests of Celeras shareholders are properly

22 protected and provides Quest with an unfair advantage by effectively excluding other alternative

23 proposals. 24 88. By the acts, transactions, and courses of conduct alleged herein, these Defendants,

25 individually and acting as a part of a common plan, will unfairly deprive Plaintiff and other

26 members of the Class of the true value of their Celera investment. Plaintiff and other Members of

27 the Class will suffer irreparable harm unless the actions of these Defendants are enjoined and a fair

28 process is substituted.

21 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

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1 89. The Individual Defendants have breached their duties of loyalty, entire fairness, 2 good faith, and care by not taking adequate measures to ensure that the interests of Celera's public 3 shareholders are properly protected from over-reaching by Quest. 4 90. By reason of the foregoing acts, practices, and courses of conduct, the Individual 5 Defendants have failed to exercise due care and diligence in the exercise of their fiduciary 6 obligations toward Plaintiff and the other members of the Class. 7 91. As a result of the actions of Defendants, Plaintiff and the Class have been, and will 8 be, irreparably harmed in that they have not, and will not, receive their fair portion of the value of

9 Celera's stock and businesses, and will be prevented from obtaining a fair price for their common 10 stock. 11 92. Unless enjoined by this Court, the Individual Defendants will continue to breach 12 the fiduciary duties owed to Plaintiff and the Class and may consummate the Proposed

13 Transaction to the disadvantage of the public stockholders, without providing sufficient 14 information to enable Celera's public shareholders to be properly informed, :15 93. The Individual Defendants have engaged in self-dealing, have not acted in good 16. faith to Plaintiff and the other members of the Class, and have breached, and are breaching, 17 fiduciary requirements to the members of the Class. 18 94. Plaintiff and members of the Class have no adequate remedy at law. Only through 19 the exercise of this Court's equitable powers can Plaintiff and the Class be fully protected from the

20 immediate and irreparable injury that these actions threaten to inflict. 21 COUNT II 22 Aiding and Abetting the Individual Defendants' Breaches of Fiduciary Duties (Against Celera, Quest, and Merger Sub) 23 24 95. Plaintiff repeats and realleges each and every allegation set forth herein. 25 96. The Individual Defendants breached their fiduciary duties to the Celera 26 stockholders by the actions alleged herein. 27 97. Such breaches of fiduciary duties could not, and would not, have occurred but for 28 the conduct of Defendants Celera, Quest, and Merger Sub, which, therefore, aided and abetted

22 COMPLAINT FOR BREACH OF FIDUCIARY DUTY Case3:11-cv-01769-SC Document1 Filed04/11/11 Page24 of 30

I such breaches through entering into the Proposed Transaction between Celera and Quest. 2 98. Defendants Celera, Quest, and Merger Sub had knowledge that they were aiding

3 and abetting the Individual Defendants' breaches of fiduciary duties to Cetera stockholders. 4 99. Defendants Celera, Quest, and Merger Sub rendered substantial assistance to the

5 Individual Defendants in their breaches of their fiduciary duties to Celera stockholders. 6 100. As a result of Defendants' conduct of aiding and abetting the Individual 7 I Defendants' breaches of fiduciary duties, Plaintiff and the other members of the Class have been, 8 and will be, damaged in that they have been, and will be, prevented from obtaining a fair price for

9 their shares. 10 101. As a result of the unlawful actions of Defendants Celera, Quest, and Merger Sub,

11 Plaintiff and the other members of the Class will be irreparably harmed in that they will be 12 prevented from obtaining the fair value of their equity ownership in the Company. Unless enjoined 13 by the Court, Defendants Celera, Quest, and Merger Sub will continue to aid and abet the

14 Individual Defendants' breaches of their fiduciary duties owed to Plaintiff and the members of the 15 Class, and will aid and abet a process that inhibits the maximization of stockholder value and the

16 disclosure of material information, 17 102. Plaintiff and the other members of the Class have no adequate remedy at law. Only

18 through the exercise of this Court's equitable powers can Plaintiff and the Class be fully protected 19 from immediate and irreparable injury that Defendants' actions threaten to inflict.

20 COUNT III

21 Violations of Section 14(e) of the 1934 Act and Rule 14a-9 Promulgated Thereunder 22 (Against the Individual Defendants and Celera) 23 24 103. Plaintiff repeats and realleges each and every allegation set forth herein. 25 104. During the relevant time period, the Individual Defendants and Cetera disseminated 26 the false and misleading Proxy specified above, which failed to disclose material facts necessary

27 in order to make the statements made, in light of the circumstances under which they were made, 28 not misleading.

23 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

Case3:11-cv-01769-SC Document1 Filed04/11/11 Page25 of 30

1 105. The Proxy was prepared, reviewed, and/or disseminated by the Individual

2 Defendants and Celera. It misrepresented and/or omitted material facts, including material

3 information about the unfair sales process for the Company, the unfair consideration offered in the 4 Proposed Transaction, and the actual intrinsic value of the Company's assets. 5 106. In so doing, the Individual Defendants and Celera made untrue statements of 6 material facts and omitted to state material facts necessary to make the statements that were made

7 not misleading in violation of Section 14(e) of the 1934 Act and SEC Rule 14a-9 promulgated 8 thereunder. By virtue of their positions at the Company, the Individual Defendants and Celera 9 were aware of this information and of their duty to disclose this information in the Proxy. 10 107. The Individual Defendants and Celera were at least negligent in filing the Proxy 11 with these materially false and misleading statements. 12 108. The omissions and false and misleading statements in the Proxy are material in that 13 a reasonable shareholder would consider them important in deciding whether to tender their shares

14 and how to vote on the Proposed Transaction. In addition, a reasonable investor would view a full 15 and accurate disclosure as significantly altering the "total mix" of information made available in

16 the Solicitation and in other information reasonably available to shareholders. 17 109. By reason of the foregoing, the Individual Defendants and Celera have violated 18 Section 14(e) of the 1934 Act and SEC Rule 14a-9(a) promulgated thereunder. 19 110. Because of the false and misleading statements in the Proxy, plaintiff is threatened

20 with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief is 21 appropriate to ensure defendants' misconduct is corrected. 22 COUNT IV 23 Violation of Section 20(a) of the 1934 Act (Against the Individual Defendants and Celera) 24 25 111. Plaintiff repeats and realleges each and every allegation set forth herein. 26 112. The Individual Defendants acted as controlling persons of Celera within the 27 meaning of Section 20(a) of the 1934 Act as alleged herein. By virtue of their positions as officers 28 and/or directors of Celera, and participation in and/or awareness of the Company's operations

24 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

Case3:11-cv-01769-SC Document1 Filed04/11/11 Page26 of 30

1 and/or intimate knowledge of the false statements contained in the Solicitation filed with the SEC, • 2 they had the power to influence and control and did influence and control, directly or indirectly,

3 lithe decision-making of the Company, including the content and dissemination of the various 4 statements that plaintiff contends is false and misleading. 5 113. Each of the Individual Defendants and Celera was provided with or had unlimited

6 access to copies of the Proxy and other statements alleged by plaintiff to be misleading prior to 7 and/or shortly after these statements were issued and had the ability to prevent the issuance of the

8 I statements or cause the statements to be corrected. 9 114. In particular, each of the Individual Defendants had direct and supervisory

10 involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had 11 the power to control or influence the particular transactions giving rise to the securities violations 12 as alleged herein, and exercised the same. The Proxy at issue contains the unanimous

13 recommendation of each of the Individual Defendants to approve the Proposed Transaction. They 14 were, thus, directly involved in the making of this document. 15 115. Celera also had direct supervisory control over composition of the Proxy and the 16 information disclosed therein, as well as the information that was omitted and/or misrepresented in

17 the Proxy. Celera, in fact, disseminated the Proxy and is, thus, directly responsible for materially 18 misleading shareholders because it permitted the materially misleading Proxy to be published to

Fill shareholders. IIl 116. In addition, as the Proxy sets forth at length, and as described herein, the Individual

21 Defendants and Celera were each involved in negotiating, reviewing, and approving the Proposed 22 Transaction. The Proxy purports to describe the various issues and information that they reviewed

23 and considered, descriptions that had input from both the directors and Celera. 24 117. By virtue of the foregoing, the Individual Defendants and Celera have violated 25 Section 20(a) of the 1934 Act. 26 118. As set forth above, the Individual Defendants and Celera had the ability to exercise 27 control over and did control a person or persons who have each violated Section 14(e) and SEC 28 Rule 14a-9, by their acts and omissions as alleged herein. By virtue of their positions as

25 COMPLAINT FOR BREACH OF FIDUCIARY DUTY

Case3:11-cv-01769-SC Document1 Filed04/11/11 Page27 of 30

1 controlling persons, these defendants are liable pursuant to Section 20(a) of the 1934 Act. As a

2 direct and proximate result of defendants' conduct, Celera will be irreparably harmed. 3 PRAYER FOR RELIEF 4 WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief,

5 including injunctive relief, in his favor and in favor of the Class, and against the Defendants as 6 follows: 7 A. Certifying this case as a class action, certifying Plaintiff as class representative and 8 his counsel as class counsel; 9 B. Declaring that the Individual Defendants have breached their fiduciary duties to 10 Plaintiff and the Class; 11 C. Enjoining Defendants, their agents, counsel, employees, and all persons acting in 12 concert with them from consummating the Proposed Transaction, unless and until the Individual

13 Defendants adopt and implement a fair procedure or process to sell the Company; 14 D. Declaring the Proposed Transaction void and ordering rescission if consummated; 15 E. Awarding damages, including rescissory damages, in favor of Plaintiff and the 16 Class against all Defendants, jointly and severally, together with interest thereon; 17 F. Awarding Plaintiff the costs, expenses, and disbursements of this action, including 18 any attorneys' and experts' fees and if applicable, pre-judgment and post-judgment interest; and 19 G. Awarding Plaintiff and the Class such other relief as this Court deems just, 20 equitable, and proper. 21 JURY DEMAND 22 Plaintiff demands a trial by jury on all issues so triable,

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28 26 COMPLAINT FOR BREACH OF FIDUCIARY DUTY Case3:11-cv-01769-SC Document1 Filed04/11/11 Page28 of 30

1 By: -_--- 2 , JDATED: April 11, 2011 Jennie 3 Jennie ____ =(SBN 86) 4 ANDRUS ANDERSON LLP 155 Montgomery Street, Suite 900 5 San Francisco, California 94104 Telephone: (415) 986-1400 6 Facsimile: (415) 986-1474 [email protected] 7 DAVID A. P. BROWER (pro hoc vice pending) 8 BRIAN C. KERR (pro hoc vice pending) BROWER PIVEN 9 A PROFESSIONAL CORPORATION 488 Madison Avenue, Eighth Floor 10 New York, NY 10022 Telephone: (212) 501-9000 11 Facsimile: (212) 501-0300 12 A ttornevs for Plaintiff 13

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27 28 27 COMPLAINT FOR BREACH OF FIDUCIARY DUTY Case3:11-cv-01769-SC Document1 Filed04/11/11 Page29 of 30

Exhibit A Case3:11-cv-01769-SC Document1 Filed04/11/11 Page30 of 30

PLAINTIFF'S CERTIFICATION

Elizabeth M. Andal ("Plaintiff") declares that: Celera Corporation Securities Litigation 1 I have reviewed the first filed complaint in th e and authorize the filing of that complaint.

2. Plaintiff did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary, and Plaintiff is willing to serve as a lead

plaintiff either individually or as part of a group, a lead plaintiff being a representative party who acts on

behalf of other class members in directing the action.

4. Plaintiff currently owns 11,700 shares of Celera Corporation.

5. During the three years prior to the date of this Certification, Plaintiff has not sought to serve or served as a representative party for a class under the federal securities Laws.

6. Plaintiff will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except such reasonable costs and expenses

(including lost wages) directly relating to the representation of the class as ordered or approved by the

court. Plaintiff understands that this is not a claim form, and that Plaintiff's ability to share in any

recovery as a member of the class is unaffected by Plaintiff's decision to serve as a representative party.

I declare under penalty of perjury under the laws of the United States of America that the Jj foregoing is true and correct. Executed this day of April 2011. - -

I • '..-. '

Elizeth M. Andal

Brower Piven, A Professional Corporation 1925 Old Valley Road Stevenson, Maryland 21153 Telephone: 410-332-0030 Facsimile: 410-85-1300 www.browerp i yen .com