10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 4, 2009

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-5075

PerkinElmer, Inc.

(Exact name of Registrant as specified in its Charter)

Massachusetts	04-2052042
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

940 Winter Street

Waltham, Massachusetts 02451

(Address of principal executive offices) (Zip code)

(781) 663-6900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ¨    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨    No þ

As of November 6, 2009, there were outstanding 116,764,074 shares of common stock, $1 par value per share.

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Income Statements	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Overview	31
	Recent Developments	34
	Critical Accounting Policies and Estimates	35
	Consolidated Results of Continuing Operations	35
	Reporting Segment Results of Continuing Operations	44
	Liquidity and Capital Resources	46
	Off-Balance Sheet Arrangements	49
	Dividends	50
	Contractual Obligations	50
	Effects of Recently Adopted Accounting Pronouncements	50
	Effects of Recently Issued Accounting Pronouncements	52
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	54
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 6.	Exhibits	64
Signature		65
Exhibit Index		66

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands, except per share data)
Sales	$	437,065		$	478,747		$	1,303,214		$	1,442,432
Cost of sales		249,495			273,124			740,216			829,665
Selling, general and administrative expenses		121,431			129,800			373,807			402,384
Research and development expenses		27,336			26,192			78,877			82,963
Restructuring and lease charges, net		12,383			6,495			20,206			6,190
Operating income from continuing operations		26,420			43,136			90,108			121,230
Interest and other expense, net		4,821			6,049			13,839			16,308
Income from continuing operations before income taxes		21,599			37,087			76,269			104,922
Provision for (benefit from) income taxes		5,578			(4,596	)		22,232			12,908
Net income from continuing operations		16,021			41,683			54,037			92,014
(Loss) income from discontinued operations, net of income taxes		(864	)		2,075			(4,828	)		2,747
(Loss) gain on disposition of discontinued operations, net of income taxes		(1,568	)		8,144			(3,556	)		985
Net income	$	13,589		$	51,902		$	45,653		$	95,746
Basic earnings (loss) per share:
Continuing operations	$	0.14		$	0.35		$	0.46		$	0.78
(Loss) income from discontinued operations, net of income taxes		(0.01	)		0.02			(0.04	)		0.02
(Loss) gain on disposition of discontinued operations, net of income taxes		(0.01	)		0.07			(0.03	)		0.01
Net income	$	0.12		$	0.44		$	0.39		$	0.81
Diluted earnings (loss) per share:
Continuing operations	$	0.14		$	0.35		$	0.46		$	0.77
(Loss) income from discontinued operations, net of income taxes		(0.01	)		0.02			(0.04	)		0.02
(Loss) gain on disposition of discontinued operations, net of income taxes		(0.01	)		0.07			(0.03	)		0.01
Net income	$	0.12		$	0.43		$	0.39		$	0.80
Weighted average shares of common stock outstanding:
Basic		116,211			118,347			116,227			117,821
Diluted		116,641			119,609			116,487			119,029
Cash dividends per common share	$	0.07		$	0.07		$	0.21		$	0.21

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	October 4, 2009			December 28, 2008
	(In thousands, except share and per share data)
Current assets:
Cash and cash equivalents	$	150,586		$	179,110
Accounts receivable, net		348,399			327,636
Inventories, net		224,427			197,967
Other current assets		110,489			111,087
Current assets of discontinued operations		17,363			14,947
Total current assets		851,264			830,747
Property, plant and equipment, net:
At cost		608,858			570,257
Accumulated depreciation		(397,503	)		(365,843	)
Property, plant and equipment, net		211,355			204,414
Marketable securities and investments		2,190			3,459
Intangible assets, net		474,614			452,473
Goodwill		1,473,547			1,396,292
Other assets, net		41,370			38,760
Long-term assets of discontinued operations		4,446			5,622
Total assets	$	3,058,786		$	2,931,767
Current liabilities:
Short-term debt	$	146		$	40
Accounts payable		158,957			169,447
Accrued restructuring and integration costs		17,585			5,904
Accrued expenses		318,952			323,815
Current liabilities of discontinued operations		17,288			17,036
Total current liabilities		512,928			516,242
Long-term debt		576,734			509,040
Long-term liabilities		364,267			335,354
Long-term liabilities of discontinued operations		3,099			3,188
Total liabilities		1,457,028			1,363,824
Commitments and contingencies (see Note 19)
Stockholders’ equity:
Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding		—			—
Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 116,720,000 shares and 117,112,000 shares at October 4, 2009 and at December 28, 2008, respectively		116,720			117,112
Capital in excess of par value		244,671			246,549
Retained earnings		1,256,850			1,235,521
Accumulated other comprehensive loss		(16,483	)		(31,239	)
Total stockholders’ equity		1,601,758			1,567,943
Total liabilities and stockholders’ equity	$	3,058,786		$	2,931,767

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	October 4, 2009			September 28, 2008
	(In thousands)
Operating activities:
Net income	$	45,653		$	95,746
Add: loss (income) from discontinued operations, net of income taxes		4,828			(2,747	)
Add: loss (gain) on disposition of discontinued operations, net of income taxes		3,556			(985	)
Net income from continuing operations		54,037			92,014
Adjustments to reconcile net income from continuing operations to net cash provided by continuing operations:
Restructuring and lease charges, net		20,206			6,190
Depreciation and amortization		67,075			66,433
Stock-based compensation		10,806			13,671
Amortization of deferred debt issuance costs		1,905			1,431
Gains on dispositions, net		—			(1,158	)
Amortization of acquired inventory revaluation		500			—
Changes in operating assets and liabilities which used cash, excluding effects from companies purchased and divested:
Accounts receivable, net		(11,733	)		(6,898	)
Inventories, net		(16,326	)		(16,113	)
Accounts payable		(12,543	)		(1,136	)
Accrued expenses and other		(20,063	)		(35,412	)
Net cash provided by operating activities of continuing operations		93,864			119,022
Net cash (used in) provided by operating activities of discontinued operations		(8,242	)		8,247
Net cash provided by operating activities		85,622			127,269
Investing activities:
Capital expenditures		(20,839	)		(31,622	)
Changes in restricted cash balances		1,412			334
Payments for business development activity		—			(160	)
Proceeds from disposition of investments, net		—			1,158
Payments for acquisitions and investments, net of cash and cash equivalents acquired		(122,690	)		(87,252	)
Net cash used in investing activities of continuing operations		(142,117	)		(117,542	)
Net cash used in investing activities of discontinued operations		(1,015	)		(1,864	)
Net cash used in investing activities		(143,132	)		(119,406	)
Financing activities:
Payments on debt		(277,611	)		(531,500	)
Proceeds from borrowings		339,500			409,500
Proceeds from the sale of senior subordinated debt		—			150,000
Payments of debt issuance costs		(7	)		(1,969	)
Settlement of cash flow hedges		—			(11,702	)
Payments on other credit facilities		(79	)		(511	)
Excess tax benefit from exercise of common stock options		30			359
Proceeds from issuance of common stock under stock plans		2,262			43,435
Purchases of common stock		(14,619	)		(57,139	)
Dividends paid		(24,528	)		(24,805	)
Net cash provided by (used in) financing activities		24,948			(24,332	)
Effect of exchange rate changes on cash and cash equivalents		4,038			1,929
Net decrease in cash and cash equivalents		(28,524	)		(14,540	)
Cash and cash equivalents at beginning of period		179,110			203,348
Cash and cash equivalents at end of period	$	150,586		$	188,808

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by PerkinElmer, Inc. (the “Company”), without audit, in accordance with accounting principles generally accepted in the United States (the “U.S.”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information in the footnote disclosures of the financial statements has been condensed or omitted where it substantially duplicates information provided in the Company’s latest audited consolidated financial statements in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended December 28, 2008, filed with the SEC (the “2008 Form 10-K”). The balance sheet amounts at December 28, 2008 in this report were derived from the Company’s audited 2008 consolidated financial statements included in the 2008 Form 10-K. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods indicated. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and nine months ended October 4, 2009 and September 28, 2008, respectively, are not necessarily indicative of the results for the entire fiscal year or any future period.

Recently Adopted Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance on business combinations. This guidance establishes principles and requirements for how an acquirer recognizes and measures in its financial statements significant aspects of a business combination. Under this guidance, acquisition costs are generally expensed as incurred; noncontrolling interests are reflected at fair value at the acquisition date; in-process research and development (“IPR&D”) is recorded at fair value as an intangible asset at the acquisition date; restructuring costs associated with a business combination are generally expensed rather than capitalized; contingent consideration is measured at fair value at the acquisition date, with changes in the fair value after the acquisition date affecting earnings; and changes in deferred tax asset valuation allowances and income tax uncertainties after the measurement period will affect income tax expense. This guidance amends the accounting for income taxes such that adjustments made to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of this guidance would also apply the provisions of this guidance. This guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This guidance is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. The Company adopted this authoritative guidance on business combinations in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on the Company’s acquisition activity in the nine months ended October 4, 2009. See Note 2 for the impact on the Company’s condensed consolidated financial statements.

In December 2007, the FASB issued authoritative guidance on noncontrolling interests. This guidance establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. This guidance also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. The Company

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adopted this authoritative guidance on noncontrolling interests in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

In March 2008, the FASB issued authoritative guidance on disclosures about derivative instruments and hedging activities. This guidance is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, results of operations and cash flows. This guidance establishes principles and requirements for how an entity identifies derivative instruments and related hedged items that affect its financial position, results of operations and cash flows. This guidance also establishes disclosure requirements that the fair values of derivative instruments and their gains and losses are disclosed in a tabular format, that derivative features which are credit-risk related be disclosed to provide clarification to an entity’s liquidity and that cross-referencing be included within footnotes. The Company adopted this authoritative guidance on disclosures about derivative instruments and hedging activities in the first quarter of fiscal year 2009 and has evaluated the requirements, which provide for additional disclosure on the Company’s derivative instruments. See Notes 17 and 18 for the Company’s disclosure on derivative instruments and hedging activities.

In April 2008, the FASB issued authoritative guidance on determination of the useful life of intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The objective of this guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under the new authoritative guidance on business combinations, and other accounting principles. This guidance applies to all intangible assets, whether acquired in a business combination or otherwise, and early adoption is prohibited. The Company adopted this authoritative guidance on determination of the useful life of intangible assets in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

In April 2009, the FASB issued authoritative guidance on accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies, which amends and clarifies the initial recognition and measurement, subsequent measurement and accounting, and related disclosures of assets and liabilities arising from contingencies in a business combination. This guidance is effective for assets and liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008. The Company adopted this authoritative guidance in the first quarter of fiscal year 2009 in conjunction with the adoption of the new authoritative guidance on business combinations. The adoption of this guidance did not have a significant impact on the Company’s acquisition activity in the nine months ended October 4, 2009. See Note 2 for the impact on the Company’s condensed consolidated financial statements.

In April 2009, the FASB issued authoritative guidance on disclosures about fair value of financial instruments, which requires disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this guidance, fair values for these assets and liabilities were only disclosed annually. This guidance requires all entities to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments and is effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. The Company adopted this authoritative guidance in the second quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

In May 2009, the FASB issued authoritative guidance on subsequent events, which establishes general standards for the accounting and disclosure of events or transactions that occur during the period after the balance sheet date that management will need to evaluate for potential recognition or disclosure in the financial

7

statements, the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. The Company adopted this authoritative guidance on subsequent events in the second quarter of fiscal year 2009. The adoption of this guidance had no impact on the Company’s condensed consolidated financial statements. The Company has evaluated subsequent events through November 12, 2009, which is the date the condensed consolidated financial statements were issued.

In June 2009, the FASB issued the FASB Accounting Standards Codification (the “Codification”) and the hierarchy of U.S. GAAP. The Codification will now be the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. All guidance contained in the Codification carries an equal level of authority. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. As of the effective date, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. The Company adopted this authoritative guidance in the third quarter of fiscal year 2009. The adoption of this guidance had no impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2008, the FASB issued authoritative guidance on employers’ disclosures about postretirement benefit plan assets, which requires additional disclosures for employers’ pension and other postretirement benefit plan assets. Pension and other postretirement benefit plan assets were not included within the scope of the guidance on fair value measurements. This guidance requires employers to disclose information about fair value measurements of plan assets similar to the disclosures required under the fair value measurement guidance, including the investment policies and strategies for the major categories of plan assets, and significant concentrations of risk within plan assets. This guidance will be effective for fiscal years ending after December 15, 2009, with earlier adoption permitted. Upon initial adoption, the provisions of this guidance are not required for earlier periods that are presented for comparative purposes. The Company will be required to adopt this authoritative guidance in the fourth quarter of fiscal year 2009. This guidance affects only disclosure requirements; the Company expects the adoption of this guidance will have no impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued authoritative guidance on the accounting for transfers of financial assets. This guidance is intended to improve practices that have developed that are not consistent with the original intent and key requirements of the original disclosure requirements, including establishing a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarifying and amending the derecognition criteria for a transfer to be accounted for as a sale, and changing the amount that can be recognized as a gain or loss on a transfer accounted for as a sale when beneficial interests are received by the transferor. This guidance also requires enhanced disclosures to provide information about transfers of financial assets and a transferor’s continuing involvement with transferred financial assets. The Company will be required to adopt this authoritative guidance on the accounting for transfers of financial assets in the first quarter of fiscal year 2010. The Company expects the adoption of this guidance will not have a significant impact on the Company’s condensed consolidated financial statements.

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities. This guidance requires an enterprise to qualitatively assess the determination of the primary beneficiary of a variable interest entity based on whether the entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Also, this guidance requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a variable interest entity. Enhanced disclosures are also required to provide information about an enterprise’s involvement in a variable interest entity. The Company will be

8

required to adopt this authoritative guidance on the consolidation of variable interest entities in the first quarter of fiscal year 2010. The Company expects the adoption of this guidance will not have a significant impact on the Company’s condensed consolidated financial statements.

In October 2009, the FASB issued authoritative guidance on multiple-deliverable revenue arrangements. This guidance establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities. This guidance provides amendments to the criteria for separating and measuring deliverables and allocating arrangement consideration to one or more units of accounting. The amendments in this guidance also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms of significant deliverables, and a vendor’s performance within those arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The Company will be required to adopt this authoritative guidance on multiple-deliverable revenue arrangements in the first quarter of fiscal year 2011. The Company is currently evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company’s condensed consolidated financial statements.

In October 2009, the FASB issued authoritative guidance on certain revenue arrangements that include software elements. This guidance changes the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality” of the product and excludes these products from current software revenue guidance. The new guidance will include factors to help companies determine what software elements are considered “essential to the functionality.” Once adopted the amendments will subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple deliverables. The Company will be required to adopt this authoritative guidance on certain revenue arrangements that include software elements in the first quarter of fiscal year 2011. The Company is currently evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company’s condensed consolidated financial statements.

Note 2: Acquisitions and Asset Purchases

Purchase of Intangible Assets from GE Healthcare. In September 2009, the Company purchased the core technology and patents of GE Healthcare’s 3H and 14C Catalog Radiochemicals, Scintillation Proximity Assay (“SPA”) reagents and Cytostar-T plate portfolios for aggregate consideration of $12.0 million in cash. The Catalog Radiochemical products are used for a variety of research applications, including screening of potential drug candidates through binding assays. The SPA bead-based light-emitting assay and Cytostar-T plate technologies are offerings that enable the automation of High Throughput Screening (“HTS”) processes to help drug discovery researchers determine if potential new drug compounds are effective against their intended disease targets. The Company expects that incorporation of these technologies will strengthen its G-protein-coupled receptor and Kinase research product lines and complement its HTS and research reagent solutions. The purchased core technology and patents do not meet the definition of a business as the purchased assets were not accompanied by any associated processes. Purchased intangible assets are amortized over their estimated useful lives. The Company reports the amortization of these intangible assets within the results of the Company’s Human Health segment from the purchase date. The Company periodically reviews the carrying value of these assets based, in part, upon current estimated market values and the Company’s projections of anticipated future cash flows. The Company undertakes this review on a periodic basis for long-lived assets when facts and circumstances suggest that cash flows emanating from those assets may be diminished. See Note 13 below for additional details.

Acquisition of Sym-Bio LifeScience Co., Ltd. In August 2009, the Company acquired the outstanding equity interests of Sym-Bio LifeScience Co., Ltd. (“Sym-Bio”). Sym-Bio is a major supplier of diagnostics instruments and related reagents to hospitals in China, particularly in the area of infectious diseases. The Company expects

9

this acquisition to expand the Company’s access to the hospital market segment in China, offering a larger base from which to expand its prenatal and newborn screening business in the country and providing the Company with a significant diagnostics manufacturing and research and development base within China. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company as well as non-capitalizable intangible assets, such as the employee workforce acquired. The Company paid the shareholders of Sym-Bio approximately $51.2 million in cash for this acquisition plus an additional amount of $12.5 million held in an escrow account for contingencies, of which $7.3 million is for potential additional contingent consideration with a fair value of $6.9 million at the acquisition date. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, none of which is tax deductible. The Company reports the operations for this acquisition within the results of the Company’s Human Health segment from the acquisition date.

Acquisition of Analytica of Branford, Inc. In May 2009, the Company acquired the outstanding stock of Analytica of Branford, Inc. (“Analytica”). Analytica is a leading developer of mass spectrometry and ion source technology. The Company expects this acquisition to allow the Company to offer its customers access to critical technologies such as time-of-flight and quadrupole mass spectrometers and new ion sources that provide more complete information as well as better throughput. The Company will also gain significant intellectual property in the field of mass spectrometry and ion source technology. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company as well as non-capitalizable intangible assets, such as the employee workforce acquired. The Company paid the shareholders of Analytica approximately $21.7 million in cash for this acquisition plus up to $1.3 million in additional consideration, which the Company expects to pay during the fourth quarter of fiscal year 2009. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, which may be tax deductible if elected by the Company and approved by the shareholders of Analytica. The Company reports the operations for this acquisition within the results of the Company’s Environmental Health segment from the acquisition date.

Acquisition of Opto Technology Inc. In January 2009, the Company acquired the outstanding stock of Opto Technology Inc. (“Opto Technology”). Opto Technology is a supplier of light-emitting diode (“LED”) based lighting components and subsystems. The Company expects this acquisition to expand its portfolio of high brightness LED components by adding optical subsystems to provide energy efficient solid state lighting solutions to original equipment manufacturers. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company as well as non-capitalizable intangible assets, such as the customer base acquired. The Company paid the shareholders of Opto Technology approximately $20.6 million in cash for this acquisition plus up to $8.0 million in potential additional contingent consideration, of which the Company recorded $4.9 million as the fair value at the acquisition date. During the first nine months of fiscal year 2009, the Company recorded a decrease of $0.3 million to the potential additional contingent consideration as a fair value adjustment through current period earnings. During the first nine months of fiscal year 2009, the Company received approximately $0.2 million from the former shareholders of Opto Technology for net working capital adjustments. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, none of which is tax deductible. The Company reports the operations for this acquisition within the results of the Company’s Environmental Health segment from the acquisition date.

The Sym-Bio, Analytica and Opto Technology acquisitions were accounted for using the acquisition method of accounting. Allocations of the purchase price for these acquisitions were based on estimates of the fair value of the net assets acquired, and are subject to adjustment upon finalization of the purchase price allocation. The fair values assigned to contingent consideration, tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Contingent consideration has been measured at fair value at the acquisition date with changes in the fair value after the acquisition date

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affecting earnings. The excess purchase price over those assigned values was recorded as goodwill. Goodwill is reviewed at least annually for impairment. Purchased intangibles with finite lives will be amortized over their respective estimated useful lives. See Note 13 below for additional details.

As of October 4, 2009, the purchase price and related allocations for the Sym-Bio, Analytica and Opto Technology acquisitions were preliminary. The preliminary allocations may be revised as a result of additional information regarding assets acquired and liabilities assumed, including tax elections, deferred taxes and revisions of preliminary estimates of fair values made to intangible assets at the date of purchase. For acquisitions completed subsequent to fiscal year 2008, during the measurement period, the Company will recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The Company expects to finalize any outstanding information no later than one year from the date of acquisition. Adjustments to the initial allocation of the purchase price during the measurement period require the revision of comparative prior period financial information when reissued in subsequent financial statements. The effect of measurement period adjustments to the allocation of the purchase price would be as if the adjustments had been completed on the acquisition date. The effects of measurement period adjustments may cause changes in depreciation, amortization, or other income or expense recognized in prior periods. All changes that do not qualify as measurement period adjustments are included in current period earnings.

The components of the preliminary purchase price and related allocations for the Sym-Bio, Analytica and Opto Technology acquisitions were as follows:

	Sym-Bio			Analytica			Opto Technology
	(In thousands)
Consideration and acquisition costs:
Cash payments	$	63,675		$	21,730		$	20,604
Less: cash acquired		(2,887	)		(293	)		—
Deferred consideration		(420	)		1,309			4,857
Working capital adjustments		—			—			(180	)
Total consideration	$	60,368		$	22,746		$	25,281
Allocation of purchase price:
Current assets	$	4,562		$	2,448		$	2,155
Property, plant and equipment		10,862			91			828
Identifiable intangible assets		18,697			17,600			13,100
Goodwill		36,485			14,680			16,299
Other long-term assets		2,647			—			—
Deferred taxes		(5,264	)		(6,530	)		(4,031	)
Liabilities assumed		(7,621	)		(5,543	)		(3,070	)
Total	$	60,368		$	22,746		$	25,281

Note 3: Restructuring and Lease Charges, net

The Company has undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, alignment with the Company’s growth strategy and the integration of its business units.

A description of the restructuring plans and the activity recorded for the nine months ended October 4, 2009 is listed below. Details of the plans initiated in previous years, particularly those listed under “Previous Restructuring and Integration Plans,” are discussed more fully in Note 3 to the audited consolidated financial statements in the 2008 Form 10-K.

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The restructuring plan for the third quarter of fiscal year 2009 was intended principally to reduce resources in anticipation of continued decreasing demand in certain end markets and to shift resources to higher growth geographic regions and end markets. The restructuring plan for the first quarter of fiscal year 2009 was intended principally to reduce resources in anticipation of decreasing demand in certain end markets. The restructuring plan for the third quarter of fiscal year 2008 was intended principally to shift resources into geographic regions and product lines that are more consistent with the Company’s growth strategy. The activities associated with these plans have been reported as restructuring expenses as a component of operating expenses from continuing operations. The Company expects the impact of immediate cost savings from the restructuring plans on operating results and cash flows to approximately offset the decline in revenue. The Company expects the impact of future cost savings from these restructuring activities on operating results and cash flows to be negligible, as the Company will incur offsetting costs.

Q3 2009 Plan

During the third quarter of fiscal year 2009, the Company’s management approved a plan to reduce resources in anticipation of continued decreasing demand in certain end markets and to shift resources to higher growth geographic regions and end markets (the “Q3 2009 Plan”). As a result of the Q3 2009 Plan, the Company recognized a $4.9 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. The Company also recognized a $7.3 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. As part of the Q3 2009 Plan, the Company reduced headcount by 171 employees. All notifications and actions related to the Q3 2009 Plan were completed by October 4, 2009.

The following table summarizes the Q3 2009 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facility			Total
	(In thousands)
Provision	$	11,753		$	440		$	12,193
Amounts paid and foreign currency translation		(1,526	)		(55	)		(1,581	)
Balance at October 4, 2009	$	10,227		$	385		$	10,612

All employee relationships have been severed and the Company anticipates that the remaining severance payments of $10.2 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2011. The Company also anticipates that the remaining payments of $0.4 million for the closure of the excess facility will be paid through fiscal year 2011, in accordance with the terms of the applicable lease.

Q1 2009 Plan

During the first quarter of fiscal year 2009, the Company’s management approved a plan to reduce resources in anticipation of decreasing demand in certain end markets (the “Q1 2009 Plan”). As a result of the Q1 2009 Plan, the Company recognized a $4.8 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. The Company also recognized a $3.0 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. As part of the Q1 2009 Plan, the Company reduced headcount by 166 employees. All notifications and actions related to the Q1 2009 Plan were completed by April 5, 2009.

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The following table summarizes the Q1 2009 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facility			Total
	(In thousands)
Provision	$	7,365		$	458		$	7,823
Amounts paid and foreign currency translation		(3,672	)		(126	)		(3,798	)
Balance at October 4, 2009	$	3,693		$	332		$	4,025

All employee relationships have been severed and the Company anticipates that the remaining severance payments of $3.7 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2010. The Company also anticipates that the remaining payments of $0.3 million for the closure of the excess facility will be paid through fiscal year 2012, in accordance with the terms of the applicable lease.

Q3 2008 Plan

During the third quarter of fiscal year 2008, the Company’s management approved a plan to shift resources into product lines that are more consistent with the Company’s growth strategy (the “Q3 2008 Plan”). As a result of the Q3 2008 Plan, the Company recognized a $4.5 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of excess facilities. The Company also recognized a $3.3 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities and the closure of excess facilities. As part of the Q3 2008 Plan, the Company reduced headcount by 107 employees. All notifications and actions related to the Q3 2008 Plan were completed by September 28, 2008.

The following table summarizes the Q3 2008 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facilities			Total
	(In thousands)
Balance at December 28, 2008	$	2,659		$	1,152		$	3,811
Amounts paid and foreign currency translation		(1,581	)		(295	)		(1,876	)
Balance at October 4, 2009	$	1,078		$	857		$	1,935

All employee relationships have been severed and the Company anticipates that the remaining severance payments of $1.1 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2010. The Company also anticipates that the remaining payments of $0.9 million for the closure of excess facilities will be paid through fiscal year 2011, in accordance with the terms of the applicable leases.

Previous Restructuring and Integration Plans

The principal actions of the restructuring and integration plans from fiscal years 2001 through 2007 were workforce reductions related to the integration of the Company’s businesses in order to reduce costs and achieve operational efficiencies as well as workforce reductions in both the Human Health and Environmental Health segments by shifting resources into geographic regions and product lines that are more consistent with the Company’s growth strategy. During the nine months ended October 4, 2009, the Company paid $0.4 million related to these plans and recorded a reversal of $0.7 million related to lower than expected severance costs for several of these plans. As of October 4, 2009, the Company had approximately $1.0 million of remaining liabilities associated with these restructuring and integration plans, primarily for residual lease obligations related to closed facilities in both the Human Health and Environmental Health segments. Payments for these leases, the terms of which vary in length, will be made through fiscal year 2011.

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Lease Charges

To facilitate the sale of a business in fiscal year 2001, the Company was required to guarantee the lease obligations that the buyer assumed related to the lease for the building in which the business operated. The lease obligations continue through March 2011. While the Company assigned its interest in the lease to the buyer at the time of the sale of the business, the buyer subsequently defaulted under the lease, and the lessor sought reimbursement from the Company. The Company recorded a charge of $2.7 million in fiscal year 2007 related to payments for this lease obligation. The buyer filed for bankruptcy protection during the third quarter of fiscal year 2008 and was delinquent in making both its lease payments and payments for certain building expenses, requiring the Company to make payments of $0.4 million during fiscal year 2008 and $0.5 million during the first nine months of fiscal year 2009. The buyer ceased operations in the third quarter of fiscal year 2009 and vacated the property. As of October 4, 2009, the Company recorded an additional charge of $0.9 million related to waste removal and restoration costs, and reduced the estimated sublease rental payments reasonably expected to be obtained for the property.

Note 4: Interest and Other Expense, net

Interest and other expense, net, consisted of the following:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Interest income	$	(124	)	$	(1,064	)	$	(777	)	$	(3,249	)
Interest expense		4,147			6,371			12,964			18,435
Gains on dispositions of investments, net		—			—			—			(1,158	)
Other expense, net		798			742			1,652			2,280
Total interest and other expense, net	$	4,821		$	6,049		$	13,839		$	16,308

Note 5: Inventories, net

Inventories consisted of the following:

	October 4, 2009		December 28, 2008
	(In thousands)
Raw materials	$	84,614	$	78,097
Work in progress		21,550		16,191
Finished goods		118,263		103,679
Total inventories, net	$	224,427	$	197,967

Note 6: Income Taxes

The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits. The Company makes adjustments to its unrecognized tax benefits when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; (ii) a tax position is effectively settled with a tax authority; and/or (iii) the statute of limitations expires regarding a tax position.

At October 4, 2009, the Company had gross tax effected unrecognized tax benefits of $40.4 million, of which $37.4 million, if recognized, would affect the continuing operations effective tax rate. The remaining

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amount, if recognized, would affect discontinued operations. With the Company’s adoption of the new authoritative guidance on business combinations in the first quarter of fiscal year 2009, changes in deferred tax asset valuation allowances and income tax uncertainties, after the acquisition date, will affect income tax expense, including those associated with acquisitions that closed prior to the effective date of the new authoritative guidance on business combinations.

At October 4, 2009, the Company had $5.6 million of accrued liabilities for uncertain tax positions, including accrued interest, net of tax benefits, and penalties, which should be resolved within the next year. A portion of the accrued liabilities for uncertain tax positions could affect the continuing operations effective tax rate depending on the ultimate resolution; however, the Company cannot quantify an estimated range at this time. The Company is subject to U.S. federal income tax as well as to income tax of numerous state and foreign jurisdictions.

The Company re-measured several of its uncertain tax positions related to fiscal years 2006 and 2007 during the third quarter of fiscal year 2009 based on new information arising from events during the quarter that affected positions for those years. The Company also effectively settled several income tax audits worldwide. The re-measurements and closure of audits included positions in Hong Kong, the United Kingdom and the United States. The re-measurements and closure of audits, as well as other discrete items, resulted in the recognition of $1.7 million of income tax benefits in continuing operations during the third quarter of fiscal year 2009. Tax years ranging from 1998 through 2008 remain open to examination by various state and foreign tax jurisdictions in which the Company has significant business operations, such as Singapore, Canada, Germany, the United Kingdom and the United States. The tax years under examination vary by jurisdiction.

Note 7: Debt

Amended Senior Unsecured Revolving Credit Facility. On August 13, 2007, the Company entered into an amended and restated senior unsecured revolving credit facility providing for a facility through August 13, 2012, which amended and restated in its entirety the Company’s previous senior revolving credit agreement dated as of October 31, 2005. During the first quarter of fiscal year 2008, the Company exercised its option to increase the amended senior unsecured revolving credit facility to $650.0 million from $500.0 million. Letters of credit in the aggregate amount of approximately $13.0 million were issued under the previous facility, which are treated as issued under the amended facility. The Company uses the amended senior unsecured revolving credit facility for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, acquisitions and strategic alliances. The interest rates under the amended senior unsecured revolving credit facility are based on the Eurocurrency rate at the time of borrowing plus a margin, or the base rate from time to time. The base rate is the higher of (i) the corporate base rate announced from time to time by Bank of America, N.A. and (ii) the Federal Funds rate plus 50 basis points. The Company may allocate all or a portion of its indebtedness under the amended senior unsecured revolving credit facility to interest based upon the Eurocurrency rate plus a margin, or the base rate. The Eurocurrency margin as of October 4, 2009 was 40 basis points. The weighted average Eurocurrency interest rate as of October 4, 2009 was 0.24%, resulting in a weighted average effective Eurocurrency rate, including the margin, of 0.64%. The Company had drawn down approximately $424.5 million of borrowings in U.S. Dollars under the facility as of October 4, 2009, with interest based on the above described Eurocurrency rate. The agreement for the facility contains affirmative, negative and financial covenants and events of default customary for financings of this type, which are consistent with those financial covenants contained in the Company’s previous senior revolving credit agreement. The financial covenants in the Company’s amended and restated senior unsecured revolving credit facility include debt-to-capital ratios and a contingent maximum total leverage ratio, applicable if the Company’s credit rating is down-graded below investment grade. The Company was in compliance with all applicable covenants as of October 4, 2009.

6% Senior Unsecured Notes. On May 30, 2008, the Company issued and sold seven-year senior notes at a rate of 6% with a face value of $150.0 million and received $150.0 million in gross proceeds from the issuance.

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The debt, which matures in May 2015, is unsecured. Interest on the 6% senior notes is payable semi-annually on May 30th and November 30th. The Company may redeem some or all of its 6% senior notes at any time in an amount not less than 10% of the original aggregate principal amount, plus accrued and unpaid interest, plus the applicable make-whole amount. The financial covenants in the Company’s 6% senior notes include debt-to-capital ratios which, if the Company’s credit rating is down-graded below investment grade, would be replaced by a contingent maximum total leverage ratio. The Company was in compliance with all applicable covenants as of October 4, 2009.

The Company entered into forward interest rate contracts in October 2007 that were intended to hedge movements in interest rates prior to the Company’s expected debt issuance. In May 2008, the Company settled forward interest rate contracts with notional amounts totaling $150.0 million upon the issuance of the Company’s 6% senior unsecured notes, and recognized $8.4 million, net of taxes of $5.4 million, of accumulated derivative losses in other comprehensive loss. The Company did not recognize any ineffectiveness related to these cash flow hedges. As of October 4, 2009, the balance remaining in accumulated other comprehensive loss related to these cash flow hedges, net of taxes of $4.4 million, was $6.8 million. The derivative losses are amortized into interest expense when the hedged exposure affects interest expense. The Company amortized into interest expense $1.5 million during the first nine months of fiscal year 2009 and $1.2 million during fiscal year 2008 for these derivative losses.

Note 8: Earnings Per Share

Basic earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding during the period less restricted unvested shares. Diluted earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding plus all potentially dilutive common stock equivalents, primarily shares issuable upon the exercise of stock options using the treasury stock method. The following table reconciles the number of shares utilized in the earnings per share calculations:

	Three Months Ended		Nine Months Ended
	October 4, 2009	September 28, 2008	October 4, 2009	September 28, 2008
	(In thousands)
Number of common shares—basic	116,211	118,347	116,227	117,821
Effect of dilutive securities:
Stock options	332	1,182	186	1,140
Restricted stock	98	80	74	68
Number of common shares—diluted	116,641	119,609	116,487	119,029
Number of potentially dilutive securities excluded from calculation due to antidilutive impact	6,252	4,846	8,707	6,274

Antidilutive securities include outstanding stock options with exercise prices and average unrecognized compensation cost in excess of the average fair market value of the Company’s common stock for the related period. Antidilutive options were excluded from the calculation of diluted net income per share and could become dilutive in the future.

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Note 9: Comprehensive Income

The components of comprehensive income, net of income taxes, consist of the following:

	Three Months Ended					Nine Months Ended
	October 4, 2009		September 28, 2008			October 4, 2009		September 28, 2008
	(In thousands)
Net income	$	13,589	$	51,902		$	45,653	$	95,746
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments		19,808		(35,884	)		13,667		(1,096	)
Unrealized net gains (losses) on securities		42		(60	)		192		(72	)
Losses on effective cash flow hedges reclassified to earnings		299		299			897		399
Unrealized and realized net losses on effective cash flow hedges		—		(1,696	)		—		(9,809	)
		20,149		(37,341	)		14,756		(10,578	)
Comprehensive income, net of income taxes	$	33,738	$	14,561		$	60,409	$	85,168

The components of accumulated other comprehensive loss, net of income taxes, consist of the following:

	October 4, 2009			December 28, 2008
	(In thousands)
Foreign currency translation adjustments	$	96,772		$	83,105
Unrecognized losses and prior service costs		(106,300	)		(106,300	)
Unrealized net losses on securities		(176	)		(368	)
Net losses on cash flow hedges		(6,779	)		(7,676	)
Accumulated other comprehensive loss, net of income taxes	$	(16,483	)	$	(31,239	)

Note 10: Industry Segment Information

The Company discloses information about its operating segments based on the way that management organizes the segments within the Company for making operating decisions and assessing financial performance.

Beginning with fiscal year 2009, the Company has realigned its businesses in a manner intended to allow the Company to prioritize its capabilities on two key strategic operating areas – Human Health and Environmental Health. The Company realigned into these two new operating segments to align its resources to meet the demands of the markets the Company serves and to focus on the important outcomes enabled by its technologies. The Company evaluates the performance of its operating segments based on sales and operating income. Intersegment sales and transfers are not significant. The Company’s management reviews the results of the operations by these two new operating segments. The accounting policies of the operating segments are the same as those described in Note 1 to the audited consolidated financial statements in the 2008 Form 10-K. The results reported for the three and nine months ended October 4, 2009 reflect this new alignment of the Company’s operating segments. Financial information in this report relating to the three and nine months ended September 28, 2008 has been retrospectively adjusted to reflect the changes in the Company’s operating segments. The principal products and services of these operating segments are:

• Human Health. Develops diagnostics, tools and applications to help detect disease earlier and more accurately and to accelerate the discovery and development of critical new therapies. Within the

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Human Health segment, the Company serves both the diagnostics and research markets. Specifically, the Human Health segment includes the Company’s products and services that address the genetic screening and bio-discovery markets, formerly in its Life and Analytical Sciences segment, and its technology serving the medical imaging market, formerly in its Optoelectronics segment.

• Environmental Health. Provides technologies and applications to facilitate the creation of safer food and consumer products, more secure surroundings and efficient energy resources. The Environmental Health segment serves the environmental, safety and security, industrial and laboratory services markets. Specifically, the Environmental Health segment includes the Company’s products and services that address the analytical sciences and laboratory service and support markets, formerly in its Life and Analytical Sciences segment, and its technology designed for the sensors and specialty lighting markets, formerly in its Optoelectronics segment.

The assets and expenses for the Company’s corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, have been included as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when such costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments.

Sales and operating profit by segment, excluding discontinued operations, are shown in the table below:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Human Health
Sales	$	180,197		$	196,697		$	542,311		$	580,699
Operating income from continuing operations		18,890			21,392			55,646			52,854
Environmental Health
Sales		256,868			282,050			760,903			861,733
Operating income from continuing operations		15,505			30,512			58,622			98,468
Corporate
Operating loss from continuing operations		(7,975	)		(8,768	)		(24,160	)		(30,092	)
Continuing Operations
Sales	$	437,065		$	478,747		$	1,303,214		$	1,442,432
Operating income from continuing operations		26,420			43,136			90,108			121,230
Interest and other expense, net (see Note 4)		4,821			6,049			13,839			16,308
Income from continuing operations before income taxes	$	21,599		$	37,087		$	76,269		$	104,922

Note 11: Discontinued Operations

As part of the Company’s continuing efforts to focus on higher growth opportunities, the Company has discontinued certain businesses. The Company has accounted for these businesses as discontinued operations and, accordingly, has presented the results of operations and related cash flows as discontinued operations for all periods presented. The assets and liabilities of these businesses have been presented separately, and are reflected within the assets and liabilities from discontinued operations in the accompanying condensed consolidated balance sheets as of October 4, 2009 and December 28, 2008.

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The Company recorded the following gains and losses, which have been reported as (loss) gain on disposition of discontinued operations:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Net gain (loss) on disposition of ViaCyteSM and Cellular Therapy Technology businesses	$	85		$	113		$	(2,301	)	$	(8,338	)
Net loss on disposition of other discontinued operations		(1,365	)		(300	)		(1,371	)		(254	)
Net loss on disposition of discontinued operations before income taxes		(1,280	)		(187	)		(3,672	)		(8,592	)
Provision for (benefit from) income taxes		288			(8,331	)		(116	)		(9,577	)
(Loss) gain on disposition of discontinued operations, net of income taxes	$	(1,568	)	$	8,144		$	(3,556	)	$	985

As part of the Company’s new strategic business alignment into the Human Health and Environmental Health segments and the Company’s continuing efforts to focus on higher growth opportunities, in December 2008, the Company’s management approved separate plans to divest its Photonics and Photoflash businesses within the Environmental Health segment. Photonics and Photoflash products and technologies include xenon flashtubes and modules. These products are used in a variety of applications including mobile phones and laser machine tools. The Company is actively marketing and is currently committed to a plan to sell both of these businesses.

In addition, during December 2008, the Company’s management approved the shut down of certain instrument businesses within the Human Health segment: Cellular Screening Fluorescence and Luminescence workstations, Analytical Proteomics Instruments and Proteomics and Genomics Instruments. The shut down of the Cellular Screening Fluorescence and Luminescence workstations business, the Analytical Proteomics Instruments business, and the Proteomics and Genomics Instruments business resulted in a pre-tax loss of $4.8 million related to lease and severance costs and the reduction of fixed assets and inventory to net realizable value during fiscal year 2008.

In November 2007, the Company acquired ViaCell, Inc. (“ViaCell”), which specializes in the collection, testing, processing and preservation of umbilical cord blood stem cells. Following the ViaCell acquisition, the Board of Directors of the Company (the “Board”) approved a plan to sell the ViaCyte^SM and Cellular Therapy Technology businesses that were acquired with ViaCell. The Company determined that both businesses did not strategically fit with the other products offered by the Human Health segment. The Company also determined that without investing capital into the operations of both businesses, the Company could not effectively compete with larger companies that focus on the market for such products. After careful consideration, the Company decided in the second quarter of fiscal year 2008 to shut down the ViaCyte^SM and Cellular Therapy Technology businesses. The Company recorded a pre-tax loss of $8.0 million for severance and facility closure costs during fiscal year 2008 and recorded an additional pre-tax loss of $2.3 million related to facility closure costs during the first nine months of fiscal year 2009.

During the first nine months of both fiscal years 2009 and 2008, the Company settled various commitments related to the divestiture of other discontinued operations. The Company recognized a pre-tax loss of $1.4 million in the first nine months of fiscal year 2009 in connection with the closure of a facility and a pre-tax loss of $0.3 million in the first nine months of fiscal year 2008 in connection with other various commitments. The benefit from income taxes of $9.6 million recorded in discontinued operations in the first nine months of fiscal year 2008 includes $8.5 million of income tax benefits related to the favorable settlement of several income tax audits worldwide during the fiscal quarter ended September 28, 2008.

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Summary operating results of the discontinued operations for the periods prior to disposition were as follows:

	Three Months Ended					Nine Months Ended
	October 4, 2009			September 28, 2008		October 4, 2009			September 28, 2008
	(In thousands)
Sales	$	11,485		$	26,370	$	28,415		$	73,664
Costs and expenses		12,255			24,204		33,345			70,447
Operating (loss) income from discontinued operations		(770	)		2,166		(4,930	)		3,217
Other expense, net		—			—		—			—
(Loss) income from discontinued operations before income taxes		(770	)		2,166		(4,930	)		3,217
Provision for (benefit from) income taxes		94			91		(102	)		470
(Loss) income from discontinued operations, net of income taxes	$	(864	)	$	2,075	$	(4,828	)	$	2,747

Note 12: Stock Plans

In addition to the Company’s Employee Stock Purchase Plan, the Company formerly had three stock-based compensation plans, the Amended and Restated 2001 Incentive Plan, the 2005 Incentive Plan and the Amended and Restated Life Sciences Incentive Plan (collectively the “Prior Plans”), under which the Company’s common stock was made available for stock option grants, restricted stock awards, and stock grants as part of the Company’s compensation programs. The Prior Plans are described in more detail in the Company’s definitive proxy statement filed with the SEC on March 20, 2009 and Note 20 to the Company’s audited consolidated financial statements included in the Company’s 2008 Form 10-K filed with the SEC on February 26, 2009. On April 28, 2009, the Company’s shareholders approved the 2009 Incentive Plan (the “2009 Plan”), which is described in more detail in the Company’s definitive proxy statement filed with the SEC on March 20, 2009. Under the 2009 Plan, 10.0 million shares of the Company’s common stock, as well as shares of the Company’s common stock previously granted under the Amended and Restated 2001 Incentive Plan and the 2005 Incentive Plan that were cancelled or forfeited without the shares being issued, are authorized for stock option grants, restricted stock awards, and stock grants as part of the Company’s compensation programs. The 2009 Plan replaced the Prior Plans. Awards granted under the Prior Plans prior to the approval of the 2009 Plan remain outstanding.

For the three and nine months ended October 4, 2009, the total pre-tax stock-based compensation expense for the cost of stock options, restricted stock, restricted stock units, performance units and stock grants was $3.8 million and $11.9 million, respectively. For the three and nine months ended September 28, 2008, the total pre-tax stock-based compensation expense for the cost of stock options, restricted stock, restricted stock units, performance units and stock grants was $5.5 million and $16.4 million, respectively. The total income tax benefit recognized in the condensed consolidated income statements for stock-based compensation was $1.4 million and $4.0 million for the three and nine months ended October 4, 2009, respectively. The total income tax benefit recognized in the condensed consolidated income statements for stock-based compensation was $1.8 million and $5.4 million for the three and nine months ended September 28, 2008, respectively. Stock-based compensation costs capitalized as part of inventory were approximately $0.2 million as of both October 4, 2009 and September 28, 2008.

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Stock Options: The fair value of each option grant is estimated using the Black-Scholes option pricing model. The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	Three and Nine Months Ended
	October 4, 2009		September 28, 2008
Risk-free interest rate	1.6	%	2.6	%
Expected dividend yield	1.9	%	1.2	%
Expected lives	4 years		4 years
Expected stock volatility	35	%	28	%

The following table summarizes stock option activity for the nine months ended October 4, 2009:

	Number of Shares		Weighted- Average Price		Weighted-Average Remaining Contractual Term	Total Intrinsic Value
	(Shares in thousands)				(In years)	(In millions)
Outstanding at December 28, 2008	9,424		$	24.81
Granted	2,250			13.24
Exercised	(212	)		10.65
Canceled	(2,552	)		28.61
Forfeited	(175	)		21.65
Outstanding at October 4, 2009	8,735		$	21.13	3.9	$	12.7
Exercisable at October 4, 2009	5,170		$	23.56	2.5	$	1.9
Vested and expected to vest in the future	7,856		$	21.13	3.9	$	11.4

The weighted-average grant-date fair value of options granted for the three and nine months ended October 4, 2009 were $4.43 and $3.32, respectively. The weighted-average grant-date fair value of options granted for the three and nine months ended September 28, 2008 were $6.59 and $5.88, respectively. The total intrinsic value of options exercised for the three and nine months ended October 4, 2009 were $0.2 million and $1.0 million, respectively. The total intrinsic value of options exercised for the three and nine months ended September 28, 2008 were $11.1 million and $19.1 million, respectively. Cash received from option exercises for the nine months ended October 4, 2009 and September 28, 2008 was $2.3 million and $43.4 million, respectively. The related excess tax benefit, classified as a financing cash activity, was $0.03 million and $0.4 million for the nine months ended October 4, 2009 and September 28, 2008, respectively.

There was $9.6 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested stock options granted as of October 4, 2009. This cost is expected to be recognized over a weighted-average period of 1.8 fiscal years and will be adjusted for any future changes in estimated forfeitures.

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The following table summarizes total compensation expense recognized related to the Company’s outstanding stock options, which is a function of current and prior year awards, net of estimated forfeitures, included in the Company’s condensed consolidated income statements for the three and nine months ended October 4, 2009 and September 28, 2008:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Cost of sales	$	288		$	359		$	887		$	948
Research and development expenses		110			32			352			265
Selling, general and administrative and other expenses		1,381			2,085			4,348			5,010
Compensation expense related to stock options		1,779			2,476			5,587			6,223
Less: income tax benefit		(722	)		(764	)		(1,919	)		(1,922	)
Net compensation expense related to stock options	$	1,057		$	1,712		$	3,668		$	4,301

Restricted Stock Awards: The following table summarizes restricted stock award activity for the nine months ended October 4, 2009:

	Number of Shares		Weighted- Average Grant- Date Fair Value
	(Shares in thousands)
Nonvested at December 28, 2008	321		$	24.54
Granted	283			13.24
Vested	(31	)		20.85
Forfeited	(35	)		23.80
Nonvested at October 4, 2009	538		$	18.85

The weighted-average grant-date fair value of restricted stock awards granted during the three and nine months ended October 4, 2009 were $18.25 and $13.24, respectively. The weighted-average grant-date fair value of restricted stock awards granted during the three and nine months ended September 28, 2008 were $28.23 and $25.38, respectively. The fair value of restricted stock awards vested were $0.7 million and $0.2 million for the nine months ended October 4, 2009 and September 28, 2008, respectively. The total compensation expense recognized related to the Company’s outstanding restricted stock awards, which is a function of current and prior year awards, was approximately $0.9 million and $2.5 million for the three and nine months ended October 4, 2009, respectively. The total compensation expense recognized related to the Company’s outstanding restricted stock awards, which is a function of current and prior year awards, was approximately $1.9 million and $4.5 million for the three and nine months ended September 28, 2008, respectively.

As of October 4, 2009, there was $4.6 million of total unrecognized compensation cost, net of forfeitures, related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 1.8 fiscal years.

Performance Units: The Company granted 205,900 performance units and 131,151 performance units during the nine months ended October 4, 2009 and September 28, 2008, respectively. The weighted-average grant-date fair value of performance units granted during the nine months ended October 4, 2009 and September 28, 2008 were $13.17 and $24.95, respectively. The total compensation expense recognized related to these performance units, which is a function of current and prior year awards, was approximately $1.1 million and $3.0 million for the three and nine months ended October 4, 2009, respectively. The total compensation

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expense recognized related to these performance units, which is a function of current and prior year awards, was approximately $1.2 million and $4.8 million for the three and nine months ended September 28, 2008, respectively. As of October 4, 2009, there were 387,863 performance units outstanding subject to forfeiture.

Stock Awards: The Company granted 5,790 shares and 3,740 shares to each non-employee Director during the nine months ended October 4, 2009 and September 28, 2008, respectively. During the first quarter of fiscal year 2008, a new non-employee Director was granted 667 shares. The weighted-average grant-date fair value of stock awards granted during the nine months ended October 4, 2009 and September 28, 2008 was $17.27 and $26.70, respectively. The total compensation expense recognized related to these stock awards was approximately $0.8 million for each of the nine months ended October 4, 2009 and September 28, 2008.

Employee Stock Purchase Plan: During the nine months ended October 4, 2009, the Company issued 138,691 shares of common stock under the Company’s Employee Stock Purchase Plan at a weighted-average price of $14.62 per share. At October 4, 2009, there remained available for sale to employees an aggregate of 1.5 million shares of the Company’s common stock out of the 5.0 million shares authorized by shareholders for issuance under this plan.

Stock Repurchase Program: On October 23, 2008, the Company announced that the Board authorized the Company to repurchase up to 10.0 million shares of common stock under a stock repurchase program (the “Repurchase Program”). The Repurchase Program will expire on October 22, 2012 unless terminated earlier by the Board, and may be suspended or discontinued at any time. During the first nine months of fiscal year 2009, the Company repurchased 1,000,833 shares of its common stock in the open market at an aggregate cost of $14.2 million, including commissions, under the Repurchase Program. Approximately 8.0 million shares of the Company’s common stock remain available for repurchase from the 10.0 million shares authorized by the Board under the Repurchase Program. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

The Board has authorized the Company to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to the Company’s equity incentive plans. During the first nine months of fiscal year 2009, the Company repurchased 28,890 shares of common stock for this purpose. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

Note 13: Goodwill and Intangible Assets, net

The Company tests goodwill and non-amortizing intangible assets at least annually for possible impairment. Accordingly, the Company completes the annual testing of impairment for goodwill and non-amortizing intangible assets on the later of January 1 or the first day of each fiscal year. In addition to its annual test, the Company regularly evaluates whether events and circumstances have occurred that may indicate a potential impairment of goodwill or non-amortizing intangible assets.

As discussed in Note 10, the Company realigned its organization into two new operating segments at the beginning of fiscal year 2009. In conjunction with the realignment of its operating segments, the Company also redefined its reporting units based on the new alignment of its operating segments. Financial information in this report relating to the first nine months of fiscal year 2008 has been retrospectively adjusted to reflect the changes in the Company’s operating segments. The Company’s segment management reviews the results of the operations one level below its operating segments. The Company has determined that the reporting units that should be used to test goodwill for impairment are the analytical sciences and laboratory services business, illumination and detection solutions business, genetic screening business, bio-discovery business and medical imaging business. The income approach, specifically the discounted cash flow model, was used to determine the fair values of each of the reporting units in order to allocate goodwill on a relative fair value basis.

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The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of a two-step process. The first step is the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. The second step measures the amount of an impairment loss, and is only performed if the carrying value exceeds the fair value of the reporting unit. The Company performed its annual impairment testing for its reporting units as of January 1, 2009, its annual impairment date, and concluded based on the first step of the process that there was no goodwill impairment.

The Company has consistently employed the income approach to estimate the current fair value when testing for impairment of goodwill. A number of significant assumptions and estimates are involved in the application of the income approach to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, and working capital changes. Cash flow forecasts are based on approved business unit operating plans for the early years’ cash flows and historical relationships in later years. The income approach is sensitive to changes in long-term terminal growth rates and the discount rate. The long-term terminal growth rates are consistent with the Company’s historical long-term terminal growth rates, as the current economic trends are not expected to affect the long-term terminal growth rates of the Company. In fiscal year 2009, the long-term terminal growth rates for the Company’s reporting units ranged from 5.0% to 7.5%. The range for the discount rates for the reporting units was 10.5% to 11.5%. Keeping all other variables constant, a 5.0% to 10.0% change in any one of the input assumptions for the various reporting units would still allow the Company to conclude, based on the first step of the process, that there was no impairment of goodwill.

The Company has consistently employed the Relief from Royalty model to estimate the current fair value when testing for impairment of non-amortizing intangible assets. The impairment test consists of a comparison of the fair value of the non-amortizing intangible asset with its carrying amount. If the carrying amount of a non-amortizing intangible asset exceeds its fair value, an impairment loss in an amount equal to that excess is recognized. In addition, the Company currently evaluates the remaining useful life of its non-amortizing intangible assets at least annually to determine whether events or circumstances continue to support an indefinite useful life. If events or circumstances indicate that the useful lives of non-amortizing intangible assets are no longer indefinite, the assets will be tested for impairment. These intangible assets will then be amortized prospectively over their estimated remaining useful life and accounted for in the same manner as other intangible assets that are subject to amortization. The Company performed its annual impairment testing as of January 1, 2009, its annual impairment date, and concluded that there was no impairment of non-amortizing intangible assets.

The changes in the carrying amount of goodwill for the period ended October 4, 2009 from December 28, 2008 were as follows:

	Human Health		Environmental Health		Consolidated
	(In thousands)
Balance at December 28, 2008	$	888,172	$	508,120	$	1,396,292
Foreign currency translation		4,535		3,403		7,938
Acquisitions and earn-out adjustments		37,235		32,082		69,317
Balance at October 4, 2009	$	929,942	$	543,605	$	1,473,547

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Identifiable intangible asset balances at October 4, 2009 and December 28, 2008 by category were as follows:

	October 4, 2009			December 28, 2008
	(In thousands)
Patents	$	138,420		$	124,693
Less: Accumulated amortization		(79,981	)		(73,183	)
Net patents		58,439			51,510
Licenses		73,359			63,963
Less: Accumulated amortization		(39,588	)		(35,238	)
Net licenses		33,771			28,725
Core technology		410,443			372,861
Less: Accumulated amortization		(191,553	)		(159,788	)
Net core technology		218,890			213,073
IPR&D		4,349			—
Less: Accumulated amortization		—			—
Net IPR&D		4,349			—
Net amortizable intangible assets		315,449			293,308
Non-amortizing intangible assets:
Trade names and trademarks		159,165			159,165
Totals	$	474,614		$	452,473

Total amortization expense related to finite-lived intangible assets was $42.0 million for both the nine months ended October 4, 2009 and September 28, 2008.

Note 14: Warranty Reserves

The Company provides warranty protection for certain products for periods usually ranging from one to three years beyond the date of sale. The majority of costs associated with warranty obligations include the replacement of parts and the time for service personnel to respond to repair and replacement requests. A warranty reserve is recorded based upon historical results, supplemented by management’s expectations of future costs. Warranty reserves are included in “Accrued expenses” on the condensed consolidated balance sheets. A summary of warranty reserve activity for the three and nine months ended October 4, 2009 and September 28, 2008 is as follows:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Balance beginning of period	$	9,771		$	9,610		$	9,433		$	10,362
Provision charged to income		3,271			3,283			9,554			9,964
Payments		(3,655	)		(3,495	)		(10,731	)		(10,536	)
Adjustments to previously provided warranties, net		88			185			1,001			(586	)
Foreign currency and acquisitions		285			(381	)		503			(2	)
Balance end of period	$	9,760		$	9,202		$	9,760		$	9,202

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Note 15: Employee Benefit Plans

The following table summarizes the components of net periodic benefit cost (credit) for the Company’s various defined benefit employee pension and post-retirement plans for the three and nine months ended October 4, 2009 and September 28, 2008:

	Defined Benefit Pension Benefits						Post-Retirement Medical Benefits
	Three Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Service cost	$	991		$	1,295		$	21		$	22
Interest cost		6,149			6,878			48			54
Expected return on plan assets		(5,636	)		(6,602	)		(190	)		(259	)
Amortization of prior service		(43	)		(48	)		(79	)		(78	)
Recognition of actuarial losses (gains)		1,284			955			(14	)		(109	)
Net periodic benefit cost (credit)	$	2,745		$	2,478		$	(214	)	$	(370	)

	Defined Benefit Pension Benefits						Post-Retirement Medical Benefits
	Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Service cost	$	3,424		$	3,802		$	73		$	72
Interest cost		18,440			20,524			160			168
Expected return on plan assets		(16,802	)		(20,108	)		(568	)		(776	)
Amortization of prior service		(123	)		(149	)		(237	)		(236	)
Recognition of actuarial losses (gains)		4,040			2,475			(16	)		(290	)
Net periodic benefit cost (credit)	$	8,979		$	6,544		$	(588	)	$	(1,062	)

Note 16: Settlement of Insurance Claim

During fiscal year 2007, the Company settled an insurance claim resulting from a fire that occurred at its facility in Boston, Massachusetts in March 2005. In connection with the settlement, the Company accrued $9.7 million representing management’s estimate of the total cost for decommissioning the building, including environmental matters, that was damaged in the fire. The Company paid $2.5 million during the first nine months of fiscal year 2009, $1.6 million during fiscal year 2008 and $3.9 million during fiscal year 2007 towards decommissioning the building. The Company anticipates that the remaining payments of $1.7 million will be completed by the end of the second quarter of fiscal year 2010.

Note 17: Derivatives and Hedging Activities

In March 2008, the FASB issued authoritative guidance on disclosures about derivative instruments and hedging activities, which requires entities to provide enhanced disclosure about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for, and how the instruments and related hedged items affect the Company’s financial position, results of operations and cash flows. The Company adopted this new authoritative guidance on disclosures about derivative instruments and hedging activities during the first quarter of fiscal year 2009.

The Company uses derivative instruments as part of its risk management strategy only, and includes derivatives utilized as economic hedges that are not designated as hedging instruments. The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged

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financial instruments. Approximately 60% of the Company’s business is conducted outside of the United States, generally in foreign currencies. The fluctuations in foreign currency can increase the costs of financing, investing and operating the business. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures.

Principal hedged currencies include the British Pound (GBP), Canadian Dollar (CAD), Euro (EUR), Japanese Yen (JPY), and Singapore Dollar (SGD). The Company held forward foreign exchange contracts with U.S. equivalent notional amounts totaling $173.8 million and $107.8 million as of October 4, 2009 and September 28, 2008, respectively. The fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on foreign currency derivative contracts are not material and the duration of these contracts was generally 30 days during both fiscal years 2009 and 2008.

By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and has policies to monitor the credit risk of those counterparties.

Note 18: Fair Value Measurements

The Company adopted FASB’s authoritative guidance on fair value measurements as of December 31, 2007, with the exception of the application of the guidance on non-recurring nonfinancial assets and nonfinancial liabilities that was delayed to fiscal years beginning after November 15, 2008, which the Company adopted as of December 29, 2008. The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during the nine months ended October 4, 2009. The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities and derivative contracts used to hedge the Company’s currency risk. The Company has not elected to measure any additional financial instruments or other items at fair value.

Valuation Hierarchy: The following summarizes the three levels of inputs required by the guidance to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and Level 3 inputs are unobservable estimates that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities based on the Company’s assumptions. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

The following table shows the assets and liabilities carried at fair value measured on a recurring basis at October 4, 2009 classified in one of the three classifications described above:

	Fair Value Measurements at October 4, 2009 Using:
	Total Carrying Value at October 4, 2009			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities	$	1,280		$	992	$	—		$	—
Foreign exchange derivative liabilities, net		(44	)		—		(44	)		—
Contingent consideration		(4,105	)		—		—			(4,105	)

Valuation Techniques: The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity and fixed-income securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price

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quotes, including common stock price quotes, foreign exchange forward prices, and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities.

Marketable securities	Include equity and fixed-income securities measured at fair value using the quoted market prices at the reporting date.
Foreign exchange derivative assets and liabilities	Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date.

For the nine months ended October 4, 2009, the Company has classified its net liabilities for contingent consideration relating to its acquisitions of Opto Technology and Sym-Bio within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs. A description of these acquisitions and determination of fair value for the contingent consideration is included within Note 2. A reconciliation of the beginning and ending Level 3 net liabilities for the nine months ended October 4, 2009 is as follows:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	(In thousands)
Beginning balance	$	—
Transfers into Level 3		(4,437	)
Change in fair value (included within selling, general and administrative expenses)		332
Ending balance	$	(4,105	)

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities.

The Company’s amended senior unsecured revolving credit facility, with a $650.0 million available limit, and the Company’s 6% senior unsecured notes, with a face value of $150.0 million, had outstanding balances as of October 4, 2009 of $424.5 million and $150.0 million, respectively, and as of December 28, 2008 of $359.0 million and $150.0 million, respectively. The interest rate on the Company’s amended senior unsecured revolving credit facility is reset at least monthly to correspond to variable rates that reflect currently available terms and conditions for similar debt. The Company had no change in credit standing during the first nine months of fiscal year 2009. Consequently, the carrying value of the current year and prior year credit facilities approximate fair value. The fair value of the 6.0% senior unsecured notes is estimated using market quotes from brokers or is based on current rates offered for similar debt. At October 4, 2009, the 6.0% senior unsecured notes had an aggregate carrying value of $150.0 million and a fair value of $160.3 million. At December 28, 2008, the 6.0% senior unsecured notes had an aggregate carrying value of $150.0 million and a fair value of $146.3 million.

As of October 4, 2009, there has not been any significant impact to the fair value of the Company’s derivative liabilities due to its credit risk. Similarly, there has not been any significant adverse impact to the Company’s derivative assets based on the evaluation of its counterparties’ credit risks.

Note 19: Contingencies

The Company is conducting a number of environmental investigations and remedial actions at current and former locations of the Company and, along with other companies, has been named a potentially responsible

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party (“PRP”) for certain waste disposal sites. The Company accrues for environmental issues in the accounting period that the Company’s responsibility is established and when the cost can be reasonably estimated. The Company has accrued $4.7 million as of October 4, 2009, which represents management’s estimate of the total cost of ultimate disposition of known environmental matters. This amount is not discounted and does not reflect the recovery of any amounts through insurance or indemnification arrangements. These cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. The Company expects that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had or are expected to have a material adverse effect on the Company’s condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.

Enzo Biochem, Inc. and Enzo Life Sciences, Inc. (collectively, “Enzo”) filed a complaint dated October 23, 2002 in the United States District Court for the Southern District of New York, Civil Action No. 02-8448, against Amersham plc, Amersham BioSciences, PerkinElmer, Inc., PerkinElmer Life Sciences, Inc., Sigma-Aldrich Corporation, Sigma Chemical Company, Inc., Molecular Probes, Inc., and Orchid BioSciences, Inc. The complaint alleges that the Company has breached its distributorship and settlement agreements with Enzo, infringed Enzo’s patents, engaged in unfair competition and fraud, and committed torts against Enzo by, among other things, engaging in commercial development and exploitation of Enzo’s patented products and technology, separately and together with the other defendants. Enzo seeks injunctive and monetary relief. In 2003, the court severed the lawsuit and ordered Enzo to serve individual complaints against the five defendants. The Company subsequently filed an answer and a counterclaim alleging that Enzo’s patents are invalid. In July 2006, the court issued a decision regarding the construction of the claims in Enzo’s patents that effectively limited the coverage of certain of those claims and, the Company believes, excludes certain of the Company’s products from the coverage of Enzo’s patents. Summary judgment motions were filed by the defendants in January 2007, and a hearing with oral argument on those motions took place in July 2007. In January 2009, the case was assigned to a new district court judge. On March 16, 2009, the new judge denied the pending summary judgment motions without prejudice and ordered a stay of the case until the federal appellate court decides Enzo’s appeal of the judgment of the United States District Court for the District of Connecticut in Enzo Biochem vs. Applera Corp. and Tropix, Inc., which involves a number of the same patents and which could materially affect the scope of Enzo’s case against the Company.

PharmaStem Therapeutics, Inc. (“PharmaStem”) filed a complaint dated February 22, 2002 against ViaCell, Inc., which is now a wholly owned subsidiary of the Company, and several other defendants in the United States District Court for the District of Delaware, alleging infringement of United States Patents No. 5,004,681 and No. 5,192,553, relating to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem I”). After several years of proceedings at the District Court level, the United States Court of Appeals for the Federal Circuit issued a decision in July 2007 that ViaCell did not infringe these two patents and that the two patents are invalid. PharmaStem filed a certiorari petition in January 2008 seeking to have the United States Supreme Court review the appellate court’s decision as to the invalidity of the patents, but did not seek any further review of the non-infringement decision. However, the United States Supreme Court denied certiorari in March 2008, so the decision by the United States Court of Appeals for the Federal Circuit in favor of ViaCell is final and non-appealable. PharmaStem had also filed a second complaint against ViaCell and other defendants in July 2004 in the United States District Court for the District of Massachusetts, alleging infringement of United States Patents No. 6,461,645 and 6,569,427, which also relate to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem II”). The Delaware court granted ViaCell’s motion in

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October 2005 to stay the proceedings in PharmaStem II pending the outcome of PharmaStem I and a decision from the United States Patent and Trademark Office (“U.S. PTO”) on certain patent re-examination issues. On September 2, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,461,645, and on September 16, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,569,427. As a result of the cancellation of all patent claims involved in PharmaStem II by the U.S. PTO, the Company will seek a dismissal of all claims for relief set forth by PharmaStem in PharmaStem II.

The Company believes it has meritorious defenses to these lawsuits and other proceedings, and it is contesting the actions vigorously in all of the above unresolved matters. While each of these matters is subject to uncertainty, in the opinion of the Company’s management, based on its review of the information available at this time, the resolution of these matters will not have a material adverse effect on the Company’s condensed consolidated financial statements.

The Company is also subject to various other claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of its business activities. Although the Company has established accruals for potential losses that it believes are probable and reasonably estimable, in the opinion of the Company’s management, based on its review of the information available at this time, the total cost of resolving these other contingencies at October 4, 2009 should not have a material adverse effect on the Company’s condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q, including the following management’s discussion and analysis, contains forward-looking information that you should read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements that we have included elsewhere in this report. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “plans,” “anticipates,” “intends,” “expects,” “will” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from the plans, intentions or expectations we disclose in the forward-looking statements we make. We have included important factors below under the heading “Risk Factors” in Part II, Item 1A. that we believe could cause actual results to differ materially from the forward-looking statements we make. We are not obligated to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a leading provider of technology, services and solutions to the diagnostics, research, environmental monitoring, safety and security, and laboratory services markets. Through our advanced technologies, applications, and services, we address critical issues that help to improve the health and safety of people and their environment.

We announced a new alignment of our businesses to allow us to prioritize our capabilities on two key strategic operating areas – Human Health and Environmental Health. We reorganized into these two new operating segments to align our resources to meet the demands of the markets we serve and to focus on the important outcomes enabled by our technologies. This new alignment became effective at the start of our fiscal year 2009. The results reported for the three and nine months ended October 4, 2009 reflect this new alignment of our operating segments. Financial information in this report relating to the three and nine months ended September 28, 2008 has been retrospectively adjusted to reflect the changes in our operating segments. In conjunction with the realignment of our operating segments, we also redefined the reporting units we use to test for the impairment of goodwill related to our businesses. We performed our annual impairment testing as of January 1, 2009, our annual impairment date for our reporting units, and based on the first step of the impairment process, the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value, we concluded that there was no goodwill impairment.

Human Health

Our new Human Health segment concentrates on developing diagnostics, tools and applications to help detect disease earlier and more accurately and to accelerate the discovery and development of critical new therapies. Within the Human Health segment, we serve both the diagnostics and research markets. The Human Health segment includes our products and services that address the genetic screening and bio-discovery markets, formerly in our Life and Analytical Sciences segment, and our technology serving the medical imaging market, formerly in our Optoelectronics segment. Our Human Health segment generated sales of $180.2 million in the third quarter of fiscal year 2009 and $542.3 million in the first nine months of fiscal year 2009.

Diagnostics Market:

We provide early detection for genetic disorders from pre-conception to early childhood as well as medical imaging for the diagnostics market. We provide early and accurate insights into the health of expectant mothers during pregnancy and their newborns. Our instruments, reagents and software test and screen for disorders and diseases, including Down syndrome, infertility, anemia and diabetes. Our medical imaging detectors are used to enable doctors to make faster and more accurate diagnoses of conditions ranging from broken bones to reduced blood flow in vascular systems. In addition, our detectors improve oncology treatments by focusing radiation directly at tumors.

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Research Market:

In the research market, we provide a broad suite of solutions including reagents, liquid handling and detection technologies that enable researchers to improve the drug discovery process. These applications, solutions and services enable pharmaceutical companies to create better therapeutics by helping to bring such therapeutics to market faster and more efficiently. The portfolio of liquid handling and detection technologies includes a wide range of systems consisting of instrumentation for automation and detection solutions, cellular imaging and analysis hardware and software, and a portfolio of consumables products, including drug discovery and research reagents. We sell our research solutions to pharmaceutical, biotechnology and academic research customers globally.

Environmental Health

Our new Environmental Health segment provides technologies and applications to facilitate the creation of safer food and consumer products, more secure surroundings and efficient energy resources. The Environmental Health segment serves the environmental, safety and security, industrial and laboratory services markets. The Environmental Health segment includes our products and services that address the analytical sciences and laboratory service and support markets, formerly in our Life and Analytical Sciences segment, and our technology designed for the sensors and specialty lighting markets, formerly in our Optoelectronics segment. Our Environmental Health segment generated sales of $256.9 million in the third quarter of fiscal year 2009 and $760.9 million in the first nine months of fiscal year 2009.

Environmental and Safety and Security Markets:

For the environmental and safety and security markets, we provide analytical technologies that address the quality of our environment, sustainable energy development, and ensure safer food and consumer products as well as sensor and detection solutions that contribute to safer homes, offices and buildings.

We take an active part in minimizing the impact of products and industrial processes on our environment, including our water quality solutions to detect harmful substances, such as trace metal, organic, pesticide, chemical and radioactive contaminants, in the world’s water supply. Through our EcoAnalytix^TM initiative, we deliver systems that combine applications, methodologies, standard operating procedures and training required for the specific analyses required.

We also develop the sensors and detectors that maintain safe and sustainable environments. To help ensure safety, our motion detectors turn lights on and off automatically and our gas sensors detect harmful levels of carbon dioxide in the air to help maintain optimal air quality. In addition, our sensors are integral to security systems, helping to ensure the safety of an environment from intruders.

Industrial Market:

We provide analytical instrumentation, detectors, and sensors for the industrial market which includes the semiconductor, chemical, lubricants, construction, office equipment and quality assurance industries.

Laboratory Services Market:

We have over 1,300 service engineers to support our customers throughout the world and to help them improve the productivity of their labs. Our OneSource service business strategy is aligned with customer needs to consolidate laboratory services and improve efficiencies within their labs.

Overview of the Third Quarter of Fiscal Year 2009

Our fiscal year ends on the Sunday nearest December 31. We report fiscal years under a 52/53 week format, and as a result certain fiscal years will contain 53 weeks. Our 2009 fiscal year will include 53 weeks, while our 2008 fiscal year included 52 weeks. This additional week has been reflected in the first quarter of fiscal year 2009.

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The distressed global economy has continued to negatively impact certain of our end markets during the third quarter of fiscal year 2009; however, several of our other end markets continued to perform better than we anticipated. Our overall sales in the third quarter of fiscal year 2009 declined $41.7 million, or 9%, as compared to the third quarter of fiscal year 2008, reflecting a decline of $16.5 million, or 8%, in our Human Health segment sales and a decline of $25.2 million, or 9%, in our Environmental Health segment sales. This decline in our Human Health segment sales during the three months ended October 4, 2009 was due primarily to decreased demand for our medical imaging products in the diagnostics market, as well as government stimulus related order delays in the research market. The decreased demand for our medical imaging products resulted from continued constraints on medical providers’ capital budgets, and a lack of financing availability. The government stimulus related order delays in the research market resulted from many of our customers continuing to redirect their budgets in hopes of obtaining grants for larger instrument purchases. The decline in our Environmental Health segment sales during the three months ended October 4, 2009 was due primarily to the decline in spending by private testing labs, and continued weak demand in fire detection and intrusion alarm sensors in the environmental and safety and security markets, as well as traditional chemical and semiconductor markets reducing capital purchases in response to continued tight capital budgets and difficulty accessing credit markets.

These declines have been offset in part by certain of our businesses operating in markets which are more isolated from current economic trends, or where our businesses have benefited from a push for more efficient spending. In our Human Health segment, we experienced strong growth in sales in the diagnostics market related to our genetic screening business during the third quarter of fiscal year 2009 as compared to that market in the third quarter of fiscal year 2008. The genetic screening business was driven by continued expansion of neonatal and prenatal screening platforms, with broad-based growth experienced across all major geographies. Our cord blood business also contributed to the growth of our genetic screening business during the third quarter of fiscal year 2009. In the research market, demand for our broad suite of reagents and low-end instruments was encouraging as customers continued to spend on basic research. As the rising cost of healthcare continues to be one of the critical issues contributing to the economic downturn, we anticipate that while there is continued pressure on lab budgets and credit availability, we may continue to see growth in our newborn screening business during the fourth quarter of fiscal year 2009 as the benefits of providing earlier detection of disease, which can result in savings of long-term health care cost as well as creating better outcomes for patients, are increasingly valued.

In our Environmental Health segment, our laboratory services business enables our customers to drive efficiencies, increase production time and reduce maintenance costs, all of which are increasingly critical in this distressed economic environment. During the third quarter of fiscal year 2009, we continued to grow by adding new customers to our OneSource multivendor service and we continued to expand in markets beyond our traditional customer base and services. The increase in sales in the laboratory service market partially offset decreased sales in the environmental, safety and security and industrial markets. While overall sales in the environmental and safety and security markets were driven down by the decline in spending by private testing labs in the pharmaceutical market and the decline in spending for fire detection and intrusion alarm sensors, sales of consumer safety and food testing products grew in the third quarter of fiscal year 2009 due to increased demand for the production and analysis of renewable energy sources and new testing requirements for consumer product safety applications. We believe that the need for increased inspection, testing and tracking of contaminants will drive increased demand for our products during the fourth quarter of fiscal year 2009.

Our gross margins declined approximately 10 basis points in the third quarter of fiscal year 2009 as compared to the third quarter of fiscal year 2008 due to lower demand, partially offset by changes in product mix, especially growth in sales of higher gross margin product offerings, and cost containment initiatives. In addition, our consolidated operating margin declined approximately 300 basis points in the third quarter of fiscal year 2009 as compared to the third quarter of fiscal year 2008, primarily as a result of lower demand, additional restructuring activities and increased pension expenses, partially offset by cost containment initiatives.

We believe we are well positioned to continue to take advantage of our end markets where spending trends have countered the prevailing downturn, and to promote our efficiencies in markets where current conditions

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may increase demand for certain services. Overall, we believe that our strategic focus on Human Health and Environmental Health coupled with our breadth of end markets, deep portfolio of technologies and applications, leading market positions, global scale and financial strength will provide us with a strong foundation to weather the current economic climate.

Recent Developments

Acquisitions and Asset Purchases

Purchase of Intangible Assets from GE Healthcare. In September 2009, we purchased the core technology and patents of GE Healthcare’s 3H and 14C Catalog Radiochemicals, Scintillation Proximity Assay (“SPA”) reagents and Cytostar-T plate portfolios for aggregate consideration of $12.0 million in cash. The Catalog Radiochemical products are used for a variety of research applications, including screening of potential drug candidates through binding assays. The SPA bead-based light-emitting assay and Cytostar-T plate technologies are offerings that enable the automation of High Throughput Screening (“HTS”) processes to help drug discovery researchers determine if potential new drug compounds are effective against their intended disease targets. We expect that incorporation of these technologies will strengthen our G-protein-coupled receptor and Kinase research product lines and complement our HTS and research reagent solutions. The purchased core technology and patents do not meet the definition of a business as the purchased assets were not accompanied by any associated processes. Purchased intangible assets are amortized over their estimated useful lives. We report the amortization of these intangible assets within the results of our Human Health segment from the purchase date. We periodically review the carrying value of these assets based, in part, upon current estimated market values and our projections of anticipated future cash flows. We undertake this review on a periodic basis for long-lived assets when facts and circumstances suggest that cash flows emanating from those assets may be diminished.

Acquisition of Sym-Bio LifeScience Co., Ltd. In August 2009, we acquired the outstanding equity interests of Sym-Bio LifeScience Co., Ltd. (“Sym-Bio”). Sym-Bio is a major supplier of diagnostics instruments and related reagents to hospitals in China, particularly in the area of infectious diseases. We expect this acquisition to expand our access to the hospital market segment in China, offering a larger base from which to expand our prenatal and newborn screening business in the country and providing us with a significant diagnostics manufacturing and research and development base within China. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to us as well as non-capitalizable intangible assets, such as the employee workforce acquired. We paid the shareholders of Sym-Bio approximately $51.2 million in cash for this acquisition plus an additional amount of $12.5 million held in an escrow account for contingencies, of which $7.3 million is for potential additional contingent consideration with a fair value of $6.9 million at the acquisition date. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, none of which is tax deductible. We report the operations for this acquisition within the results of our Human Health segment from the acquisition date.

Acquisition of Analytica of Branford, Inc. In May 2009, we acquired the outstanding stock of Analytica of Branford, Inc. (“Analytica”). Analytica is a leading developer of mass spectrometry and ion source technology. We expect this acquisition to allow us to offer our customers access to critical technologies such as time-of-flight and quadrupole mass spectrometers and new ion sources that provide more complete information as well as better throughput. We will also gain significant intellectual property in the field of mass spectrometry and ion source technology. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to us as well as non-capitalizable intangible assets, such as the employee workforce acquired. We paid the shareholders of Analytica approximately $21.7 million in cash for this acquisition plus up to $1.3 million in additional consideration, which we expect to pay during the fourth quarter of fiscal year 2009. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, which may be tax deductible if elected by us and approved by the shareholders of Analytica. We report the operations for this acquisition within the results of our Environmental Health segment from the acquisition date.

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Acquisition of Opto Technology Inc. In January 2009, we acquired the outstanding stock of Opto Technology Inc. (“Opto Technology”). Opto Technology is a supplier of light-emitting diode (“LED”) based lighting components and subsystems. We expect this acquisition to expand our portfolio of high brightness LED components by adding optical subsystems to provide energy efficient solid state lighting solutions to original equipment manufacturers. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to us as well as non-capitalizable intangible assets, such as the customer base acquired. We paid the shareholders of Opto Technology approximately $20.6 million in cash for this acquisition plus up to $8.0 million in potential additional contingent consideration, of which we recorded $4.9 million as the fair value at the acquisition date. During the first nine months of fiscal year 2009, we recorded a decrease of $0.3 million to the potential additional contingent consideration as a fair value adjustment through current period earnings. During the first nine months of fiscal year 2009, we received approximately $0.2 million from the former shareholders of Opto Technology for net working capital adjustments. The excess of the purchase price over the fair value of the acquired net assets has been allocated to goodwill, none of which is tax deductible. We report the operations for this acquisition within the results of our Environmental Health segment from the acquisition date.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, income taxes, restructuring, pensions and other post-retirement benefits, stock-based compensation, warranty costs, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. We believe our critical accounting policies include our policies regarding revenue recognition, allowances for doubtful accounts, inventory valuation, business combinations, value of long-lived assets, including intangibles, employee compensation and benefits, restructuring activities, gains or losses on dispositions and income taxes.

For a more detailed discussion of our critical accounting policies, please refer to the Notes to our Audited Consolidated Financial Statements and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2008, as filed with the Securities and Exchange Commission (the “SEC”) (the “2008 Form 10-K”).

Consolidated Results of Continuing Operations

Sales

Sales for the three months ended October 4, 2009 were $437.1 million, as compared to $478.7 million for the three months ended September 28, 2008, a decrease of $41.7 million, or 9%, which includes an approximate 2% decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1% increase from acquisitions. The analysis in the remainder of this paragraph compares segment sales for the three months ended October 4, 2009 as compared to the three months ended September 28, 2008 and includes the effect of foreign exchange rate fluctuations and acquisitions. The total decrease in sales reflects a $16.5 million, or 8%, decrease in our Human Health segment sales, due to a decrease in diagnostics market sales of $8.5 million and a decrease in research market sales of $8.0 million. Our Environmental Health segment sales decreased $25.2 million, or 9%, due to decreases in environmental, safety and security and industrial markets sales of $26.6 million, partially offset by an increase in laboratory services market sales of $1.4 million.

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Sales for the nine months ended October 4, 2009 were $1,303.2 million, as compared to $1,442.4 million for the nine months ended September 28, 2008, a decrease of $139.2 million, or 10%, which includes an approximate 5% decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1% increase from acquisitions. The analysis in the remainder of this paragraph compares segment sales for the nine months ended October 4, 2009 as compared to the nine months ended September 28, 2008 and includes the effect of foreign exchange rate fluctuations and acquisitions. The total decrease in sales reflects a $38.4 million, or 7%, decrease in our Human Health segment sales, due to a decrease in diagnostics market sales of $23.8 million and a decrease in research market sales of $14.6 million. Our Environmental Health segment sales decreased $100.8 million, or 12%, due to decreases in the environmental, safety and security and industrial markets sales of $99.6 million and a decrease in laboratory services market sales of $1.2 million.

Cost of Sales

Cost of sales for the three months ended October 4, 2009 was $249.5 million, as compared to $273.1 million for the three months ended September 28, 2008, a decrease of approximately $23.6 million, or 9%. As a percentage of sales, cost of sales increased to 57.1% for the three months ended October 4, 2009, from 57.0% for the three months ended September 28, 2008, resulting in a decrease in gross margin of approximately 10 basis points to 42.9% for the three months ended October 4, 2009, from 43.0% for the three months ended September 28, 2008. Amortization of intangible assets was $9.5 million for each of the three month periods ended October 4, 2009 and September 28, 2008. Stock option expense decreased and was $0.3 million for the three months ended October 4, 2009, as compared to $0.4 million for the three months ended September 28, 2008. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.3 million for the three months ended October 4, 2009. The decrease in gross margin was primarily the result of lower demand, partially offset by changes in product mix, especially growth in sales of higher gross margin product offerings, and cost containment initiatives.

Cost of sales for the nine months ended October 4, 2009 was $740.2 million, as compared to $829.7 million for the nine months ended September 28, 2008, a decrease of approximately $89.4 million, or 11%. As a percentage of sales, cost of sales decreased to 56.8% for the nine months ended October 4, 2009, from 57.5% for the nine months ended September 28, 2008, resulting in an increase in gross margin of approximately 70 basis points to 43.2% for the nine months ended October 4, 2009, from 42.5% for the nine months ended September 28, 2008. Amortization of intangible assets decreased and was $27.4 million for the nine months ended October 4, 2009, as compared to $28.3 million for the nine months ended September 28, 2008. Stock option expense was $0.9 million for each of the nine month periods ended October 4, 2009 and September 28, 2008. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.5 million for the nine months ended October 4, 2009. The increase in gross margin was primarily the result of the combined favorable impact of changes in product mix, especially growth in sales of higher gross margin product offerings, productivity improvements and cost containment initiatives.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended October 4, 2009 were $121.4 million, as compared to $129.8 million for the three months ended September 28, 2008, a decrease of approximately $8.4 million, or 6%. As a percentage of sales, selling, general and administrative expenses were 27.8% for the three months ended October 4, 2009, as compared to 27.1% for the three months ended September 28, 2008. Amortization of intangible assets increased and was $4.5 million for the three months ended October 4, 2009, as compared to $4.1 million for the three months ended September 28, 2008. Stock option expense decreased and was $1.4 million for the three months ended October 4, 2009, as compared to $2.1 million for the three months ended September 28, 2008. Purchase accounting adjustments for contingent consideration and other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.7 million for the three months ended October 4, 2009. The decrease in selling, general and administrative expenses was primarily the result of cost containment initiatives, partially offset by increased pension expenses.

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Selling, general and administrative expenses for the nine months ended October 4, 2009 were $373.8 million, as compared to $402.4 million for the nine months ended September 28, 2008, a decrease of approximately $28.6 million, or 7%. As a percentage of sales, selling, general and administrative expenses were 28.7% for the nine months ended October 4, 2009, as compared to 27.9% for the nine months ended September 28, 2008. Amortization of intangible assets increased and was $13.1 million for the nine months ended October 4, 2009, as compared to $12.1 million for the nine months ended September 28, 2008. Stock option expense decreased and was $4.3 million for the nine months ended October 4, 2009, as compared to $5.0 million for the nine months ended September 28, 2008. Purchase accounting adjustments for contingent consideration and other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $1.8 million for the nine months ended October 4, 2009. The decrease in selling, general and administrative expenses was primarily the result of cost containment initiatives, partially offset by increased sales and marketing expenses, particularly in emerging territories, increased pension expenses and foreign exchange.

Research and Development Expenses

Research and development expenses for the three months ended October 4, 2009 were $27.3 million, as compared to $26.2 million for the three months ended September 28, 2008, an increase of $1.1 million, or 4%. As a percentage of sales, research and development expenses increased to 6.3% for the three months ended October 4, 2009, as compared to 5.5% for the three months ended September 28, 2008. Amortization of intangible assets was $0.5 million for each of the three month periods ended October 4, 2009 and September 28, 2008. Research and development expenses also included stock option expense of $0.1 million for the three months ended October 4, 2009, as compared to $0.03 million for the three months ended September 28, 2008. We directed research and development efforts similarly during fiscal years 2009 and 2008, primarily toward the diagnostics and research markets within our Human Health segment, and the environmental and safety and security markets within our Environmental Health segment, in order to help accelerate our growth initiatives.

Research and development expenses for the nine months ended October 4, 2009 were $78.9 million, as compared to $83.0 million for the nine months ended September 28, 2008, a decrease of $4.1 million, or 5%. As a percentage of sales, research and development expenses increased to 6.1% for the nine months ended October 4, 2009, as compared to 5.8% for the nine months ended September 28, 2008. Amortization of intangible assets decreased and was $1.5 million for the nine months ended October 4, 2009, as compared to $1.6 million for the nine months ended September 28, 2008. Research and development expenses also included stock option expense of $0.4 million for the nine months ended October 4, 2009, as compared to $0.3 million for the nine months ended September 28, 2008.

Restructuring and Lease Charges, Net

We have undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, alignment with our growth strategy and the integration of our business units.

A description of the restructuring plans and the activity recorded for the nine months ended October 4, 2009 is listed below. Details of the plans initiated in previous years, particularly those listed under “Previous Restructuring and Integration Plans,” are discussed more fully in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2008 Form 10-K.

The restructuring plan for the third quarter of fiscal year 2009 was intended principally to reduce resources in anticipation of continued decreasing demand in certain end markets and to shift resources to higher growth geographic regions and end markets. The restructuring plan for the first quarter of fiscal year 2009 was intended principally to reduce resources in anticipation of decreasing demand in certain end markets. The restructuring plan for the third quarter of fiscal year 2008 was intended principally to shift resources into geographic regions and product lines that are more consistent with our growth strategy. The activities associated with these plans

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have been reported as restructuring expenses as a component of operating expenses from continuing operations. We expect the impact of immediate cost savings from the restructuring plans on operating results and cash flows to approximately offset the decline in revenue. We expect the impact of future cost savings from these restructuring activities on operating results and cash flows to be negligible, as we will incur offsetting costs.

Q3 2009 Plan

During the third quarter of fiscal year 2009, our management approved a plan to reduce resources in anticipation of continued decreasing demand in certain end markets and to shift resources to higher growth geographic regions and end markets (the “Q3 2009 Plan”). As a result of the Q3 2009 Plan, we recognized a $4.9 million pre-tax restructuring charge in our Human Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. We also recognized a $7.3 million pre-tax restructuring charge in our Environmental Health segment related to a workforce reduction from reorganization activities. As part of our Q3 2009 Plan, we reduced headcount by 171 employees. All notifications and actions related to the Q3 2009 Plan were completed by October 4, 2009.

The following table summarizes the Q3 2009 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facility			Total
	(In thousands)
Provision	$	11,753		$	440		$	12,193
Amounts paid and foreign currency translation		(1,526	)		(55	)		(1,581	)
Balance at October 4, 2009	$	10,227		$	385		$	10,612

All employee relationships have been severed and we anticipate that the remaining severance payments of $10.2 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2011. We also anticipate that the remaining payments of $0.4 million for the closure of the excess facility will be paid through fiscal year 2011, in accordance with the terms of the applicable lease.

Q1 2009 Plan

During the first quarter of fiscal year 2009, our management approved a plan to reduce resources in anticipation of decreasing demand in certain end markets (the “Q1 2009 Plan”). As a result of the Q1 2009 Plan, we recognized a $4.8 million pre-tax restructuring charge in our Human Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. We also recognized a $3.0 million pre-tax restructuring charge in our Environmental Health segment related to a workforce reduction from reorganization activities and the closure of an excess facility. As part of our Q1 2009 Plan, we reduced headcount by 166 employees. All notifications and actions related to the Q1 2009 Plan were completed by April 5, 2009.

The following table summarizes the Q1 2009 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facility			Total
	(In thousands)
Provision	$	7,365		$	458		$	7,823
Amounts paid and foreign currency translation		(3,672	)		(126	)		(3,798	)
Balance at October 4, 2009	$	3,693		$	332		$	4,025

All employee relationships have been severed and we anticipate that the remaining severance payments of $3.7 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2010. We also anticipate that the remaining payments of $0.3 million for the closure of the excess facility will be paid through fiscal year 2012, in accordance with the terms of the applicable lease.

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Q3 2008 Plan

During the third quarter of fiscal year 2008, our management approved a plan to shift resources into product lines that are more consistent with our growth strategy (the “Q3 2008 Plan”). As a result of the Q3 2008 Plan, we recognized a $4.5 million pre-tax restructuring charge in our Human Health segment related to a workforce reduction from reorganization activities and the closure of excess facilities. We also recognized a $3.3 million pre-tax restructuring charge in our Environmental Health segment related to a workforce reduction from reorganization activities and the closure of excess facilities. As part of our Q3 2008 Plan, we reduced headcount by 107 employees. All notifications and actions related to the Q3 2008 Plan were completed by September 28, 2008.

The following table summarizes the Q3 2008 Plan activity for the nine months ended October 4, 2009:

	Severance			Closure of Excess Facilities			Total
	(In thousands)
Balance at December 28, 2008	$	2,659		$	1,152		$	3,811
Amounts paid and foreign currency translation		(1,581	)		(295	)		(1,876	)
Balance at October 4, 2009	$	1,078		$	857		$	1,935

All employee relationships have been severed and we anticipate that the remaining severance payments of $1.1 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2010. We also anticipate that the remaining payments of $0.9 million for the closure of excess facilities will be paid through fiscal year 2011, in accordance with the terms of the applicable leases.

Previous Restructuring and Integration Plans

The principal actions of the restructuring and integration plans from fiscal years 2001 through 2007 were workforce reductions related to the integration of our businesses in order to reduce costs and achieve operational efficiencies as well as workforce reductions in both our Human Health and Environmental Health segments by shifting resources into geographic regions and product lines that are more consistent with our growth strategy. During the nine months ended October 4, 2009, we paid $0.4 million related to these plans and recorded a reversal of $0.7 million related to lower than expected severance costs for several of these plans. As of October 4, 2009, we had approximately $1.0 million of remaining liabilities associated with these restructuring and integration plans, primarily for residual lease obligations related to closed facilities in both our Human Health and Environmental Health segments. Payments for these leases, the terms of which vary in length, will be made through fiscal year 2011.

Lease Charges

To facilitate the sale of a business in fiscal year 2001, we were required to guarantee the lease obligations that the buyer assumed related to the lease for the building in which the business operated. The lease obligations continue through March 2011. While we assigned our interest in the lease to the buyer at the time of the sale of the business, the buyer subsequently defaulted under the lease, and the lessor sought reimbursement from us. We recorded a charge of $2.7 million in fiscal year 2007 related to payments for this lease obligation. The buyer filed for bankruptcy protection during the third quarter of fiscal year 2008 and was delinquent in making both its lease payments and payments for certain building expenses, requiring us to make payments of $0.4 million during fiscal year 2008 and $0.5 million during the first nine months of fiscal year 2009. The buyer ceased operations in the third quarter of fiscal year 2009 and vacated the property. As of October 4, 2009, we recorded an additional charge of $0.9 million related to waste removal and restoration costs, and reduced the estimated sublease rental payments reasonably expected to be obtained for the property.

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Interest and Other Expense, Net

Interest and other expense, net, consisted of the following:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Interest income	$	(124	)	$	(1,064	)	$	(777	)	$	(3,249	)
Interest expense		4,147			6,371			12,964			18,435
Gains on dispositions of investments, net		—			—			—			(1,158	)
Other expense, net		798			742			1,652			2,280
Total interest and other expense, net	$	4,821		$	6,049		$	13,839		$	16,308

Interest and other expense, net, for the three months ended October 4, 2009 was $4.8 million, as compared to $6.1 million for the three months ended September 28, 2008, a decrease of $1.2 million. The decrease in interest and other expense, net, for the three months ended October 4, 2009 as compared to the three months ended September 28, 2008 was primarily due to lower interest rates on outstanding debt balances, which was partially offset by higher outstanding debt balances. Interest expense decreased by $2.2 million and interest income decreased by $0.9 million for the three months ended October 4, 2009, as compared to the three months ended September 28, 2008. Other expenses for the three months ended October 4, 2009 as compared to the three months ended September 28, 2008 increased by $0.1 million, and consisted primarily of expenses related to foreign currency transactions and foreign currency translation. A more complete discussion of our liquidity is set forth below under the heading “Liquidity and Capital Resources.”

Interest and other expense, net, for the nine months ended October 4, 2009 was $13.8 million, as compared to $16.3 million for the nine months ended September 28, 2008, a decrease of $2.5 million. The decrease in interest and other expense, net, for the nine months ended October 4, 2009 as compared to the nine months ended September 28, 2008 was primarily due to lower interest rates on outstanding debt balances, which was partially offset by higher outstanding debt balances and lower interest rates on cash balances. Interest expense decreased by $5.5 million and interest income decreased by $2.5 million for the nine months ended October 4, 2009, as compared to the nine months ended September 28, 2008. Other expenses for the nine months ended October 4, 2009 as compared to the nine months ended September 28, 2008 decreased by $0.6 million, and consisted primarily of expenses related to foreign currency transactions and foreign currency translation.

Provision for (Benefit from) Income Taxes

For the three months ended October 4, 2009, the provision for income taxes from continuing operations was $5.6 million, as compared to a benefit of $4.6 million for the three months ended September 28, 2008. The provision for income taxes from continuing operations was $22.2 million for the nine months ended October 4, 2009, as compared to a provision of $12.9 million for the nine months ended September 28, 2008. The effective tax rate from continuing operations was a provision of 25.8% and 29.1% for the three and nine months ended October 4, 2009, respectively, as compared to a benefit of 12.4% for the three months ended September 28, 2008 and a provision of 12.3% for the nine months ended September 28, 2008. The higher effective tax rate in fiscal year 2009 was primarily due to an increase in the expected mix of profits from higher tax rate jurisdictions in 2009 as compared to the three and nine months ended September 28, 2008 and reflects the favorable settlement of several income tax audits worldwide during the fiscal quarter ended September 28, 2008.

Discontinued Operations

As part of our continuing efforts to focus on higher growth opportunities, we have discontinued certain businesses. We have accounted for these businesses as discontinued operations and, accordingly, have presented the results of operations and related cash flows as discontinued operations for all periods presented. The assets

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and liabilities of these businesses have been presented separately, and are reflected within the assets and liabilities from discontinued operations in the accompanying condensed consolidated balance sheets as of October 4, 2009 and December 28, 2008.

We recorded the following gains and losses, which have been reported as (loss) gain on disposition of discontinued operations:

	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
	(In thousands)
Net gain (loss) on disposition of ViaCyteSM and Cellular Therapy Technology businesses	$	85		$	113		$	(2,301	)	$	(8,338	)
Net loss on disposition of other discontinued operations		(1,365	)		(300	)		(1,371	)		(254	)
Net loss on disposition of discontinued operations before income taxes		(1,280	)		(187	)		(3,672	)		(8,592	)
Provision for (benefit from) income taxes		288			(8,331	)		(116	)		(9,577	)
(Loss) gain on disposition of discontinued operations, net of income taxes	$	(1,568	)	$	8,144		$	(3,556	)	$	985

As part of our new strategic business alignment into our Human Health and Environmental Health segments and our continuing efforts to focus on higher growth opportunities, in December 2008, our management approved separate plans to divest our Photonics and Photoflash businesses within our Environmental Health segment. Photonics and Photoflash products and technologies include xenon flashtubes and modules. These products are used in a variety of applications including mobile phones and laser machine tools. We are actively marketing and are currently committed to a plan to sell both of these businesses.

In addition, during December 2008, our management approved the shut down of certain instrument businesses within our Human Health segment: Cellular Screening Fluorescence and Luminescence workstations, Analytical Proteomics Instruments and Proteomics and Genomics Instruments. The shut down of the Cellular Screening Fluorescence and Luminescence workstations business, the Analytical Proteomics Instruments business, and the Proteomics and Genomics Instruments business resulted in a pre-tax loss of $4.8 million related to lease and severance costs and the reduction of fixed assets and inventory to net realizable value during fiscal year 2008.

In November 2007, we acquired ViaCell, Inc. (“ViaCell”), which specializes in the collection, testing, processing and preservation of umbilical cord blood stem cells. Following the ViaCell acquisition, our Board of Directors (our “Board”) approved a plan to sell the ViaCyte^SM and Cellular Therapy Technology businesses that were acquired with ViaCell. We determined that both businesses did not strategically fit with the other products offered by our Human Health segment. We also determined that without investing capital into the operations of both businesses, we could not effectively compete with larger companies that focus on the market for such products. After careful consideration, we decided in the second quarter of fiscal year 2008 to shut down the ViaCyte^SM and Cellular Therapy Technology businesses. We recorded a pre-tax loss of $8.0 million for severance and facility closure costs during fiscal year 2008 and recorded an additional pre-tax loss of $2.3 million related to facility closure costs during the first nine months of fiscal year 2009.

During the first nine months of both fiscal years 2009 and 2008, we settled various commitments related to the divestiture of other discontinued operations. We recognized a pre-tax loss of $1.4 million in the first nine months of fiscal year 2009 in connection with the closure of a facility and a pre-tax loss of $0.3 million in the first nine months of fiscal year 2008 in connection with other various commitments. The benefit from income taxes of $9.6 million recorded in discontinued operations in the first nine months of fiscal year 2008 includes $8.5 million of income tax benefits related to the favorable settlement of several income tax audits worldwide during the fiscal quarter ended September 28, 2008.

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Summary operating results of the discontinued operations for the periods prior to disposition were as follows:

	Three Months Ended					Nine Months Ended
	October 4, 2009			September 28, 2008		October 4, 2009			September 28, 2008
	(In thousands)
Sales	$	11,485		$	26,370	$	28,415		$	73,664
Costs and expenses		12,255			24,204		33,345			70,447
Operating (loss) income from discontinued operations		(770	)		2,166		(4,930	)		3,217
Other expense, net		—			—		—			—
(Loss) income from discontinued operations before income taxes		(770	)		2,166		(4,930	)		3,217
Provision for (benefit from) income taxes		94			91		(102	)		470
(Loss) income from discontinued operations, net of income taxes	$	(864	)	$	2,075	$	(4,828	)	$	2,747

Contingencies, Including Tax Matters

We are conducting a number of environmental investigations and remedial actions at our current and former locations and, along with other companies, have been named a potentially responsible party (“PRP”) for certain waste disposal sites. We accrue for environmental issues in the accounting period that our responsibility is established and when the cost can be reasonably estimated. We have accrued $4.7 million as of October 4, 2009, which represents our management’s estimate of the total cost of ultimate disposition of known environmental matters. This amount is not discounted and does not reflect the recovery of any amounts through insurance or indemnification arrangements. These cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where we have been named a PRP, our management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. We expect that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had or are expected to have a material adverse effect on our condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.

Enzo Biochem, Inc. and Enzo Life Sciences, Inc. (collectively, “Enzo”) filed a complaint dated October 23, 2002 in the United States District Court for the Southern District of New York, Civil Action No. 02-8448, against Amersham plc, Amersham BioSciences, PerkinElmer, Inc., PerkinElmer Life Sciences, Inc., Sigma-Aldrich Corporation, Sigma Chemical Company, Inc., Molecular Probes, Inc., and Orchid BioSciences, Inc. The complaint alleges that we have breached our distributorship and settlement agreements with Enzo, infringed Enzo’s patents, engaged in unfair competition and fraud, and committed torts against Enzo by, among other things, engaging in commercial development and exploitation of Enzo’s patented products and technology, separately and together with the other defendants. Enzo seeks injunctive and monetary relief. In 2003, the court severed the lawsuit and ordered Enzo to serve individual complaints against the five defendants. We subsequently filed an answer and a counterclaim alleging that Enzo’s patents are invalid. In July 2006, the court issued a decision regarding the construction of the claims in Enzo’s patents that effectively limited the coverage of certain of those claims and, we believe, excludes certain of our products from the coverage of Enzo’s patents. Summary judgment motions were filed by the defendants in January 2007, and a hearing with oral argument on

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those motions took place in July 2007. In January 2009, the case was assigned to a new district court judge. On March 16, 2009, the new judge denied the pending summary judgment motions without prejudice and ordered a stay of the case until the federal appellate court decides Enzo’s appeal of the judgment of the United States District Court for the District of Connecticut in Enzo Biochem vs. Applera Corp. and Tropix, Inc., which involves a number of the same patents and which could materially affect the scope of Enzo’s case against us.

PharmaStem Therapeutics, Inc. (“PharmaStem”) filed a complaint dated February 22, 2002 against ViaCell, Inc., which is now our wholly owned subsidiary, and several other defendants in the United States District Court for the District of Delaware, alleging infringement of United States Patents No. 5,004,681 and No. 5,192,553, relating to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem I”). After several years of proceedings at the District Court level, the United States Court of Appeals for the Federal Circuit issued a decision in July 2007 that ViaCell did not infringe these two patents and that the two patents are invalid. PharmaStem filed a certiorari petition in January 2008 seeking to have the United States Supreme Court review the appellate court’s decision as to the invalidity of the patents, but did not seek any further review of the non-infringement decision. However, the United States Supreme Court denied certiorari in March 2008, so the decision by the United States Court of Appeals for the Federal Circuit in favor of ViaCell is final and non-appealable. PharmaStem had also filed a second complaint against ViaCell and other defendants in July 2004 in the United States District Court for the District of Massachusetts, alleging infringement of United States Patents No. 6,461,645 and 6,569,427, which also relate to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem II”). The Delaware court granted ViaCell’s motion in October 2005 to stay the proceedings in PharmaStem II pending the outcome of PharmaStem I and a decision from the United States Patent and Trademark Office (“U.S. PTO”) on certain patent re-examination issues. On September 2, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,461,645, and on September 16, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,569,427. As a result of the cancellation of all patent claims involved in PharmaStem II by the U.S. PTO, we will seek a dismissal of all claims for relief set forth by PharmaStem in PharmaStem II.

We believe we have meritorious defenses to these lawsuits and other proceedings, and we are contesting the actions vigorously in all of the above unresolved matters. While each of these matters is subject to uncertainty, in the opinion of our management, based on its review of the information available at this time, the resolution of these matters will not have a material adverse effect on our condensed consolidated financial statements.

We re-measured several of our uncertain tax positions related to fiscal years 2006 and 2007 during the third quarter of fiscal year 2009 based on new information arising from events during the quarter that affected positions for those years. We also effectively settled several income tax audits worldwide. The re-measurements and closure of audits included positions in Hong Kong, the United Kingdom and the United States. The re-measurements and closure of audits, as well as other discrete items, resulted in the recognition of $1.7 million of income tax benefits in continuing operations during the third quarter of fiscal year 2009. Tax years ranging from 1998 through 2008 remain open to examination by various state and foreign tax jurisdictions in which we have significant business operations, such as Singapore, Canada, Germany, the United Kingdom and the United States. The tax years under examination vary by jurisdiction. We regularly review our tax positions in each significant taxing jurisdiction in the process of evaluating our unrecognized tax benefits. We make adjustments to our unrecognized tax benefits when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; (ii) a tax position is effectively settled with a tax authority; and/or (iii) the statute of limitations expires regarding a tax position.

We are also subject to various other claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of our business activities. Although we have established accruals for potential losses that we believe are probable and reasonably estimable, in the opinion of our management, based on its review of the information available at this time, the total cost of resolving these other contingencies at

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October 4, 2009 should not have a material adverse effect on our condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.

Reporting Segment Results of Continuing Operations

Human Health

Sales for the three months ended October 4, 2009 were $180.2 million, as compared to $196.7 million for the three months ended September 28, 2008, a decrease of $16.5 million, or 8%, which includes an approximate 2% decrease in sales attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares selected sales by product type for the three months ended October 4, 2009, as compared to the three months ended September 28, 2008, and includes the effect of foreign exchange fluctuations and acquisitions. The decrease in sales in our Human Health segment was primarily a result of a decrease in diagnostics market sales of $8.5 million and a decrease in research market sales of $8.0 million. This decline in our Human Health segment sales during the three months ended October 4, 2009 was due primarily to the decreased demand for our medical imaging products in the diagnostics market, which has resulted from constraints on medical providers’ capital budgets, and a lack of financing availability, as well as government stimulus related order delays in the research market, as many of our customers are redirecting their budgets in hopes of obtaining grants for larger instrument purchases.

Sales for the nine months ended October 4, 2009 were $542.3 million, as compared to $580.7 million for the nine months ended September 28, 2008, a decrease of $38.4 million, or 7%, which includes an approximate 5% decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1% increase from acquisitions. The analysis in the remainder of this paragraph compares selected sales by product type for the nine months ended October 4, 2009, as compared to the nine months ended September 28, 2008, and includes the effect of foreign exchange fluctuations and acquisitions. The decrease in sales in our Human Health segment was primarily a result of a decrease in diagnostics market sales of $23.8 million and a decrease in research market sales of $14.6 million. This decline in our Human Health segment sales during the nine months ended October 4, 2009 was due primarily to the decreased demand for our medical imaging products in the diagnostics market, which has resulted from constraints on medical providers’ capital budgets, and a lack of financing availability, as well as government stimulus related order delays in the research market, as many of our customers are redirecting their budgets in hopes of obtaining grants for larger instrument purchases.

Operating income from continuing operations for the three months ended October 4, 2009 was $18.9 million, as compared to $21.4 million for the three months ended September 28, 2008, a decrease of $2.5 million, or 12%. Amortization of intangible assets was $10.0 million and $10.3 million for the three months ended October 4, 2009 and September 28, 2008, respectively. Restructuring and lease charges were $4.4 million for the three months ended October 4, 2009 as a result of our Q3 2009 Plan. Restructuring and lease charges were $3.7 million for the three months ended September 28, 2008 as a result of our Q3 2008 Plan. Purchase accounting adjustments for other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.5 million for the three months ended October 4, 2009. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.3 million for the three months ended October 4, 2009. Lower demand and increased pension expenses decreased operating income, which was partially offset by changes in product mix, especially growth in sales of higher gross margin product offerings, and cost containment initiatives.

Operating income from continuing operations for the nine months ended October 4, 2009 was $55.6 million, as compared to $52.9 million for the nine months ended September 28, 2008, an increase of $2.8 million, or 5%. Amortization of intangible assets was $30.0 million and $30.7 million for the nine months ended October 4, 2009 and September 28, 2008, respectively. Restructuring and lease charges were $9.2 million for the nine months ended October 4, 2009 as a result of our Q1 2009 and Q3 2009 Plans. Restructuring and lease charges were

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$3.7 million for the nine months ended September 28, 2008 as a result of our Q3 2008 Plan. Purchase accounting adjustments for other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $1.2 million for the nine months ended October 4, 2009. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.3 million for the nine months ended October 4, 2009. The favorable impact of changes in product mix, especially growth in sales of higher gross margin products, productivity improvements and cost containment initiatives increased operating income, which was partially offset by increased sales and marketing expenses, particularly in emerging territories, increased pension expenses and foreign exchange.

Environmental Health

Sales for the three months ended October 4, 2009 were $256.9 million, as compared to $282.1 million for the three months ended September 28, 2008, a decrease of $25.2 million, or 9%, which includes an approximate 2% decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1% increase from acquisitions. The following analysis in the remainder of this paragraph compares selected sales by market and product type for the three months ended October 4, 2009, as compared to the three months ended September 28, 2008, and includes the effect of foreign exchange fluctuations and acquisitions. The decrease in sales was a result of decreases in environmental, safety and security and industrial markets sales of $26.6 million, partially offset by an increase in laboratory services market sales of $1.4 million. This decline in our Environmental Health segment sales during the three months ended October 4, 2009 was due primarily to private testing labs and traditional chemical and semiconductor markets reducing capital purchases in response to tight capital budgets and difficulty accessing credit markets, as well as continued weak demand in fire detection and intrusion alarm sensors, partially offset by sales of consumer safety and food testing products.

Sales for the nine months ended October 4, 2009 were $760.9 million, as compared to $861.7 million for the nine months ended September 28, 2008, a decrease of $100.8 million, or 12%, which includes an approximate 5% decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1% increase from acquisitions. The following analysis in the remainder of this paragraph compares selected sales by market and product type for the nine months ended October 4, 2009, as compared to the nine months ended September 28, 2008, and includes the effect of foreign exchange fluctuations and acquisitions. The decrease in sales was a result of decreases in the environmental, safety and security and industrial markets sales of $99.6 million and a decrease in laboratory services market sales of $1.2 million. This decline in our Environmental Health segment sales during the nine months ended October 4, 2009 was due primarily to private testing labs and traditional chemical and semiconductor markets reducing capital purchases in response to tight capital budgets and difficulty accessing credit markets, as well as continued weak demand in fire detection and intrusion alarm sensors, partially offset by sales of consumer safety and food testing products.

Operating income from continuing operations for the three months ended October 4, 2009 was $15.5 million, as compared to $30.5 million for the three months ended September 28, 2008, a decrease of $15.0 million, or 49%. Amortization of intangible assets was $4.6 million and $3.8 million for the three months ended October 4, 2009 and September 28, 2008, respectively. Purchase accounting adjustments for contingent consideration and other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.2 million for the three months ended October 4, 2009. Restructuring and lease charges were $8.0 million for the three months ended October 4, 2009 as a result of our Q3 2009 Plan. Restructuring and lease charges were $2.8 million for the three months ended September 28, 2008 as a result of our Q3 2008 Plan. The combined unfavorable impact of decreased sales volume and increased pension expenses decreased operating income for the three months ended October 4, 2009, which was partially offset by cost containment initiatives.

Operating income from continuing operations for the nine months ended October 4, 2009 was $58.6 million, as compared to $98.5 million for the nine months ended September 28, 2008, a decrease of $39.8 million, or

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40%. Amortization of intangible assets was $12.0 million for the nine months ended October 4, 2009, as compared to $11.3 million for the nine months ended September 28, 2008. Restructuring and lease charges were $11.0 million for the nine months ended October 4, 2009 as a result of our Q1 2009 and Q3 2009 Plans. Restructuring and lease charges were $2.5 million for the nine months ended September 28, 2008 as a result of our Q3 2008 Plan. Purchase accounting adjustments for contingent consideration and other acquisition costs related to certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.6 million for the nine months ended October 4, 2009. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions completed to date in fiscal year 2009 added an expense of approximately $0.2 million for the nine months ended October 4, 2009. The combined unfavorable impact of decreased sales volume, increased sales and marketing expenses, particularly in emerging territories, increased pension expenses and foreign exchange decreased operating income for the nine months ended October  4, 2009, which was partially offset by productivity improvements and cost containment initiatives.

Liquidity and Capital Resources

We require cash to pay our operating expenses, make capital expenditures, make acquisitions, service our debt and other long-term liabilities, repurchase shares of our common stock and pay dividends on our common stock. Our principal sources of funds are from our operations and the capital markets, particularly the debt markets. In the near term, we anticipate that our operations will generate sufficient cash to fund our operating expenses, capital expenditures, interest payments on our debt and dividends on our common stock. In the long term, we expect to use internally generated funds and external sources to satisfy our debt and other long-term liabilities.

Principal factors that could affect the availability of our internally generated funds include:

• deterioration of sales due to weakness in markets in which we sell our products and services, and

• changes in our working capital requirements.

Principal factors that could affect our ability to obtain cash from external sources include:

• financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,

• increases in interest rates applicable to our outstanding variable rate debt,

• a ratings downgrade that would limit our ability to borrow under our amended and restated senior unsecured revolving credit facility and our overall access to the corporate debt market,

• increases in interest rates or credit spreads, as well as limitations on the availability of credit, that affect our ability to borrow under future potential facilities on a secured or unsecured basis,

• a decrease in the market price for our common stock, and

• volatility in the public debt and equity markets.

On October 23, 2008, we announced that our Board authorized us to repurchase up to 10.0 million shares of our common stock under a stock repurchase program (the “Repurchase Program”). The Repurchase Program will expire on October 22, 2012 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During the first nine months of fiscal year 2009, we repurchased 1,000,833 shares of our common stock in the open market at an aggregate cost of $14.2 million, including commissions, under the Repurchase Program. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

Our Board has authorized us to repurchase shares of our common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans. During the first nine months of fiscal year 2009, we repurchased

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28,890 shares of our common stock for this purpose. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

At October 4, 2009, we had cash and cash equivalents of approximately $150.6 million and an amended senior unsecured revolving credit facility with $212.5 million available for additional borrowing.

In connection with the settlement of an insurance claim resulting from a fire that occurred at our facility in Boston, Massachusetts in March 2005, we accrued $9.7 million during fiscal year 2007, representing management’s estimate of the total cost for decommissioning the building, including environmental matters, that was damaged in the fire. We paid $2.5 million during the first nine months of fiscal year 2009, $1.6 million during fiscal year 2008 and $3.9 million during fiscal year 2007 towards decommissioning the building. We anticipate that the remaining payments of $1.7 million will be completed by the end of the second quarter of fiscal year 2010.

Distressed global financial markets have adversely impacted general economic conditions by reducing liquidity and credit availability, creating increased volatility in security prices, widening credit spreads, and decreasing valuations of certain investments. The widening of credit spreads may create a less favorable environment for certain of our businesses and may affect the fair value of financial instruments that we issue or hold. Increases in credit spreads, as well as limitations on the availability of credit at rates we consider to be reasonable, could affect our ability to borrow under future potential facilities on a secured or unsecured basis, which may adversely affect our liquidity and results of operations.

Our pension plans have not experienced any material impact on liquidity or counterparty exposure due to the volatility in the credit markets; however, as a result of losses experienced in global equity markets, our pension funds had a negative return for fiscal year 2008, offset by modest gains for the first nine months of fiscal year 2009, which in turn created increased pension costs in fiscal year 2009 and potentially in additional future periods. In addition, we may be required to fund our pension plans with a contribution of up to $18.0 million by the end of fiscal year 2010, and we could potentially have to make additional funding payments in future periods. We cannot predict how long these conditions will exist or how our businesses may be affected. In difficult global financial markets, we may be forced to fund our operations at a higher cost, or we may be unable to raise as much funding as we need to support our business activities.

Cash Flows

Operating Activities. Net cash provided by continuing operations was $93.9 million for the nine months ended October 4, 2009, as compared to net cash provided by continuing operations of $119.0 million for the nine months ended September 28, 2008, a decrease of $25.2 million. The decrease in cash provided by operating activities for the nine months ended October 4, 2009 was driven by the repayment and termination of our accounts receivable securitization facility for $40.0 million. The accounts receivable securitization facility totaled $40.0 million at December 28, 2008. Depreciation and amortization was $67.1 million, income from continuing operations was $54.0 million, and restructuring and lease charges were $20.2 million. These amounts were partially offset by a net decrease in working capital of $40.6 million. Contributing to the net decrease in working capital for the nine months ended October 4, 2009, excluding the effect of foreign exchange rate fluctuations, was an increase in inventory of $16.3 million, a decrease in accounts payable of $12.5 million and an increase in accounts receivable of $11.7 million, which included the repayment and termination of our accounts receivable securitization for $40.0 million. The increase in inventory was primarily the result of lower sales volume and expanding the amount of inventory held at sales locations within our Environmental Health and Human Health segments to improve timing of sales. The decrease in accounts payable was a result of the timing of disbursements during the first nine months of fiscal year 2009. The increase in accounts receivable was a result of lower sales volume and strong performance in accounts receivable collections during the first nine months of fiscal year 2009, offset by the repayment and termination of our accounts receivable securitization for $40.0 million. Changes in accrued expenses, other assets and liabilities and other items, net, totaled $6.9 million for the nine months ended October 4, 2009, and primarily related to the timing of payments for tax, restructuring and salary and benefits.

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Investing Activities. Net cash used in continuing operations investing activities was $142.1 million for the nine months ended October 4, 2009, as compared to $117.5 million of cash used in continuing operations investing activities for the nine months ended September 28, 2008. For the nine months ended October 4, 2009, we used $114.2 million of net cash for acquisitions and core technology purchases and $8.5 million for earn-out payments, acquired licenses, related transaction costs for acquisitions completed prior to fiscal year 2009 and other costs in connection with these and other transactions. Capital expenditures for the nine months ended October 4, 2009 were $20.8 million, primarily in the areas of tooling and other capital equipment purchases. These cash outflows were partially offset by $1.4 million related to the release of restricted cash balances.

Financing Activities. Net cash provided by continuing operations financing activities was $24.9 million for the nine months ended October 4, 2009, as compared to $24.3 million of net cash used in continuing operations financing activities for the nine months ended September 28, 2008. For the nine months ended October 4, 2009, we repurchased approximately 1.0 million shares of our common stock, including 28,890 shares to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards, for a total cost of $14.6 million. This compares to repurchases of approximately 2.0 million shares of our common stock, including 20,903 shares of our common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards, for a total cost of $57.1 million for the nine months ended September 28, 2008. This use of cash was offset by proceeds from common stock option exercises of $2.3 million, including the related excess tax benefit, for the nine months ended October 4, 2009. This compares to the proceeds from common stock option exercises of $43.8 million, including the related excess tax benefit, for the nine months ended September 28, 2008. During the nine months ended October 4, 2009, debt borrowings from our amended senior unsecured revolving credit facility totaled $339.5 million, which was offset by debt reductions of $277.6 million. This compares to debt borrowings from our amended senior unsecured revolving credit facility of $409.5 million and proceeds of $150.0 million from the issuance of our seven-year senior unsecured notes at a rate of 6%, which were offset by debt reductions of $531.5 million during the nine months ended September 28, 2008. We also paid $11.7 million to settle forward interest rate contracts, with notional amounts totaling $150.0 million and a weighted average interest rate of 4.25%, and $2.0 million for debt issuance costs during the nine months ended September 28, 2008. In addition, we paid $24.5 million and $24.8 million in dividends during the nine months ended October 4, 2009 and September 28, 2008, respectively.

Borrowing Arrangements

Amended Senior Unsecured Revolving Credit Facility. On August 13, 2007, we entered into an amended and restated senior unsecured revolving credit facility providing for a facility through August 13, 2012, which amended and restated in its entirety our previous senior revolving credit agreement dated as of October 31, 2005. During the first quarter of fiscal year 2008, we exercised our option to increase the amended senior unsecured revolving credit facility to $650.0 million from $500.0 million. Letters of credit in the aggregate amount of approximately $13.0 million were issued under the previous facility, which are treated as issued under the amended facility. We use the amended senior unsecured revolving credit facility for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, acquisitions and strategic alliances. The interest rates under the amended senior unsecured revolving credit facility are based on the Eurocurrency rate at the time of borrowing plus a margin, or the base rate from time to time. The base rate is the higher of (i) the corporate base rate announced from time to time by Bank of America, N.A. and (ii) the Federal Funds rate plus 50 basis points. We may allocate all or a portion of our indebtedness under the amended senior unsecured revolving credit facility to interest based upon the Eurocurrency rate plus a margin, or the base rate. The Eurocurrency margin as of October 4, 2009 was 40 basis points. The weighted average Eurocurrency interest rate as of October 4, 2009 was 0.24%, resulting in a weighted average effective Eurocurrency rate, including the margin, of 0.64%. We had drawn down approximately $424.5 million of borrowings in U.S. Dollars under the facility as of October 4, 2009, with interest based on the above described Eurocurrency rate. The agreement for the facility contains affirmative, negative and financial covenants and events of default customary for financings of this type, which are consistent with those financial covenants contained in our previous senior revolving credit agreement. The financial covenants in our amended and restated

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senior unsecured revolving credit facility include debt-to-capital ratios and a contingent maximum total leverage ratio, applicable if our credit rating is down-graded below investment grade. We were in compliance with all applicable covenants as of October 4, 2009, and anticipate being in compliance for the duration of the term of the credit facility.

6% Senior Unsecured Notes. On May 30, 2008, we issued and sold seven-year senior notes at a rate of 6% with a face value of $150.0 million and received $150.0 million in gross proceeds from the issuance. The debt, which matures in May 2015, is unsecured. Interest on the 6% senior notes is payable semi-annually on May 30th and November 30th. We may redeem some or all of our 6% senior notes at any time in an amount not less than 10% of the original aggregate principal amount, plus accrued and unpaid interest, plus the applicable make-whole amount. The financial covenants in our 6% senior notes include debt-to-capital ratios which, if our credit rating is down-graded below investment grade, would be replaced by a contingent maximum total leverage ratio. We were in compliance with all applicable covenants as of October 4, 2009, and anticipate being in compliance for the duration of the term of the notes.

We entered into forward interest rate contracts in October 2007 that were intended to hedge movements in interest rates prior to our expected debt issuance. In May 2008, we settled forward interest rate contracts with notional amounts totaling $150.0 million upon the issuance of our 6% senior unsecured notes, and recognized $8.4 million, net of taxes of $5.4 million, of accumulated derivative losses in other comprehensive loss. We did not recognize any ineffectiveness related to these cash flow hedges. As of October 4, 2009, the balance remaining in accumulated other comprehensive loss related to these cash flow hedges, net of taxes of $4.4 million, was $6.8 million. The derivative losses are amortized into interest expense when the hedged exposure affects interest expense. We amortized into interest expense $1.5 million during the first nine months of fiscal year 2009 and $1.2 million during fiscal year 2008 for these derivative losses.

Off-Balance Sheet Arrangements

Receivables Securitization Facility

During fiscal year 2001, we established a wholly owned consolidated subsidiary to maintain a receivables purchase agreement with a third-party financial institution. Under this arrangement, we sold, on a revolving basis, certain of our accounts receivable balances to the consolidated subsidiary which simultaneously sold an undivided percentage ownership interest in designated pools of receivables to a third-party financial institution. As collections reduced the balance of sold accounts receivable, new receivables were sold. Our consolidated subsidiary retained the risk of credit loss on the receivables. Accordingly, the full amount of the allowance for doubtful accounts had been provided for on our balance sheets. The amount of receivables sold and outstanding with the third-party financial institution was not to exceed $65.0 million, reduced to $50.0 million in March 2009. Under the terms of this agreement, our consolidated subsidiary retained collection and administrative responsibilities for the balances. The agreement required the third-party financial institution to be paid interest during the period from the date the receivable was sold to its maturity date.

In March 2009, our consolidated subsidiary entered into an agreement to extend the term of the accounts receivable securitization facility to December 30, 2009. On June 30, 2009, our consolidated subsidiary exercised the right to terminate the receivables purchase agreement with a third-party financial institution releasing both parties of their rights, liabilities and obligations under this agreement.

The aggregate amount of receivables sold to the consolidated subsidiary was $72.8 million as of December 28, 2008. At December 28, 2008, an undivided interest of $40.0 million in the receivables had been sold to the third-party financial institution under this agreement. The remaining interest in receivables of $32.8 million that was sold to and held by the consolidated subsidiary was included in accounts receivable in the condensed consolidated financial statements at December 28, 2008.

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Dividends

Our Board declared regular quarterly cash dividends of $0.07 per share in the first three quarters of fiscal year 2009 and in each quarter of fiscal year 2008. On October 21, 2009, we announced that our Board had declared a quarterly dividend of $0.07 per share for the fourth quarter of fiscal year 2009 that will be paid in February 2010. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Contractual Obligations

The following table summarizes our contractual obligations as of October 4, 2009:

	Operating Leases		Amended Sr. Unsecured Revolving Credit Facility Maturing 2012(1)		6.0% Sr. Notes Maturing 2015(2)		Other Debt Facilities(1)		Employee Benefit Plans		Uncertain Tax Positions(3)		Total
	(In thousands)
2009	$	10,416	$	—	$	—	$	36	$	6,079	$	5,585	$	22,116
2010		33,451		—		—		146		24,872		—		58,469
2011		26,895		—		—		2,198		25,212		—		54,305
2012		22,605		424,500		—		—		25,768		—		472,873
2013		19,041		—		—		—		27,110		—		46,151
Thereafter		105,634		—		150,000		—		144,457		—		400,091
Total	$	218,042	$	424,500	$	150,000	$	2,380	$	253,498	$	5,585	$	1,054,005

(1) The credit facilities borrowings carry variable interest rates; the amounts included in this table do not contemplate interest obligations.

(2) For the purposes of this table, the obligation has been calculated without interest obligations.

(3) The amount includes accrued interest, net of tax benefits, and penalties. We have excluded $40.0 million, including accrued interest, net of tax benefits, and penalties, from the amount related to our uncertain tax positions as we cannot make a reasonably reliable estimate of the amount and period of related future payments.

Effects of Recently Adopted Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance on business combinations. This guidance establishes principles and requirements for how an acquirer recognizes and measures in its financial statements significant aspects of a business combination. Under this guidance, acquisition costs are generally expensed as incurred; noncontrolling interests are reflected at fair value at the acquisition date; in-process research and development (“IPR&D”) is recorded at fair value as an intangible asset at the acquisition date; restructuring costs associated with a business combination are generally expensed rather than capitalized; contingent consideration is measured at fair value at the acquisition date, with changes in the fair value after the acquisition date affecting earnings; and changes in deferred tax asset valuation allowances and income tax uncertainties after the measurement period will affect income tax expense. This guidance amends the accounting for income taxes such that adjustments made to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of this guidance would also apply the provisions of this guidance. This guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This guidance is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. We adopted this authoritative guidance on business combinations in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on our acquisition activity in the nine months ended October 4, 2009. See Note 2 for the impact on our condensed consolidated financial statements.

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In December 2007, the FASB issued authoritative guidance on noncontrolling interests. This guidance establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. This guidance also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. We adopted this authoritative guidance on noncontrolling interests in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on our condensed consolidated financial statements.

In March 2008, the FASB issued authoritative guidance on disclosures about derivative instruments and hedging activities. This guidance is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, results of operations and cash flows. This guidance establishes principles and requirements for how an entity identifies derivative instruments and related hedged items that affect its financial position, results of operations and cash flows. This guidance also establishes disclosure requirements that the fair values of derivative instruments and their gains and losses are disclosed in a tabular format, that derivative features which are credit-risk related be disclosed to provide clarification to an entity’s liquidity and that cross-referencing be included within footnotes. We adopted this authoritative guidance on disclosures about derivative instruments and hedging activities in the first quarter of fiscal year 2009 and have evaluated the requirements, which provide for additional disclosure on our derivative instruments. See Notes 17 and 18 for our disclosure on derivative instruments and hedging activities.

In April 2008, the FASB issued authoritative guidance on determination of the useful life of intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The objective of this guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under the new authoritative guidance on business combinations, and other accounting principles. This guidance applies to all intangible assets, whether acquired in a business combination or otherwise, and early adoption is prohibited. We adopted this authoritative guidance on determination of the useful life of intangible assets in the first quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on our condensed consolidated financial statements.

In April 2009, the FASB issued authoritative guidance on accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies, which amends and clarifies the initial recognition and measurement, subsequent measurement and accounting, and related disclosures of assets and liabilities arising from contingencies in a business combination. This guidance is effective for assets and liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008. We adopted this authoritative guidance in the first quarter of fiscal year 2009 in conjunction with the adoption of the new authoritative guidance on business combinations. The adoption of this guidance did not have a significant impact on our acquisition activity in the nine months ended October 4, 2009. See Note 2 for the impact on our condensed consolidated financial statements.

In April 2009, the FASB issued authoritative guidance on disclosures about fair value of financial instruments, which requires disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this guidance, fair values for these assets and liabilities were only disclosed annually. This guidance requires all entities to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments and is effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. We adopted this authoritative guidance in the second quarter of fiscal year 2009. The adoption of this guidance did not have a significant impact on our condensed consolidated financial statements.

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In May 2009, the FASB issued authoritative guidance on subsequent events, which establishes general standards for the accounting and disclosure of events or transactions that occur during the period after the balance sheet date that management will need to evaluate for potential recognition or disclosure in the financial statements, the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. We adopted this authoritative guidance on subsequent events in the second quarter of fiscal year 2009. The adoption of this guidance had no impact on our condensed consolidated financial statements. We have evaluated subsequent events through November 12, 2009, which is the date our condensed consolidated financial statements were issued.

In June 2009, the FASB issued the FASB Accounting Standards Codification (the “Codification”) and the hierarchy of U.S. Generally Accepted Accounting Principles (“GAAP”). The Codification will now be the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. All guidance contained in the Codification carries an equal level of authority. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. As of the effective date, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. We adopted this authoritative guidance in the third quarter of fiscal year 2009. The adoption of this guidance had no impact on our condensed consolidated financial statements.

Effects of Recently Issued Accounting Pronouncements

In December 2008, the FASB issued authoritative guidance on employers’ disclosures about postretirement benefit plan assets, which requires additional disclosures for employers’ pension and other postretirement benefit plan assets. Pension and other postretirement benefit plan assets were not included within the scope of the guidance on fair value measurements. This guidance requires employers to disclose information about fair value measurements of plan assets similar to the disclosures required under the fair value measurement guidance, including the investment policies and strategies for the major categories of plan assets, and significant concentrations of risk within plan assets. This guidance will be effective for fiscal years ending after December 15, 2009, with earlier adoption permitted. Upon initial adoption, the provisions of this guidance are not required for earlier periods that are presented for comparative purposes. We will be required to adopt this authoritative guidance in the fourth quarter of fiscal year 2009. This guidance affects only disclosure requirements; we expect the adoption of this guidance will have no impact on our consolidated financial statements.

In June 2009, the FASB issued authoritative guidance on the accounting for transfers of financial assets. This guidance is intended to improve practices that have developed that are not consistent with the original intent and key requirements of the original disclosure requirements, including establishing a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarifying and amending the derecognition criteria for a transfer to be accounted for as a sale, and changing the amount that can be recognized as a gain or loss on a transfer accounted for as a sale when beneficial interests are received by the transferor. This guidance also requires enhanced disclosures to provide information about transfers of financial assets and a transferor’s continuing involvement with transferred financial assets. We will be required to adopt this authoritative guidance on the accounting for transfers of financial assets in the first quarter of fiscal year 2010. We expect the adoption of this guidance will not have a significant impact on our condensed consolidated financial statements.

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities. This guidance requires an enterprise to qualitatively assess the determination of the primary beneficiary of a variable interest entity based on whether the entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.

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Also, this guidance requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a variable interest entity. Enhanced disclosures are also required to provide information about an enterprise’s involvement in a variable interest entity. We will be required to adopt this authoritative guidance on the consolidation of variable interest entities in the first quarter of fiscal year 2010. We expect the adoption of this guidance will not have a significant impact on our condensed consolidated financial statements.

In October 2009, the FASB issued authoritative guidance on multiple-deliverable revenue arrangements. This guidance establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities. This guidance provides amendments to the criteria for separating and measuring deliverables and allocating arrangement consideration to one or more units of accounting. The amendments in this guidance also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms of significant deliverables, and a vendor’s performance within those arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. We will be required to adopt this authoritative guidance on multiple-deliverable revenue arrangements in the first quarter of fiscal year 2011. We are currently evaluating the requirements of this guidance and have not yet determined the impact of its adoption on our condensed consolidated financial statements.

In October 2009, the FASB issued authoritative guidance on certain revenue arrangements that include software elements. This guidance changes the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality” of the product and excludes these products from current software revenue guidance. The new guidance will include factors to help companies determine what software elements are considered “essential to the functionality.” Once adopted the amendments will subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple deliverables. We will be required to adopt this authoritative guidance on certain revenue arrangements that include software elements in the first quarter of fiscal year 2011. We are currently evaluating the requirements of this guidance and have not yet determined the impact of its adoption on our condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Market Risk. We are exposed to market risk, including changes in interest rates and currency exchange rates. To manage the volatility relating to these exposures, we enter into various derivative transactions pursuant to our policies to hedge against known or forecasted market exposures. We briefly describe several of the market risks we face below. The following disclosure is not materially different from the disclosure provided under the heading, Item 7A. “Quantitative and Qualitative Disclosure About Market Risk,” in our 2008 Form 10-K.

Foreign Exchange Risk. The potential change in foreign currency exchange rates poses a substantial risk to us, as approximately 60% of our business is conducted outside of the United States, generally in foreign currencies. Our risk management strategy currently uses forward contracts to mitigate certain balance sheet foreign currency transaction exposures. The intent is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward contracts that hedge these exposures. In addition, we are able to partially mitigate the impact that fluctuations in currencies have on our net income as a result of our manufacturing facilities located in countries outside the United States, material sourcing and other spending which occurs in countries outside the United States, resulting in natural hedges.

Principal hedged currencies include the British Pound (GBP), Canadian Dollar (CAD), Euro (EUR), Japanese Yen (JPY), and Singapore Dollar (SGD). We held forward foreign exchange contracts with U.S. equivalent notional amounts totaling $173.8 million and $107.8 million as of October 4, 2009 and September 28,

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2008, respectively. The fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on foreign currency derivative contracts are not material and the duration of these contracts was generally 30 days during both fiscal years 2009 and 2008.

We do not enter into foreign currency derivative contracts for trading or other speculative purposes, nor do we use leveraged financial instruments. Although we attempt to manage our foreign currency exchange risk through the above activities, when the U.S. Dollar weakens against other currencies in which we transact business, generally sales and net income will be positively, but not proportionately impacted.

Foreign Currency Risk—Value-at-Risk Disclosure. We continue to measure foreign currency risk using the Value-at-Risk model described in Item 7A. “ Quantitative and Qualitative Disclosure About Market Risk,” of our 2008 Form 10-K. The measures for our Value-at-Risk analysis have not changed materially.

Interest Rate Risk. As described above, our debt portfolio includes variable rate instruments. Fluctuations in interest rates can therefore have a direct impact on both our short-term cash flows, as they relate to interest, and our earnings. To manage the volatility relating to these exposures, we may enter into various derivative transactions pursuant to our policies to hedge against known or forecasted interest rate exposures.

We entered into forward interest rate contracts in October 2007 that were intended to hedge movements in interest rates prior to our expected debt issuance. In May 2008, we settled forward interest rate contracts with notional amounts totaling $150.0 million upon the issuance of our 6% senior unsecured notes, and recognized $8.4 million, net of taxes of $5.4 million, of accumulated derivative losses in other comprehensive loss. We did not recognize any ineffectiveness related to these cash flow hedges. As of October 4, 2009, the balance remaining in accumulated other comprehensive loss related to these cash flow hedges, net of taxes of $4.4 million, was $6.8 million. The derivative losses are amortized into interest expense when the hedged exposure affects interest expense. We amortized into interest expense $1.5 million during the first nine months of fiscal year 2009 and $1.2 million during fiscal year 2008 for these derivative losses.

Interest Rate Risk—Sensitivity. Our 2008 Form 10-K presents sensitivity measures for our interest rate risk. The measures for our sensitivity analysis have not changed materially. We refer to Item 7A. “Quantitative and Qualitative Disclosure About Market Risk,” in our 2008 Form 10-K for our sensitivity disclosure.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of our fiscal quarter ended October 4, 2009. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on their evaluation of our disclosure controls and procedures as of the end of our fiscal quarter ended October 4, 2009, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended October 4, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Enzo Biochem, Inc. and Enzo Life Sciences, Inc. (collectively, “Enzo”) filed a complaint dated October 23, 2002 in the United States District Court for the Southern District of New York, Civil Action No. 02-8448, against Amersham plc, Amersham BioSciences, PerkinElmer, Inc., PerkinElmer Life Sciences, Inc., Sigma-Aldrich Corporation, Sigma Chemical Company, Inc., Molecular Probes, Inc., and Orchid BioSciences, Inc. The complaint alleges that we have breached our distributorship and settlement agreements with Enzo, infringed Enzo’s patents, engaged in unfair competition and fraud, and committed torts against Enzo by, among other things, engaging in commercial development and exploitation of Enzo’s patented products and technology, separately and together with the other defendants. Enzo seeks injunctive and monetary relief. In 2003, the court severed the lawsuit and ordered Enzo to serve individual complaints against the five defendants. We subsequently filed an answer and a counterclaim alleging that Enzo’s patents are invalid. In July 2006, the court issued a decision regarding the construction of the claims in Enzo’s patents that effectively limited the coverage of certain of those claims and, we believe, excludes certain of our products from the coverage of Enzo’s patents. Summary judgment motions were filed by the defendants in January 2007, and a hearing with oral argument on those motions took place in July 2007. In January 2009, the case was assigned to a new district court judge. On March 16, 2009, the new judge denied the pending summary judgment motions without prejudice and ordered a stay of the case until the federal appellate court decides Enzo’s appeal of the judgment of the United States District Court for the District of Connecticut in Enzo Biochem vs. Applera Corp. and Tropix, Inc., which involves a number of the same patents and which could materially affect the scope of Enzo’s case against us.

PharmaStem Therapeutics, Inc. (“PharmaStem”) filed a complaint dated February 22, 2002 against ViaCell, Inc. (“ViaCell”), which is now our wholly owned subsidiary, and several other defendants in the United States District Court for the District of Delaware, alleging infringement of United States Patents No. 5,004,681 and No. 5,192,553, relating to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem I”). After several years of proceedings at the District Court level, the United States Court of Appeals for the Federal Circuit issued a decision in July 2007 that ViaCell did not infringe these two patents and that the two patents are invalid. PharmaStem filed a certiorari petition in January 2008 seeking to have the United States Supreme Court review the appellate court’s decision as to the invalidity of the patents, but did not seek any further review of the non-infringement decision. However, the United States Supreme Court denied certiorari in March 2008, so the decision by the United States Court of Appeals for the Federal Circuit in favor of ViaCell is final and non-appealable. PharmaStem had also filed a second complaint against ViaCell and other defendants in July 2004 in the United States District Court for the District of Massachusetts, alleging infringement of United States Patents No. 6,461,645 and 6,569,427, which also relate to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells and progenitor cells from umbilical cord blood (“PharmaStem II”). The Delaware court granted ViaCell’s motion in October 2005 to stay the proceedings in PharmaStem II pending the outcome of PharmaStem I and a decision from the United States Patent and Trademark Office (“U.S. PTO”) on certain patent re-examination issues. On September 2, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,461,645, and on September 16, 2008, the U.S. PTO issued a Re-examination Certificate cancelling all claims of United States Patent No. 6,569,427. As a result of the cancellation of all patent claims involved in PharmaStem II by the U.S. PTO, we will seek a dismissal of all claims for relief set forth by PharmaStem in PharmaStem II.

We believe we have meritorious defenses to these lawsuits and other proceedings, and we are contesting the actions vigorously in all of the above unresolved matters. While each of these matters is subject to uncertainty, in the opinion of our management, based on its review of the information available at this time, the resolution of these matters will not have a material adverse impact on our condensed consolidated financial statements.

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We are also subject to various other claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of our business activities. Although we have established accruals for potential losses that we believe are probable and reasonably estimable, in the opinion of our management, based on its review of the information available at this time, the total cost of resolving these other contingencies at October 4, 2009 should not have a material adverse effect on our condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.

Item 1A. Risk Factors

The following important factors affect our business and operations generally or affect multiple segments of our business and operations and are not materially different from those factors reported in our Quarterly Report on Form 10-Q for the period ended July 5, 2009:

If the markets into which we sell our products decline, or do not grow as anticipated due to a decline in general economic conditions or uncertainties surrounding the approval of government or industrial funding proposals, we may see an adverse effect on the results of our business operations.

Our customers include pharmaceutical and biotechnology companies, laboratories, academic and research institutions, public health authorities, private healthcare organizations, doctors and government agencies. Our quarterly sales and results of operations are highly dependent on the volume and timing of orders received during the quarter. In addition, our revenues and earnings forecasts for future quarters are often based on the expected trends in our markets. However, the markets we serve do not always experience the trends that we may expect. Negative fluctuations in our customers’ markets, the inability of our customers to secure credit or funding, restrictions in capital expenditures, general economic conditions or cuts in government funding would likely result in a reduction in demand for our products and services. In addition, government funding is subject to economic conditions and the political process, which is inherently fluid and unpredictable. Our revenues may be adversely affected if our customers delay or reduce purchases as a result of uncertainties surrounding the approval of government or industrial funding proposals. Such declines could harm our consolidated financial position, results of operations, cash flows and trading price of our common stock, and could limit our ability to sustain profitability.

Our growth is subject to global economic, political and other risks.

We have operations in many parts of the world. The health of the global economy has a significant impact on our business. Since 2008, worldwide economic conditions have experienced a severe downturn due to the sequential effects of the credit market crisis and the resulting impact on the finance and banking industries, volatile currency exchange rates and energy costs, inflation concerns, decreased consumer confidence, reduced corporate profits and capital expenditures, and liquidity concerns. For example, the current tightening of credit in the financial markets may make it more difficult for customers to obtain financing for their operations, resulting in a material decrease in the orders we receive. Our business is also affected by local economic environments, including inflation, recession, financial liquidity and currency volatility or devaluation. Political changes, some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location. In addition, our global manufacturing facilities face risks to their production capacity that may relate to natural disasters, labor relations or regulatory compliance. While some of these risks can be hedged using financial instruments and some are insurable, such attempts to mitigate these risks are costly and not always successful. In addition, our ability to engage in such mitigation has decreased or become even more costly as a result of recent market developments.

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If we do not introduce new products in a timely manner, we may lose market share and be unable to achieve revenue growth targets.

We sell many of our products in industries characterized by rapid technological change, frequent new product and service introductions, and evolving customer needs and industry standards. Many of the businesses competing with us in these industries have significant financial and other resources to invest in new technologies, substantial intellectual property portfolios, substantial experience in new product development, regulatory expertise, manufacturing capabilities, and the distribution channels to deliver products to customers. Our products could become technologically obsolete over time, or we may invest in technology that does not lead to revenue growth, or continue to sell products for which the demand from our customers is declining, in which case we may lose market share or not achieve our revenue growth targets. The success of our new product offerings will depend upon several factors, including our ability to:

• accurately anticipate customer needs,

• innovate and develop new technologies and applications,

• successfully commercialize new technologies in a timely manner,

• price our products competitively, and manufacture and deliver our products in sufficient volumes and on time, and

• differentiate our offerings from our competitors’ offerings.

Many of our products are used by our customers to develop, test and manufacture their products. We must anticipate industry trends and consistently develop new products to meet our customers’ expectations. In developing new products, we may be required to make significant investments before we can determine the commercial viability of the new product. If we fail to accurately foresee our customers’ needs and future activities, we may invest heavily in research and development of products that do not lead to significant sales. We may also suffer a loss in market share and potential sales revenue if we are unable to commercialize our technology in a timely and efficient manner.

In addition, some of our licensed technology is subject to contractual restrictions, which may limit our ability to develop or commercialize products for some applications.

We may not be able to successfully execute acquisitions or license technologies, integrate acquired businesses or licensed technologies into our existing businesses, make acquired businesses or licensed technologies profitable, or successfully divest businesses.

We have in the past supplemented, and may in the future supplement, our internal growth by acquiring businesses and licensing technologies that complement or augment our existing product lines, such as Opto Technology Inc., acquired in January 2009, Analytica of Branford, Inc., acquired in May 2009 and Sym-Bio LifeScience Co., Ltd., acquired in August 2009. However, we may be unable to identify or complete promising acquisitions or license transactions for many reasons, including:

• competition among buyers and licensees,

• the high valuations of businesses and technologies,

• the need for regulatory and other approval, and

• our inability to raise capital to fund these acquisitions.

Some of the businesses we acquire may be unprofitable or marginally profitable. Accordingly, the earnings or losses of acquired businesses may dilute our earnings. For these acquired businesses to achieve acceptable levels of profitability, we would have to improve their management, operations, products and market penetration. We may not be successful in this regard and may encounter other difficulties in integrating acquired businesses

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into our existing operations, such as incompatible management, information or other systems, cultural differences, unforeseen regulatory requirements, previously undisclosed liabilities or difficulties in predicting financial results. Additionally, if we are not successful in selling businesses we seek to divest, the activity of such businesses may dilute our earnings. As a result, our financial results may differ from our forecasts or the expectations of the investment community in a given quarter or over the long term.

To finance our acquisitions, we may have to raise additional funds, either through public or private financings. We may be unable to obtain such funds or may be able to do so only on terms unacceptable to us. We may also incur expenses related to completing acquisitions or licensing technologies, or in evaluating potential acquisitions or technologies, which expenses may adversely impact our profitability.

We may not be successful in adequately protecting our intellectual property.

Patent and trade secret protection is important to us because developing new products, processes and technologies gives us a competitive advantage, although it is time-consuming and expensive. We own many United States and foreign patents and intend to apply for additional patents. Patent applications we file, however, may not result in issued patents or, if they do, the claims allowed in the patents may be narrower than what is needed to protect fully our products, processes and technologies. Similarly, applications to register our trademarks may not be granted in all countries in which they are filed. For our intellectual property that is protected by keeping it secret, such as trade secrets and know-how, we may not use adequate measures to protect this intellectual property.

Third parties may also challenge the validity of our issued patents, may circumvent or “design around” our patents and patent applications, or may claim that our products, processes or technologies infringe their patents. In addition, third parties may assert that our product names infringe their trademarks. We may incur significant expense in legal proceedings to protect our intellectual property against infringement by third parties or to defend against claims of infringement by third parties. Claims by third parties in pending or future lawsuits could result in awards of substantial damages against us or court orders that could effectively prevent us from manufacturing, using, importing or selling our products in the United States or other countries.

If we are unable to renew our licenses or otherwise lose our licensed rights, we may have to stop selling products or we may lose competitive advantage.

We may not be able to renew our existing licenses, or licenses we may obtain in the future, on terms acceptable to us, or at all. If we lose the rights to a patented or other proprietary technology, we may need to stop selling products incorporating that technology and possibly other products, redesign our products or lose a competitive advantage. Potential competitors could in-license technologies that we fail to license and potentially erode our market share.

Our licenses typically subject us to various economic and commercialization obligations. If we fail to comply with these obligations, we could lose important rights under a license, such as the right to exclusivity in a market. In some cases, we could lose all rights under the license. In addition, rights granted under the license could be lost for reasons out of our control. For example, the licensor could lose patent protection for a number of reasons, including invalidity of the licensed patent, or a third-party could obtain a patent that curtails our freedom to operate under one or more licenses.

If we do not compete effectively, our business will be harmed.

We encounter aggressive competition from numerous competitors in many areas of our business. We may not be able to compete effectively with all of these competitors. To remain competitive, we must develop new products and periodically enhance our existing products. We anticipate that we may also have to adjust the prices of many of our products to stay competitive. In addition, new competitors, technologies or market trends may emerge to threaten or reduce the value of entire product lines.

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Our quarterly operating results could be subject to significant fluctuation, and we may not be able to adjust our operations to effectively address changes we do not anticipate, which could increase the volatility of our stock price and potentially cause losses to our shareholders.

Given the nature of the markets in which we participate, we cannot reliably predict future sales and profitability. Changes in competitive, market and economic conditions may require us to adjust our operations, and we may not be able to make those adjustments or make them quickly enough to adapt to changing conditions. A high proportion of our costs are fixed, due in part to our research and development and manufacturing costs. Thus, small declines in sales could disproportionately affect our operating results in a quarter. Factors that may affect our quarterly operating results include:

• demand for and market acceptance of our products,

• competitive pressures resulting in lower selling prices,

• adverse changes in the level of economic activity in regions in which we do business,

• decline in general economic conditions or government funding,

• adverse income tax audit settlements,

• differing tax laws and changes in those laws, or changes in the countries in which we are subject to tax,

• fluctuations in our effective tax rate,

• adverse changes in industries, such as pharmaceutical and biomedical,

• changes in the portions of our sales represented by our various products and customers,

• delays or problems in the introduction of new products,

• our competitors’ announcement or introduction of new products, services or technological innovations,

• increased costs of raw materials, energy or supplies,

• changes in the volume or timing of product orders, and

• changes in assumptions used to determine contingent consideration in acquisitions.

A significant disruption in third-party package delivery and import/export services, or significant increases in prices for those services, could interfere with our ability to ship products, increase our costs and lower our profitability.

We ship a significant portion of our products to our customers through independent package delivery and import/export companies, including UPS and Federal Express in the United States, TNT, UPS and DHL in Europe and UPS in Asia. We also ship our products through other carriers, including national trucking firms, overnight carrier services and the United States Postal Service. If one or more of the package delivery or import/export providers experiences a significant disruption in services or institutes a significant price increase, the delivery of our products could be prevented or delayed. Such events could cause us to incur increased shipping costs that could not be passed on to our customers, negatively impacting our profitability and our relationships with certain of our customers.

Disruptions in the supply of raw materials, certain key components, certain analytical instrumentation and other goods from our limited or single source suppliers could have an adverse effect on the results of our business operations, and could damage our relationships with customers.

The production of our products requires a wide variety of raw materials, key components and other goods that are generally available from alternate sources of supply. However, certain critical raw materials, key components, analytical instrumentation and other goods required for the production and sale of some of our

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principal products are available from limited or single sources of supply. We generally have multi-year contracts with no minimum purchase requirements with these suppliers, but those contracts may not fully protect us from a failure by certain suppliers or strategic relationships to supply critical materials and analytical instrumentation or from the delays inherent in being required to change suppliers and, in some cases, validate new raw materials. Such raw materials, key components, analytical instrumentation and other goods could usually be obtained from alternative sources with the potential for an increase in price, decline in quality or delay in delivery. A prolonged inability to obtain certain raw materials, key components, analytical instrumentation or other goods is possible and could have an adverse effect on our business operations, and could damage our relationships with customers.

The manufacture and sale of products may expose us to product liability claims for which we could have substantial liability.

We face an inherent business risk of exposure to product liability claims if our products or product candidates are alleged or found to have caused injury, damage or loss. We may in the future be unable to obtain insurance with adequate levels of coverage for potential liability on acceptable terms or claims of this nature may be excluded from coverage under the terms of any insurance policy that we can obtain. If we are unable to obtain such insurance or the amounts of any claims successfully brought against us substantially exceed our coverage, then our business could be adversely impacted.

If we fail to maintain satisfactory compliance with the regulations of the United States Food and Drug Administration and other governmental agencies, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.

Our operations are subject to regulation by different state and federal government agencies in the United States and other countries. If we fail to comply with those regulations, we could be subject to fines, penalties, criminal prosecution or other sanctions. Some of the products produced by our Human Health segment are subject to regulation by the United States Food and Drug Administration and similar foreign and domestic agencies. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, promotion, sales, resales and distribution. If we fail to comply with those regulations or those of similar foreign and domestic agencies, we may have to recall products, cease their manufacture and distribution, and may be subject to fines or criminal prosecution.

Changes in governmental regulations may reduce demand for our products or increase our expenses.

We compete in markets in which we or our customers must comply with federal, state, local and foreign regulations, such as environmental, health and safety, and food and drug regulations. We develop, configure and market our products to meet customer needs created by these regulations. Any significant change in these regulations could reduce demand for our products or increase our costs of producing these products.

The healthcare industry is highly regulated and if we fail to comply with its extensive system of laws and regulations, we could suffer fines and penalties or be required to make significant changes to our operations which could have a significant adverse effect on the results of our business operations.

The healthcare industry, including the genetic screening market, is subject to extensive and frequently changing international and United States federal, state and local laws and regulations. In addition, legislative provisions relating to healthcare fraud and abuse, patient privacy violations and misconduct involving government insurance programs provide federal enforcement personnel with substantial powers and remedies to pursue suspected violations. We believe that our business will continue to be subject to increasing regulation as the federal government continues to strengthen its position on healthcare matters, the scope and effect of which we cannot predict. If we fail to comply with applicable laws and regulations, we could suffer civil and criminal damages, fines and penalties, exclusion from participation in governmental healthcare programs, and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur liabilities from third-party claims, all of which could have a significant adverse effect on our business.

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Economic, political and other risks associated with foreign operations could adversely affect our international sales and profitability.

Because we sell our products worldwide, our businesses are subject to risks associated with doing business internationally. Our sales originating outside the United States represented the majority of our total sales in the fiscal quarter ended October 4, 2009. We anticipate that sales from international operations will continue to represent a substantial portion of our total sales. In addition, many of our manufacturing facilities, employees and suppliers are located outside the United States. Accordingly, our future results of operations could be harmed by a variety of factors, including:

• changes in foreign currency exchange rates,

• changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets,

• longer payment cycles of foreign customers and timing of collections in foreign jurisdictions,

• trade protection measures and import or export licensing requirements,

• differing tax laws and changes in those laws, or changes in the countries in which we are subject to tax,

• adverse income tax audit settlements or loss of previously negotiated tax incentives,

• differing business practices associated with foreign operations,

• difficulty in staffing and managing widespread operations,

• differing labor laws and changes in those laws,

• differing protection of intellectual property and changes in that protection, and

• differing regulatory requirements and changes in those requirements.

If we do not retain our key personnel, our ability to execute our business strategy will be limited.

Our success depends to a significant extent upon the continued service of our executive officers and key management and technical personnel, particularly our experienced engineers, and on our ability to continue to attract, retain, and motivate qualified personnel. The competition for these employees is intense. The loss of the services of one or more of our key personnel could have a material adverse effect on our operating results. In addition, there could be a material adverse effect on us should the turnover rates for engineers and other key personnel increase significantly or if we are unable to continue to attract qualified personnel. We do not maintain any key person life insurance policies on any of our officers or employees.

Our success also depends on our ability to execute leadership succession plans. The inability to successfully transition key management roles could have a material adverse effect on our operating results.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected.

We rely on several centralized information systems throughout our company to keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers and suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business.

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Restrictions in our credit facility and outstanding debt instruments may limit our activities.

Our amended senior unsecured revolving credit facility and our 6% senior unsecured notes contain, and future debt instruments to which we may become subject may contain, restrictive covenants that limit our ability to engage in activities that could otherwise benefit our company. These debt instruments include restrictions on our ability and the ability of our subsidiaries to:

• pay dividends on, redeem or repurchase our capital stock,

• sell assets,

• incur obligations that restrict their ability to make dividend or other payments to us,

• guarantee or secure indebtedness,

• enter into transactions with affiliates, and

• consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

We are also required to meet specified financial ratios under the terms of our debt instruments. Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control such as foreign exchange rates, interest rates, changes in technology and changes in the level of competition.

Our failure to comply with any of these restrictions in our amended senior unsecured revolving credit facility and our 6% senior unsecured notes may result in an event of default under either or both of these debt instruments, which could permit acceleration of the debt under either or both debt instruments, and require us to prepay that debt before its scheduled due date.

Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets.

As of October 4, 2009, our total assets included $1.9 billion of net intangible assets. Net intangible assets consist principally of goodwill associated with acquisitions and costs associated with securing patent rights, trademark rights, core technology and technology licenses, net of accumulated amortization. We test certain of these items—specifically all of those that are considered “non-amortizing”—at least on an annual basis for potential impairment by comparing the carrying value to the fair market value of the reporting unit to which they are assigned. All of our amortizing intangible assets are evaluated for impairment should discrete events occur that call into question the recoverability of the intangible assets.

Adverse changes in our business, adverse changes in the assumptions used to determine the fair value of our reporting units, or the failure to grow our Human Health and Environmental Health segments may result in impairment of our intangible assets, which could adversely affect our results of operations.

Our share price will fluctuate.

Over the last several quarters, stock markets in general and our common stock in particular have experienced significant price and volume volatility. Both the market price and the daily trading volume of our common stock may continue to be subject to significant fluctuations due not only to general stock market conditions but also to a change in sentiment in the market regarding our operations and business prospects. In addition to the risk factors discussed above, the price and volume volatility of our common stock may be affected by:

• operating results that vary from the expectations of securities analysts and investors,

• the financial performance of the major end markets that we target,

• the operating and securities price performance of companies that investors consider to be comparable to us,

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• announcements of strategic developments, acquisitions and other material events by us or our competitors, and

• changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, commodity and equity prices and the value of financial assets.

Dividends on our common stock could be reduced or eliminated in the future.

On July 21, 2009, we announced that our Board had declared a quarterly dividend of $0.07 per share for the third quarter of fiscal year 2009 that was paid in November 2009. On October 21, 2009, we announced that our Board had declared a quarterly dividend of $0.07 per share for the fourth quarter of fiscal year 2009 that is payable in February 2010. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Stock Repurchase Program

The following table provides information with respect to the shares of common stock repurchased by us for the periods indicated.

	Issuer Repurchases of Equity Securities
Period	Total Number of Shares Purchased(1)(2)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 6, 2009 – August 2, 2009	1,788	$	17.63	0	7,999,167
August 3, 2009 – August 30, 2009	0	$	0.00	0	7,999,167
August 31, 2009 – October 4, 2009	0	$	0.00	0	7,999,167
Activity for quarter ended October 4, 2009	1,788	$	17.63	0	7,999,167

(1) On October 23, 2008, we announced that our Board authorized us to repurchase up to 10.0 million shares of our common stock under the Repurchase Program. The Repurchase Program will expire on October 22, 2012 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During the first quarter of fiscal year 2009, we repurchased 1,000,000 shares of our common stock in the open market at an aggregate cost of $14.2 million, including commissions, under the Repurchase Program. During the second quarter of fiscal year 2009, we repurchased 833 shares of our common stock in the open market at an aggregate cost of $0.01 million, including commissions, under the Repurchase Program. We did not repurchase any shares of our common stock in the open market under the Repurchase Program during the third quarter of fiscal year 2009. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

(2) Our Board has authorized us to repurchase shares of our common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans. During the first quarter of fiscal year 2009, we repurchased 27,102 shares of our common stock for this purpose. During the second quarter of fiscal year 2009 we did not repurchase any of our common stock for this purpose. During the third quarter of fiscal year 2009, we repurchased 1,788 shares of our common stock for this purpose. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

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Item 6. Exhibits

Exhibit Number	Exhibit Name
10.1	Equity Transfer Agreement, dated as of June 12, 2009, by and among The Sellers (as defined therein) and PerkinElmer IVD Pte. Ltd. (as Buyer).(1)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. PerkinElmer, Inc. agrees to furnish a supplemental copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PERKINELMER, INC.
By:	/S/    FRANK A. WILSON
	Frank A. Wilson Senior Vice President, Chief Financial Officer, and Chief Accounting Officer

November 12, 2009

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EXHIBIT INDEX

Exhibit Number	Exhibit Name
10.1	Equity Transfer Agreement, dated as of June 12, 2009, by and among The Sellers (as defined therein) and PerkinElmer IVD Pte. Ltd. (as Buyer).(1)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. PerkinElmer, Inc. agrees to furnish a supplemental copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

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EX-10.1

Exhibit 10.1

EXECUTION COPY

EQUITY TRANSFER AGREEMENT

dated as of June 12, 2009

by and between

THE SELLERS

(as defined herein)

and

PERKINELMER IVD PTE. LTD.

(as “Buyer”)

TABLE OF CONTENTS

ARTICLE I DEFINITIONS		2
1.1	CERTAIN DEFINITIONS	2
1.2	TERMS DEFINED ELSEWHERE IN THIS AGREEMENT	7
1.3	OTHER DEFINITIONAL AND INTERPRETIVE MATTERS	9
ARTICLE II SALE AND PURCHASE OF EQUITY INTERESTS, PURCHASE PRICE; CLOSING		10
2.1	SALE AND PURCHASE OF EQUITY INTERESTS	10
2.2	PURCHASE PRICE	10
2.3	PAYMENT OF PURCHASE PRICE	10
2.4	CLOSING DATE	12
2.5	DELIVERIES ON THE CLOSING DATE	12
2.6	BUYER CONFIRMATION LETTER	13
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS		14
3.1	ORGANIZATION AND GOOD STANDING	14
3.2	AUTHORIZATION OF AGREEMENT	14
3.3	CONFLICTS; CONSENTS OF THIRD PARTIES	14
3.4	OWNERSHIP AND TRANSFER OF EQUITY INTERESTS	15
3.5	LITIGATION	15
3.6	FINANCIAL ADVISORS	15
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY		15
4.1	ORGANIZATION AND GOOD STANDING	15
4.2	AUTHORIZATION OF AGREEMENT	15
4.3	CONFLICTS; CONSENTS OF THIRD PARTIES	16
4.4	CAPITALIZATION	16
4.5	SUBSIDIARY	17
4.6	CORPORATE RECORDS	18
4.7	FINANCIAL STATEMENTS	18
4.8	NO UNDISCLOSED LIABILITIES	19
4.9	ABSENCE OF CERTAIN DEVELOPMENTS	19
4.10	TAXES	21
4.11	REAL PROPERTY	23
4.12	TANGIBLE PERSONAL PROPERTY	24
4.13	INTELLECTUAL PROPERTY	25
4.14	MATERIAL CONTRACTS	28
4.15	EMPLOYEE BENEFIT PLANS	30
4.16	LABOR	31
4.17	LITIGATION	32
4.18	COMPLIANCE WITH LAWS; PERMITS	32
4.19	ENVIRONMENTAL MATTERS	33
4.20	INSURANCE	34
4.21	INVENTORIES	34
4.22	ACCOUNTS AND NOTES RECEIVABLE AND PAYABLE	35
4.23	RELATED PARTY TRANSACTIONS	35
4.24	CUSTOMERS AND SUPPLIERS	36
4.25	PRODUCT WARRANTY; PRODUCT LIABILITY	36
4.26	BANKS; POWER OF ATTORNEY	36
4.27	NO BRIBERY	37
4.28	FINANCIAL ADVISORS	37
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER		37

5.1	ORGANIZATION AND GOOD STANDING	37
5.2	AUTHORIZATION OF AGREEMENT	37
5.3	CONFLICTS; CONSENTS OF THIRD PARTIES	38
5.4	CAPITAL SOURCE	38
5.5	LITIGATION	38
5.6	FINANCIAL ADVISORS	38
ARTICLE VI COVENANTS		38
6.1	ACCESS TO INFORMATION; CONFIDENTIALITY	38
6.2	CONDUCT OF THE BUSINESS PENDING THE CLOSING	39
6.3	THIRD PARTY CONSENTS	43
6.4	GOVERNMENTAL CONSENTS AND APPROVALS	43
6.5	FURTHER ASSURANCES	43
6.6	NO SHOP	44
6.7	NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY	45
6.8	PRESERVATION OF RECORDS	46
6.9	PUBLICITY	47
6.10	USE OF NAME	48
6.11	ENVIRONMENTAL MATTERS	48
6.12	RELATED-PARTY TRANSACTIONS WITH NON-MANAGEMENT AFFILIATES	48
6.13	MONTHLY FINANCIAL STATEMENTS	49
6.14	FEES AND EXPENSES	49
6.15	NOTIFICATION OF CERTAIN MATTERS	49
6.16	DEBT	49
6.17	RESIGNATION OF DIRECTORS	50
ARTICLE VII CONDITIONS TO CLOSING		50
7.1	CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER	50
7.2	CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS	51
ARTICLE VIII INDEMNIFICATION		52
8.1	SURVIVAL OF REPRESENTATIONS AND WARRANTIES	52
8.2	INDEMNIFICATION	53
8.3	INDEMNIFICATION PROCEDURES	54
8.4	LIMITATIONS ON INDEMNIFICATION FOR BREACHES OF REPRESENTATIONS AND WARRANTIES	55
8.5	INDEMNIFICATION IN RELATION TO FINAL CLOSING NET ASSETS	56
8.6	TAX MATTERS	57
8.7	INDEMNITY PAYMENTS	59
8.8	TAX TREATMENT OF INDEMNITY PAYMENTS	59
ARTICLE IX TERMINATION		59
9.1	TERMINATION OF AGREEMENT	59
9.2	PROCEDURE UPON TERMINATION	60
9.3	EFFECT OF TERMINATION	61
9.4	EQUITY INTERESTS REVERSE	61
ARTICLE X MISCELLANEOUS		61
10.1	EXPENSES	61
10.2	SELLER REPRESENTATIVE	61
10.3	SPECIFIC PERFORMANCE	62
10.4	DISPUTE RESOLUTION	62
10.5	ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS	63
10.6	GOVERNING LAW	64
10.7	NOTICES	64
10.8	SEVERABILITY	66
10.9	BINDING EFFECT; ASSIGNMENT	66

10.10	NON-RECOURSE	67
10.11	COUNTERPARTS	67
10.12	REVIEW BY LEGAL COUNSEL	67
EXHIBIT A: FORM OF SYM-BIO GUARANTY		I
EXHIBIT B: FORM OF PERKINELMER GUARANTY		II
EXHIBIT C: SELLERS INFORMATION		III
EXHIBIT D: FORM OF ESCROW AGREEMENT		IV
EXHIBIT E: FORM OF PAYMENT REQUEST		V
EXHIBIT F: FORM OF MONEY TRANSFER NOTICE		VI
EXHIBIT G: FORM OF ESCROW FUND RECEIPT ACKNOWLEDGEMENT		VII
EXHIBIT H: FORM OF KEY MANAGEMENT EMPLOYMENT CONTRACT		VIII
EXHIBIT I: LIST OF KEY MANAGEMENT		IX
EXHIBIT J: FORM OF AFFILIATE RELEASE		X
EXHIBIT K: FORM OF RESIGNATION LETTER		XI
EXHIBIT L: FORM OF LEGAL OPINION OF SELLERS’ COUNSEL		XII
EXHIBIT M: FORM OF CLOSING CERTIFICATE		XIII
EXHIBIT N: FORM OF BUYER CONFIRMATION LETTER		XIV
EXHIBIT O: REFERENCE BALANCE SHEET		XV
SCHEDULES		XVI

EQUITY TRANSFER AGREEMENT

This EQUITY TRANSFER AGREEMENT (this “Agreement”) is entered into on this date of June 12, 2009 by and between:

PerkinElmer IVD Pte. Ltd., a company existing under the laws of Singapore with its legal address at 80 Raffles Place, #32-01 UOB Plaza 1, Singapore 068808 (the “Buyer”); and

The Sellers listed on the signature pages hereof under the heading “Sellers” (collectively, the “Sellers”), who hold equity interests in Shanghai Sym-Bio LifeScience Co., Ltd., a company organized under the laws of the PRC with its legal address at Room 102, Building 5, No. 590 RuiQing Road, East District, Zhang Jiang High-Tech Area, Shanghai 201201 with a registered capital of RMB27,000,000 (the “Company”).

RECITALS

WHEREAS, the Sellers own an aggregate of 100% of the issued and paid up equity interests of the Company (“Equity Interests”), which constitute all of the issued and outstanding equity interests of the Company;

WHEREAS, the Sellers desire to sell to Buyer, and Buyer desires to purchase from the Sellers, 100% of the Equity Interests for the purchase price and upon the terms and conditions hereinafter set forth;

WHEREAS, Sym-Bio SZ and the Company agree to guarantee the Sellers’ performance of this Agreement before the Closing Date (defined in Section 2.4 herein) pursuant to a guaranty letter set forth in Exhibit A (“Sym-Bio Guaranty”);

WHEREAS, the Buyer’s ultimate parent company PerkinElmer Inc., a US company with its legal address at 940 Winter Street, Waltham, MA, USA, agrees to guarantee the Buyer’s performance of this Agreement pursuant to a guaranty letter set forth in Exhibit B (“PerkinElmer Guaranty”); and

WHEREAS, certain terms used in this Agreement are defined in Section 1.1;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

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ARTICLE I

DEFINITIONS

1.1 Certain Definitions

For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Business Day” means any day of the year on which national banking institutions in Shanghai and Boston are open to the public for conducting business and are not required or authorized to close.

“Cash” means the amount of cash and bank deposits as reflected in bank statements, and certificates of deposit less escrowed amounts or other restricted cash balances and less the amounts of any unpaid checks, drafts and wire transfers issued on or prior to the date of determination, calculated in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements.

“Company Transaction Expenses” means, except as otherwise expressly set forth in this Agreement, the aggregate amount of reasonable all out-of-pocket fees and expenses, incurred by or on behalf of, or paid or to be paid by, the Company or any of the Subsidiaries in connection with the process of selling the Company or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the transactions contemplated hereby, including (A) any fees and expenses associated with obtaining necessary or appropriate waivers, consents or approvals of any Governmental Body or third parties on behalf of the Company or any of the Subsidiaries, (B) any fees or expenses associated with obtaining the release and termination of any Liens; (C) all brokers’ or finders’ fees; (D) fees and expenses of counsel, advisors, consultants, investment bankers, accountants, and auditors and experts, and (E) all sale, “stay-around,” retention, or similar bonuses or payments to current or former directors, officers, employees and consultants paid as a result of or in connection with the transactions contemplated hereby.

“Contract” means any contract, agreement, indenture, note, bond, mortgage, loan, instrument, lease, license, commitment or other arrangement, understanding, undertaking, commitment or obligation, whether written or oral.

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“Environmental Costs and Liabilities” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages (including punitive damages and consequential damages) costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or otherwise, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, Order or agreement with any Governmental Body or other Person, that relates to any environmental, health or safety condition, violation of Environmental Law or a Release or threatened Release of Hazardous Materials.

“Environmental Law” means any PRC Law, as now or hereafter in effect, in any way relating to the protection of human health and safety, the environment or natural resources and the regulations promulgated pursuant thereto.

“Environmental Permit” means any Permit required by Environmental Laws for the operation of the Company and the Subsidiaries.

“GAAP” means the Accounting Standards for Business Enterprises and other relevant accounting regulations applicable to the Company issued by the Ministry of Finance of the PRC as of the date hereof.

“Governmental Body” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether central, provincial, local or foreign, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).

“Hazardous Material” means any substance, material or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning or effect, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold and urea formaldehyde insulation.

“Indebtedness” of any Person means, without duplication, (i) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities arising in the Ordinary Course of Business (other than the current liability portion of any indebtedness for borrowed money)); (iii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iv) all obligations of such Person for the reimbursement of any

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obligor on any letter of credit, banker’s acceptance or similar credit transaction; (v) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (vi) all obligations of the type referred to in clauses (i) through (v) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person).

“Intellectual Property” means all intellectual property rights owned or used by the Company and the Subsidiaries arising from or in respect of the following, whether protected, created or arising under the laws of the PRC or any other jurisdiction: (i) all patents and applications therefor, including continuations, divisionals, continuations-in-part, or reissues of patent applications and patents issuing thereon, and all similar rights arising under the Laws of any jurisdiction (collectively, “Patents”), (ii) all trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, Internet domain names and corporate names and general intangibles of a like nature, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof, (collectively, “Marks”), (iii) registered or unregistered copyrights and registrations and applications therefor, works of authorship and mask work rights (collectively, “Copyrights”), (iv) discoveries, concepts, ideas, research and development, know-how, formulas, inventions, compositions, manufacturing and production processes and techniques, technical data, procedures, designs, drawings, specifications, databases, and other proprietary or confidential information, including customer lists, supplier lists, pricing and cost information, and business and marketing plans and proposals of the Company and the Subsidiaries, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Copyrights or Patents (collectively, “Trade Secrets”), and (v) all Software and Technology of the Company and the Subsidiaries.

“Intellectual Property Licenses” means (i) any grant by the Company or any Subsidiary to another Person of any right to use any of the Intellectual Property, and (ii) any grant by another Person to the Company or any Subsidiary of a right to use such Person’s intellectual property rights included in the Intellectual Property.

“Knowledge” means, with respect to any Person that is not an individual, the knowledge assuming due inquiry of such Person’s directors and executive officers and all other officers and managers having responsibility relating to the applicable matter or, in the case of an individual, knowledge assuming due inquiry.

“Law” means any foreign, central government, provincial government or local law, statute, code, ordinance, rule, regulation, Order or other requirement.

“Legal Proceeding” means any judicial, administrative or arbitral actions, suits, mediation, investigation, inquiry, proceedings or claims (including counterclaims) by or before a Governmental Body.

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“Liability” means any debt, loss, damage, adverse claim, fines, penalties, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, matured or unmatured, determined or determinable, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise), and including all costs and expenses relating thereto including all fees, disbursements and expenses of legal counsel, experts, engineers and consultants and costs of investigation.

“Lien” means any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any joint venture, limited liability company, partnership, members’, shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.

“Material Adverse Effect” means a material adverse effect on (i) the historical, near-term or long-term projected business, assets, properties, results of operations, condition (financial or otherwise) or prospects of the Company or the Subsidiaries, (ii) the value of the Company or the Subsidiaries, (iii) regulatory or political conditions, or securities markets in the PRC or worldwide or any outbreak of hostilities, terrorist activities or war, or any material worsening of any such hostilities, activities or war underway as of the date hereof or (iv) the ability of the Sellers to consummate the transactions contemplated by this Agreement or perform their obligations under this Agreement or the Seller Documents. A Material Adverse Effect shall be determined in light of Buyer’s intended capital structure for the transactions contemplated by this Agreement.

“Order” means any order, injunction, judgment, doctrine, decree, ruling, writ, assessment or arbitration award of a Governmental Body.

“Ordinary Course of Business” means the ordinary and usual course of day-to-day operations of the business of the Company and the Subsidiaries through the date hereof consistent with past practice.

“Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Body.

“Permitted Exceptions” means (i) all defects, exceptions, restrictions, easements, rights of way and encumbrances disclosed in land-use rights agreements that have been delivered to Buyer; (ii) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings, provided an appropriate reserve has been established therefor in the Financial Statements in accordance with GAAP; (iii) mechanics’, carriers’, workers’, and repairers’ Liens arising or incurred in the Ordinary Course of Business that are not material to the business, operations and financial condition of the Company Property so encumbered and that are not resulting from a breach, default or violation by the Company or any of the Subsidiaries of any Contract or Law; and (iv) zoning, entitlement and other land use and environmental regulations by any Governmental Body, provided that such regulations have not been violated.

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“Person” means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

“PRC” means the People’s Republic of China, which for purposes of this Agreement does not include the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan.

“Release” means any release, spill, emission, leaking, pumping, poring, injection, deposit, dumping, emptying, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, or into or out of any property.

“Remedial Action” means all actions including any capital expenditures undertaken to (i) clean up, remove, treat or in any other way address any Hazardous Material; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (iv) correct a condition of noncompliance with Environmental Laws.

“SAFE” means the State Administration of Foreign Exchange of the PRC and its local counterparts.

“SAIC” means the State Administration for Industry and Commerce of the PRC and its local counterparts.

“SCC” means Shanghai Commerce Commission or its local counterpart, the competent authority to approve the equity transfer transaction contemplated under this Agreement.

“Software” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, and (iv) documentation including user manuals and other training documentation related to any of the foregoing.

“Subsidiary” means any Person of which (i) a majority of the outstanding share capital, voting securities or other equity interests are owned, directly or indirectly, by the Company or (ii) the Company is entitled, directly or indirectly, to appoint a majority of the board of directors, board of managers or comparable body of such Person. In this Agreement, the only Subsidiary of the Company is Sym-Bio SZ.

“Sym-Bio SZ” means Suzhou Sym-Bio LifeScience Co., Ltd., a Chinese domestic company with its legal address at East country, Chengxiang town, Taicang City, Suzhou, Jiangsu Province, in which the Company holds 100% equity interests.

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“Taxes” means (i) all central government, provincial government, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, share capital, equity interest, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority in connection with any item described in clause (i) and (iii) any transferee liability in respect of any items described in clauses (i) or (ii) payable by reason of Contract, assumption, transferee liability, operation of Law or otherwise.

“Taxing Authority” means any Governmental Body responsible for the administration of any Tax.

“Tax Return” means any return, report or statement required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof) including any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities that includes the Company, any of the Subsidiaries, or any of their Affiliates.

“Technology” means, collectively, all designs, formulas, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology, that are used in, incorporated in, embodied in, displayed by or relate to, or are used by the Company or any Subsidiary.

1.2 Terms Defined Elsewhere in this Agreement

For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

Term	Section
Acquisition Transaction	6.6(a)
Agreement	Recitals
Arbiter	8.5(b)
Arbitration Agency	10.4(a)
Assets Appraisal Report	8.5(a)
Balance Sheet	4.7(a)
Balance Sheet Date	4.7(a)
Basket	8.4(a)
Buyer	Recitals

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Term	Section
Buyer Documents	5.2
Buyer’s Environmental Assessment	6.11(a)
Buyer Indemnified Parties	8.2(a)
Cap	8.4(b)
Closing	2.4
Closing Date	2.4
Company	Recitals
Company Documents	4.2
Company Marks	6.10
Company Permits	4.18(b)
Company Property	4.11 (a)
Confidential Information	6.7 (c)
1.1 Copyrights	1.2 (in Intellectual Property definition)
Employee Benefit Plans	4.15(a)
Employees	4.15(a)
Equity Interests	Recitals
Escrow Account	2.3 (c)
Escrow Agent	2.3 (c)I
Escrow Agreement	2.3 (c)
Escrowed Amount	2.3 (c)
Financial Statements	4.7(a)
Final Closing Net Asset Statement	8.5(a)
Losses	8.2(a)
Marks	1.1 (in Intellectual Property definition)
Material Contracts	4.14(a)
Owned Property	4.11(a)
Payment Acknowledgement	2.3(d)
Patents	1.1 (in Intellectual Property definition)
PerkinElmer Guaranty	Recitals
Personal Property Leases	4.12(b)
Purchase Price	2.2
Real Property Lease	4.11(a)
Related Persons	4.23
Representatives	6.6(a)
Restricted Business	6.7(a)
Sellers	Recitals
Seller Documents	3.2
Seller Indemnified Parties	8.2(b)
Seller Representative	10.2(a)
Special FX Account	2.3(a)
Survival Period	8.1
Sym-Bio Guaranty	Recitals
Tax Claim	8.6(c)(i)
Termination Date	9.1(a)

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Term	Section
Third Party Claim	8.3(b)
Trade Secrets	1.1 (in Intellectual Property definition)

1.3 Other Definitional and Interpretive Matters

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

Currency. Any reference in this Agreement to RMB shall mean the lawful currency of the PRC. Any reference in this Agreement to USD shall mean U.S. dollars.

Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

Including. The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no

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presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

ARTICLE II

SALE AND PURCHASE OF EQUITY INTERESTS, PURCHASE PRICE; CLOSING

2.1 Sale and Purchase of Equity Interests

Upon the terms and subject to the conditions contained herein, on the Closing Date, each Seller agrees to sell to Buyer, free and clear of any and all Liens, and Buyer agrees to purchase from each Seller, the Equity Interests owned by such Seller set forth opposite such Seller’s name on Exhibit C hereto.

2.2 Purchase Price

The aggregate purchase price to be paid by Buyer for the Equity Interests shall be an amount in USD cash equal to RMB 435,000,000, which shall be paid in two installments pursuant to Section 2.3 below (“Purchase Price”, the foreign exchange rate between USD and RMB for each installment Purchase Price shall be determined according to the USD-RMB exchange rate announced by SAFE on its official website on the date of making such installment payment of the Purchase Price). This Purchase Price represents a gross purchase price on which the Sellers will be responsible for clearing all their own tax liabilities and filing obligations on this transaction and Buyer should hold no responsibility for the taxes and any other related costs.

2.3 Payment of Purchase Price

(a) The Sellers shall, immediately after the Closing Date, use their best efforts to obtain approvals from SAFE approving the Sellers to (i) open Special Foreign Exchange Account for Converting Assets into Cash (“Special FX Account”) with Standard Chartered Bank (China) Limited, (ii) receive the Purchase Price from Buyer, and (iii) transfer RMB 70,000,000 equivalent USD of the received Purchase Price in accordance with this Agreement (the “Escrowed Amount”).

(b) Simultaneously with the execution of this Agreement, each Seller shall sign an escrow agreement substantially in the form set forth in Exhibit D (“Escrow Agreement”) with Standard Chartered Bank (China) Limited (“Escrow Agent”) and the Buyer, in which each Seller shall agree that of his/her pro rata part of the Escrowed Amount paid by the Buyer into his/her Special FX Account shall be transferred to a bank account opened in the name of Escrow Agent (“Escrow Account”) and shall be placed under the Escrow Agreement. The Escrowed Amount transferred to the Escrow Account shall be the escrow amount under this Agreement and the Escrow Agreement (“Escrow Fund”) with the purpose of being applied to realize the Indemnification set forth in Article VIII and other escrow purposes as provided under the Escrow Agreement, and therefore cannot be withdrawn by any Seller except as provided in the Escrow Agreement.

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(c) After the Sellers have obtained the required SAFE approvals to receive the Purchase Price from the Buyer, the Buyer shall pay the first installment Purchase Price in USD equivalent to RMB 350,000,000 to the Sellers in accordance with their pro rata ownership of the Equity Interests as set forth on Exhibit C by wire transfer of funds into the Special FX Accounts opened by the Sellers within five (5) Business Days after the Sellers made qualified payment request substantially in the form set forth in Exhibit E (“Payment Request”). As soon as possible after the foregoing said RMB 350,000,000 equivalent USD of the Purchase Price was paid into the Special FX Account by Buyer, the Sellers shall promptly and jointly convert part of such USD-denominated Purchase Price into RMB at an amount equals to RMB70,000,000 and thereafter issue a written notice substantially in the form of Exhibit F (“Money Transfer Notice”) to the Escrow Agent authorizing the Escrow Agent to transfer the converted RMB 70,000,000 to the Escrow Account as the Escrow Fund. Upon receiving the Money Transfer Notice jointly issued by the Sellers, the Escrow Agent shall immediately transfer such RMB denominated money to the Escrow Account and thereafter promptly issue a written Escrow Fund receipt acknowledgement substantially in the form of Exhibit G (“Escrow Fund Receipt Acknowledgement”) to the Buyer and each Seller.

(d) Within five (5) Business Days after receiving the Escrow Fund Receipt Acknowledgement from the Escrow Agent, the Buyer shall promptly pay the second installment Purchase Price in USD at an amount equivalent to RMB 85,000,000 to the Sellers in accordance with his/her pro rata ownership of the Equity Interests as set forth on Exhibit C by wire transfer of funds into the Special FX Accounts. For the avoidance of doubt, if due to the Sellers’ fault, the Sellers failed to obtain SAFE’s approval for RMB conversion (in case such approval is necessarily required by the Escrow Agent) and send the Money Transfer Notice as set forth in Section 2.3 (c) above, then the Sellers shall be deemed as having constituted a material breach of this Agreement, as such, the Buyer shall not be obligated to pay the remaining RMB 85,000,000 equivalent USD of the Purchase Price and shall have the right to (i) terminate this Agreement pursuant to Article IX (Termination), (ii) request refund of any and all the paid Purchase Price, and (iii) claim for indemnification pursuant to Article VIII (Indemnification), provided that the Buyer shall return the Equity Interest to the Sellers upon exercise of such rights.

(e) Promptly after the arrival to the Special FX Account of any payment by Buyer hereunder, the corresponding Seller shall provide Buyer with a written acknowledgement thereof (each, a “Payment Acknowledgement”). Each Payment Acknowledgement shall state that such Seller understands and agrees that the Buyer has duly performed its payment obligations hereunder with respect to the portion of proceeds which such Seller is entitled to, and shall constitute final and conclusive evidence thereof.

(f) Immediately after all of the Purchase Price has been paid to the Sellers’ Special FX Account, the Sellers shall promptly provide to the Buyer the original copy of the amended business license indicating that the Buyer has become the sole shareholder of the Company and all official seals, stamps and chops of the Company and the Subsidiaries, and the Buyer and the Sellers shall jointly use best commercial efforts to apply to SAFE for the issuance of the Foreign Exchange Registration Certificate of Foreign Investment for Equity Transfer.

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2.4 Closing Date

The consummation of the sale and purchase of the Equity Interests provided for in Section 2.1 hereof (the “Closing”) shall take place at the office of MWE China Law Offices located at Floor 28, Jin Mao Tower, 88 Century Boulevard, Pudong New District, Shanghai 200120, P.R. China (or at such other place as the parties may designate in writing) at 10:00 a.m. (Shanghai time) on a date to be specified by the parties (the “Closing Date”), which shall be the second date on which the Buyer and the Seller Representative jointly receive the Company’s amended business license from the SAIC showing Buyer as the holder of the Company’s Equity Interests and shall be a date no earlier than July 6^th, 2009, provided that the Parties have confirmed prior to the receipt of the aforesaid amended business license that all the conditions set forth in Article VII are fully satisfied or waived on or prior to the date such business license is received.

2.5 Deliveries on the Closing Date

At or prior to the Closing, the Sellers shall deliver or cause the Company to deliver, as applicable, to Buyer:

(a) Resolutions of related shareholders meetings of the Company, bearing the signature or official seal of each Seller, as to the authorization of this Agreement and all of the transactions contemplated hereby;

(b) Resolutions of related board meetings of the Company, bearing the official seal of the Company, as to the authorization of this Agreement and all of the transactions contemplated hereby;

(c) Approvals and filings required by Governmental Bodies with respect to the sale of the Equity Interests to Buyer;

(d) The foreign investment certificate of the Company showing the name of the Buyer entered in respect of the Equity Interests purchased pursuant to this Agreement;

(e) The copy of amended business license of the Company in connection with its conversion into a foreign-invested enterprise wholly owned by Buyer;

(f) The certificate required by Section 7.1(e);

(g) The Key Management Employment Contracts (substantially in the form set forth in Exhibit H) executed by the Company and each of the Key Management (set forth in Exhibit I) and the Employee Patent and Proprietary Information Utilization and Non-Solicitation Agreement (the form of which shall be agreed by the parties prior to the Closing Date) executed by each of the Employees of the Company and its Subsidiaries;

(h) The executed Escrow Agreement among the Buyer, the Escrow Agent and each of the Sellers substantially in the form of Exhibit D hereto;

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(i) The executed Sym-Bio Guaranty by Sym-Bio SZ and the Company substantially in the form of Exhibit A hereto;

(j) Copies of the releases from Affiliates of the Company substantially in the form of Exhibit J hereto stating that the Sellers and their Affiliates have irrevocably and unconditionally released the Company and the Subsidiaries from any and all Liabilities to the Sellers and their Affiliates pursuant to Section 6.12;

(k) Confirmation from the Company that all Company Transaction Expenses have been paid and discharged as of the close of business on the day immediately preceding the Closing pursuant to Section 6.14;

(l) The pay-off letters or final invoices in respect of Company Indebtedness and the certificate setting forth an estimate of the balance of the Company’s and the Subsidiaries’ Indebtedness, pursuant to Section 6.16;

(m) The copies of all the Third Party Consents set forth in Section 6.3 in a form satisfactory to Buyer;

(n) Written resignations and release of claims to fees or expenses of each of the directors and officers of the Company and the Subsidiaries identified by Buyer, each substantially in the form of Exhibit K hereto;

(o) An opinion of Grandall Legal Group (Shanghai), counsel to the Sellers, in substantially the form of Exhibit L hereto and permitting reliance thereon by Buyer.

(p) Closing Certificate executed by the Sellers substantially in the form set forth in Exhibit M.

At the Closing, the Buyer shall deliver to the Sellers:

(a) Resolutions of related board meetings of the Buyer, as to the authorization of this Agreement and all of the transactions contemplated hereby.

(b) The executed PerkinElmer Guaranty by PerkinElmer Inc. substantially in the form of Exhibit B hereto.

(c) Closing Certificate executed by the Buyer substantially in the form set forth in Exhibit M.

2.6 Buyer Confirmation Letter

After SCC has issued its approval regarding the equity transfer contemplated under this Agreement and provided that the Buyer is preliminarily satisfied with (i) the deliveries set forth in Section 2.5, (ii) the Conditions Precedent set forth in Section 7.1, (iii) the result of Buyer’s Environmental Assessment set forth in Section 6.11 and (iv) feels confident that an Material Adverse Effect has not occurred, the Buyer agrees to issue to

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the Sellers a Buyer Confirmation Letter substantially in the form set forth in Exhibit N before the Company initiates shareholder change procedures with SAIC.

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS

Each Seller, severally and not jointly, hereby represents and warrants to Buyer that:

3.1 Organization and Good Standing

Such Seller has all requisite capacity, power and authority to own, lease and operate its properties and to carry on its business as now conducted. Such Seller is duly qualified or authorized to do business and is in good standing under the laws of the PRC.

3.2 Authorization of Agreement

Such Seller has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, or instrument or certificate contemplated by this Agreement or to be executed by such Seller in connection with the consummation of the transactions contemplated by this Agreement (the “Seller Documents”), and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the Seller Documents, and the consummation of the transactions contemplated hereby and thereby, has been duly authorized and approved by all required action on the part of such Seller. This Agreement has been, and each of the Seller Documents will be, upon execution, duly and validly executed and delivered by such Seller and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes, and each of the Seller Documents when so executed and delivered will constitute, legal, valid and binding obligations of such Seller, enforceable against such Seller in accordance with its terms.

3.3 Conflicts; Consents of Third Parties

(a) None of the execution and delivery by such Seller of this Agreement or the Seller Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by such Seller with any of the provisions hereof or thereof will conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under any provision of (i) the articles of association or comparable organizational documents of such Seller; (ii) any Contract, or Permit to which any Seller is a party or by which any of the properties or assets of such Seller is bound; (iii) any Order of any Governmental Body applicable to such Seller or by which any of the properties or assets of such Seller are bound; or (iv) any applicable Law, except in each case where such organizational documents, Contracts, Orders or Laws are adopted or otherwise take effect after the Closing or where such violation or default arises from actions or omissions by any Person other than such Seller.

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(b) No material consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of such Seller in connection with the execution and delivery of this Agreement, the Seller Documents, the compliance by such Seller with any of the provisions hereof, or the consummation of the transactions contemplated hereby, except for the consents, approvals, permits, licenses expressly set forth in this Schedule 3.3.

3.4 Ownership and Transfer of Equity Interests

Such Seller is the record and beneficial owner of the Equity Interests indicated as being owned by such Seller on Exhibit C, free and clear of any and all Liens. Such Seller has the power and authority to sell, transfer, assign and deliver such Equity Interests as provided in this Agreement, and such delivery will convey to Buyer good and marketable title to such Equity Interests, free and clear of any and all Liens.

3.5 Litigation

Except as set forth in Schedule 3.5, there is no Legal Proceeding pending or, to the Knowledge of such Seller, threatened against such Seller or to which such Seller is otherwise a party relating to this Agreement, the Seller Documents or the transactions contemplated hereby or thereby.

3.6 Financial Advisors

Except as set forth on Schedule 3.6, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for such Seller in connection with the transactions contemplated by this Agreement and no Person is or will be entitled to any fee or commission or like payment in respect thereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY

The Sellers jointly and severally, hereby represent and warrant to Buyer that:

4.1 Organization and Good Standing

The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the PRC and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted and as currently proposed to be conducted. The Company is duly qualified or authorized to do business and is in good standing under the laws of the PRC.

4.2 Authorization of Agreement

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The Company has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, or instrument or certificate contemplated by this Agreement or to be executed by the Company in connection with the transactions contemplated by this Agreement (the “Company Documents”), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the Company Documents, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized and approved by all required action on the part of the Company. This Agreement has been, and each of the Company Documents will be, upon execution, duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes, and each of the Company Documents when so executed and delivered will constitute, legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

4.3 Conflicts; Consents of Third Parties

(a) None of the execution and delivery by the Company of this Agreement or the Company Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by the Company with any of the provisions hereof or thereof will conflict with, or result in any violation or breach of, conflict with or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or give rise to any obligation of the Company to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Liens upon any of the properties or assets of the Company or any Subsidiary under, any provision of (i) the articles of association or comparable organizational documents of the Company or any Subsidiary; (ii) any Contract, or Permit to which the Company or any Subsidiary is a party or by which any of the properties or assets of the Company or any Subsidiary is bound; (iii) any Order applicable to the Company or any Subsidiary or any of the properties or assets of the Company or any Subsidiary; or (iv) any applicable Law, except in each case where such organizational documents, Contracts, Permits, Orders or Laws are adopted or otherwise take effect after the Closing or where such violation or default arises from actions or omissions by any Person other than the Company or the Sellers.

(b) No material consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of the Company or any Subsidiary in connection with (i) the execution and delivery of this Agreement, the Company Documents, respectively, the compliance by the Company with any of the provisions hereof and thereof, or the consummation of the transactions contemplated hereby or thereby, or (ii) the continuing validity and effectiveness immediately following the Closing of any Permit or Contract of the Company or any Subsidiary, except for the consents, approvals, permits, licenses expressly set forth in Schedule 4.3(b).

4.4 Capitalization

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(a) The registered capital with respect to all of the Equity Interests in the Company have been fully paid up and such Equity Interests were issued to the Sellers not in violation of any purchase or call option, right of first refusal, subscription right, preemptive right or any similar rights. All of the Equity Interests in the Company are owned of record by the holders and in the respective amounts as are set forth on Exhibit C.

(b) There is no existing option, warrant, call, right or Contract to which any Seller or the Company is a party requiring, and there are no securities of the Company outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional equity securities of the Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase equity securities of the Company. Except otherwise set forth in Schedule 4.4(b), there are no obligations, contingent or otherwise, of the Company or any Subsidiary to (i) repurchase, redeem or otherwise acquire any Equity Interests or other ownership interests in the Company or the equity interests or other ownership interests in any Subsidiary, (ii) declare any dividend or pay any declared but unpaid dividend on its Equity Interests or (iii) provide material funds to, or make any material investment in (in the form of a loan, capital contribution or otherwise), or provide any guarantee with respect to the obligations of (except for the Guaranty provided by Sym-Bio SZ and the Company set forth in Exhibit A), any Person. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights with respect to the Company or any of the Subsidiaries. There are no bonds, debentures, notes or other indebtedness of the Company or the Subsidiaries having the right to vote or consent (or, convertible into, or exchangeable for, securities having the right to vote or consent) on any matters on which equityholders of the Company or the Subsidiaries may vote. There are no voting trusts, irrevocable proxies or other Contracts or understandings to which the Company or any Subsidiary or any Seller is a party or is bound with respect to the voting or consent of any Equity Interests in the Company or the equity interests of any Subsidiary.

4.5 Subsidiary

Sym-Bio SZ is the only Subsidiary owned by the Company. The Company does not own, directly or indirectly, any share capital or equity securities of any Person other than Sym-Bio SZ. Sym-Bio SZ is a duly organized and validly existing limited liability company in good standing under the laws of the PRC and is duly qualified or authorized to do business and is in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing has not had and would not reasonably be expected to have a Material Adverse Effect. Sym-Bio SZ has all requisite power and authority to own its properties and carry on its business as presently conducted. The equity interests of Sym-Bio SZ are validly issued, fully paid and non-assessable and were not issued in violation of any purchase or call option, right of first refusal, subscription right, preemptive right or any similar right. All such shares or other equity interests represented as being owned by the Company are owned by the Company free and clear of any and all Liens, except as set forth in Schedule 4.5. There is no existing option, warrant, call, right or Contract to which Sym-

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Bio SZ is a party requiring, and there are no convertible securities of Sym-Bio SZ outstanding which upon conversion would require, the issuance of any share capital or other equity interests of Sym-Bio SZ. Except as set forth on Schedule 4.5, there are no material restrictions on the ability of Sym-Bio SZ to make distributions of cash to its equity holders.

4.6 Corporate Records

(a) The Company has delivered to Buyer true, correct and complete copies of the business license and articles of association or comparable organizational documents of the Company and each of the Subsidiaries in each case as amended and in effect on the due date hereof, including all amendments thereto.

(b) The minute books of the Company and each Subsidiary previously made available to Buyer contain true, correct and complete records of all meetings and accurately reflect all other requisite action of the equityholders and board of directors (including committees thereof) of the Company and the Subsidiaries. The capital contribution certificate issued to shareholders of the Company and the Subsidiaries previously made available to Buyer are true, correct and complete. Except as set forth in Schedule 4.6, all equity transfer taxes levied, if any, or payable with respect to all transfers of shares or equity interests of the Company and the Subsidiaries prior to the date hereof have been paid and appropriate transfer tax stamps affixed to any certificates representing such shares.

4.7 Financial Statements

(a) The Company has delivered to Buyer copies of (i) the consolidated balance sheets of the Company and the Subsidiaries as at December 31st, 2006, 2007 and 2008 and the related consolidated statements of income and of cash flows of the Company and the Subsidiaries for the years then ended and (ii) the unaudited consolidated balance sheet of the Company and the Subsidiaries as at April 30th, 2009 and the related consolidated statements of income and cash flows of the Company and the Subsidiaries for the four (4) month period then ended (such statements, including the related notes and schedules thereto, are referred to herein as the “Financial Statements”). Each of the Financial Statements is complete and correct in all material respects, has been prepared in accordance with GAAP consistently applied by the Company in the preparation thereof throughout the periods presented and presents fairly in all material respects the consolidated financial position, results of operations and cash flows of the Company and the Subsidiaries as at the dates and for the periods indicated therein.

The consolidated balance sheet of the Company and the Subsidiaries for the year 2008 is referred to herein as the “Balance Sheet” and December 31, 2008 is referred to herein as the “Balance Sheet Date”.

(b) All books, records and accounts of the Company and the Subsidiaries are accurate and complete and are maintained in all material respects in accordance with good business practice and all applicable Laws. The Company and the Subsidiaries maintain

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systems of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences.

(c) The financial projections and business plan provided by the Company to Buyer prior to the date hereof were reasonably prepared on a basis reflecting management’s best estimates, assumptions and judgments, at the time provided to Buyer, as to the future financial performance of the Company and the Subsidiaries.

(d) All of the Financial Statements have been prepared from, are in accordance with and accurately reflect the books and records of the Company and its consolidated Subsidiaries.

(e) The Company has established and maintains disclosure controls and procedures; such disclosure controls and procedures are designed to ensure that material information relating to the Company, including the Subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; and, to the Knowledge of the Company and the Sellers, such disclosure controls and procedures are effective in timely alerting the Company’s principal executive officer and its principal financial officer to material information.

4.8 No Undisclosed Liabilities

Neither the Company nor any Subsidiary has any Indebtedness or Liabilities (whether or not required under GAAP to be reflected on a balance sheet or the notes thereto) other than those (i) specifically reflected on and fully reserved against in the Balance Sheet, (ii) incurred in the Ordinary Course of Business since the Balance Sheet Date or (iii) that are immaterial to the Company or any Subsidiary.

4.9 Absence of Certain Developments

Except as expressly contemplated by this Agreement or as set forth on Schedule 4.9, since the Balance Sheet Date (i) the Company and the Subsidiaries have conducted their respective businesses only in the Ordinary Course of Business and (ii) there has not been any event, change, occurrence or circumstance that, individually or in the aggregate with any such events, changes, occurrences or circumstances, has had or could reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, since the Balance Sheet Date:

(a) there has not been any damage, destruction or loss, whether or not covered by insurance, with respect to the property and assets of the Company or any Subsidiary having a replacement cost of more than RMB100,000 for any single loss or RMB1,000,000 for all such losses;

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(b) there has not been any declaration, setting aside or payment of any dividend or other distribution in respect of any equity in or other securities of the Company or any repurchase, redemption or other acquisition by the Company or any Subsidiary of any outstanding equity interests in or other securities of, or other ownership interest in, the Company or any Subsidiary;

(c) neither the Company nor any Subsidiary has awarded or paid any bonuses to employees of the Company or any Subsidiary with respect to the fiscal year ended December 31, 2008, except to the extent accrued on the Balance Sheet, or entered into any employment, deferred compensation, severance or similar agreement (nor amended any such agreement) or agreed to increase the compensation payable or to become payable by it to any of the Company’s or any Subsidiary’s directors, officers, employees, agents or representatives or agreed to increase the coverage or benefits available under any severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with such directors, officers, employees, agents or representatives;

(d) there has not been any change by the Company or any Subsidiary in accounting or Tax reporting principles, methods or policies;

(e) neither the Company nor any Subsidiary has made or rescinded any election relating to Taxes or settled or compromised any claim relating to Taxes;

(f) neither the Company nor any Subsidiary has entered into any transaction or Contract other than in the Ordinary Course of Business;

(g) neither the Company nor any Subsidiary has failed to promptly pay and discharge current liabilities except where disputed in good faith by appropriate proceedings;

(h) Except as set forth on Schedule 4.9 (h), neither the Company nor any Subsidiary has made any loans, advances or capital contributions to, or investments in, any Person with an amount exceeding RMB 100,000 or paid any fees or expenses to any Seller or any director, officer, partner, equityholder, member, shareholder or Affiliate of any Seller with an amount exceeding RMB 100,000, except for the normal payment of relevant employees’ salaries, reimbursement and bonuses;

(i) neither the Company nor any Subsidiary has (A) mortgaged, pledged or subjected to any Lien (other than Permitted Exceptions) any of its assets, or (B) acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise disposed of any assets of the Company or any Subsidiary, except, in the case of clause (B), for assets acquired, sold, assigned, transferred, conveyed, leased or otherwise disposed of in the Ordinary Course of Business;

(j) neither the Company nor any Subsidiary has discharged or satisfied any Lien, or paid any Liability, except in the Ordinary Course of Business;

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(k) neither the Company nor any Subsidiary has canceled or compromised any debt or claim or amended, canceled, terminated, relinquished, waived or released any Contract or right except in the Ordinary Course of Business and which, in the aggregate, would not be material to the Company and the Subsidiaries taken as a whole;

(l) neither the Company nor any Subsidiary has made or committed to make any capital expenditures or capital additions or betterments in excess of RMB500,000 individually or RMB2,000,000 in the aggregate, with the exception of commitments relating to the Company’s new construction project specified on Schedule 4.9(l);

(m) neither the Company nor any Subsidiary has issued, created, incurred, assumed, guaranteed, endorsed or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness in an amount in excess of RMB1,000,000 in the aggregate;

(n) the Company has not granted any license or sublicense of any rights under or with respect to any Intellectual Property except in the Ordinary Course of Business;

(o) neither the Company nor any Subsidiary has instituted or settled any Legal Proceeding resulting in a loss of revenue in excess of RMB1,000,000 in the aggregate; and

(p) none of the Sellers or the Company has agreed, committed, arranged or entered into any understanding to do anything set forth in this Section 4.9.

4.10 Taxes

(a) (i) All Tax Returns required to be filed by or on behalf of each of the Company, any Subsidiary and any affiliated group of which the Company or any Subsidiary is or was a member have been duly and timely filed with the appropriate Taxing Authority in all jurisdictions (state, provinces or subdivision) in which such Tax Returns are required to be filed (after giving effect to any valid extensions of time in which to make such filings), and all such Tax Returns are true, complete and correct in all material respects; and (ii) all Taxes payable by or on behalf of each of the Company, any Subsidiary and any affiliated group of which the Company or any Subsidiary is or was a member have been fully and timely paid or the Company has established adequate reserves for all Taxes (including penalties and interest) that have or may become due pursuant to such returns. With respect to any period for which Tax Returns have not yet been filed or for which Taxes are not yet due or owing or for which the Company or its Subsidiaries has recognized revenue for Financial Statement purposes but not for Tax purposes, the Company has made due and sufficient accruals for such Taxes in the Financial Statements and its books and records. All required estimated Tax payments sufficient to avoid any underpayment penalties or interest have been made by or on behalf of the Company and each Subsidiary.

(b) The Company and each Subsidiary has complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes and has duly and timely withheld and paid over to the appropriate Taxing Authority all amounts required

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to be so withheld and paid under all applicable Laws. The Company and each Subsidiary has complied in all material respects with all applicable laws related to the payment and withholding of taxes from employees or collected from customers for income taxes, social security and unemployment insurance, and sales-related taxes, and the portion of any such taxes to be paid by the Company to Governmental Bodies have been collected or withheld and either paid to the respective Governmental Bodies or set aside in accounts for such purpose, or such monies have been approved, reserved against, and entered upon the books of the Company.

(c) The Liabilities (including deferred Taxes) shown in the Financial Statements and to be accrued on the books and records of the Company through the Closing Date for Taxes, interest, and penalties are and will be adequate accruals with respect to income from operations, including any extraordinary items, of the Company for all periods commencing after January 1, 2009 and ending on the last day of the last accounting period ending prior to the Closing Date, and have been and will be accrued in a manner consistent with the practices utilized for accruing Tax liabilities in the Tax year ended December 31, 2008.

(d) Buyer has received complete copies of (i) all central government, provincial government, local and foreign income Tax Returns of the Company and the Subsidiaries relating to the taxable periods since 2006 and (ii) any audit report issued within the last three years relating to any Taxes due from or with respect to the Company or any Subsidiary. All income and franchise Tax Returns filed by or on behalf of the Company or any Subsidiary have been examined by the relevant Taxing Authority or the statute of limitations with respect to such Tax Returns has expired. To the Company’s knowledge, no claim has been made by a Taxing Authority in a jurisdiction (state, provinces or subdivision) where the Company or any Subsidiary does not file Tax Returns such that it is or may be subject to taxation by that jurisdiction (state, provinces or subdivision).

(e) All deficiencies asserted or assessments made as a result of any examinations by any Taxing Authority of the Tax Returns of, or including, the Company or any Subsidiary have been fully paid, and there are no other audits or investigations by any Taxing Authority in progress, nor have the Sellers, the Company or any of the Subsidiaries received any notice from any Taxing Authority that it intends to conduct such an audit or investigation. No issue has been raised by a Taxing Authority in any prior examination of the Company or any Subsidiary which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency for any subsequent taxable period.

(f) Neither the Company nor any Subsidiary nor any other Person on their behalf has (i) any application pending with any Taxing Authority requesting permission for any changes in accounting methods that relate to the Company or any Subsidiary, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has since not been filed, (iii) granted any extension for the assessment or collection of Taxes, which Taxes have not since been paid, or (iv) granted to any Person any power of attorney that is currently in force with respect to any Tax matter.

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(g) Neither the Company nor any Subsidiary is a party to any tax sharing, allocation, indemnity or similar agreement or arrangement (whether or not written) pursuant to which it will have any obligation to make any payments after the Closing.

(h) There are no liens as a result of any unpaid Taxes upon any of the assets of the Company or any Subsidiary.

(i) Neither the Company nor any of the Subsidiaries has ever been a member of any consolidated, combined, affiliated or unitary group of corporations for any Tax purposes.

(j) Neither the Company nor any of the Subsidiaries has, or has ever had, a permanent establishment in any country other than the PRC, or has engaged in a trade or business in any country other than the PRC that subjected it to tax in such country.

(k) There is no taxable income of the Company or any of the Subsidiaries that will be required under applicable Tax Law to be reported by the Buyer or any of its Affiliates, including the Company or any of the Subsidiaries, for a taxable period beginning after the Closing Date which taxable income was realized (and reflects economic income) arising prior to the Closing Date.

(l) The exempted income tax, other taxes, financial aids and/or subsidies enjoyed by the Company or any of the Subsidiaries before the Closing will not be subject to any claw-back as a result of the completion of the transaction completed herein or the conversion of the Company into a wholly foreign owned enterprise after the Closing Date.

4.11 Real Property

(a) Schedule 4.11 (a) sets forth a complete list of (i) all real properties and interests in real properties owned by the Company and the Subsidiaries (“Owned Property”), and (ii) all leases of real properties by the Company or a Subsidiary (“Real Property Lease”, and together with the Owned Properties, being referred to herein individually as a “Company Property”) as lessee or lessor. The Company or the Subsidiaries have paid all the required fees and taxes for and have good and marketable title to all the Owned Properties, free and clear of all Liens of any nature whatsoever except (A) Liens set forth on Schedule 4.11 (a) and (B) Permitted Exceptions. To the Knowledge of the Company, neither the Company nor any Subsidiary has received any written notice of any default or event that with notice or lapse of time, or both, would constitute a default by the Company or any Subsidiary under any of the Real Property Leases. All of the buildings, fixtures and improvements in respect of the Company Properties (i) are in good operating condition without structural defects, and all mechanical and other systems located thereon are in good operating condition, and no condition exists requiring material repairs, alterations or corrections and (ii) are suitable, sufficient and appropriate in all respects for their current and contemplated uses. None of the improvements located on properties that are the subject of the Company Properties constitute a legal non-conforming use or otherwise require any special dispensation, variance or special permit under any Laws. The Company has delivered to Buyer true, correct and complete copies of the Company

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Properties, together with all amendments, modifications or supplements, if any, thereto. The properties that are the subject of the Company Properties are not subject to any leases, rights of first refusal, options to purchase or rights of occupancy, except as set forth on Schedule 4.11(a).

(b) Each of the Company Properties is in full force and effect. Neither the Company nor an Subsidiary is in default under any Company Property, and no event has occurred and no circumstance exists which, if not remedied, and whether with or without notice or the passage of time or both, would result in such a default. Neither the Company nor any Subsidiary has received or given any notice of any default or event that with notice or lapse of time, or both, would constitute a default by the Company or any Subsidiary under any of the Company Properties and, to the Knowledge of the Company and the Sellers, no other party is in default thereof, and no party to any Company Property has exercised any termination rights with respect thereto.

(c) The Company and the Subsidiaries have all certificates of occupancy and Permits of any Governmental Body necessary or useful for the current use and operation of each Company Property, and the Company and the Subsidiaries have fully complied with all material conditions of the Permits applicable to them. No default or violation, or event that with the lapse of time or giving of notice or both would become a default or violation, has occurred in the due observance of any Permit.

(d) There does not exist any actual or, to the Knowledge of the Company and the Sellers, threatened or contemplated condemnation or eminent domain proceedings that affect any property that is the subject of a Company Property or any part thereof, and none of the Company, and Subsidiary or any Seller has received any notice, oral or written, of the intention of any Governmental Body or other Person to take or use all or any part thereof.

(e) None of the Sellers, the Company or any Subsidiary has received any notice from any insurance company that has issued a policy with respect to any property that is the subject of a Company Property requiring performance of any structural or other repairs or alterations to such property.

(f) Except otherwise set forth on Schedule 4.11(f), neither the Company nor any Subsidiary owns, holds, is obligated under or is a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any real estate or any portion thereof or interest therein.

4.12 Tangible Personal Property

(a) The Company and the Subsidiaries have good and marketable title to all of the items of tangible personal property used in the business of the Company and the Subsidiaries (except as sold or disposed of subsequent to the date thereof in the Ordinary Course of Business and not in violation of this Agreement), free and clear of any and all Liens, other than the Permitted Exceptions. All such items of tangible personal property that, individually or in the aggregate, are material to the operation of the business of the

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Company and the Subsidiaries are in good condition and in a state of good maintenance and repair (ordinary wear and tear excepted) and are suitable for the purposes used.

(b) Schedule 4.12(b) sets forth all leases of personal property (“Personal Property Leases”) involving annual payments in excess of RMB100,000 relating to personal property used in the business of the Company or any of the Subsidiaries or to which the Company or any of the Subsidiaries is a party or by which the properties or assets of the Company or any of the Subsidiaries is bound. All of the items of personal property under the Personal Property Leases are in good condition and repair (ordinary wear and tear excepted) and are suitable for the purposes used, and such property is in all material respects in the condition required of such property by the terms of the lease applicable thereto during the term of the lease. The Company has delivered to Buyer true, correct and complete copies of the Personal Property Leases, together with all amendments, modifications or supplements thereto.

(c) The Company and each of the Subsidiaries has a valid and enforceable leasehold interest under each of the Personal Property Leases under which it is a lessee. Each of the Personal Property Leases is in full force and effect and neither the Company nor any Subsidiary has received or given any notice of any default or event that with notice or lapse of time, or both, would constitute a default by the Company or any Subsidiary under any of the Personal Property Leases and, to the Knowledge of the Company and the Sellers, no other party is in default thereof, and no party to the Personal Property Leases has exercised any termination rights with respect thereto.

4.13 Intellectual Property

(a) Schedule 4.13(a) sets forth an accurate and complete list of all Patents, Marks and Copyrights owned or used by the Company or any Subsidiary. Schedule 4.13(a) lists the jurisdictions in which each such item of Intellectual Property has been issued or registered or in which any such application for such issuance or registration has been filed.

(b) Except as disclosed in Schedule 4.13(b), the Company or a Subsidiary is the sole and exclusive owner of all right, title and interest in and to (i) all of the Patents, Marks and Copyrights used by the Company and the Subsidiaries, and (ii) each of the other Copyrights in any works of authorship prepared by or for the Company or a Subsidiary that resulted from or arose out of any work performed by or on behalf of the Company or any Subsidiary or by any employee, officer, consultant or contractor of any of them, in each case free and clear of all Liens or obligations to others. The Company or a Subsidiary is the sole and exclusive owner of, or has valid and continuing rights to use, sell and license, as the case may be, all other Intellectual Property used, sold or licensed by the Company or the Subsidiaries in their businesses as presently conducted and as currently proposed to be conducted, free and clear of all Liens or obligations to others (except for those specified licenses included in Schedule 4.13(e)).

(c) The Intellectual Property owned, used, practiced or otherwise commercially exploited by the Company or any Subsidiary, the development, manufacturing, licensing,

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marketing, importation, offer for sale, sale or use of the products or Technology in connection with the business as presently conducted and as currently proposed to be conducted, and the Company’s and the Subsidiaries’ present and currently proposed business practices and methods, do not infringe, violate or constitute an unauthorized use or misappropriation of any Patent, Copyright, Mark, Trade Secret or other similar right, of any Person (including pursuant to any non-disclosure agreements or obligations to which the Company or any Subsidiary or, to the Company’s Knowledge, any of their present or former employees is a party, and including any intellectual property that might exist with respect to open source software or other intellectual property publicly available for certain types of use). The Intellectual Property owned by or licensed to the Company and the Subsidiaries includes all of the intellectual property rights used by the Company and the Subsidiaries to conduct their business in the manner in which such business is currently being conducted and, to the Knowledge of the Company and the Sellers, as currently proposed to be conducted.

(d) Except with respect to licenses of commercial off-the-shelf Software, and except pursuant to the Intellectual Property Licenses listed in Schedule 4.13(d), neither the Company nor any of the Subsidiaries is required, obligated, or under any liability whatsoever, to make any payments by way of royalties, fees or otherwise or provide any other consideration of any kind, to any owner or licensor of, or other claimant to, any Intellectual Property, or any other Person, with respect to the use thereof or in connection with the conduct of the business of the Company and the Subsidiaries as currently conducted or proposed to be conducted.

(e) Schedule 4.13(e) sets forth a complete and accurate list of all Contracts to which the Company or any Subsidiary is a party (i) granting any Intellectual Property Licenses, (ii) containing a covenant not to compete or otherwise limiting its ability to use or exploit fully any of the Intellectual Property or (iii) containing an agreement to indemnify any other Person against any claim of infringement, violation, misappropriation or unauthorized use of any Intellectual Property. The Company has delivered to Buyer true, correct and complete copies of each Contract set forth on Schedule 4.13(e), together with all amendments, modifications or supplements thereto.

(f) Each of the Intellectual Property Licenses is in full force and effect and is the legal, valid and binding obligation of the Company and/or the Subsidiaries, enforceable against them in accordance with its terms. Neither the Company nor any Subsidiary is in default under any Intellectual Property License, nor, to the Knowledge of the Company and the Sellers, is any other party to any Intellectual Property License in default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder. No party to any of the Intellectual Property Licenses has exercised any termination rights with respect thereto.

(g) No Trade Secret of the Company or any Subsidiary as presently conducted or as presently proposed to be conducted has been authorized to be disclosed or has been actually disclosed by the Company or any Subsidiary to any employee or any third party other than pursuant to a written non-disclosure agreement including reasonable restrictions on the disclosure and use of the Intellectual Property. The Company and the

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Subsidiaries have taken adequate security measures to protect the secrecy, confidentiality and value of all the Trade Secrets of the Company and the Subsidiaries (including invention disclosures). Each employee, consultant and independent contractor of the Company and the Subsidiaries has entered into a written non-disclosure and invention assignment agreement with the Company or such Subsidiary substantially in a form provided to Buyer.

(h) As of the date hereof, neither the Company nor any of the Subsidiaries is the subject of any pending or, to the Knowledge of the Company and the Sellers, threatened Legal Proceedings which involve a claim of infringement, misappropriation, unauthorized use, or violation of any intellectual property rights by any Person against the Company or the Subsidiaries or challenging the ownership, use, validity or enforceability of any Intellectual Property. Neither the Company nor any Subsidiary has received notice of any such threatened claim and, to the Knowledge of the Company and the Sellers, there are no facts or circumstances that would form the basis for any claim of infringement, unauthorized use, misappropriation or violation of any intellectual property rights by any Person against the Company or any Subsidiary, or challenging the ownership, use, validity or enforceability of any material Intellectual Property. All of the Company’s and the Subsidiaries’ rights in and to material Intellectual Property are valid and enforceable.

(i) To the Knowledge of the Company and the Sellers, no Person is infringing, violating, misusing or misappropriating any material Intellectual Property of the Company or any Subsidiary, and no such claims have been made against any Person by the Company or any Subsidiary.

(j) There are no Orders to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound which restrict, in any material respect, the right to use any of the Intellectual Property.

(k) The consummation of the transactions contemplated hereby will not result in the loss or impairment of Buyer’s right to own or use any of the Intellectual Property.

(l) No present or former employee has any right, title, or interest, directly or indirectly, in whole or in part, in any Intellectual Property owned or used by the Company or any Subsidiary. To the Knowledge of the Company and the Sellers, no employee, consultant or independent contractor of the Company or any Subsidiary is, as a result of or in the course of such employee’s, consultant’s or independent contractor’s engagement by the Company or any Subsidiary, in default or breach of any material term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement.

(m) Schedule 4.13(m) sets forth a complete and accurate list of (i) all Software that is owned exclusively by the Company or any Subsidiary that is material to the operation of the business of the Company and the Subsidiaries and (ii) all Software that is used by the Company or any Subsidiary in the business of the Company and the Subsidiaries that is not exclusively owned by the Company or any Subsidiary, excluding Software available

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on reasonable terms through commercial distributors or in consumer retail stores for a license fee of no more than RMB10,000.

(n) No open source software or freeware has been incorporated into the products of the Company or any Subsidiary that would in any way limit the ability to make, use or sell any such product or that would diminish or transfer the rights of ownership in any Intellectual Property or Software of the Company to a third party.

4.14 Material Contracts

(a) Schedule 4.14(a) sets forth, by reference to the applicable subsection of this Section 4.14(a), all of the following outstanding Contracts to which the Company or any of the Subsidiaries is a party or by which any of them or their respective assets of properties are bound (collectively, the “Material Contracts”):

(i) Contracts with any Seller or Affiliate thereof or any current or former officer, director, equityholder, member, shareholder or Affiliate of the Company or any of the Subsidiaries;

(ii) Contracts with any labor union or association representing any employee of the Company or any of the Subsidiaries;

(iii) Contracts for the sale of any of the assets of the Company or any of the Subsidiaries other than in the Ordinary Course of Business or for the grant to any Person of any preferential rights to purchase any of its assets;

(iv) Contracts for joint ventures, strategic alliances, partnerships, licensing arrangements, or sharing of profits or proprietary information;

(v) Contracts containing covenants of the Company or any of the Subsidiaries not to compete in any line of business or with any Person in any geographical area or not to solicit or hire any person with respect to employment or covenants of any other Person not to compete with the Company or any of the Subsidiaries in any line of business or in any geographical area or not to solicit or hire any person with respect to employment;

(vi) Contracts relating to the acquisition (by merger, purchase of equity interests or shares or assets or otherwise) by the Company or any of the Subsidiaries of any operating business or material assets or the share capital or other equity interests of any other Person;

(vii) Contracts relating to the incurrence, assumption or guarantee of any Indebtedness or imposing a Lien on any of the assets of the Company or any Subsidiary, including indentures, guarantees, loan or credit agreements, sale and leaseback agreements, purchase money obligations incurred in connection with the acquisition of property, mortgages, pledge agreements, security agreements, or conditional sale or title retention agreements;

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(viii) purchase Contracts or commitments giving rise to Liabilities of the Company or any of the Subsidiaries in excess of RMB500,000;

(ix) all Contracts providing for payments by or to the Company or any of the Subsidiaries in excess of RMB250,000 in any fiscal year or RMB1,000,000 in the aggregate during the term thereof;

(x) all Contracts in excess of RMB 100,000 obligating the Company or any of the Subsidiaries to provide or obtain products or services for a period of one year or more or requiring the Company to purchase or sell a stated portion of its requirements or outputs;

(xi) Contracts under which the Company or any of the Subsidiaries has made advances or loans to any other Person;

(xii) Contracts providing for severance, retention, change in control or other similar payments;

(xiii) Contracts for the employment of any individual on a full-time, part-time or consulting or other basis providing annual compensation in excess of RMB200,000;

(xiv) material management Contracts and Contracts with independent contractors or consultants (or similar arrangements) that are not cancelable without severance, penalty or further payment and without more than 30 days’ notice;

(xv) outstanding Contracts of guaranty, surety or indemnification, direct or indirect, by the Company or any of the Subsidiaries;

(xvi) Contracts (or group of related Contracts) which involve the expenditure of more than RMB250,000 annually or RMB500,000 in the aggregate.

(b) Each of the Material Contracts is in full force and effect and is the legal, valid and binding obligation of the Company or any Subsidiary which is party thereto, and of the other parties thereto enforceable against each of them in accordance with its terms and, upon consummation of the transactions contemplated by this Agreement, shall, except as otherwise stated in Schedule 4.14(b), continue in full force and effect without penalty or other adverse consequence. Neither the Company nor any Subsidiary is in default under any Material Contract, nor, to the Knowledge of the Company or the Sellers, is any other party to any Material Contract in breach of or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a breach or default by the Company, any Subsidiary or any other party thereunder. No party to any of the Material Contracts has exercised any termination rights with respect thereto, and no party has given notice of any significant dispute with respect to any Material Contract. The Company has delivered to Buyer true, correct and complete copies of all of the Material Contracts, together with all amendments, modifications or supplements thereto.

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4.15 Employee Benefit Plans

(a) Schedule 4.15(a) sets forth a correct and complete list of all employee benefit plans, and all other employee benefit programs, agreements, policies, arrangements or payroll practices, including bonus plans, employment, consulting or other compensation agreements, collective bargaining agreements, incentive, equity or equity-based compensation, or deferred compensation arrangements, change in control, termination or severance plans or arrangements, equity purchase, severance pay, sick leave, vacation pay, salary continuation for disability, hospitalization, medical insurance, life insurance and scholarship plans and programs maintained by the Company or any of its Subsidiaries or to which the Company or any of the Subsidiaries contributed or is obligated to contribute thereunder for current or former employees of the Company or any of the Subsidiaries (the “Employees”) (collectively, with statutory social insurance applicable to the Company and the Subsidiaries, the “Employee Benefit Plans”).

(b) Correct and complete copies of the following documents, with respect to each of the Employee Benefit Plans, have been made available or delivered to Buyer by the Company, to the extent applicable: (i) any plans, all amendments thereto and related trust documents, insurance contracts or other funding arrangements, and amendments thereto; (ii) the most recent actuarial report, if any; (iii) summary plan descriptions; (iv) written communications to employees relating to the Employee Benefit Plans; and (v) written descriptions of all non-written agreements relating to the Employee Benefit Plans.

(c) The Employee Benefit Plans have been maintained in all material respects in accordance with their terms and with all provisions of applicable central government and provincial government Laws and regulations. To the Company’s knowledge, no fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any Employee Benefit Plan.

(d) All contributions (including all employer contributions and employee salary reduction contributions) required to have been made under any of the Employee Benefit Plans or by Law to any funds or trusts established thereunder or in connection therewith have been made by the due date thereof (including any valid extension), and all contributions for any period ending on or before the Closing Date that are not yet due will have been paid or sufficient accruals for such contributions and other payments in accordance with GAAP are duly and fully provided for on the Balance Sheet.

(e) There are no pending actions, claims or lawsuits that have been asserted or instituted against the Employee Benefit Plans, the assets of any of the trusts under the Employee Benefit Plans or the sponsor or administrator of any of the Employee Benefit Plans, or against any fiduciary of the Employee Benefit Plans with respect to the operation of any of the Employee Benefit Plans (other than routine benefit claims), nor does the Company or the Sellers have any Knowledge of facts that could form the basis for any such claim or lawsuit.

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(f) None of the Employee Benefit Plans provides for post-employment life or health insurance, benefits or coverage for any participant or any beneficiary of a participant, except at the expense of the participant or the participant’s beneficiary.

(g) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment becoming due to any Employee, (ii) increase any benefits otherwise payable under any Employee Benefit Plan or (iii) result in the acceleration of the time of payment or vesting of any such benefits under any Employee Benefit Plan.

(h) Neither the Company nor any of the Subsidiaries has a contract, plan or commitment, whether legally binding or not, to create any additional Employee Benefit Plan or to modify any existing Employee Benefit Plan.

(i) No equity interest, share capital or other security issued by the Company or any of the Subsidiaries forms or has formed a material part of the assets of any Employee Benefit Plan.

(j) Any individual who performs services for the Company or any of the Subsidiaries and who is not currently treated as an employee of the Company or any of the Subsidiaries is correctly categorized as a non-employee.

4.16 Labor

(a) Except as set forth on Schedule 4.16(a), neither the Company nor any of the Subsidiaries is a party to any labor or collective bargaining agreement and there are no labor or collective bargaining agreements which pertain to employees of the Company or any of the Subsidiaries. The Company has delivered or otherwise made available to Buyer true, correct and complete copies of the labor or collective bargaining agreements listed on Schedule 4.16(a), together with all amendments, modifications or supplements thereto.

(b) Except as set forth on Schedule 4.16(b), no Employees are represented by any labor organization. No labor organization or group of Employees has made a pending demand for recognition, and there are no representation proceedings or petitions seeking a representation proceeding presently pending or, to the Knowledge of the Company or the Sellers, threatened to be brought or filed, with any labor relations tribunal. There is no organizing activity involving the Company or any of the Subsidiaries pending or, to the Knowledge of the Company or the Sellers, threatened by any labor organization or group of Employees.

(c) There are no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or (ii) material grievances or other labor disputes pending or, to the Knowledge of the Company or the Sellers, threatened against or involving the Company or any of the Subsidiaries. There are no unfair labor practice charges, grievances or complaints pending or, to the Knowledge of the Company or the Sellers, threatened by or on behalf of any Employee or group of Employees.

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(d) There are no complaints, charges or claims against the Company or any of the Subsidiaries pending or, to Knowledge of the Company or the Sellers, threatened that could be brought or filed, with any Governmental Body based on, arising out of, in connection with or otherwise relating to the employment or termination of employment of or failure to employ, any individual (except that such employment or termination of employment or failure to employ is planned by the Buyer in connection with the transactions contemplated under this Agreement). Each of the Company and the Subsidiaries is in compliance with all Laws relating to the employment of labor, including all such Laws relating to wages, hours, pension plans, collective bargaining, discrimination, civil rights, safety and health, workers’ compensation and the collection and payment of withholding and/or social security taxes and any similar tax except for immaterial non-compliance.

4.17 Litigation

Except as set forth in Schedule 4.17, there is no Legal Proceeding pending or, to the Knowledge of the Company or the Sellers, alleged or threatened against the Company or any of the Subsidiaries (or to the Knowledge of the Company or the Sellers, pending or threatened, against any of the officers, directors or employees of the Company or any of the Subsidiaries with respect to their business activities on behalf of the Company), or to which the Company or any of the Subsidiaries is otherwise a party before any Governmental Body; nor to the Knowledge of the Company nor the Sellers is there any reasonable basis for any such Legal Proceeding. Except as set forth on Schedule 4.17, neither the Company nor any Subsidiary is subject to any Order, and neither the Company nor any Subsidiary is in breach or violation of any Order. Except as set forth on Schedule 4.17, neither the Company nor any Subsidiary is engaged in any legal action to recover monies due it or for damages sustained by it. There are no Legal Proceedings pending or, to the Knowledge of the Company or the Sellers, threatened against the Company or to which the Company is otherwise a party relating to this Agreement or, any Company Document or the transactions contemplated hereby or thereby.

4.18 Compliance with Laws; Permits

(a) The Company and the Subsidiaries are in compliance in all material respects with all Laws applicable to its business, operations or assets. Neither the Company nor any Subsidiary has received any notice of or been charged with the violation of any Laws. To the Knowledge of the Company or the Sellers, neither the Company nor any Subsidiary is under investigation by any Governmental Body with respect to the violation of any Laws and there are no facts or circumstances which could form the basis for any such violation.

(b) Schedule 4.18 contains a list of all Permits that are required for the operation of the business of the Company and the Subsidiaries as presently conducted and as presently intended to be conducted (“Company Permits”), other than those the failure of which to possess is immaterial, and identifies those Company Permits that have not yet undergone an annual or biennial inspection due in the current year. The Company and the Subsidiaries currently have all Permits that are required for the operation of their respective businesses as presently conducted and as presently intended to be conducted,

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other than those the failure of which to possess is immaterial. Neither the Company nor any Subsidiary is in default or violation, and no event has occurred that, with notice or the lapse of time or both, would constitute a default or violation, in any material respect of any term, condition or provision of any Company Permit, and to the Knowledge of the Company or the Sellers, there are no facts or circumstances which could form the basis for any such default or violation. There are no Legal Proceedings pending or, to the Knowledge of the Company or the Sellers, threatened, relating to the suspension, revocation or modification of any Company Permit other than the required amendments to the Company Permit in connection with the transaction contemplated under this Agreement.

4.19 Environmental Matters

Except as set forth on Schedule 4.19 hereto:

(a) the operations of the Company and each of the Subsidiaries are and have been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining in good standing and complying with all Environmental Permits and no action or proceeding is pending or, to the Knowledge of the Company or the Sellers, threatened to revoke, modify or terminate any such Environmental Permit, and, to the Knowledge of the Company or the Sellers, no facts, circumstances or conditions currently exist that could adversely affect such continued compliance with Environmental Laws and Environmental Permits or require currently unbudgeted capital expenditures to achieve or maintain such continued compliance with Environmental Laws and Environmental Permits;

(b) neither the Company nor any of the Subsidiaries is the subject of any outstanding written Order or Contract with any Governmental Body or Person with respect to (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened Release of a Hazardous Material;

(c) no claim has been made or is pending, or to the Knowledge of the Company or the Sellers, threatened against the Company or any Subsidiary alleging either or both that the Company or any of the Subsidiaries may be in violation of any Environmental Law or Environmental Permit, or may have any liability under any Environmental Law;

(d) to the Knowledge of the Company or the Sellers, no facts, circumstances or conditions exist with respect to the Company or any of the Subsidiaries or any property currently or formerly owned, operated or leased by the Company or any of the Subsidiaries or any property to which the Company or any of the Subsidiaries arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in the Company or any of the Subsidiaries incurring unbudgeted Environmental Costs and Liabilities;

(e) there are no investigations of the business, operations, or currently or, to the Knowledge of the Company or the Sellers, previously owned, operated or leased property of the Company or any of the Subsidiaries pending or, to the Knowledge of the Company

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or the Sellers, threatened which could lead to the imposition of any Environmental Costs and Liabilities or Liens under Environmental Law;

(f) the transactions contemplated hereunder do not require the consent of or filings with any Governmental Body with jurisdiction over the Company or any Subsidiary with respect to environmental matters;

(g) there is not located at any of the properties currently or (while owned, operated or leased by the Company or any Subsidiary) previously owned, operated or leased by the Company or any of the Subsidiaries any (i) underground storage tanks, (ii) landfill, (iii) surface impoundment, (iii) asbestos-containing material or (iv) equipment containing polychlorinated biphenyls; and

(h) the Company has provided to Buyer all environmentally related audits, studies, reports, analyses, and results of investigations that have been performed with respect to the currently or previously owned, leased or operated properties of the Company or any of the Subsidiaries.

4.20 Insurance

The Company and the Subsidiaries have insurance policies in full force and effect for such amounts as are sufficient for all requirements of Law and all agreements to which the Company or any of the Subsidiaries is a party or by which it is bound. Set forth in Schedule 4.20 is a list of all insurance policies and all fidelity bonds held by or applicable to the Company or any of the Subsidiaries setting forth, in respect of each such policy, the policy name, policy number, carrier, term, type and amount of coverage and annual premium, whether the policies may be terminated upon consummation of the transactions contemplated hereby and if and to what extent events being notified to the insurer after the Closing Date are generally excluded from the scope of the respective policy. Except as set forth on Schedule 4.20, no event relating to the Company or any of the Subsidiaries has occurred which could reasonably be expected to result in a retroactive upward adjustment in premiums under any such insurance policies or which could reasonably be expected to result in a prospective upward adjustment in such premiums. Excluding insurance policies that have expired and been replaced in the Ordinary Course of Business, no insurance policy has been cancelled within the last two years and, to the Knowledge of the Company or the Sellers, no threat has been made to cancel any insurance policy of the Company or any of the Subsidiaries during such period. Except as noted on Schedule 4.20, all such insurance will remain in full force and effect immediately following the consummation of the transactions contemplated hereby. No event has occurred, including the failure by the Company or any of the Subsidiaries to give any notice or information or the Company or any of the Subsidiaries giving any inaccurate or erroneous notice or information, which limits or impairs the rights of the Company or any of the Subsidiaries under any such insurance policies.

4.21 Inventories

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The inventories of the Company and the Subsidiaries are in good and marketable condition, and are usable and of a quantity and quality saleable in the Ordinary Course of Business. The inventories of the Company and the Subsidiaries set forth in the Balance Sheet were valued at market and were properly stated therein in accordance with GAAP consistently applied. Adequate reserves have been reflected in the Balance Sheet for obsolete, excess, damaged, slow-moving, or otherwise unusable inventory, which reserves were calculated in a manner consistent with past practice and in accordance with GAAP consistently applied. The inventories of the Company and the Subsidiaries constitute sufficient quantities for the normal operation of business in accordance with past practice.

4.22 Accounts and Notes Receivable and Payable

(a) All accounts and notes receivable of the Company and the Subsidiaries have arisen from bona fide transactions in the Ordinary Course of Business consistent with past practice, are not excessive and are payable on ordinary trade terms. All accounts and notes receivable of the Company and the Subsidiaries reflected on the Balance Sheet are good and collectible at the aggregate recorded amounts thereof, net of any applicable reserve for returns or doubtful accounts reflected thereon, which reserves are adequate and were calculated in a manner consistent with past practice and in accordance with GAAP consistently applied. All accounts and notes receivable arising after the Balance Sheet Date are good and collectible at the aggregate recorded amounts thereof, net of any applicable reserve for returns or doubtful accounts, which reserves are adequate and were calculated in a manner consistent with past practice and in accordance with GAAP consistently applied. None of the accounts or the notes receivable of the Company or any of the Subsidiaries (i) are subject to any setoffs or counterclaims or (ii) represent obligations for goods sold on consignment, on approval or on a sale-or-return basis or subject to any other repurchase or return arrangement.

(b) All accounts payable of the Company and the Subsidiaries reflected in the Balance Sheet or arising after the date thereof are the result of bona fide transactions in the Ordinary Course of Business and have been paid or are not yet due and payable.

4.23 Related Party Transactions

Except otherwise set forth in Schedule 4.23, no employee, officer, director, equityholder, shareholder, partner or member of the Company or any of the Subsidiaries, any member of his or her immediate family or any of their respective Affiliates (“Related Persons”) (i) owes any amount to the Company or any of the Subsidiaries nor does the Company or any of the Subsidiaries owe any amount to, or has the Company or any of the Subsidiaries committed to make any loan or extend or guarantee credit to or for the benefit of, any Related Person, (ii) is involved in any business arrangement or other relationship with the Company or any of the Subsidiaries (whether written or oral), (iii) owns any property or right, tangible or intangible, that is used by the Company or any of the Subsidiaries, (iv) has any claim or cause of action against the Company or any of the Subsidiaries or (v) owns any direct or indirect interest of any kind in, or controls or is a director, officer, employee or partner of, or consultant to, or lender to or borrower from

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or has the right to participate in the profits of, any Person which is a competitor, supplier, customer, landlord, tenant, creditor or debtor of the Company or any Subsidiary.

4.24 Customers and Suppliers

(a) Schedule 4.24 sets forth a list of the twenty (20) largest customers (or end-users) of the products and services provided by the Company and the Subsidiaries and the twenty (20) largest suppliers of the Company and the Subsidiaries, as measured by the RMB amount of purchases therefrom or thereby, during the fiscal year ended December 31, 2008, showing the approximate total sales by the Company and the Subsidiaries to each such customer (or end-user) and the approximate total purchases by the Company and the Subsidiaries from each such supplier, during such period.

(b) For the period commencing on the Balance Sheet Date and ending on the date hereof, no customer (or end-user) or supplier listed on Schedule 4.24 has terminated its relationship with the Company or any of the Subsidiaries (or course of dealing upon which the Company or Subsidiaries have relied) or materially reduced or changed the pricing or other terms of its business with the Company or any of the Subsidiaries and, to the Knowledge of the Company or the Sellers, no customer (or end-user) or supplier listed on Schedule 4.24 has notified the Company or the Subsidiaries that it intends to terminate or materially reduce or change the pricing or other terms of its business with the Company or any of the Subsidiaries (or the course of dealing upon which the Company or the Subsidiaries have relied).

4.25 Product Warranty; Product Liability

(a) Except as set forth on Schedule 4.25, each product manufactured, sold or delivered by the Company or any of the Subsidiaries in conducting its business has been in conformity with all product specifications all express and implied warranties and all applicable Laws. Neither the Company nor any of the Subsidiaries has any liability for replacement or repair of any such products or other damages in connection therewith or any other customer or product obligations not reserved against on the Balance Sheet.

(b) Except for insignificant repairs and maintenances that may occur during the Ordinary Course of Business, neither the Company nor any of the Subsidiaries has committed any act or failed to commit any act, which would result in, and there has been no occurrence which would give rise to or form the basis of, any product liability or liability for breach of warranty (whether covered by insurance or not) on the part of the Company or any of the Subsidiaries with respect to products designed, manufactured, assembled, repaired, maintained, delivered, sold or installed or services rendered by or on behalf of the Company or any of the Subsidiaries.

4.26 Banks; Power of Attorney

Schedule 4.26 contains a complete and correct list of the names and locations of all banks in which Company or any Subsidiary has accounts or safe deposit boxes and the names of all persons authorized to draw thereon or to have access thereto. Except as set forth on

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Schedule 4.26, no person holds a power of attorney to act on behalf of the Company or any Subsidiary.

4.27 No Bribery

None of the Company, any Subsidiary or any Seller nor, to the Knowledge of the Company or the Sellers, any director, officer, employee, or other Person associated with or acting on behalf of any of them, has directly or indirectly violated any provision of PRC Law regarding bribery or similar violations.

4.28 Financial Advisors

Except as set forth on Schedule 4.28, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for the Sellers, the Company or any Subsidiary in connection with the transactions contemplated by this Agreement and no Person is or will be entitled to any fee or commission or like payment in respect thereof for which Buyer could be liable.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to the Sellers that:

5.1 Organization and Good Standing

Buyer is a company duly organized, validly existing and in good standing under the laws of the Singapore and has all requisite corporate power and authority to own, lease and operate properties and carry on its business.

5.2 Authorization of Agreement

Buyer has full corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by Buyer in connection with the consummation of the transactions contemplated hereby and thereby (the “Buyer Documents”), and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by Buyer of this Agreement has been, and on or before Closing each Buyer Document will be, duly authorized by all necessary corporate action on behalf of Buyer. This Agreement has been, and each Buyer Document will be at or prior to the Closing, duly executed and delivered by Buyer and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each Buyer Document when so executed and delivered will constitute, the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its respective terms.

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5.3 Conflicts; Consents of Third Parties

(a) Except as set forth on Schedule 5.3 hereto, none of the execution and delivery by Buyer of this Agreement and of the Buyer Documents, the consummation of the transactions contemplated hereby or thereby, or the compliance by Buyer with any of the provisions hereof or thereof will conflict with, or result in violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under any provision of (i) the articles of association or comparable organizational documents of such Buyer; (ii) any Contract or Permit to which Buyer is a party or by which any of the properties or assets of Buyer is bound; (iii) any Order of any Governmental Body applicable to Buyer or by which any of the properties or assets of Buyer is bound; or (iv) any applicable Law, except in each case where such organizational documents, Contracts, Permits, Orders or Laws are adopted or otherwise take effect after the Closing or where such violation or default arises from actions or omissions by any Person other than Buyer.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of Buyer in connection with the execution and delivery of this Agreement or the Buyer Documents or the compliance by Buyer with any of the provisions hereof or thereof, except for the consents, approvals, permits, licenses expressly set forth in this Agreement.

5.4 Capital Source

The Buyer has sufficient and lawful capital sources to consummate the transaction as contemplated by this Agreement.

5.5 Litigation

There are no Legal Proceedings pending or, to the Knowledge of Buyer, threatened against Buyer or to which Buyer is otherwise a party relating to this Agreement, the Buyer Documents or the transactions contemplated hereby and thereby.

5.6 Financial Advisors

No Person has acted, directly or indirectly, as a broker, finder or financial advisor for Buyer in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.

ARTICLE VI

COVENANTS

6.1 Access to Information; Confidentiality

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The Sellers shall cause the Company to, and the Company shall cause the Subsidiaries to, afford to Buyer and its accountants, counsel, financial advisors and other representatives, and to prospective lenders, placement agents and other financing sources and each of their respective representatives, reasonable access, during normal business hours upon prior notice throughout the period prior to the Closing, to the Company’s and the Subsidiaries’ respective properties and facilities (including all real property and the buildings, structures, fixtures, appurtenances and improvements erected, attached or located thereon), books, financial information (including working papers and data in the possession of the Company’s or the Subsidiaries’ or their respective independent public accountants, internal audit reports, and “management letters” (if any) from such accountants with respect to the Company’s or any of the Subsidiaries’ systems of internal control), Contracts and records of the Company and the Subsidiaries and, during such period, shall promptly furnish such information concerning the businesses, properties and personnel of the Company and the Subsidiaries as Buyer shall reasonably request; provided, however, such investigation shall not unreasonably disrupt the Company’s operations. Prior to the Closing, the Sellers shall cause the Company to keep the Buyer informed as to all material matters involving the operations and businesses of the Company and each of the Subsidiaries. The Sellers shall cause Company to authorize and direct the appropriate directors, managers and employees of each such Subsidiary to have preliminary discussions as to matters involving the operations and business of the Company or such Subsidiary, as the case may be, with representatives of Buyer and its prospective lenders or placement agents and other financial sources.

6.2 Conduct of the Business Pending the Closing

(a) Except as otherwise expressly provided in this Agreement or with the prior written consent of the Buyer, between the date hereof and the date on which the original copy of the amended business license of the Company (indicating that the Buyer is the sole shareholder of the Company) and all of the Company’s official chops, stamps and seals are handed over to the Buyer, the Sellers shall cause the Company to, and the Company shall cause the Subsidiaries to:

(i) conduct the respective businesses of the Company and the Subsidiaries only in the Ordinary Course of Business;

(ii) preserve (A) the present business operations, organization (including officers and employees) and goodwill of the Company and the Subsidiaries and (B) the present relationships with Persons having business dealings with the Company and the Subsidiaries (including customers (or end-users) and suppliers);

(iii) maintain (A) all of the assets and properties of, or used by, the Company and the Subsidiaries in their current condition, ordinary wear and tear excepted, and (B) insurance upon all of the properties and assets of the Company and the Subsidiaries in such amounts and of such kinds comparable to that in effect on the date of this Agreement;

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(iv) (A) maintain the books, accounts and records of the Company and the Subsidiaries in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable using normal procedures and without discounting or accelerating payment of such accounts, and (C) comply with all contractual and other obligations of the Company and the Subsidiaries;

(v) comply with the capital expenditure plan of the Company and the Subsidiaries for 2009 as previously provided to Buyer, including making such capital expenditures in the amounts and at the times set forth in such plan; and

(vi) comply in all material respects with all applicable Laws.

(b) Without limiting the generality of the foregoing, except as otherwise expressly provided in this Agreement or with the prior written consent of Buyer, the Sellers shall cause Company not to, and the Company shall cause the Subsidiaries not to:

(i) declare, set aside, make or pay any dividend or other distribution in respect of the share capital of, or other equity interests or ownership interests in, the Company or any of the Subsidiaries or repurchase, redeem or otherwise acquire any outstanding share capital, equity interests or other securities of, or other ownership interests in, the Company or any of the Subsidiaries;

(ii) transfer, issue, sell, pledge, encumber or dispose of any equity interests, share capital or other securities of, or other ownership interests in, the Company or any of the Subsidiaries or grant options, warrants, calls or other rights to purchase or otherwise acquire equity interests, share capital or other securities of, or other ownership interests in, the Company or any of the Subsidiaries;

(iii) effect any recapitalization, reclassification, share split, combination or like change in the capitalization of the Company or any of the Subsidiaries, or amend the terms of any outstanding securities of the Company or any Subsidiary;

(iv) amend the articles of association or equivalent organizational or governing documents of the Company or any of the Subsidiaries;

(v) (A) increase the salary or other compensation of any director, officer or employee of the Company or any of the Subsidiaries, except for normal year-end increases in the Ordinary Course of Business (B) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any director, officer, employee or consultant, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, employees, agents or representatives of the Company or any of the Subsidiaries or otherwise modify or amend or terminate any such plan or arrangement or (D) enter into any employment, deferred compensation, severance, special pay, consulting, non-competition or similar agreement or

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arrangement with any directors or officers of the Company or any Subsidiary (or amend any such agreement to which the Company or any of the Subsidiaries is a party);

(vi) (A) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any Indebtedness; (B) except in the Ordinary Course of Business, pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness of the Company or any of the Subsidiaries; or (C) modify the terms of any Indebtedness or other Liability of the Company or any Subsidiary;

(vii) subject to any Lien or otherwise encumber or, except for Permitted Exceptions, permit, allow or suffer to be encumbered, any of the properties or assets (whether tangible or intangible) of, or used by, the Company or any of the Subsidiaries;

(viii) acquire any material properties or assets by the Company or any Subsidiary or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material properties or assets of, or used by, the Company and the Subsidiaries, other than in the Ordinary Course of Business;

(ix) enter into or agree to enter into any merger or consolidation by the Company or any Subsidiary with any corporation or other entity, or engage the Company or any Subsidiary in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities, of any other Person by the Company or any Subsidiary;

(x) cancel or compromise any debt or claim or waive or release any material right of the Company or any of the Subsidiaries except in the Ordinary Course of Business;

(xi) enter into any commitment for capital expenditures of the Company and the Subsidiaries in excess of RMB200,000 for any individual commitment and RMB500,000 for all commitments in the aggregate;

(xii) enter into, modify or terminate any labor or collective bargaining agreement of the Company or any of the Subsidiaries or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the Company or any of the Subsidiaries;

(xiii) introduce any material change with respect to the operation of the Company or any of the Subsidiaries, including any material change in the types, nature, composition or quality of its products or services, or, other than in the Ordinary Course of Business, make any change in product specifications or prices or terms of distributions of such products or change its pricing, discount, allowance or return policies or grant any pricing, discount, allowance or return terms for any customer or supplier not in accordance with such policies;

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(xiv) enter into any transaction by the Company or any Subsidiary or enter into, modify or renew any Contract which by reason of its size, nature or otherwise is not in the Ordinary Course of Business of the Company or any Subsidiary;

(xv) except for transfers of cash pursuant to normal cash management practices in the Ordinary Course of Business, make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with any Related Persons of the Company or any Subsidiary;

(xvi) make a change in its accounting or Tax reporting principles, methods or policies of the Company or any Subsidiary;

(xvii) (A) make, change or revoke any Tax election by the Company or any Subsidiary, settle or compromise any Tax claim or liability of the Company or any Subsidiary or enter into a settlement or compromise by the Company or any Subsidiary, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for Tax purposes by the Company or any Subsidiary, or (B) prepare or file any Tax Return (or any amendment thereof) by the Company or any Subsidiary unless such Tax Return shall have been prepared in a manner consistent with past practice and the Company shall have provided Buyer a copy thereof (together with supporting papers) at least three Business Days prior to the due date thereof for Buyer to review and approve (such approval not to be unreasonably withheld or delayed);

(xviii) enter into any Contract, understanding or commitment that restrains, restricts, limits or impedes the ability of the Company or any Subsidiary to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;

(xix) terminate, amend, restate, supplement or waive any rights of the Company or any Subsidiary under any (A) Material Contract, Company Property, Personal Property Lease or Intellectual Property License, other than in the Ordinary Course of Business or (B) Permit;

(xx) settle or compromise any pending or threatened Legal Proceeding or any claim or claims by the Company or any Subsidiary for, or that would result in a loss of revenue of, an amount that could, individually or in the aggregate, reasonably be expected to be greater than RMB 500,000;

(xxi) change or modify the credit, collection or payment policies, procedures or practices of the Company or any Subsidiary, including acceleration of collections or receivables (whether or not past due) or fail to pay or delay payment of payables or other liabilities;

(xxii) take any action that would adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement;

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(xxiii) agree to do anything (A) prohibited by this Section 6.2, (B) that would make any of the representations and warranties of the Sellers in this Agreement or any of the Seller Documents or Company Documents untrue or incorrect in any material respect or could result in any of the conditions to the Closing not being satisfied or (C) that would be reasonably expected to have a Material Adverse Effect; and

(xxiv) make any decision that would cause or otherwise allow any rights in any Intellectual Property to be altered (except for Intellectual Property applications as such are processed in the Ordinary Course of Business), forfeited, lapsed, or revoked.

6.3 Third Party Consents

The Sellers shall cause Company to use, and the Company shall cause the Subsidiaries to use, their commercially reasonable efforts to obtain at the earliest practicable date all consents, waivers and approvals from, and provide all notices to, all Persons that are not a Governmental Body, which consents, waivers, approvals and notices are required to consummate, or in connection with, the transactions contemplated by this Agreement (except for such matters covered by Section 6.4). All such consents, waivers, approvals and notices shall be in writing and in form and substance satisfactory to Buyer, and executed counterparts of such consents, waivers and approvals shall be delivered to Buyer promptly after receipt thereof, and copies of such notices shall be delivered to Buyer promptly after the making thereof. Notwithstanding anything to the contrary in this Agreement, neither Buyer nor any of its Affiliates (which for purposes of this sentence shall include the Company) shall be required to pay any amounts in connection with obtaining any consent, waiver or approval.

6.4 Governmental Consents and Approvals

Each of Buyer, the Sellers shall, and Sellers shall cause the Company to, and the Company shall cause each of the Subsidiaries to, use its commercially reasonable efforts to obtain at the earliest practical date all consents, waivers, approvals, Orders, Permits, authorizations and declarations from, make all filings with, and provide all notices to, all Governmental Bodies which are required to consummate, or are required in connection with, the transactions contemplated by this Agreement, including without limitation to (A) approval by the SCC regarding the equity transfer under this Agreement; (B) registration with the SAIC and receipt of an amended business license in connection with the Company’s conversion to a wholly foreign-owned enterprise by Buyer; (C) approval by SAFE regarding the payment, transfer and conversion of the Purchase Price.

6.5 Further Assurances

Subject to, and not in limitation of, Section 6.4, each of the Sellers and the Buyer shall, and the Sellers shall cause the Company to, use its commercially reasonable efforts to (i) take, or cause to be taken, all actions necessary or appropriate to consummate the transactions contemplated by this Agreement and (ii) cause the fulfillment at the earliest

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practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement. To be specific, the Buyer and Sellers shall use their commercially reasonable efforts to prepare and submit all the application documents required by relevant Government Bodies to consummate the transactions contemplated by this Agreement.

6.6 No Shop

(a) The Sellers shall not and the Sellers shall cause the Company to not, and shall not permit the Subsidiaries or any of the Affiliates, directors, officers, employees, representatives or agents of the Sellers, the Company or any of the Subsidiaries (collectively, the “Representatives”) to, directly or indirectly, (i) discuss, encourage, negotiate, undertake, initiate, authorize, recommend, propose or enter into, whether as the proposed surviving, merged, acquiring or acquired corporation or otherwise, any transaction involving a merger, consolidation, business combination, purchase or disposition of any material amount of the assets of the Company or any of the Subsidiaries or any equity interest or other ownership interests of the Company or any of the Subsidiaries other than the transactions contemplated by this Agreement (an “Acquisition Transaction”), (ii) facilitate, encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an Acquisition Transaction, (iii) furnish or cause to be furnished, to any Person, any information concerning the business, operations, properties or assets of the Company or the Subsidiaries in connection with an Acquisition Transaction, or (iv) otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing.

(b) The Sellers shall, and Sellers shall cause the Company to, notify Buyer orally and in writing promptly (but in no event later than 24 hours) after receipt by any of the Sellers, the Company, the Subsidiaries or any of the Representatives thereof of any proposal or offer from any Person other than Buyer to effect an Acquisition Transaction or any request for non-public information relating to the Company or any of the Subsidiaries or for access to the properties, books or records of the Company or any Subsidiary by any Person other than Buyer. Such notice shall indicate the identity of the Person making the proposal or offer, or intending to make a proposal or offer or requesting non-public information or access to the books and records of the Company, the material terms of any such proposal or offer, or modification or amendment to such proposal or offer and copies of any written proposals or offers or amendments or supplements thereto. The Sellers shall, and Sellers shall cause the Company to, keep Buyer informed, on a current basis, of any material changes in the status and any material changes or modifications in the material terms of any such proposal, offer, indication or request.

(c) The Sellers shall, and Sellers shall cause the Company to (and the Sellers and the Company shall cause their Representatives to, and the Company shall cause the Subsidiaries and their Representatives to), immediately cease and cause to be terminated any existing discussions or negotiations with any Persons (other than Buyer) conducted heretofore with respect to any Acquisition Transaction. The Sellers shall not, and shall

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cause the Company not to (and the Company agrees to cause the Subsidiaries not to), release any third party from the confidentiality and standstill provisions of any agreement to which the Company or any of the Subsidiaries is a party.

6.7 Non-Competition; Non-Solicitation; Confidentiality

(a) For a period of (5) years from and after the Closing Date, the Sellers shall not, and shall cause their Affiliates not to, directly or indirectly, own, manage, engage in, operate, control, work for, consult with, render services for, do business with, maintain any interest in (proprietary, financial or otherwise) or participate in the ownership, management, operation or control of, any business, whether in corporate, proprietorship or partnership form or otherwise, engaged in the manufacturing, marketing, research and development of diagnosis equipment and reagents with respect to (i) prenatal, neonatal and maternal testing; and (ii) infectious diseases, Hepatitis B and other related diseases or that otherwise competes with the Company or any of the Subsidiaries (a “Restricted Business”); provided, however, that the restrictions contained in this Section 6.7(a) shall not restrict the acquisition by the Sellers, directly or indirectly, of less than 1% of the outstanding share capital of any publicly traded company engaged in a Restricted Business.

(b) For a period of (5) years from and after the Closing Date, the Sellers shall not, and shall cause their directors, officers, employees and Affiliates not to, directly or indirectly: (i) cause, solicit, induce or encourage any employees of the Company or the Subsidiaries to leave such employment or hire, employ or otherwise engage any such individual; or (ii) cause, induce or encourage any material actual or prospective client, customer, end-user, supplier, or licensor of the Company or any of the Subsidiaries (including any existing or former customer or end-user of the Company or the Subsidiaries and any Person that becomes a client, customer or end-user of the Company or any of the Subsidiaries after the Closing) or any other Person who has a material business relationship or course of dealing with the Company or any of the Subsidiaries or its business, to terminate or modify to the detriment of the Company any such actual or prospective relationship or course of dealing.

(c) From and after the Closing Date, the Sellers shall not and shall cause their directors, officers, employees and Affiliates not to, directly or indirectly, disclose, reveal, divulge or communicate to any Person other than authorized officers, directors and employees of Buyer or use or otherwise exploit for its own benefit or for the benefit of anyone other than Buyer, any Confidential Information (as defined below). The Sellers shall not have any obligation to keep confidential (or cause its officers, directors or Affiliates to keep confidential) any Confidential Information if and to the extent disclosure thereof is specifically required by applicable Law; provided, however, that in the event disclosure is required by applicable Law, the Sellers shall, to the extent reasonably possible, provide Buyer with prompt notice of such requirement prior to making any disclosure so that Buyer may seek an appropriate protective order. For purposes of this Section 6.7(c), “Confidential Information” means any information with respect to the Company or any of the Subsidiaries, including methods of operation, customer or end-user lists, products, prices, fees, costs, Technology, inventions, Trade

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Secrets, know-how, Software, marketing methods, plans, personnel, suppliers, competitors, markets or other specialized information or proprietary matters. “Confidential Information” does not include, and there shall be no obligation hereunder with respect to, information that (i) is generally available to the public on the date of this Agreement or (ii) becomes generally available to the public other than as a result of a disclosure not otherwise permissible hereunder.

(d) The covenants and undertakings contained in this Section 6.7 relate to matters which are of a special, unique and extraordinary character and a violation of any of the terms of this Section 6.7 will cause irreparable injury to Buyer, the amount of which will be impossible to estimate or determine and which cannot be adequately compensated. Accordingly, the remedy at law for any breach of this Section 6.7 will be inadequate. Therefore, Buyer will be entitled to a temporary and permanent injunction, restraining order or other equitable relief from any court of competent jurisdiction in the event of any breach of this Section 6.7. The rights and remedies provided by this Section 6.7 are cumulative and in addition to any other rights and remedies that Buyer may have hereunder or at law or in equity. In the event that Buyer were to seek damages for any breach of this Section 6.7 and the claim of breach were finally supported by the competent arbitration agency or court, the liquidated damages entitled to Buyer shall in any way be no less than RMB 10,000,000 and the Sellers hereby confirm that this minimum liquidated damages for the breach of this Section 6.7 is fair and reasonable considering the special, unique and extraordinary character of such breach. The portion of the consideration delivered to the Sellers hereunder which is allocated by the parties to the foregoing covenant shall not be considered a measure of or limit on such damages. For the avoidance of doubt, the aforesaid liquidated damages are only applicable to the Seller(s) having breached the provisions of this Section 6.7, and the other Seller(s) shall have no obligation to make compensation for such breach.

(e) The parties hereto agree that, if any arbitration agency or court of competent jurisdiction determines that a specified time period, a specified geographical area, a specified business limitation or any other relevant feature of this Section 6.7 is unreasonable, arbitrary or against public policy, then a lesser period of time, geographical area, business limitation or other relevant feature that is determined by such court to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.

(f) The Sellers agree that the non-competition, non-solicitation and confidentiality obligations under this Section 6.7 is a fair and reasonable commercial arrangement between the Sellers and Buyer whose construction, interpretation, validity and enforcement shall be independent from and not in any way be affected by or have impact on the Key Management Employment Contracts, which will be entered into by the Company and relevant Employees after the Closing, no matter whether or not such Employees are concurrently acting as the Sellers hereto.

6.8 Preservation of Records

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Subject to any retention requirements relating to the preservation of Tax records, the Sellers agree that they shall (and shall cause the Company and the Subsidiaries to) preserve and keep the records held by them relating to the respective businesses of the Company and the Subsidiaries for a period of seven years from the Closing Date and shall make such records and personnel available to Buyer as may be reasonably required by Buyer in connection with, among other things, any insurance claims by, legal proceedings against or governmental investigations of the Sellers, the Company, the Subsidiaries or any of their Affiliates or in order to enable Buyer to comply with their respective obligations under this Agreement and each other agreement, document or instrument contemplated hereby or thereby. In the event a Seller wish to destroy (or permit to be destroyed) such records after that time, he/she shall first give 90 days prior written notice to Buyer and Buyer shall have the right at its option and expense, upon prior written notice given to such Seller within that 90 day period, to take possession of the records within 180 days after the date of such notice.

6.9 Publicity

(a) The Buyer, Sellers shall not, and the Sellers shall cause the Company and its Subsidiaries not, issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the other party hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole judgment of Buyer, disclosure is otherwise required by applicable Law or by the applicable rules of any stock exchange on which Buyer or its Affiliates lists securities, provided that, to the extent required by applicable Law, the party intending to make such release shall use its commercially reasonable efforts consistent with such applicable Law to consult with the other party with respect to the text thereof.

(b) Each of Buyer, the Sellers agree, and the Sellers shall cause the Company and its Subsidiaries to agree, that the terms of this Agreement shall not be disclosed or otherwise made available to the public and that copies of this Agreement shall not be publicly filed or otherwise made available to the public, except where such disclosure, availability or filing is required by applicable Law and only to the extent required by such Law. In the event that such disclosure, availability or filing is required by applicable Law, each of Buyer and the Sellers (as applicable) agrees to, and the Sellers shall cause the Company and its Subsidiaries to agree to, use its commercially reasonable efforts to obtain “confidential treatment” of this Agreement with the securities regulatory authority (or the equivalent treatment by any other Governmental Body) and to redact such terms of this Agreement the other party shall request.

(c) Except as consented by the Sellers, before making the payments provided in Section 2.3, the Buyer shall keep confidential any confidential information of the Company. In the event that this Agreement is terminated or dissolved and the Equity Interests are returned to the Sellers pursuant to Section 9.4,, the Buyer shall also undertake the obligation of confidentiality under this Section 6.9(c) for a period of two (2) years.

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6.10 Use of Name

The Sellers hereby agree that upon the Closing, Buyer and the Company shall have the sole right to the use of the name “Sym-Bio( )” or similar names and any service marks, trademarks, trade names, fictitious names, identifying symbols, logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, or otherwise used in the business of the Company and the Subsidiaries, including but not limited to any name or mark confusingly similar thereto and the Marks listed on Schedule 4.13(a) (collectively, the “Company Marks”). The Sellers shall not, and shall not permit their respective Affiliates to, use such name or any variation or simulation thereof or any of the Company Marks. Each of the Sellers shall, and shall cause each its Affiliates to, immediately after the Closing, cease to hold itself out as having any affiliation with the Company or any of its Affiliates. In furtherance thereof, as promptly as practicable but in no event later than 90 days following the Closing Date, the Sellers shall remove, strike over or otherwise obliterate all Company Marks from all materials held by, or under the control of, the Sellers and their post-closing Affiliates, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, computer software and other materials. Further, at, or as soon as legally practicable after, the Closing (but in any event within ten days after the Closing Date), each of the Sellers shall, and shall cause its respective Affiliates to, remove any Company Mark from its legal name by appropriate legal proceedings in the jurisdiction of its organization and in each jurisdiction where such entity has registered to do business.

6.11 Environmental Matters

(a) The Sellers shall cause the Company to permit Buyer and Buyer’s environmental consultant, to conduct such investigations of the environmental conditions of any real property operated or leased by or for the Company or any Subsidiary and the operations conducted thereat (subject to any limitations contained in valid, previously executed leases as Buyer, in its sole discretion, shall deem necessary or prudent) (“Buyer’s Environmental Assessment”). Any Environmental Assessment performed by Buyer shall be conducted by a qualified environmental consulting firm, possessing reasonable levels of insurance, in compliance with applicable Laws and in a manner that minimizes the disruption of the operations of the Company.

(b) The Sellers shall cause the Company to promptly file all materials required by Environmental Laws as a result of or in furtherance of the transaction contemplated hereunder and all requests required or necessary for the transfer or re-issuance of Environmental Permits required to conduct the Company’s business. Buyer shall cooperate in all reasonable respects with the Company with respect to such filings.

6.12 Related-Party Transactions with Non-Management Affiliates

On or prior to the Closing Date, the Sellers shall cause the Company and the Subsidiaries to (a) terminate all Contracts with any of the Sellers or their respective Affiliates (other than (i) those Contracts set forth on Schedule 6.12 and (ii) Contracts between the Company and the Subsidiaries, Contracts between the Company and the Subsidiaries and

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their respective officers and employees and Contracts the continuation of which Buyer has approved in writing) and (b) deliver releases executed by such Affiliates with whom the Company has terminated such Contracts pursuant to this Section 6.12 providing that no further payments are due, or may become due, under or in respect of any such terminated Contacts; provided that in no event shall the Company or any of the Subsidiaries pay any fee or otherwise incur any expense or financial exposure with respect to any such termination or release.

6.13 Monthly Financial Statements

As soon as reasonably practicable, but in no event later than 10 days after the end of each calendar month during the period from the date hereof to the Closing, the Sellers shall cause the Company to provide Buyer with (i) unaudited monthly financial statements and (ii) operating or management reports (such reports to be in the form prepared by the Company in the Ordinary Course of Business) of the Company for such preceding month. As soon as reasonably practicable, but in no event later than 10 days after the end of each calendar month, during the period from the date hereof to the Closing, the Sellers shall cause the Company to provide Buyer with (i) unaudited monthly financial statements and (ii) operating or management reports (such reports to be in the form prepared by the Company and the Subsidiaries in the Ordinary Course of Business) of each of the Subsidiaries for which financial statements are prepared (to the extent the same are prepared in the Ordinary Course of Business) for such preceding month.

6.14 Fees and Expenses

At or prior to the Closing, the Sellers shall cause the Company to pay and discharge the unpaid balance of all Company Transaction Expenses as of the close of business on the day immediately preceding the Closing.

6.15 Notification of Certain Matters

The Sellers shall give notice to Buyer and Buyer shall give notice to the Sellers, as promptly as reasonably practicable upon becoming aware of (a) any fact, change, condition, circumstance, event, occurrence or non-occurrence that has caused or is reasonably likely to cause any representation or warranty in this Agreement made by it to be untrue or inaccurate in any respect at any time after the date hereof and prior to the Closing, (b) any material failure on its part to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder or (c) the institution of or the threat of institution of any Legal Proceeding against any of the Sellers, the Company or any of the Subsidiaries related to this Agreement or the transactions contemplated hereby; provided that the delivery of any notice pursuant to this Section 6.15 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice, or the representations or warranties of, or the conditions to the obligations of, the parties hereto.

6.16 Debt

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No later than the third Business Day prior to the Closing Date, the Sellers shall cause the Company to provide Buyer with (i) a certificate of the Company setting forth an estimate of the balance of all Indebtedness of the Company and the Subsidiaries as of the close of business on the day immediately preceding the Closing Date and (ii) (if reasonably required by the Buyer and as practically as possible) customary pay-off letters from all holders of Indebtedness to be repaid as of or prior to the Closing. The Sellers shall cause the Company to also make arrangements reasonably satisfactory to Buyer for such holders to provide to Buyer recordable form mortgage and lien releases, canceled notes and other documents reasonably requested by Buyer prior to the Closing such that all Liens on the assets or properties of the Company or any of the Subsidiaries that are not Permitted Exceptions or as set forth in Schedule 4.9(i) shall be satisfied, terminated and discharged on or prior to the Closing Date. On the Closing Date prior to the Closing, the Sellers shall cause the Company to deliver to Buyer a certificate of the Company setting forth all Indebtedness of the Company and the Subsidiaries as of the close of business on the day immediately preceding the Closing Date.

6.17 Resignation of Directors

Seller shall cause each of the directors of the Company and the Subsidiaries set forth on Schedule 6.17 to submit a letter of resignation effective on or before the Closing Date.

ARTICLE VII

CONDITIONS TO CLOSING

7.1 Conditions Precedent to Obligations of Buyer

The obligation of Buyer to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions precedent (any or all of which may be waived by Buyer in whole or in part to the extent permitted by applicable Law):

(a) the representations and warranties of the Sellers shall be true and correct as of the date of this Agreement and as of the Closing Date;

(b) the Sellers shall have performed and complied in all material respects with all obligations and agreements required in this Agreement to be performed or complied with by them on or prior to the Closing Date;

(c) there shall not have been or occurred any event, change, occurrence or circumstance that, individually or in the aggregate with any such events, changes, occurrences or circumstances, has had or could reasonably be expected to have a Material Adverse Effect since the Balance Sheet Date;

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(d) no Legal Proceedings shall have been instituted or threatened or claim or demand made against the Sellers, the Company or any of the Subsidiaries, or Buyer, seeking to restrain or prohibit, or to obtain substantial damages with respect to, the consummation of the transactions contemplated hereby, and there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

(e) Buyer shall have received a certificate signed by each Seller and by each of the Chief Executive Officer and Chief Financial Officer (or comparable officers) of the Company, each in form and substance reasonably satisfactory to Buyer, dated the Closing Date, to the effect that each of the conditions specified above in Sections 7.1(a)-(d) have been satisfied in all respects;

(f) the Sellers, the Company or the Subsidiaries shall have obtained or made any other consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Body required to be obtained or made by it in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby;

(g) any Environmental Assessment performed by Buyer at the properties shall not have revealed any circumstances that could reasonably be expected to result in (1) the criminal prosecution of the Company or any Subsidiary or any director, officer or employee of the Company or any Subsidiary under Environmental Laws, (2) any suspension or closure of operations at the Company’s or any Subsidiary’s properties or facilities or the revocation or termination of any Environmental Permits or (3) any Environmental Costs and Liabilities that, individually or in the aggregate, will or could reasonably be expected to result in a Material Adverse Effect;

(h) All of the Key Management shall be active and employed by the Company in the same positions as such Key Management held as of the Closing Date, unless otherwise agreed to with the Buyer;

(i) the Company shall have obtained all Permits (including Environmental Permits) required under Law (including Environmental Laws) for Buyer to conduct the operations of the Company’s business as of the Closing Date; and

(j) Buyer shall have received the items listed in Sections 2.5.

7.2 Conditions Precedent to Obligations of the Sellers

The obligations of the Sellers to consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions precedent (any or all of which may be waived by the Sellers in whole or in part to the extent permitted by applicable Law):

(a) the representations and warranties of Buyer set forth in this Agreement qualified as to materially shall be true and correct, and those not so qualified shall be true and correct in all material respects, in each case, as of the date of this Agreement and as of the

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Closing as though made at and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materially shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date);

(b) Buyer shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by Buyer on or prior to the Closing Date;

(c) there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

(d) Buyer shall have obtained or made any consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Body required to be obtained or made by it in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby; and

(e) Buyer and the Escrow Agent shall have entered into and executed the Escrow Agreement substantially in the form of Exhibit D.

ARTICLE VIII

INDEMNIFICATION

8.1 Survival of Representations and Warranties

The representations and warranties of the parties contained in this Agreement, any certificate delivered pursuant hereto or any Seller Document, Company Document or Buyer Document shall survive the Closing through and including the second anniversary of the Closing Date; provided, however, that the representations and warranties (a) of the Sellers set forth in Sections 3.1 (Organization and Good Standing), 3.2 (Authorization of Agreement), 3.4 (Ownership and Transfer of Equity Interests), 3.6 (Financial Advisors), 4.1 (Organization and Good Standing), 4.2 (Authorization of Agreement), 4.4 (Capitalization), 4.5 (Subsidiary) and 4.28 (Financial Advisors), shall survive the Closing indefinitely, (b) of the Sellers set forth in Sections 4.10 (Taxes), 4.15 (Employee Benefit Plans) and 4.19 (Environmental Matters) shall survive the Closing until 90 days following the expiration of the applicable statute of limitations with respect to the particular matter that is the subject matter thereof and (c) of Buyer set forth in Sections 5.1 (Organization and Good Standing), 5.2 (Authorization of Agreement) and 5.6 (Financial Advisors) shall survive the Closing indefinitely (in each case, the “Survival Period”); provided, however, that any obligations under Sections 8.2(a)(i) and 8.2(b)(i) shall not terminate with respect to any Losses as to which the Person to be indemnified shall have given notice (stating in reasonable detail the basis of the claim for

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indemnification) to the indemnifying party in accordance with Section 8.3(a) before the termination of the applicable Survival Period.

8.2 Indemnification

(a) Subject to Sections 8.1, 8.3 and 8.4 hereof, the Sellers hereby agree, jointly and severally, to indemnify and hold Buyer, the Company, and their respective directors, officers, employees, Affiliates, equityholders, agents, attorneys, representatives, successors and assigns (if applicable according to law) (collectively, the “Buyer Indemnified Parties”) harmless from and against, and pay to the applicable Buyer Indemnified Parties the amount of, any and all losses, liabilities, claims, obligations, deficiencies, demands, judgments, damages (including incidental and consequential damages), interest, fines, penalties, claims, suits, actions, causes of action, assessments, awards, costs and expenses (including costs of investigation and defense and attorneys’ and other professionals’ fees), or any diminution in value, whether or not involving a third party claim (individually, a “Loss” and, collectively, “Losses”):

(i) based upon, attributable to or resulting from the failure of any of the representations or warranties made by the Sellers in this Agreement or in any Seller Document or Company Document to be true and correct in all respects at and as of the date hereof and at and as of the Closing Date;

(ii) based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of the Sellers or (prior to the Closing) the Company under this Agreement or any Seller Document or Company Document;

(iii) imposed under or pursuant to any Environmental Laws (including any loss of use of Company Property or any tangible personal property of the Company or any of the Subsidiaries) arising from or related to any condition, act or omission by the Company or any Subsidiary or any predecessor thereof or related to the operations of the Company or any Subsidiary or any predecessor thereof at any real property currently or formerly operated or leased by the Company or any Subsidiary or any predecessor thereof, whether known or unknown, accrued or contingent, to the extent existing on or prior to the Closing Date, including any Environmental Costs and Liabilities and any liabilities imposed pursuant to any Law associated with a Release of Hazardous Materials other than Losses caused resulting solely from any changes in Environmental Laws following the Closing Date;

(iv) based on or attributable to (A) any employment-related liability with respect to the employment between the Company or any of its Subsidiary and Employees or arising from the termination of such employment on or prior to the Closing Date (including any workforce restructuring Liabilities) and (B) any liability relating to, arising under any Company Benefit Plans or otherwise;

(v) arising from or related to any fees, commissions, or like payments by any Person having acted or claiming to have acted, directly or indirectly, as a broker,

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finder or financial advisor for the Sellers or the Company or the Subsidiaries in connection with the transactions contemplated by this Agreement.

(b) Subject to Sections 8.1 8.3, and 8.4, the Buyer hereby agrees to indemnify and hold the Sellers and their respective Affiliates, equityholders, members, shareholders, agents, attorneys, representatives, successors and permitted assigns (collectively, the “Seller Indemnified Parties”) harmless from and against, and pay to the applicable Seller Indemnified Parties the amount of any and all Losses:

(i) based upon, attributable to or resulting from the failure of any of the representations or warranties made by Buyer in this Agreement or in any Buyer Document to be true and correct in all respects at the date hereof and as of the Closing Date; and

(ii) based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Buyer under this Agreement or any Buyer Document.

8.3 Indemnification Procedures

(a) A claim for indemnification for any matter not involving a third party claim may be asserted by notice to the party from whom indemnification is sought; provided, however, that failure to so notify the indemnifying party shall not preclude the indemnified party from any indemnification which it may claim in accordance with this Article VIII.

(b) In the event that any Legal Proceedings shall be instituted or that any claim or demand shall be asserted by any third party in respect of which indemnification may be sought under Section 8.2 hereof (regardless of the limitations set forth in Section 8.4) (a “Third Party Claim”), the indemnified party shall promptly cause written notice of the assertion of any Third Party Claim of which it has knowledge that is covered by this indemnity to be forwarded to the indemnifying party.

Subject to the provisions of this Section 8.3, within ten (10) days after Buyer has informed the Sellers the Third Party Claim, the Sellers shall recommend counsel, with the consent of Buyer, representing the Company to defend against, negotiate, settle or otherwise deal with any Third Party Claim which relates to any Losses indemnified against hereunder. If Buyer elects in its sole discretion to allow the Sellers, at their request, to defend against, negotiate, settle or otherwise deal with any Third Party Claim which relates to any Losses indemnified by them hereunder, the Sellers must conduct the defense of the Third Party Claim actively and diligently thereafter in order to preserve their rights in this regard. If the Sellers fail to recommend a counsel in the above period or to obtain consent from Buyer with respect to choice of counsel, Buyer shall have the right to select a counsel as its representative to deal with the Third Party Claim. If the indemnified party defends any Third Party Claim, then the indemnifying party shall reimburse the indemnified party for the expenses of defending such Third Party Claim upon submission of periodic bills. If the indemnifying party shall assume the defense of

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any Third Party Claim pursuant to the terms and conditions hereof, the indemnified party may participate, at his or its own expense, in the defense of such Third Party Claim.

The parties hereto agree to provide reasonable access to the other to such documents and information as may be reasonably requested in connection with the defense, negotiation or settlement of any such Third Party Claim. Notwithstanding anything in this Section 8.3 to the contrary, neither the indemnifying party nor the indemnified party shall, without the written consent of the other party, settle or compromise any Third Party Claim or permit a default or consent to entry of any judgment unless the claimant or claimants and such party provide to such other party an unqualified release from all liability in respect of the Third Party Claim. If the indemnifying party makes any payment on any Third Party Claim, the indemnifying party shall be subrogated, to the extent of such payment, to all rights and remedies of the indemnified party to any insurance benefits or other claims of the indemnified party with respect to such Third Party Claim.

(c) Any indemnification amount shall be agreed by the Parties through consultation. If such consultation fails, it shall be submitted to arbitration according to Section 10.4 herein.

8.4 Limitations on Indemnification for Breaches of Representations and Warranties

(a) An indemnifying party shall not have any liability under Section 8.2(a)(i) or Section 8.2(b)(i) hereof unless the aggregate amount of Losses incurred by the indemnified parties and indemnifiable thereunder based upon, attributable to or resulting from the failure of any of the representations or warranties to be true and correct exceeds RMB200,000 (the “Basket”) and, in such event, the indemnifying party shall be required to pay the entire amount of all such Losses; provided that the Basket limitation shall not apply to Losses related to the failure to be true and correct of any of the representations and warranties set forth in Sections 3.1 (Organization and Good Standing), 3.2 (Authorization of Agreement), 3.4 (Ownership and Transfer of Equity Interests), 3.6 (Financial Advisors), 4.1 (Organization and Good Standing), 4.2 (Authorization of Agreement), 4.4 (Capitalization), 4.5 (Subsidiaries), 4.10 (Taxes), 4.15 (Employee Benefit Plans), 4.19 (Environmental Matters) and 4.28 (Financial Advisors), and 5.1 (Organization and Good Standing), 5.2 (Authorization of Agreement) and 5.6 (Financial Advisors) hereof.

(b) Neither the Sellers nor Buyer shall be required to indemnify any Person under Section 8.2(a)(i) or 8.2(b)(i) for an aggregate amount of Losses exceeding RMB200,000,000 (the “Cap”) in connection with Losses related to the failure to be true and correct of any of the representations or warranties of the Sellers or Buyer in Articles III, IV and V, respectively; provided that there shall be no Cap with respect to Losses related to the failure to be true and correct of any of the representations or warranties contained in Sections 3.1 (Organization and Good Standing), 3.2 (Authorization of Agreement), 3.4 (Ownership and Transfer of Equity Interests), 3.6 (Financial Advisors), 4.1 (Organization and Good Standing), 4.2 (Authorization of Agreement), 4.4 (Capitalization), 4.5 (Subsidiaries), 4.7 (Ownership and Transfer of Equity Interests), 4.10 (Taxes), 4.15 (Employee Benefit Plans), 4.19 (Environmental

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Matters) and 4.28 (Financial Advisors), and 5.1 (Organization and Good Standing), 5.2 (Authorization of Agreement) and 5.6 (Financial Advisors) of this Agreement.

(c) For purposes of determining the failure of any representations or warranties to be true and correct, the breach of any covenants and agreements, and calculating Losses hereunder, any materiality or Material Adverse Effect qualifications in the representations, warranties, covenants and agreements shall be disregarded.

(d) The Sellers shall have no right of contribution or other recourse against the Company or the Subsidiaries or their respective directors, officers, employees, Affiliates, agents, attorneys, representatives, assigns or successors for any Claims asserted by Buyer Indemnified Parties.

8.5 Indemnification in Relation to Final Closing Net Assets

(a) Closing Net Assets Statement.

The Sellers and Buyer agree that the estimated consolidated net assets of the Company and its Subsidiaries as of the Closing Date is RMB 82,662,000 (“Estimated Closing Net Assets”) and further agree that Buyer will true up the Estimated Closing Net Assets within 60 days after the Closing, as such, Buyer shall deliver to the Seller Representative a statement reflecting final consolidated net assets of the Company and its Subsidiaries as of the Closing Date (“Final Closing Net Assets Statement”). The Final Closing Net Asset Statement shall be prepared in a manner using the same accounting methods, practices, principals, policies and procedures, with consistent classifications, judgments and valuations, estimation and accruals methodologies as used in the Reference Balance Sheet set forth in Exhibit O.

(b) Acceptance of Statements; Dispute Procedures.

The Final Closing Net Assets Statement delivered by Buyer to the Seller Representative shall be conclusive and binding upon the parties unless the Seller Representative, within 30 days after delivery to the Seller Representative of the Final Closing Net Assets Statement, notifies the Buyer in writing that the Seller Representative disputes any of the amounts set forth therein, specifying the nature of the dispute and the basis therefor. The parties shall in good faith attempt to resolve any dispute and, if the parties so resolve all disputes, the Final Closing Net Assets Statement, as amended to the extent necessary to reflect the resolution of the dispute, shall be conclusive and binding on the parties. If the parties do not reach agreement in resolving the dispute within 20 days after notice is given by the Seller Representative to Buyer pursuant to the second preceding sentence, the parties shall submit the dispute to the Shanghai office of a mutually satisfactory internationally recognized independent accounting (the “Arbiter”) for resolution. If the parties cannot agree on the selection of a partner at an independent accounting firm to act as Arbiter, the parties shall request the Arbitration Agency (defined in Section 10.4 hereof) to appoint such an accounting firm, and such

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appointment shall be conclusive and binding on the parties. Promptly, but no later than 20 days after acceptance of his or her appointment as Arbiter, the Arbiter shall determine (it being understood that in making such determination, the Arbiter shall be functioning as an accounting expert and not as an arbitrator), based solely on written submissions by Buyer and the Seller Representative, and not by independent review, only those issues in dispute and shall render a written report as to the resolution of the dispute and the resulting computation of the Final Closing Net Assets Statement which shall be conclusive and binding on the parties. All proceedings conducted by the Arbiter shall take place in Shanghai. In resolving any disputed item, the Arbiter (x) shall be bound by the provisions of this Section 8.5 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either party or less than the smallest value for such items claimed by either party. The fees, costs and expenses of the Arbiter shall be allocated to and borne by Buyer and the Sellers based on the inverse of the percentage that the Arbiter’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Arbiter. For example, if the items in dispute total in amount to RMB10,000 and the Arbiter awards RMB6,000 in favor of the Sellers’ position, 60% of the costs of its review would be borne by Buyer and 40% of the costs would be borne by the Sellers.

(c) Indemnification.

Upon final determination of the Final Closing Net Assets Statement as provided in Section 8.5(b) above, (A) if the Final Closing Net Assets is greater than the Estimated Closing Net Assets, and such difference is more than or equals to RMB750,000, then the Buyer shall pay to Sellers the amount of such difference no later than five business days after such final determination, or (B) if the Final Closing Net Assets is less than the Estimated Closing Net Assets, and such difference is more than or equals to RMB750,000, then the Sellers shall pay to Buyer the amount of such difference no later than five business days after such final determination. To the avoidance of doubt, if the difference between the finally determined Final Closing Net Assets and the Estimated Closing Net Assets is less than RMB750,000, then such difference shall be disregarded and neither party shall indemnify the other party.

8.6 Tax Matters

(a) Tax Indemnification. The Sellers hereby agree, jointly and severally, to be liable for and to indemnify and hold Buyer Indemnified Parties harmless from and against, and pay to Buyer Indemnified Parties the amount of any and all Losses in respect of (i) all Taxes of the Company and the Subsidiaries (or any predecessor thereof) for any taxable period ending on or before the Closing Date, (ii) the failure of any of the representations and warranties contained in Section 4.10 hereto to be true and correct in all respects (determined without regard to any qualification related to materiality contained therein) or the failure to perform any covenant contained in this Agreement with respect to Taxes,

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and (iii) any failure by the Sellers to timely pay any and all Taxes required to be borne by the Sellers pursuant to Section 8.6(d).

(b) Filing of Tax Returns; Payment of Taxes.

(i) The Sellers shall cause the Company and the Subsidiaries to timely file all Tax Returns required to be filed by it on or prior to the Closing Date and shall pay or cause to be paid all Taxes shown due thereon. All such Tax Returns shall be prepared in a manner consistent with prior practice. The Sellers shall cause the Company and the Subsidiaries to provide Buyer with copies of such completed Tax Returns promptly prior to the due date for filing thereof, along with supporting workpapers, for Buyer’s review and approval.

(ii) Following the Closing, Buyer shall cause to be timely filed all Tax Returns required to be filed by the Company after the Closing Date and, subject to the rights to payment from the Sellers under Section 8.6(b)(iii) below, pay or cause to be paid all Taxes shown due thereon.

(iii) Not later than ten (10) days prior to the due date for the payment of Taxes on any Tax Returns which Buyer has the responsibility to cause to be filed pursuant to Section 8.6(b)(ii), the Sellers shall pay to Buyer the amount of Taxes owed by the Sellers pursuant to the provisions of Section 8.6(a). No payment pursuant to this Section 8.6(b)(iii) shall excuse the Sellers from its indemnification obligations pursuant to Section 8.6(a) if the amount of Taxes as ultimately determined (on audit or otherwise) for the periods covered by such Tax Returns exceeds the amount of the Sellers’ payment under this Section 8.6(b)(iii).

(c) Tax Audits.

(i) If notice of any Legal Proceeding with respect to Taxes of the Company (a “Tax Claim”) shall be received by either party for which the other party may reasonably be expected to be liable pursuant to Section 8.6(a), the notified party shall notify such other party in writing of such Tax Claim; provided, however, that the failure of the notified party to give the other party notice as provided herein shall not relieve such failing party of its obligations under this Section 8.6 except to the extent that the other party is actually and materially prejudiced thereby.

(ii) Buyer shall have the right, at the expense of the Sellers to the extent such Tax Claim is subject to indemnification by the Sellers pursuant to Section 8.6(a) hereof, to represent the interests of the Company in any Tax Claim; provided, that with respect to a Tax Claim relating exclusively to taxable periods ending on or before the Closing Date, Buyer shall not settle such claim without the consent of the Sellers, which consent shall not be unreasonably withheld.

(d) Transfer Taxes. The parties hereto shall, according to law, be liable for and pay all their respective sales, use, stamp, documentary, filing, recording, transfer or similar fees or taxes or governmental charges as levied by any Governmental Body in connection

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with the transactions contemplated by this Agreement. If there is no relevant provision under laws, the Sellers and the Buyer shall each pay 50%.

(e) Disputes. Any dispute as to any matter covered hereby shall be resolved by an independent accounting firm mutually acceptable to the Sellers and Buyer. The fees and expenses of such accounting firm shall be borne equally by the Sellers, on the one hand, and Buyer on the other. If any dispute with respect to a Tax Return is not resolved prior to the due date of such Tax Return, such Tax Return shall be filed in the manner that the party responsible for preparing such Tax Return deems correct.

(f) Time Limits. Buyer’s claim for indemnity under this Section 8.6 may be made at any time prior to sixty (60) days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period (including all periods of extension, whether automatic or permissive).

(g) Exclusivity. The indemnification provided for in this Section 8.6 shall be the sole remedy for any claim in respect of Taxes, including any claim arising out of or relating to a breach of Section 4.10 herein. In the event of a conflict between the provisions of this Section 8.6, on the one hand, and the provisions of Sections 8.1 through 8.4, on the other, the provisions of this Section 8.6 shall control.

8.7 Indemnity Payments

Any payment to be made by the Sellers to Buyer pursuant to the indemnification set forth in this Article VIII will first be made as a payment from the Escrow Account in accordance with the terms of the Escrow Agreement. Any payment to be made by Buyer to the Sellers pursuant to the indemnification set forth in this Article VIII will be paid to the bank accounts designated by such Sellers and if any such payment is delayed, Sellers shall have the right to seek such payment from the Company.

8.8 Tax Treatment of Indemnity Payments

If any indemnification payment under Article VIII is determined to be taxable to the party receiving such payment by any Taxing Authority, the paying party shall also indemnify the party receiving such payment for any Taxes incurred by reason of the receipt of such payment and any Losses incurred by the party receiving such payment in connection with such Taxes (or any asserted deficiency, claim, demand, action, suit, proceeding, judgment or assessment, including the defense or settlement thereof, relating to such Taxes).

ARTICLE IX

TERMINATION

9.1 Termination of Agreement

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This Agreement may be terminated prior to the Closing as follows:

(a) At the election of the Seller Representative or Buyer on or after December 31, 2009 (such date, as it may be extended by mutual written consent of the Seller Representative and Buyer, the “Termination Date”), if the Closing shall not have occurred by the close of business on such date, provided that the terminating party is not in material default of any of its obligations hereunder;

(b) Notwithstanding the provisions of the above Section 9.1(a), if SCC issues an approval letter to approve the equity interest transfer contemplated hereunder in December 2009, the deadline as specified in the above Section 9.1(a) shall be automatically extended by one month to January 31, 2010;

(c) by mutual written consent of the Seller Representative and Buyer;

(d) by written notice from Buyer to the Seller Representative that there has been an event, change, occurrence or circumstance, individually or in the aggregate with any such events, changes, occurrences or circumstances that has had or could reasonably be expected to have a Material Adverse Effect;

(e) by the Seller Representative or Buyer if there shall be in effect a final non-appealable Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; provided, however, that the right to terminate this Agreement under this Section 9.1(e) shall not be available to a party if such Order was primarily due to the failure of such party to perform any of its obligations under this Agreement;

(f) by Buyer if any Seller shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, or if any representation or warranty of any Seller shall have become untrue, in either case such that the conditions set forth in Sections 7.1(a) or 7.1(b) would not be satisfied and such breach is incapable of being cured or, if capable of being cured, shall not have been cured within ten (10) days following receipt by the Seller Representative from the Buyer of notice of such breach; or

(g) by the Seller Representative if Buyer shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in Sections 7.2(a) or 7.2(b) would not be satisfied and such breach is incapable of being cured or, if capable of being cured, shall not have been cured within ten (10) days following receipt by Buyer from the Seller Representative of notice of such breach.

9.2 Procedure Upon Termination

In the event of termination and abandonment by Buyer or the Seller Representative, or both, pursuant to Section 9.1, written notice thereof shall forthwith be given to the other

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party or parties, and this Agreement shall terminate, and the transaction contemplated hereby shall be abandoned, without further action by Buyer or the Sellers.

9.3 Effect of Termination

In the event that this Agreement is validly terminated as provided herein, then each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to Buyer and any Seller; provided, however, if this Agreement is terminated by Buyer pursuant to Section 9.1(d), 9.1(e) or 9.1(f), the Sellers, in addition to any other liabilities accruing hereunder, shall be liable for and shall pay within five Business Days after such termination the cost of all filing or other fees paid by Buyer to any Governmental Body in respect of the transactions contemplated by this Agreement; provided, however, that the obligations of the parties set forth in this Section 9.3, Article X, Section 6.7(c) and Section 6.9 hereof shall survive any such termination and shall be enforceable hereunder; provided further, however, that nothing in this Section 9.3 shall relieve Buyer or any Seller of any liability for a breach of this Agreement prior to the effective date of termination.

9.4 Equity Interests Reverse

If in any case this Agreement is terminated pursuant to this Article IX, and at the time of or prior to such termination, the Equity Interests have been registered in SAIC as owned by the Buyer, both parties shall within the shortest possible time take all necessary measures to return the Equity Interests to the Sellers. If at this time the Buyer has dispatched directors to the Company, the Buyer shall immediately replace the directors as required by the Sellers, and prior to such replacement, the Buyer shall cause the directors dispatched by it and who have not been replaced to act as per the request of the Sellers.

ARTICLE X

MISCELLANEOUS

10.1 Expenses

Except as otherwise provided in this Agreement, the Sellers and Buyer shall each bear its own expenses incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby, it being understood that in no event shall the Company bear any of such costs and expenses.

10.2 Seller Representative

(a) Each Seller hereby irrevocably appoints Mr. Zhang Sheng (the “Seller Representative”) as such Seller’s representative, attorney-in-fact and agent, with full

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power of substitution to act in the name, place and stead of such Seller with respect to the transfer of such Seller’s Shares to Buyer in accordance with the terms and provisions of this Agreement and to act on behalf of such Seller in any amendment of or litigation or arbitration involving this Agreement and to do or refrain from doing all such further acts and things, and to execute all such documents, as such Seller Representative shall deem necessary or appropriate in conjunction with any of the transactions contemplated by this Agreement, including the power:

(i) to take all action necessary or desirable in connection with the waiver of any condition to the obligations of the Sellers to consummate the transactions contemplated by this Agreement;

(ii) to negotiate, execute and deliver all ancillary agreements, statements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with the consummation of the transactions contemplated by this Agreement (it being understood that such Seller shall execute and deliver any such documents which the Seller Representative agrees to execute);

(iii) to terminate this Agreement if the Sellers are entitled to do so;

(iv) to give and receive all notices and communications to be given or received under this Agreement and to receive service of process in connection with the any claims under this Agreement, including service of process in connection with arbitration; and

(v) to take all actions which under this Agreement may be taken by the Sellers and to do or refrain from doing any further act or deed on behalf of the Seller which the Seller Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as such Seller could do if personally present.

(b) If Mr. Zhang Sheng becomes unable to serve as Seller Representative, Mr. Xin Weidong, or such other Person or Persons as may be designated by a majority of the Sellers, shall succeed as the Seller Representative.

10.3 Specific Performance

The Sellers acknowledge and agree that a breach of this Agreement would cause irreparable damage to Buyer and that Buyer will not have an adequate remedy at law. Therefore, the obligations of the Sellers under this Agreement, including the Sellers’ obligation to sell the Equity Interests to Buyer, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief may be applied for and granted in connection therewith. Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise.

10.4 Dispute Resolution

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(a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be submitted to China International Economic and Trade Arbitration Commission Shanghai branch (the Arbitration Agency”) for arbitration according to the then effective rules of the Arbitration Agency.

(b) Any award made by the arbitral tribunal of Arbitration Agency shall be final and binding on the Selling Parties and Buyer, who hereby exclude any right to commence proceedings in or any right of appeal to any court that might otherwise have jurisdiction in respect of the matter and in respect of the parties’ or the Company’s directors, employees or agents, and such award shall be enforceable in any court having jurisdiction, or application may be made to such court for assistance in enforcing the award, as the case may be. If it becomes necessary for a party to enforce an arbitral award by legal action of any kind, the defaulting party shall pay all reasonable costs and expenses and attorney’s fees, including, but not limited to, any cost of additional litigation or arbitration that shall be incurred by the party seeking to enforce the award.

(c) No arbitration of any dispute or difference shall commence unless the parties have genuinely attempted to settle the same amicably for a period of forty-five (45) days after the date of the giving of a written notice of arbitration by one party hereto to the other, which notice shall describe generally the nature of the dispute.

(d) The costs of arbitration shall be borne by the losing party or according to the arbitration award made by the arbitral tribunal of Arbitration Agency.

(e) When any dispute occurs and when any dispute is under arbitration, except for the matters under dispute, the parties shall continue to fulfill their respective obligations (and shall be entitled to exercise their rights) under this Agreement.

10.5 Entire Agreement; Amendments and Waivers

This Agreement (including the schedules and exhibits hereto), the Seller Documents and the Buyer Documents represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

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10.6 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the People’s Republic of China.

10.7 Notices

All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one Business Day following the day sent by reputable international overnight courier (with written confirmation of receipt) or three (3) business days after such deposit for international deliveries, in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as a party may have specified by notice given to the other party pursuant to this provision):

If to any Seller, to that Seller’s communication address below:

Name	Communication Address	Telephone
ZHANG Sheng	Room 501, No. 38, Lane 666, LongDong Avenue, Shanghai (201203)	13901746822
XIN Weidong	Room 1108, No. 4 Lane 123, Yanping Road, Shanghai (200042)	13901863930
YIN Cong	Room 2001, No., 6, Lane 401, Jiangyin Street, Shanghai (200011)	13671979513
WU Guanying	Room 502, No. 7, Lane 399, Minchun Road, Shanghai (201209)	13701950406
DAI Changsheng	Room 602, No. 20, Lane 600, Yushan Road, Shanghai (200135)	13501759892
LI Jianhua	Room 802, No. 8, Lane 100, East Tianlin Road, Xuhui District Shanghai (200233)	13501623117
WU Fengbo	Suzhou Sym-Bio LifeScience Technology Co., Ltd., No., 36, East Luoyang Road, Taicang city, Jiangsu Province (215400)	13915496725
SUN Tianbao	Room 402, No. 22, Lane 2970, Pudong Avenue, Pudong New District, Shanghai (200129)	13585745683

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XU Peng	Room 202, No. 65, Lane 999, South Qilianshan Road, Putuo District, Shanghai (200333)	13311918938
QI Xiaofen	Room 801, No. 8, Lane 100, East Tianlin Road, Xuhui District, Shanghai (200233)	13817382833
ZHANG Tian	Room 3303, Tianzidou Building, No. 33, Hubu Street, Baixia District, Nanjing (210002)	18913967178
WANG Xijiong	Room 702, No. 2, Lane 485, Fenxi Road, Shanghai (200435)	13901888450

With a copy to:

Grandall Legal Group (Shanghai)

31/F, Nan Zheng Building, 580 West Nanjing Road

Shanghai, P.R. China 200041

Facsimile: +86 21 5234 1670

Attention: Mr. Ni Jun Ji

If to Buyer, to:

Rodyk & Davidson LLP

80 Raffles Place

#33-00 UOB Plaza 1

Singapore 048624

Fax: +65 6557 0765

Attention: Marian Ho

With a copy to:

PerkinElmer, Inc.

940 Winter Street

65

Waltham, MA 02451-1457

Fax: +781-663-5969

Attention: Joel Goldberg

and

MWE China Law Offices

Floor 28, Jin Mao Tower 88, Century Boulevard, Pudong New District

Shanghai 200120, P.R. China

Facsimile: +86 21 6105 0501

Attention: Mr. Kevin Qian

A delivery between the People’s Republic of China and Hong Kong shall be considered an international delivery.

10.8 Severability

If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

10.9 Binding Effect; Assignment

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement other than Buyer Indemnified Parties and Seller Indemnified Parties and except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either the Sellers or Buyer (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents shall be void; provided, however, that Buyer may assign this Agreement and any or all rights or obligations hereunder (including Buyer’s rights to purchase the Equity Interests and Buyer’s rights to seek indemnification hereunder) to any Affiliate of Buyer, any Person from which it has borrowed money or any Person to which Buyer or any of its Affiliates proposes to sell all or substantially all

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of the assets relating to the business. Upon any such permitted assignment, the references in this Agreement to Buyer shall also apply to any such assignee unless the context otherwise requires.

10.10  Non-Recourse

No past, present or future director, officer, employee, incorporator, member, partner, equityholder, Affiliate, agent, attorney or representative of Buyer shall have any liability for any obligations or liabilities of Buyer under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.

10.11  Counterparts

This Agreement is written and executed in Chinese and English and both versions shall have equal force and effect. Each Party acknowledges that it has reviewed both language texts and that they are substantially the same in all material respects. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

10.12  Review by Legal Counsel

Each of the Parties agrees that it has read and had the opportunity to review this Agreement with its legal counsel. Accordingly, the rule of construction that any ambiguity contained in this Agreement shall be construed against the drafting party shall not apply.

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first written above.

PERKINELMER IVD PTE. LTD.
	/s/ Daniel Marshak
By:	Daniel Marshak
Title:	Director

SELLERS:

Name	ID Number	Signature
ZHANG Sheng	310222197001060210	/s/ Zhang Sheng
XIN Weidong	310109196811131614	/s/ Xin Weidong
YIN Cong	310101195602210046	/s/ Yin Cong
WU Guanying	34011119400607802X	/s/ Wu Guanying
DAI Changsheng	340111196505208019	/s/ Dai Changsheng
LI Jianhua	31022219700225261X	/s/ Li Jianhua
WU Fengbo	43030319651212203X	/s/ Wu Fengbo
SUN Tianbao	310109194503191616	/s/ Sun Tianbao
XU Peng	652721197109130410	/s/ Xu Peng
QI Xiaofen	310105195809110400	/s/ Qi Xiaofen
ZHANG Tian	320102197809062033	/s/ Zhang Tian
WANG Xijiong	310222197004200215	/s/ Wang Xijiong

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Robert F. Friel, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PerkinElmer, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2009	/S/    ROBERT F. FRIEL
	Robert F. Friel
	Chairman of the Board and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Frank A. Wilson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PerkinElmer, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2009	/S/    FRANK A. WILSON
	Frank A. Wilson Senior Vice President, Chief Financial Officer, and Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of PerkinElmer, Inc. (the “Company”) for the period ended October 4, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Robert F. Friel, Chairman of the Board and Chief Executive Officer of the Company, and Frank A. Wilson, Senior Vice President, Chief Financial Officer, and Chief Accounting Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) Based on my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Based on my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2009	/S/    ROBERT F. FRIEL
	Robert F. Friel Chairman of the Board and Chief Executive Officer

Dated: November 12, 2009	/S/    FRANK A. WILSON
	Frank A. Wilson Senior Vice President, Chief Financial Officer, and Chief Accounting Officer