10-K

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TABLE OF CONTENTS
PART IV

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                 to                                  .

Commission file number: 001-32976

Caliper Life Sciences, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	33-0675808 (I.R.S. Employer Identification No.)
68 Elm Street, Hopkinton, MA (Address of principal executive offices)	01748 (Zip Code)

(Registrant's telephone number, including area code) (508) 435-9500

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Name of exchange on which registered
Common Stock, $0.001 Par Value Per Share	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Exchange Act: None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý

         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 ý    No o

         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 o    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Annual Report on 10-K or any amendment to this Annual Report on 10-K. ý

         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 "accelerated filer," "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

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

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

         The aggregate market value of the registrant's voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate), as of the last business day of the registrant's most recently completed second fiscal quarter was $86.7 million.

         As of February 28, 2010, the registrant had 49,325,480 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Certain information required in Part III of this Annual Report on Form 10-K is either incorporated from the Registrant's Definitive Proxy Statement for the Registrant's 2010 Annual Meeting of Stockholders or from a future amendment to this Annual Report on Form 10-K, in either case to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

CALIPER LIFE SCIENCES, INC.
FORM 10-K
For the Fiscal Year Ended December 31, 2009

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business		1
Item 1A.	Risk Factors		23
Item 1B.	Unresolved Staff Comments		37
Item 2.	Properties		37
Item 3.	Legal Proceedings		38
Item 4.	Reserved		39
	PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		40
Item 6.	Selected Financial Data		41
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		43
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		61
Item 8.	Financial Statements and Supplementary Data		63
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		63
Item 9A.	Controls and Procedures		63
Item 9B.	Other Information		65
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance		66
Item 11.	Executive Compensation		66
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		66
Item 13.	Certain Relationships and Related Transactions and Director Independence		66
Item 14.	Reserved		66
	PART IV
Item 15.	Exhibits and Financial Statement Schedules		67
Signatures			72

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

        This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. We have identified forward-looking statements by terminology denoting future events such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should" or "will" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under Part I, Item 1A, "Risk Factors," and under "Factors Affecting Operating Results" contained in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements.

        Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date we file this Annual Report on Form 10-K, and we do not intend to update any of the forward-looking statements after the date we file this Annual Report on Form 10-K to conform these statements to actual results, unless required by law.

PART I

Item 1.    Business

Overview

        Caliper Life Sciences, Inc. develops and sells innovative and enabling products and services to the life sciences research community, a customer base that includes pharmaceutical and biotechnology companies, and government and other not-for-profit research institutions. We believe our integrated systems, consisting of instruments, software and reagents, our laboratory automation tools and our assay and discovery services enable researchers to better understand the basis for disease and more effectively discover safe and effective drugs. Our strategy is to transform drug discovery and development by offering technologies and services that ultimately enhance the ability to predict the effects that new drug candidates will have on humans.

        We believe that increasing the clinical relevance of drug discovery experimentation, whether at early stage, lower cost in vitro (in an artificial environment) testing or later stage, more expensive, preclinical in vivo (in a living organism) testing, will have a profound impact in helping our customers to determine the ultimate likelihood of success of drugs in treating humans. With enabling offerings in both the in vitro and in vivo testing arenas, and a unique strategy of enhancing the "bridge" or linkages between in vitro and in vivo research testing and between research testing and clinical diagnostic testing, we expect to continue to address growing, unmet needs in the market and drive on-going demand for our products and services. These market needs are underscored by key challenges that face the pharmaceutical and biotechnology industry, including late-stage drug failures and unforeseen side effects coming to light late in the development process or even after drugs are on the market.

        We offer an array of products and services, many of which are based on our own proprietary technologies, to address critical experimental needs in drug discovery and preclinical development. Our technologies are also enabling for other life sciences applications beyond drug discovery, such as environmental-related testing, and in applied markets such as agriculture and forensics. We also believe that our technology platforms may be able to provide ease of use, cost and data quality benefits for certain in vitro and in vivo diagnostic applications.

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        Caliper was organized under the laws of the State of Delaware on July 26, 1995. Our principal executive offices are located at 68 Elm Street, Hopkinton, Massachusetts 01748, and our telephone number is (508) 435-9500. Our website address is www.caliperLS.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, are available to you free of charge through the Investor Relations section of our website as soon as reasonably practicable after such materials have been electronically filed with, or furnished to, the SEC. The contents of our website are not part of this Annual Report.

Market Opportunity

        We serve a worldwide market that consists of tens of thousands of laboratories in pharmaceutical and biotechnology companies, and governmental and not-for-profit institutions engaged in life sciences research. These companies and institutions seek to understand ways to increase the quality and length of human life by gaining new molecular level insights related to disease and discovering and developing new cost-effective therapies and diagnostics.

        The pharmaceutical and biotechnology industries face intense competitive and regulatory pressure to more effectively discover and deliver safe new drugs. The regulatory bodies that oversee these industries seek to improve the drug approval process to ensure that appropriate drugs are approved as quickly as possible and drugs with dangerous side-effects are not brought to market. Governments want cost-effective drugs for their populations. As highlighted in the FDA Critical Path Initiative, new research methods and better experimentation models are essential to improve the predictability and efficiency of the long and expensive path leading from discovery in the laboratory to commercially available drugs. We believe our solutions directly enable efficiencies derived from improved quality of data, novel biological insights, cost-effective experiments and better translation of early stage experimentation into expected results in the clinic. More specifically, our products and services are designed to enable researchers performing drug discovery functions such as in vitro and in vivo screening and profiling of compounds against disease targets, lead optimization, toxicology, biomolecule separation and quantification, sample preparation and cell-based assays, which are the various steps that are typically used to identify, advance and validate potential preclinical drug candidates, to reduce costs, increase data quality and standardize efficient analytical techniques.

        Our in vitro product and service offerings incorporate microfluidic and automation technologies to provide tools, services and complete integrated systems to perform assays. Our high quality in vitro application solutions are designed to allow researchers to integrate and automate experiments to achieve improved data accuracy and reproducibility at a reduced cost and higher speed, leading to expanded individual researcher capabilities and improved enterprise-wide productivity.

        We believe that our in vivo product and service offerings allow researchers unprecedented visibility into molecular level biological processes inside living animal models. Single animals can be studied over a period of time to track, for example, disease progression or the effect of a drug candidate compound. Conventional technology requires a larger population of animals that have to be sacrificed at various time points to allow them to be invasively examined. Further, since our proprietary imaging technology is highly sensitive, we can enable researchers to see just a few cells of interest within the living animal model. This provides enabling capabilities in a variety of therapeutic areas including cancer, where, for example, metastases can be detected well before conventional methods allow. Light Producing Transgenic Animal (LPTA) models can be engineered to allow detection of biological events of interest at the molecular level, such as gene expression, and this level of direct insight goes far beyond what can be determined from a test tube experiment.

        Our product and service offerings are organized into three core business areas—Preclinical Molecular Imaging (Imaging), Discovery Research (Research), and Caliper Discovery Alliances and

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Services (CDAS)—with the goal of creating a more scalable infrastructure while putting increased focus on growth and profitability.

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The Imaging business holds, we believe, a global leadership position in the high-growth optical molecular imaging market. Principal activities of this business area include the expansion of the IVIS imaging instrument system and related reagent product lines, development of new therapeutic area applications and facilitating additional imaging modalities.

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The Research business is responsible for utilizing our core automation and microfluidic technologies, including our LabChip systems, to address an expanding array of opportunities in drug discovery and life science research, including molecular biology sample preparation for genomics, proteomics, cellular screening and forensics.

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CDAS is responsible for building drug discovery collaborations and alliances, and growing our sales of drug discovery services, with an emphasis on leveraging our core technologies to provide our customers with the option to purchase our instruments and reagents or to engage us to perform experiments for them using our instruments and reagents. The focus of CDAS is to capitalize on market "outsourcing" trends in preclinical drug research.

Technologies

Imaging

        Our imaging solutions allow researchers to observe and quantify, noninvasively and at the molecular level, biological events such as disease progression and drug efficacy in living small animal models. We refer to this process as "molecular imaging." Our technology enables researchers to follow, for example, the quantitative spread of a disease, or effects of a drug at the molecular level, in the same animal over a period of time. These noninvasive "longitudinal studies" can provide much more meaningful information while also requiring a smaller number of animals to complete a study than conventional methods.

        In vivo preclinical research involves studies on animal models and is a required step before clinical (human) research can commence. Experiments performed on mice, for example, are expected to provide insights regarding disease in humans and how particular drug candidate compounds may impact the disease. Conventional approaches to preclinical research may involve, for example, phenotypic observations regarding mouse appearance and behavior, measurement of tumor size with mechanical calipers and/or sacrificing the animal for pathological examination. In contrast, our proprietary optical imaging technology enables real-time quantitative observation of molecular activity within the living animal. For example, the researcher can determine if a cancer is spreading, even at levels as low as a few cells at a time, and can explore whether a tumor that is growing in size is actually dying, or whether the cancer cells are continuing to divide and grow at an uncontrolled rate. We provide calibrated imaging systems, along with reagents to enable this research.

        We have a proprietary method for noninvasive optical molecular imaging. A key component of this method is the genetic modification of an organism, cell or animal to produce light that can be detected noninvasively when a specific molecular event of interest occurs from within a living animal model. We currently offer multiple detection modalities—optical (which consists of bioluminescence and fluorescence) and x-ray. Bioluminescence entails inserting a light-producing gene, such as firefly luciferase, into the genetic makeup of the animal or cells injected into the animal, so when a gene of interest is expressed, the light-producing gene is also expressed. The expression of the light-producing gene, when the right reagent substrate is present, produces light which can be detected through the skin of the animal. Fluorescence occurs when an external light source excites a molecule within the animal, causing the molecule to produce its own light at a different wavelength. These fluorescent molecules can be genetically inserted into the animal, or can consist of dye that is injected into the

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animal or cell line going into the animal. X-ray, an imaging modality offered on certain of our instruments, provides detailed noninvasive anatomical information which can also serve as an additional reference for molecular events imaged optically. We offer a full line of reagents to support bioluminescence, fluorescence and x-ray based research.

Microfluidics

        We believe our LabChip products provide significant advances in laboratory experimentation based on microfluidic chips, which consist of a network of miniaturized channels in which experiments are performed. Our systems include an instrument, software that controls the experiment and detects results, and a kit containing the chip and reagents that are optimized for the assay to be performed. Our chip technology can be configured for automated processing of large numbers of samples, or can be reconfigured on a "personal scale" for just a few samples at a time in a more interactive mode with the researcher. The chip provides a highly controlled, miniaturized environment that integrates multiple experimental steps into a single workflow, thus resulting in an easy to use solution designed to produce exceptional quality results.

Features of LabChip Systems

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Miniaturization.  By fitting entire experiments onto a microfluidic chip, the environment of the experiment can be highly controlled for reproducible and accurate results. Additional benefits include requiring only a very small amount of what is often a precious sample and reduced consumption of often very expensive reagents. In many applications using our LabChip systems, the sample volume needed can be reduced up to 100,000-fold over conventional systems. In some processes within the chip, reagents are dispensed in the microchannels in volumes down to as low as a trillionth of a liter.

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Integration.  Integration involves combining multiple processes into a single process, or the inclusion of multiple functions into one device. Today many laboratory systems perform only one or two steps of an experimental protocol. Our LabChip systems can integrate complete experiments involving half a dozen or more steps into one continuous process performed on a single chip.

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Automation.  Many laboratory experiments are performed in multiple manual steps. With our LabChip systems, entire experiments can be automated and performed inside a chip using one instrument, freeing up valuable research time and laboratory space and reducing labor requirements.

Key Benefits of LabChip Systems

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Improved Data Quality and Accuracy.  Our LabChip systems are designed to produce data that are more clear, accurate, consistent and reproducible. We achieve this by reducing the opportunity for human error through increased automation, reducing the variability caused by the use of multiple instruments through integration of an application on a single system, and establishing a highly-controlled environment inside the chip that ensures consistent processing of samples. Further, the microfluidic environment can enable expanded analytical capabilities in the workflow. For example, biochemical screening assays typically call for fast measurements of a complex experimental mixture that contains the molecules of interest as well as other materials. Reducing the volume size of the experiment allows for rapid separation and measurement of individual molecular species in the test mixture, which in turn enhances the accuracy of the overall result. With higher quality data, our customers can make better decisions earlier in the drug discovery and development process. This enables our customers to avoid the time and

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expense of performing additional analyses and experiments on "false positive" results from their primary screening experiments.

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Improved Sensitivity.  When screening against drug targets, such as kinases, the higher quality data from our LabChip systems allows customers to detect more subtle drug compound activities than can be detected with traditional microplate well-based assays. This has two advantages: (1) an increase in the pool of potential lead compounds, and (2) the possibility that a "hit" found at lower levels of inhibition will be more selective for the target of interest than a hit found at higher levels of inhibition because compounds that produce higher levels of inhibition may also produce unacceptable levels of inhibition on other, non-target kinases.

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Reduced Reagent and Labor Cost.  Our LabChip systems utilize only a small fraction of the usual amount of expensive reagents used in experiments performed in test tubes, 96-well plates, or 384-well plates, and reduce the labor involved in each experiment. We believe that saving on reagent and labor costs will enable pharmaceutical companies to expand the scale of experimentation in ways that would otherwise not be commercially feasible.

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High Speed.  We believe our LabChip systems can, depending on the application, accelerate the time it takes to conduct some experiments as much as 100-fold or more. For example, molecular separations such as electrophoresis may take two hours or more using conventional equipment. However, using one of our microfluidic chips, these separations can be performed in less than one minute.

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Faster Assay Development.  Traditional assays, particularly those used for enzymatic screening, can require complex and time-consuming assay development. For example, some popular assays rely on developing specific antibodies for the assay—a process that can take up to six weeks or more. Because our LabChip assays eliminate the requirement for assay development steps such as antibody preparation, they are much faster to develop. In addition, we have exploited the predictable nature of fluid and reagent movement inside microfluidic channels and have developed software tools to facilitate the process of optimizing the experimental conditions necessary for a successful enzymatic assay on a LabChip device, such as separating a substrate peptide from its product. Typically, our customers have found that these combined benefits shorten a two- to three-month assay development process for a traditional assay to just a week or two for a LabChip assay.

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Expanded Individual Researcher Capability.  Because our LabChip systems can combine a multi-step, complex experiment into one step, we believe that individual researchers can perform experiments that were previously outside their areas of expertise. By comparison, with conventional, non-integrated equipment, researchers need to master the complexities of performing each individual step.

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Improved Enterprise-Wide Productivity.  We believe that our LabChip systems improve data quality and reproducibility so much that researchers will be able to utilize data generated outside their laboratory or organization if such data was generated on a LabChip system. This has the potential to greatly improve enterprise-wide productivity by supporting data sharing and reducing the need to repeat experiments. For example, a typical primary screen produces approximate, "yes/no" answers about the activity of library compounds against a particular kinase target, and therefore the information from such primary screens is only useful for one primary screening experiment. With LabChip assays, the primary screening data is more specific in terms of the degree of inhibition, and more reproducible. This could enable an organization to build a database of primary screening data that could ultimately be mined by other scientists within the organization who are interested in a particular compound/target interaction.

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Automation and Liquid Handling

        We offer a full range of in vitro technologies that includes high-throughput screening systems, liquid handlers, advanced robotics and storage devices which are primarily marketed to the drug discovery and life sciences research market.

        Our advanced liquid handling systems provide fast and accurate liquid transfers for 96-, 384- and 1536-well microplates, including tube-to-plate transfer, and are designed to enable scientists to automate and accelerate time- and labor-intensive tasks resulting in increased walk-away time and improved data quality. Our family of liquid handling instruments and integrated systems supports a wide range of applications related to the target identification and target validation phases of the drug discovery process. Adapted to support the rapidly changing nature of research in life science, our liquid handlers are well-suited for genomics applications, cell-based assays, absorption, distribution, metabolism, excretion, and toxicity (ADME/Tox) screening and enzymatic assays.

        Our microplate management and storage automation systems provide users with the ability to automate several lab instruments and build completely automated work cells, with expandable storage capacity, to enable valuable walk-away time for scientists and researchers.

CDAS

        CDAS develops biological testing applications using our imaging, microfluidics, and automation/liquid handling technologies and offers these applications as services to our customers. In addition to using our own technologies, CDAS develops applications using a wide range of other technologies derived internally or obtained from third parties in order to provide our customers with comprehensive solutions for their drug discovery and development programs, as well as for evaluation of potential safety or toxicity liabilities of environmental chemicals, among other industry segments. These non-Caliper technologies include radioligand binding assays, fluorescence-based assays, label-free technologies, cell-based assays for assessing anti-cancer activity and other biological functions, high performance liquid chromatography, liquid chromatography/mass spectrometry/mass spectrometry, multiplexed bead array, fluorescence activated cell sorting , luciferase or aequorin-based luminescent assays, databases and in silico tools for predictive toxicology and pharmacology.

Products and Services

        The following discussion summarizes our products and services portfolio as of December 31, 2009.

Imaging Systems

        IVIS Imaging Systems and Living Image Software.    Our IVIS imaging systems are the leading preclinical optical molecular imaging solution. IVIS imaging systems are an integrated instrument solution for the researcher. The systems are based on a highly sensitive camera and optimized optics for high sensitivity detection of light produced from within animal models, and specialized software to capture and analyze images of the light producing animals. Caliper IVIS systems, depending on the model selected, currently enable bioluminescence, fluorescence and x-ray detection, a useful combination of capabilities that enables a broad range of research. The original IVIS system was introduced in 2000, and since then, new models have been introduced that offer assorted new features and benefits, including higher throughput and sensitivity. The throughput, image resolution and analytical capabilities differ by IVIS model, and address different end user needs. Our IVIS systems are supported by a range of practical accessories developed through experience in research laboratories worldwide. IVIS imaging systems offer advantages, including ease of use, higher throughput and no radioactivity, all in a reasonably priced instrument platform. Further, our Living Image software and

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mouse handling accessories facilitate efficient workflows for animal studies. Our portfolio of imaging systems includes the following:

        IVIS Spectrum.    The IVIS Spectrum in vivo optical imaging system can perform high sensitivity bioluminescent imaging and advanced fluorescent imaging, including spectral unmixing, trans-illumination, and 3 dimensional (3D) tomographic capabilities. With an optical switch to move from epi-illumination (reflection or top illumination) to trans-illumination (bottom illumination), IVIS Spectrum maintains high throughput capability, while providing increased sensitivity in fluorescent imaging. This dual illumination capability enables tomographic localization of both shallow and deep tumors in 3 dimensions and reduces background interference.

        IVIS 200.    The IVIS Imaging System 200 Series is an advanced single-view 3D optical imaging system designed to improve quantitative outcomes of in vivo imaging, using our novel patented optical imaging technology to facilitate noninvasive longitudinal monitoring of disease progression, cell trafficking and gene expression patterns in living animals. The instrumentation and software of the IVIS 200 Series allow researchers to better account for the effects of photon absorption and scattering in tissue, making bioluminescent source measurements more quantitative.

        IVIS Kinetic.    Introduced in 2008, the IVIS Kinetic system provides a real time, fast imaging system enabling acquisition of biologically relevant events within milliseconds. The IVIS Kinetic system can perform both quantitative bioluminescent and fluorescent imaging as a standard high signal to noise imager and as a high speed imager. The system includes a highly sensitive EMCCD camera for signal enhancement and the ability to reduce exposure times, enabling fast kinetics. The IVIS Kinetic system also offers a light-tight injection port which supports a syringe injector system enabling real time compound and/or substrate administration.

        IVIS Lumina II.    The IVIS Lumina II provides an expandable, sensitive imaging system that is easy to use for both fluorescent and bioluminescent imaging in vivo. The system includes a highly sensitive CCD camera, light-tight imaging chamber and complete automation and analysis capabilities.

        IVIS Lumina XR.    Introduced in 2009, the IVIS Lumina XR provides all the features of the IVIS Lumina II, along with x-ray for detailed anatomical reference and bone imaging.

        Method Licenses.    We control patent rights covering certain fundamental methods of optical imaging. We grant licenses to our customers to perform these patented imaging methods in connection with their purchase of an IVIS instrument. Commercial customers pay us a license fee for the right to practice our proprietary optical imaging methods.

        IVIS Options and Accessories.    We offer numerous options and accessories to expand our IVIS workstations, which are sold separately from the imaging systems. Our standard accessory package includes a calibration unit to ensure the overall performance and accuracy of the light sources used in the system as well as a small animal holding unit. We also offer an anesthesia accessory package, which is designed to work with all of our IVIS imaging systems. Our anesthesia package integrates a gas delivery system into the imaging chamber, so that mice or other small animals can be anesthetized when placed in the IVIS imaging system, thus minimizing gas exposure to lab personnel. We also provide an electrocardiograph monitoring accessory to monitor animal heart activity during imaging.

        Bioware Products—Light-Producing Cells and Microorganisms.    Our Bioware lines of light-producing cells and microorganisms enable researchers to analyze the spread and treatment of cancer and infectious diseases, as well as to study immunology. In April 2008, we introduced Bioware Ultra cell lines. Bioware Ultra cell lines are 10 to 100 times brighter than cell lines created using traditional methods, which allows researchers, for the first time ever, to detect a single cancer cell in an animal via noninvasive in vivo imaging. We currently offer approximately 29 lines of light-producing microorganisms, including E. coli, Pseudomonas, Salmonella and other gram negative bacteria, as well

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as Staphylococcus aureus, Streptococcus pneumonia and other gram positive bacteria. We have also developed approximately 16 tumor cell lines for breast, melanoma and prostate cancer. In addition, we are able to create custom light-producing microorganisms and tumor cell lines in accordance with the needs of our customers. All of our Bioware products are optimized to work with our IVIS imaging systems.

        LPTA Models.    Our LPTA models are mouse models that have been genetically altered to incorporate the firefly gene, luciferase, into pathway-specific animal models that enable researchers to analyze gene expression, protein activity and disease progression. In conjunction with our divestiture of Xenogen Biosciences in December 2009, we entered into a distribution arrangement with Taconic Farms, Inc. under which Taconic will exclusively market and sell our LPTA models to the worldwide market.

        Reagents.    We offer multiple reagents for use in connection with our IVIS systems. Our offerings include luciferin, a chemical compound that is introduced into cells and organisms to produce bioluminescence, light producing cell lines, and VivoFluor fluorescent labeling kits for fluorescent imaging.

Microfluidics Systems

        LabChip GX and GXII Microfluidic Systems.    In July 2008, we introduced two microfluidics-based separations products, the LabChip GX and LabChip GXII benchtop systems, for fast, automated, one dimensional electrophoretic separations of protein, DNA, and RNA samples. The LabChip GX represents a low price entry system targeted at genomics applications, while the GXII combines both genomics and protein research applications. The LabChip GX series of instruments is designed to provide scientists with novel benefits, including extended walk-away time, higher throughput and economical plate processing ability.

        LabChip EZ Reader, EZ Reader II and ProfilerPro Kits.    Our LabChip EZ Reader systems and ProfilerPro reagent kits provide a convenient, affordable approach to turnkey kinase profiling and screening and mechanistic studies for a broad range of enzymatic targets which includes phosphodiesterases, histone deacetylases, proteases, phosphatases, G-protein coupled receptors (GPCRs) and many other target classes. In particular, kinases are an important class of drug discovery targets since they have been shown to play a role in cancer and cardiovascular disease, as well as other diseases. A typical kinase drug development program will focus on finding lead compounds that inhibit a particular kinase thought to play a role in the disease being studied. As scientists learn more about the human "kinome," the collective term for the 518 different kinases found in the human body, they also are becoming increasingly concerned about the interactions of lead compounds on non-target kinases, and the potential adverse side effects resulting from these interactions. As a result, selectivity or "profiling" screens, where lead compounds are screened against a representative group of human kinases, are increasingly becoming a routine part of drug discovery programs. Our ProfilerPro kinase panel plate kits presently consist of a broad sample of 96 kinases that are pre-dispensed into 384-well microplates, and the library continues to grow. This diverse set of kinases spans the human kinome, and is highly relevant in a variety of therapeutic research areas including oncology, the central nervous system, cardiovascular disease, inflammation and diabetes.

Automation and Liquid Handling Systems

        Caliper Sciclone.    Our Caliper Sciclone Automated Liquid Handling (ALH) series features interchangeable 96- and 384-channel pipetting heads that can pipette and dispense volumes from 100 nanoliters to 200 microliters into and out of standard laboratory testing microplates. The Caliper Sciclone liquid handler offers multiple accessories such as an independent 8-channel pipettor for single-well access, and bulk reagent dispense modules for efficient reagent broadcasting. Other available

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accessories include the Sciclone gripper, microplate shakers, a positive pressure filtration system, and temperature-controlled locators. The control software enables ease-of-use capabilities and supports 21 CFR Part 11 compliance, an important regulatory requirement for researchers developing drugs. The Caliper Sciclone liquid handler can be used as a standalone instrument, or integrated in a more complete system that incorporates automated microplate carriers such as our Twister robot, and other analytical instruments.

        Zephyr.    The Zephyr liquid handling instrument is a compact, low-cost, multi-channel liquid handling system. Zephyr is designed to handle key applications for compound management, high-throughput screening (HTS), genomics, proteomics and bio-analytical assays, as well as numerous commercially available kits. These applications include: DNA/RNA purification clean-ups, polymerase chain reaction (PCR) setup, protein precipitation, solid phase extraction (SPE), protein purification solubility assays, kinase assays and cell-based assays. Zephyr's small footprint makes it ideal for workbench operation, while the convenient deck design provides ready access to consumables and accessories from all four sides.

        Staccato Automated Workstations.    Staccato workstations provide fast, reliable and scalable automation for drug discovery, genomics, proteomics and drug development laboratories. Staccato systems are available in three base configurations: Mini Workstation Series, Application Series and Custom Systems Series. Staccato Mini Workstations offer the minimal amount of equipment required to automate basic liquid handling and material management tasks. Staccato Application Series are pre-configured and pre-integrated solutions for common applications such as plate reformatting and replication, hit-picking, enzyme-linked immunosorbent assays (ELISA), and a variety of cell-based assays. Staccato custom systems use proven automation-friendly building blocks, iBlox, that are designed into custom configurations as dictated by the needs of the user. In January 2008, we announced the formation of our Automation, Consulting, Engineering & Services (ACES) team to create customized, multi-vendor automation solutions. The ACES team includes engineers and scientists with deep experience in mechanical and electrical engineering, software development, assay development, automation and project management. The team works with biotech, pharmaceutical and academic R&D laboratories to create solutions that leverage existing and new technology investments from multiple vendors via one Caliper-supported, integrated solution.

        Twister I and II.    The Twister Universal Microplate Handler automates the movement of microplates to and from a microplate reader, washer, or other microplate-processing instrument. Twister I has a capacity of 80 microplates, and is used as a dedicated autoloader with a wide variety of scientific instruments. The Twister II provides increased integration capabilities and increased handling up to 320 standard microplates.

        TurboVap.    The TurboVap family of evaporators covers a wide range of formats from microplates to tubes and accommodates the fast unattended concentration or evaporation of any size sample up to 500mL.

        RapidTrace.    The RapidTrace SPE Workstation is a modular, highly scalable, automated sample prep high throughput SPE platform. Utilizing 1 mL or 3 mL industry standard SPE cartridges, the RapidTrace can process up to 100 samples in less than two hours unattended. Each module can be loaded with 10 cartridges, and up to 10 modules can be connected together and controlled through a simple, easy-to-use software package. The RapidTrace has been designed to eliminate SPE bottlenecks, so that labs can realize the full benefit of today's powerful and costly analytical instruments.

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Services

        We provide a wide range of services to our customers. Our service offerings include:

        Drug Discovery and Development Services and Contract Research.    Through CDAS, we are able to provide innovative drug discovery and development services designed to improve the productivity, accelerate the pace and reduce the cost of pharmaceutical research and development. CDAS develops and offers a wide range of primary and secondary screening, profiling and assay development services to major pharmaceutical, biotechnology and academic research institutions worldwide. In addition to its core screening and assay development services in pharmacology, CDAS provides in vitro ADME/TOX services, in vivo optical imaging studies, custom cell line development, and protein or nucleic acid analyses. In total, CDAS has a portfolio of approximately 1,000 in vitro assays for profiling and selectivity screening applications, providing a valuable tool for our customers to gain cost-effective information early in the drug discovery process about the effects of drug candidates on molecular targets or cellular processes that indicate the potential for drug safety concerns or new therapeutic applications. In addition to these screening services, we have developed content databases and pharmacoinformatics tools that provide statistical predictability in the drug discovery process. We also offer screening and pharmacological testing support services to government agencies such as the National Institutes of Health (NIH), in particular the National Institute on Drug Abuse (NIDA).

        Alliances and Integrated Research Programs.    CDAS' drug discovery and development capabilities are provided to customers on an a la carte basis as contract research services or integrated into comprehensive programs to collaborate with our customers on specific pharmaceutical development programs. We consider our core competencies to be in the areas of oncology, immunology, central nervous system disorders, and toxicology. In the field of oncology, for example, we can help identify potential new anti-cancer drugs that act by inhibiting kinases using the Caliper microfluidics-based LabChip technologies. We maintain panels of human cancer cell lines for use in testing anti-cancer drug candidates (such as kinase inhibitors) for their differential activity against specific genetic modifications inherent in those cell lines, for selecting the best drug candidates or for translation to patient selection during clinical trials, as well as animal models of various cancer types for assessing the effect of potential anti-cancer drugs using Caliper's proprietary in vivo optical imaging technologies.

        Environmental Testing.    Under the U.S. Environmental Protection Agency's ToxCast program, CDAS was awarded a contract to assist the EPA in developing new approaches to identify toxic environmental chemicals. Under this contract, CDAS will test compounds provided by EPA through up to 275 different in vitro screening assays for molecular targets that may potentially play a role in mechanisms of toxicity in humans or other animals. Since 2007, screening has been performed by CDAS for the first set of 320 chemicals from EPA. These screening data will be used to create a database and build predictive models for identifying toxicity risk profiles of chemicals that may be released into the environment. An ultimate goal of the ToxCast program is to improve the efficiency and reduce the cost of regulatory review and approval of EPA-regulated chemicals through use of predictive in vitro assays validated under the ToxCast program to supplement or replace current regulatory processes based on animal testing.

        Product Support.    In our worldwide technical support centers, service engineers and application specialists provide support for our customers' specific needs, thereby maximizing each product's efficiency and productivity. The range of product support services we provide includes technical telephone support, field engineering support for both emergency and preventative maintenance, field applications support, formal classroom training at Caliper and customer locations, a repair depot, and loaner support. Our maintenance contracts are typically for one- to three-year terms.

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Sales and Marketing

        We have multiple channels of distribution for our products and services: direct sales to end-user customers, indirect sales to end-user customers through our international network of distributors, OEM sales through partnership channels under our Caliper Driven program, and through joint marketing agreements.

        Direct Sales.    We sell our products and services principally through our direct sales and marketing organization. Our sales force includes regional sales representatives and technical field representatives in North America, Europe and Japan. Within each region we have sales representatives with a particular product, service or customer focus. Our applied science and technical application group is integrated into the sales process to support our highly technical products. Many of the application group individuals have doctorate degrees in biology, biochemistry or physics, and provide support for the sales and marketing team, as well as providing customer service support in the areas of biology, imaging and microfluidics. We generate customer leads through presentations, exhibiting at and attending scientific and partnering meetings, tradeshows, publications and advertisements in scientific journals. We also receive many qualified leads through our website, targeted promotional efforts to strategic accounts and referrals from current customers.

        Distributors.    We work with local distributors in certain markets where we do not have a direct presence. We currently have over 50 distributor arrangements covering countries located in Africa, Europe, the Middle East, the Pacific Rim, Scandinavia and South America. Under our distribution agreements, most of the distributors assume responsibility for the installation and post-sales support of systems. In 2009, sales through distributors comprised approximately 14% of our total sales.

        In 2009, we entered into a strategic partnership arrangement with Taconic Farms, Inc. under which Taconic became the exclusive distributor of our LPTA models.

        Caliper Driven Program.    Our Caliper Driven program is an important component of our business strategy and is complementary to our direct sales and distribution network activities as it enables us to extend the commercial potential of our LabChip and advanced liquid handling technologies into new industries and new application areas through collaboration with experienced commercial partners. Under this program, we supply liquid handling products, microfluidics chips, and other products on an OEM (original equipment manufacturer) basis, and in certain situations, provide product development expertise and services to our commercial partners, who then typically integrate an application solution and market it to their end customers. In addition, as part of our Caliper Driven program, we license our patent estate to other companies for various applications. We view out-licensing under our Caliper Driven program as a way for us to extend our technologies into certain application areas that we do not have a present strategic intent to address directly, or that may require the greater technical, marketing or financial resources of our licensing partner in order to obtain more rapid adoption of our technology in a particular application area. By using direct and indirect distribution, and out-licensing our technology under our Caliper Driven program, we seek to maximize penetration of our products and technologies into the marketplace, and to position us as a leader in the life sciences tools market.

        Currently, our two most significant OEM partners include Agilent Technologies and Bio-Rad Laboratories as described below:

        Agilent Technologies.    In June 2005, we entered into a new five-year supply agreement to be the exclusive supplier of planar chips to Agilent for both research and diagnostic applications. The term of this agreement is subject to extension for up to four additional two year-periods. The planar chips, based on our microfluidic LabChip technologies, are utilized on the Agilent 2100 Bioanalyzer instrument, which Agilent first introduced in September 1999. The Agilent 2100 Bioanalyzer is a desktop instrument designed to perform a menu of analyses including DNA, RNA, protein and cell assays, based on the particular chip utilized.

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        Bio-Rad Laboratories.    In the fall of 2004, Bio-Rad launched its Experion™ automated electrophoresis system as a result of a product development and commercialization agreement we entered into with Bio-Rad in June 2003. Bio-Rad is a long-established leader in gel electrophoresis separations, particularly protein separations. The Experion system represents Bio-Rad's first microfluidics-based product for this market, and it provides rapid, reproducible analysis of protein, DNA and RNA samples. Under the terms of the agreement, we currently receive royalties based on sales of co-developed instruments, and we are the exclusive manufacturer of LabChip devices for use with such instruments.

Customers

        Our current customers include a majority of the world's leading biomedical and pharmaceutical companies, prestigious not-for-profit research institutions and other life sciences vendor companies who incorporate our technology and products into their products. Approximately 55% of our total revenues for 2009 were derived from customers in the United States. See Note 16 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for revenues from customers and long-lived assets attributable to geographic areas outside of the United States. During 2009, no single customer accounted for 10% or more of our total revenue.

        We have typically experienced higher revenues in the second half of our fiscal year as a result of the capital spending patterns of our customers. In addition, our revenue trends may be affected by variations in grant funding, especially among government and other not-for-profit research institutions, such as academic institutions, and customer budget cycles. For example, in the biomedical research community, grant proposals are typically due in October, February and June with funds delivered the following June, October and March, respectively. Due to the grant cycle, we may achieve higher revenues in the second and fourth quarters. One of our CDAS customers is the EPA under its ToxCast project. It has been difficult to predict the timing of the receipt of task orders and delivery of compounds under this agreement. As a result, our service revenues may be higher in certain quarters within the fiscal year.

Backlog

        For a portion of our sales, we manufacture products based on our forecast of customer demand and maintain inventories in advance of receipt of purchase orders. Our net sales in any given quarter depend upon a combination of (1) orders received in that quarter for shipment in the same quarter, (2) shipments from our backlog of orders from previous quarters, and (3) recognition of revenues that had been previously recorded as deferred revenue pursuant to our revenue recognition policy. Our products are typically shipped within ninety days of purchase order receipt. As a result, we do not believe that the amount of backlog at any particular date is indicative of our future level of sales in any succeeding quarter. The level of backlog at December 31, 2009 was $8.9 million. In our backlog, we include only the total value of open purchase orders for products and services that management has concluded have a reasonable probability of being delivered over the subsequent twelve-month period. This amount specifically excludes deferred revenue, and products and services to be provided in the future pursuant to terms of contractual agreements for which we do not require purchase orders.

        Our backlog at the beginning of each quarter does not include all product sales needed to achieve expected revenues for that quarter. Consequently, we are dependent on obtaining orders for products to be shipped in the same quarter that the order is received. Moreover, customers may reschedule shipments, and production difficulties could delay shipments. Accordingly, we have limited visibility into future product shipments, and our results of operations are subject to variability from quarter to quarter.

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Research and Development

Research and Development Infrastructure

        We employ personnel with legal and scientific expertise to help manage our intellectual property and acquire new intellectual property. We also have biological scientists who work with our electromechanical engineers, physicists and imaging experts to create scientific applications in oncology, inflammation, and drug metabolism, cardiovascular disease, metabolic disease and toxicology. We also employ a technical applications group to interact at the scientific level with our customers, in order to understand our customers' technological needs, both for future product development purposes and to help our customers understand new applications that we have developed.

Technology Research

        We currently have ongoing core technology research and applied product development efforts in several areas:

        Microfluidics.    We continue the development of new microfluidic chips and related instruments, software and reagents. Analytical and computer simulation models are employed to more effectively produce new functional chip designs. These modeling capabilities are also essential for optimizing assay conditions for specific analytes and reagents, on-chip thermal control, and determining quality control parameters for production chips. Our engineers continue to develop new generations of instrument systems with better performance, smaller footprints, lower cost and increased ease of use. We have made substantial investments in lab-on-a-chip research since our inception, and believe that we have established a leading position in lab-on-a-chip technology.

        Chip Manufacturing.    We continue to seek ways to improve the yield and quality while decreasing the cost of manufacturing our microfluidic chips. We are consolidating our chip offerings to facilitate more efficient manufacturing and reduce inventory, and also continue to explore novel fabrication techniques and the use of new materials, including plastic, that offer functional advantages, such as superior optical features or lower manufacturing costs. Plastic devices potentially offer cost advantages and can offer favorable surface chemistry or design features for some applications. Development of glass-like coatings for plastic chips is another active area of research.

        Imaging Instrumentation and Software.    Our imaging systems research and development department is responsible for new imaging instrument product development. With a strong leadership position in the noninvasive optical imaging field, we continue to be on the forefront of advancing the technology to provide new levels of performance, cost and/or integrated support for developing technologies such as fluorescence and 3-dimensional tomography. This department works closely with our biology group to ensure that new systems will enable continued breakthroughs in application enablement.

        Reagents and Bioware Products.    Our biology group is responsible for developing new applications and associated reagents, cell lines, microorganisms and animal models. Our biology group produces these validated new applications comprising animal models and cell lines from three different sources: (1) we in-license and perform quality control on reagents that have already been made by others for conventional methodologies that complement our noninvasive imaging methodology; (2) we build and validate proprietary cell lines and models in our research laboratories; and (3) we in-license rights to cell lines and animal models made by certain of our customers who have used our technology to create animal models. Through these strategies, we are able to leverage the research and development expenditures of third parties to further our sales and the adoption of our technology.

        Liquid Handling and Automation Instrument Manufacturing and Software Design.    Our skilled electrical engineers, optical engineers, mechanical engineers, product designers and software engineers

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create new liquid handling and automation instruments and software that are designed to optimize liquid handling and automation of life science laboratory applications. Software engineers write computer programs to manage tasks such as controlling chip functionality, collecting data, communicating between different instrument modules and communicating between our instruments and those of other manufacturers.

        Systems and Assay Integration.    When developing commercial products, we seek to incorporate functionalities that are necessary to perform a specific experiment, and configure the assay so that it offers tangible benefits to users as compared to existing, traditional technologies. By carefully characterizing the problems and existing bottlenecks in an end-user's workflow, as well as the solution, we are able to define precise product specifications to meet customer needs. The resulting complete solution often includes a LabChip device, liquid handling to manage "bulk" reagent needs of the chip, instrumentation to control flow and temperature, robotics for automating the handling of sample plates and detection optics, computer software for instrument control and data analysis, and reagents. Our recent development efforts have focused on continuing to increase functional integration on chip, including sample purification, reaction reagent assembly, reaction incubation (sometimes with temperature cycling), post reaction separation, and detection.

        Our research and development expenses for the years ended December 31, 2009, 2008, and 2007 were approximately $17.9 million, $19.9 million and $24.8 million, respectively. As a percentage of revenues, we expect research and development spending to decrease in the future to the extent that our revenues grow, and as we slow the pace of discretionary spending on research programs by focusing on those opportunities with maximum commercial viability, and sharing the funding of R&D programs with our partners.

Manufacturing and Supply

        All of our instrument manufacturing is performed in our Hopkinton, Massachusetts manufacturing facility, which is ISO 9001:2008 compliant. The International Standards Organization, or ISO, sets international standards for quality in product design, manufacturing and distribution.

        We manufacture some subassemblies, and other components are made to our specifications by outside vendors. To ensure the quality and on-time delivery of parts and subassemblies, we track our top suppliers and score them on a monthly basis. The subassemblies are inspected and tested before being placed into final product assemblies. Production cycle times range from several hours to five days for more complex workstations.

        Systems and workstations are produced from components based on a wide variety of proprietary technologies, including intricate mechanical actuators, precision fluid handling systems, computers and software. We produce systems by combining certain of our products with third-party vendor equipment, primarily detection instrumentation. The systems are a combination of standard components, assembled in either standard or custom configurations to meet a customer's specific needs. A typical production cycle ranges from 30 to 90 days from receipt of an order to shipment of a system. The final products are then put through an extensive testing cycle before being released for shipment. Testing at our factory and/or the customer's site establishes that the system is performing to the customer's specifications.

        We manufacture all of our chips in a Class 1000 clean room facility in Mountain View, California. We are ISO 9001:2008 compliant for the development, manufacture and distribution of our chips and reagents. We contract with third parties to supply raw materials, component parts and sub-assemblies used in our chips and reagents kits. For a discussion of the methods we use to manufacture our chips see the sections above titled "Technologies," "Products and Services" and "Research and Development."

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        We use OEM providers for various parts of the imaging systems including the cameras, boxes, certain subassemblies, filters and lenses. We rely on two primary camera vendors to provide cameras for all of our IVIS imaging systems, one of which is under a supply agreement as of December 31, 2009.

        We obtain key components of our chips, instruments and reagent-based products from a number of suppliers, including, in certain cases, single-source or limited-source suppliers. For instance, we receive proprietary dyes, which are used in many of our LabChip products, from a single source. Furthermore, we depend on a foreign single-source supplier for the glass used in the manufacture of certain types of our chips. However, the majority of key components for our chips and instruments are available on a short lead time from our suppliers. The only component requiring any significant lead time to acquire is our glass stock, as our supplier requires a minimum order to cover an entire production run. We anticipate that current inventories and purchase commitments of this material, at current production levels, will be sufficient for the next 12 months.

        Although we have established licensing arrangements and supply agreements with most of our suppliers, there can be no assurances that these companies could not in some way be adversely affected in the future, and be unable to meet our critical supply needs. If the supply of components from these suppliers were interrupted, we might not be able to manufacture our products at all or in a timely fashion, which would disrupt our delivery of products to our customers.

        We believe our current manufacturing capacity is sufficient to meet current and anticipated demand through 2013.

Reagents and Bioware

        We maintain laboratory space in our Alameda facility to create and maintain stocks of microorganisms and cell line reagents. We have a supply agreement with Promega Corporation which requires us to acquire all of our supply for luciferin from Promega. Luciferin is a chemical compound that is introduced into cells and organisms in order to produce bioluminescence, and which we, and our customers, use with our Bioware products and LPTA models. Luciferin is stored and shipped out of our Mountain View, California facility. VivoFluor fluorescent labeling kits for in vivo imaging, which are custom-developed for us by Invitrogen (now Life Technologies), are also stored and shipped out of our Mountain View facility.

        Our Alameda, California research and development facility has one vivarium and a separate animal imaging suite. We perform breeding and model validation in this facility, which has an animal resources program with personnel specially trained in animal care and handling.

Competition

        In general, markets for life science research tools and services are very competitive, and we believe these markets will remain competitive in the future. We compete with other companies selling similar tools and services and with companies selling alternative tools and services who are competing for the same funds in a potential customer budget. Although we believe that we have significant intellectual property protection to prevent competitors from developing many of our products, there are other manufacturers of similar technologies.

        Imaging.    We compete with conventional, non-imaging based approaches such as using mechanical calipers to measure tumor size, invasive surgical techniques, as well as with other imaging technologies applied in the preclinical arena, including modalities such as PET, MRI, x-ray, CT, SPECT and ultrasound, which utilize the penetrating radiation of positrons, radio waves, x-rays, gamma rays and sound. Most of these technologies require operation by a highly trained technician. In addition, some are limited by the need for radioactivity and concomitant shielding, storage and disposal issues. Certain

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of these technologies image anatomy, rather than molecular events. By comparison, our in vivo molecular bioluminescent and fluorescent imaging methods involve optical imaging approaches that provide molecular level insight, are generally easier to perform, are higher throughput and require no radioactive substances.

        We believe we are the leading supplier of integrated systems of equipment, software and reagents for the noninvasive optical imaging of small animal models. While we believe that our integrated system of instruments and equipment, software and reagents enable valuable insights and improve the productivity and efficiency of drug discovery and development, the up-front costs and commercial customer licensing fees associated with the use of our systems make the investment required for their use more expensive than conventional approaches for preclinical small animal testing.

        Numerous companies sell cameras or camera systems capable of certain forms of optical imaging, including Carestream, Berthold Detection Systems GmbH, Hamamatsu Photonics, Biospace, VisEn Medical and CRi, Inc. While certain of these cameras share certain similar features and imaging capabilities of our IVIS imaging systems, none of those companies has the right to sell their cameras for in vivo imaging methods claimed by our patents, which includes patents we exclusively license from Stanford University, nor do they have rights to our instrumentation patents.

        Automation and Liquid Handling Systems.    There are many companies providing competitive liquid handling products, automation products and integration services for applications such as high throughput screening, ADME and Active Pharmaceutical Ingredient (API) analyses. We believe the primary competitive factors in these markets are productivity enhancement, breadth of applications, accuracy, ease-of-use, price, performance, product reliability and service support. Direct and indirect competition for these types of products and services comes from many companies, including Beckman Coulter, BioTek Instruments, CyBio, Hamilton, Innovadyne, Gilson, LabCyte, MDS Inc., PerkinElmer, Tecan, Thermo Fisher Scientific, Tomtec, Agilent and Symyx.

        In Vitro Compound Profiling Services.    We compete with other companies that provide in vitro assay development, screening and profiling services to drug discovery and development laboratories. We believe the primary competitive factors in these markets are breadth of assays offered, cost per compound tested, data quality, innovation, and turn-around time. Competition for these types of services comes from many companies, including Cerep, MDS Inc., Millipore, Life Technologies, Carna Biosciences, and increasingly from companies based in China.

        LabChip Drug Discovery.    We compete directly with established alternative technologies for enzymatic assays such as Promega, Invitrogen (now Life Technologies), Millipore and Cisbio as well as potentially with companies developing their own microfluidics or lab-on-a-chip technologies and products, such as Fluidigm, Micronics, BioTrove, Microfluidic Systems, 3M, Life Technologies and Cepheid. Microfluidic technologies are still a relatively new technology and our future success will depend in large part on our ability to establish and maintain a competitive position in these and future technologies, which we may not be able to do. Rapid technological development may result in our products or technologies becoming obsolete. Products offered by us could be made obsolete either by less expensive or more effective products based on similar or other technologies.

        LabChip Electrophoresis Separations.    We compete with companies that supply both traditional gel technologies, capillary electrophoresis and more contemporary microfluidic technologies, for gel electrophoresis separations for proteins, DNA and/or RNA. We believe the primary competitive factors in these markets are cost per sample analyzed, throughput and productivity enhancement, data quality, ease of use and service support. Competition for these types of products and services comes from many companies, including Agilent, Bio-Rad Laboratories, General Electric, Beckman Coulter, Qiagen and Invitrogen (now Life Technologies). In 2008, Shimadzu Corporation introduced its MCE-202 MultiNA microchip electrophoresis system for performing DNA and RNA separations. We believe the MCE

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MultiNA system infringes a number of different patents owned or controlled by Caliper, and in January, 2009 we initiated a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. In this suit, Caliper alleged that Shimadzu's MCE-202 MultiNA instrument system infringes 11 different U.S. patents owned by Caliper. In March 2010, we entered into a settlement agreement with Shimadzu pursuant to which we agreed to dismiss our complaint against Shimadzu and Shimadzu agreed to discontinue sales of the MCE-202 MultiNA system in the United States. See the section titled "Legal Proceedings" elsewhere in this Annual Report on Form 10-K.

        In markets where we sell products based on our LabChip technology, we not only need to demonstrate the advantages of our products over competing technologies and products, but we must also often overcome a customer's resistance to switching from a well-established, traditional technology to a fundamentally new technology.

        We have entered into several licenses granting non-exclusive licenses to certain of our proprietary LabChip technologies. Present licensees include Agilent, Canon, Wako Pure Chemical, Bio-Rad and Becton Dickinson. In addition, certain of these licensees may sell products which compete with our own products.

        Light-Producing Reagents.    Although our patented noninvasive imaging patents protect certain methods of imaging light through opaque tissue (e.g., skin) in mammals, there are many companies who have light producing reagent products and related intellectual property. We therefore compete with numerous companies that develop light-producing reagents used in in vitro and in vivo applications, including large companies such as GE Healthcare Discovery Systems and Life Technologies. Related to bioluminescence, we have agreements in place with Promega Corporation and The Regents of the University of California, under which we non-exclusively license several patents on a royalty-bearing basis for use of a modified firefly luciferase gene in living organisms, such as our LPTA models and certain of our Bioware products. Other companies must obtain similar licenses from those two entities in order to use that gene as a tagging reagent in animal models for commercial purposes. Related to fluorescence, many companies have technology for fluorescent label and/or fluorescent proteins. We purchase certain fluorescent reagents from Life Technologies for resale and are actively working on in-licensing, partnering and/or developing additional fluorescent animal models, cell lines and reagents.

Intellectual Property

        We consistently seek patent protection for our key imaging, microfluidics and other technologies. As of December 31, 2009, we owned approximately 340 issued U.S. patents and 69 pending U.S. patent applications, some of which derive from a common parent application. We are also the exclusive licensee of approximately 90 U.S. patents. Foreign counterparts of many of these patents and applications have been filed and/or issued in one or more other countries. We also rely upon trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our competitive intellectual property position. Our success will depend, in part, on our ability to obtain patent protection for our products and processes, to preserve our copyrights and trade secrets, to operate without infringing the proprietary rights of third parties, and to acquire licenses to enabling technology and products. In addition, U.S. patents filed since 1995 generally have a term of 20 years from the date of filing. In the life sciences industry, it often takes several years from the date of filing of a patent application to the date of a patent issuance, often resulting in a shortened period of patent protection, which may adversely affect our ability to exclude competitors from our markets.

        Microfluidics.    A majority of our patents and applications are directed to various technological areas which we believe are valuable to our microfluidics businesses, including:

•

control of movement of fluid and other material through interconnected microchannels;

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•

continuous flow, high-throughput screening assay methods and systems;

•

chip-based assay chemistries and methods;

•

chip-compatible sample access;

•

software for control of microfluidic based systems and data analysis;

•

chip manufacturing processes;

•

analytical and control instrumentation; and

•

analytical system architecture.

        We are also a party to various exclusive and non-exclusive license agreements with third parties which give us rights to use certain technologies in our microfluidics and laboratory automation business. For example, we have exclusive licenses from UT-Battelle, LLC, relating to patents covering inventions by Dr. J. Michael Ramsey, and from the Trustees of the University of Pennsylvania covering certain microfluidic applications and chip structures. We also have an exclusive license from Monogram BioSciences, Inc. covering a variety of microfluidic applications, chip structures and chip fabrication techniques, particularly in the area of polymeric substrates. These licenses extend for the duration of the life of the licensed patents. A failure to maintain some or all of the rights to these technologies could adversely impact our business.

        Imaging.    We believe that our patent portfolio relating to in vivo imaging methods is a valuable resource for licensing to our customers and also presents a barrier to entry for the practice of our patented optical imaging methods. Our imaging patent portfolio is built on two foundations: (i) methods and applications relating to the biological aspects of optical imaging; and (ii) methods and apparatus relating to the instrumentation aspects of optical imaging. We have also non-exclusively licensed patents relating to methods of animal production that add value and accelerate the production of specific types of modified animals. In addition to our foundational claims for certain methods of noninvasive optical imaging, our patent portfolio includes issued and pending patent claims for specific applications of optical imaging along with a number of areas that we believe will be valuable to our business, including animal models of disease, transgenic animals useful in drug discovery research, imaging system components and computer-implemented methods for image acquisition and analysis.

        We license several patents from third parties that are important to our imaging business. Our core imaging patents and related applications are licensed from Stanford University on an exclusive basis. The license is worldwide, royalty-bearing and includes the right to grant sublicenses. The term of this license is for the life of the patents resulting from the applications, which do not begin to expire until 2014.

        As discussed in Note 10 of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, in 2006 Stanford engaged an independent auditing firm to conduct an audit of the royalties paid to Stanford under our license agreement with Stanford. This audit was based on a different interpretation of the scope of imaging products that are subject to the royalty provisions of the Stanford license agreement than we had used for the calculation of royalties since the beginning of this licensing arrangement in 1997. We believe that Stanford's interpretation of the license agreement is not correct. However, as a result of Stanford's view of the license agreement, the parties may amend the agreement to change the royalties we pay to Stanford for future sales. In 2009, we initiated a mediation process with Stanford to resolve our different interpretations of the license agreement, but no substantive progress has been made to resolve the parties' disagreement.

        In connection with the settlement of our litigation with AntiCancer, Inc. in February, 2008, we obtained license rights under AntiCancer's portfolio of patents covering various methods and applications of in vivo imaging utilizing fluorescent proteins. We now can provide sub-license rights to

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these AntiCancer patents in connection with our granting of license rights under our other imaging method patents.

        The right to use the specific luciferase gene in our LPTA models and certain of our Bioware products is licensed from Promega Corporation and The Regents of the University of California (UC), under non-exclusive, royalty-bearing licenses. The Promega agreement continues for the life of the subject patent, which expires in 2014. Promega, however, may terminate the agreement for breach of contract. The agreement with the UC Regents continues for the life of those subject patents, which expire in 2013; however, this agreement may also be terminated for breach of contract or failure to sufficiently commercialize luciferase-bearing products.

        Trademarks.    We have registered and applied to register a number of trademarks in the U.S. and in foreign markets where our products are sold. Trademarks currently used by us include: Caliper, the Caliper logo, Caliper Driven, LabChip, the LabChip logo, Discovery Alliance and Services, CDAS, Allegro, CLARA, RapidPlate, RapidTrace, Staccato, TurboVap, Twister, iLink, inL10, Maestro, EZ Reader, ProfilerPro, Zephyr, and Sciclone. NovaScreen is a trademark of NovaScreen Biosciences Corporation, which is a wholly-owned subsidiary of Caliper. Xenogen, the Xenogen logo, IVIS, Living Image, LPTA, Bioware, Xenofluor, VivoFluor, Lumina, Spectrum and Kinetic are trademarks of Xenogen Corporation, which is a wholly-owned subsidiary of Caliper.

Environmental Matters

        Our manufacturing and laboratory sites utilize chemicals and other potentially hazardous materials, and generate both hazardous and non-hazardous waste, the transportation, treatment, storage and disposal of which are regulated by various governmental agencies. Although we believe that our safety procedures for handling and disposing of such materials comply with state and federal laws and regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result and any liability could exceed our resources.

        We continuously assess the compliance of our operations with applicable federal, state and local environmental laws and regulations. Our policy is to record liabilities for environmental matters when loss amounts are probable and reasonably determinable. When needed, we have engaged environmental consultants to assist with our compliance efforts. We believe we are currently in compliance with all applicable environmental permits and are aware of our responsibilities under applicable environmental laws. Any expenditure necessitated by changes in law and permitting requirements cannot be predicted at this time, although we do not expect such costs to be material to our financial position, results of operations or competitive position.

Government Regulation

        Many of our pharmaceutical and biotechnology licensees employ our technology to develop preclinical animal data on therapeutic products in development that may be submitted to governmental agencies as part of a regulatory application to commence human clinical testing or to commercialize their products. It is our belief that preclinical data collected using our technology has been submitted by several of our clients and accepted by the FDA to support commencement of clinical trials, and that in several cases regulatory approval has been received for a therapeutic product based, in part, on data collected using our technology. There can be no assurance that the FDA or other regulatory agencies will continue to accept preclinical data collected using our technology and submitted as part of an application to support initiation of clinical trials, or that such data can or will be used to support regulatory approval to commercialize therapeutic products.

        Additionally, exports of certain products and biological reagents to foreign customers and distributors are governed by the International Traffic in Arms Regulations, the Export Administration

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Regulations, the Patriot Act and the Bioterrorism Safety Act. Although these laws and regulations do not restrict our present foreign sales programs, there can be no assurance that future changes to these regulatory regimes will not affect or limit our foreign sales.

Other Business Risks

        In addition to the risks to our business associated with suppliers, competition and intellectual property discussed above, our business is subject to a number of other significant risks, including the risks that our products may not achieve wide market acceptance and that we may not be successful in developing new and enhanced products. These and other risks that may cause our actual results, financial performance or achievements to be materially different from our present expectations are discussed in more detail below under Item 1A, "Risk Factors".

Employees

        As of December 31, 2009, we had a total of 401 employees, including 72 in research and development, 181 in operations and service, 87 in sales and marketing and 61 in administration and finance. None of our employees is represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relations with our employees to be good.

Executive Officers of the Registrant

        Listed below are our executive officers and key employees as of February 28, 2010. No family relationship exists between any one of these individuals and any of the other executive officers or directors.

E. Kevin Hrusovsky, 48, was appointed President and CEO immediately following the acquisition of Zymark Corporation, a liquid handling instruments company, by us in July 2003. Prior to the acquisition, Mr. Hrusovsky had served as President and CEO of Zymark since 1996. From 1992 to 1996, Mr. Hrusovsky was Director of International Business, Agricultural Chemical Division, and President of the Pharmaceutical Division, for FMC Corporation, a diversified holding company. From 1983 to 1992, Mr. Hrusovsky held several management positions at E.I. DuPont de Nemours, including North American Sales and Marketing Head, Teflon. He has also served as a board member of the Association for Laboratory Automation since January 2003. He received his B.S. in Mechanical Engineering from Ohio State University, an M.B.A. from Ohio University, and an honorary doctorate from Framingham State University.

Bruce J. Bal, 51, currently serves as Senior Vice President, Operations, and was appointed to the position of Vice President, Operations and Aftermarket Businesses following the combination of Caliper with Zymark. Mr. Bal joined Zymark in 1997 as Vice President of R&D and Operations. He previously worked at FMC Corporation, a diversified holding company, in the Biotechnology Division as Director of Operations. He has also held a wide range of management positions in his 13 years at E.I. DuPont de Nemours and was General Manager of United States Pollution Control, Inc. in Utah. Mr. Bal received a B.S. in Chemical Engineering from the University of Wisconsin in 1981 and an MBA from Loyola University, Louisiana in 1986.

Enrique Bernal, 71, was promoted to Senior Vice President, In vitro Business Development in May 2008. He was Vice President, Instrument R&D following the acquisition of Zymark. Mr. Bernal joined Zymark in February 1999, prior to which he worked at Galileo Corporation of Sturbridge, Massachusetts, a developer and manufacturer of electron multipliers and optical fiber products, where he was responsible for all engineering functions and product development. Previously, he had spent 29 years at Honeywell Inc. He received a B.S. in Physics from the College of St. Thomas, and a Masters in Physics from the University of Minnesota.

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Paula J. Cassidy, 41, was promoted to Senior Vice President, Human Resources in March 2009. Ms. Cassidy joined us as Vice President, Human Resources in November 2005. Ms. Cassidy previously was Vice President, Human Resources at Virtusa, Corp., a global provider of software development and related IT services. In that position, Ms. Cassidy was responsible for all aspects of the human resources function and she established a cohesive and unified global HR practice. Prior to joining Virtusa Corp in 2003, Ms. Cassidy was with Innoveda, Inc., a publicly traded provider of software and services for the electronic design automation industry. Innoveda had facilities all over the world including the United States, Europe, Israel and Asia. Prior to Innoveda, Ms. Cassidy was Vice President, Human Resources for a wholly-owned subsidiary of Synopsys, Inc. Ms. Cassidy started her career in Human Resources at Viewlogic Systems, Inc. and held various human resources management positions while at Viewlogic. Ms. Cassidy holds a bachelors degree from St. Anselm College.

Stephen E. Creager, 56, currently serves as Senior Vice President, General Counsel and Secretary. Mr. Creager joined the company in October 2002 as Associate General Counsel and was appointed to the position of Vice President, General Counsel and Secretary following the combination of Caliper with Zymark. Previously, Mr. Creager was Vice President of Business Development for Tyco Electronics, an operating unit of Tyco International involved in the development and manufacture of electronic components. In this role, he provided the legal support for the business development initiatives of Tyco Electronics, including the acquisition of over 40 businesses. Prior to taking on these business development responsibilities at Tyco Electronics, Mr. Creager served as the General Counsel of Tyco Electronics. Prior to that, Mr. Creager served as Associate General Counsel of Raychem Corporation, a manufacturer of electronic components, from November 1993 until August 1999, when Raychem was acquired by Tyco Electronics. Prior to his experience at Raychem, Mr. Creager was in private legal practice for nine years. Mr. Creager received a B.A. degree from The Evergreen State College, and a Masters of Philosophy degree in economics and a J.D. degree, both from Yale University.

Joseph H. Griffith IV, 35, currently serves as Vice President, Finance. He previously served as Corporate Controller from July 2003 to April 2008, having also served as Corporate Controller for Zymark Corporation, which was acquired by Caliper, since 2002. Mr. Griffith was previously employed by Arthur Andersen, LLP in its Boston, MA audit practice from 1997 to 2002. He received his B.S. in Accounting from Villanova University, and is a licensed Certified Public Accountant in the State of Pennsylvania.

William C. Kruka, 49, currently serves as Senior Vice President, Corporate Development and Imaging Business Unit Head and joined the Company in 2002 as Vice President, Business Development. Previously, Mr. Kruka was Senior Manager of Business Development with leading life science tool provider Applied Biosystems Group, an Applera Corporation business. In that role, he led the business development initiatives for proteomics, including related mass spectrometry, sample preparation, chromatography and microfluidic technologies. These initiatives included developing strategy, formulating deal structures and negotiating collaborations, licenses and divestitures. He also chaired an internal business development council that addressed strategic and operational matters from a cross-functional business and technology perspective. Prior to Applied Biosystems, Mr. Kruka held a number of corporate business development, sales, marketing and administration positions with Applera and its predecessors, PE Corporation and The Perkin-Elmer Corporation, from 1983 to 2002.

Jerome Leclercq, 45, was promoted to Vice President International Research Sales & Aftermarket Service & General Manager International Operations, in August 2008. From March 2007 up to his most recent appointment, Mr. Leclercq previously served as General Manager, EMEA Commercial Operations for Caliper. In the years prior to serving as General Manager EMEA, Mr. Leclercq held positions of increasing responsibility within Caliper and Zymark Corporation, which he joined in October 1987. He received his Masters Degree in Biochemical Engineering from University of Clermont-Ferrand in 1987.

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David M. Manyak, Ph.D., 57, is currently Executive Vice President, Caliper Discovery Alliances & Services, and joined the Company in 2005 as Executive Vice President, Drug Discovery Services. Previously, Dr. Manyak was Chief Executive Officer of NovaScreen Biosciences, which was acquired in October 2005, since January 1993. Dr. Manyak has more than 25 years of experience in research, financial analysis, and management of biotechnology companies. From 1990 to 1992, Dr. Manyak was a biotechnology industry consultant and was a co-founder and former Director of GeneMedicine Inc., a gene therapy company. He was previously employed by Merrill Lynch & Co. (from 1985 to 1990) as Vice President, Senior Biotechnology Industry Analyst, and held a similar analyst position with Value Line Inc. (from 1983 to 1985). Dr. Manyak also serves as a Director of TCM and its MDBio division, which is a biotechnology trade organization in the State of Maryland. He holds a Ph.D. in Zoology/Biochemistry from Duke University and a B.A. from Brown University.

Peter F. McAree, 45, has served as Senior Vice President and Chief Financial Officer since April 2008 after having held the position of Vice President of Finance since 2003. Mr. McAree was Chief Financial Officer of Zymark Corporation from May 2000, until the acquisition of Zymark by Caliper in 2003. From January 2000 through November 2000, Mr. McAree served as Chief Financial Officer of Iconomy.com, Inc., a commerce solutions provider. From January 1999 through December 1999, Mr. McAree was an independent consultant. From January 1997 through December 1998, Mr. McAree served as Executive Vice President and Vice President, Finance at Elcom International, Inc., a commercial distributor of personal computers, and as President of its wholly-owned subsidiary, Elcom Systems. Prior to Elcom, Mr. McAree was Chief Financial Officer of Geerlings & Wade, Inc., a direct marketer of wine, from 1995 through 1996. Mr. McAree began his career with Arthur Andersen, Boston, where he held various positions, most recently as Senior Manager in 1995. He received his B.S. in Accountancy from Bentley College, and is a licensed Certified Public Accountant in Massachusetts.

Bradley W. Rice, Ph.D., 50, was promoted to Senior Vice President, Systems R&D in May 2008. Dr. Rice had served as the Chief Technical Officer and Vice President of Xenogen since January 2005. From 1999 through 2004, he served as the Senior Director of Imaging R&D and played a key role in developing the suite of IVIS imaging systems. Prior to joining Xenogen, Dr. Rice worked for 15 years as a scientist at Lawrence Livermore National Laboratory developing optical diagnostic instrumentation in the magnetic fusion energy program. Dr. Rice received his B.A. in Physics from Colorado College, M.S. in Electrical Engineering from the University of Wisconsin-Madison, and his Ph.D. in Applied Science from the University of California-Davis.

Mark T. Roskey, Ph.D., 50, currently serves as Senior Vice President, Biology R&D. In addition to leading the Company's biology efforts, Dr. Roskey is currently directing the North American western region sales, service and automation support functions for the Research products business area. Dr. Roskey was appointed to the position of Vice President, Worldwide Marketing following the acquisition of Zymark, where he had held this role since he joined Zymark in December 2001. Prior to that, Dr. Roskey worked for six years at Applied Biosystems, a life sciences company, where he served as Director of Marketing. He has more than 15 years of experience in product research, development and strategic marketing with complex biological solutions and automated instrument systems. Dr. Roskey holds a B.S. in Biology from Framingham State College, a Ph.D. in Microbiology from the University of Notre Dame and completed a postdoctoral fellowship in Molecular Immunobiology at the Harvard Medical School.

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Item 1A.    Risk Factors

Risks Related To Our Business

We expect to incur future operating losses and may not achieve profitability.

        We have experienced significant operating losses each year since our inception and we expect to incur an operating loss in 2010. As of December 31, 2009, we had an accumulated deficit of approximately $310.6 million. Our losses have resulted principally from costs incurred in research and development and product marketing and from general and administrative costs associated with our operations. These costs have exceeded our cumulative cash proceeds which, to date, have been generated principally from product sales, collaborative research and development agreements, technology access fees, license fees, litigation settlement proceeds and interest income on cash and investment balances. To achieve profitability, we will need to generate and sustain higher revenue than we have to date, while achieving reasonable costs and expense levels. We may not be able to generate enough revenue to achieve profitability. We may not achieve or maintain reasonable costs and expense levels. Even if we become profitable, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to achieve profitability within the timeframe expected by securities analysts or investors, the market price of our common stock will likely decline.

Our LabChip products may not achieve widespread market acceptance, which could cause our revenue to grow slowly or decline and make it more difficult for us to achieve or maintain profitability.

        The commercial success of our LabChip products depends upon market acceptance of the merits of our drug discovery and automated electrophoresis separations systems by pharmaceutical and biotechnology companies, academic research centers and other companies that rely upon laboratory experimentation. Although our microfluidic drug discovery and automated electrophoresis systems have been marketed and sold commercially for over ten years, their accuracy, reliability, ease-of-use and commercial value have not yet gained widespread commercial acceptance. During 2008, we introduced a wholly redesigned automated electrophoresis separations system, the LabChip GX and LabChip GXII. Although the market reaction to our new LabChip GX systems during 2009 was positive, if these systems do not continue to gain further market acceptance, our revenue may grow more slowly than expected or decline.

        Our strategy for our microfluidic-based screening products, such as the EZ Reader, and LabChip GX systems, depends upon the early users of these systems buying additional units as they spread the adoption of this technology throughout their organizations worldwide. New customers for our LabChip GX systems may wait for indications from these early users that our drug discovery and automated electrophoresis separations systems work effectively and generate substantial benefits. If the early users of our EZ Reader and LabChip GX instrument systems do not endorse the further adoption of these systems because they fail to generate the expected quantities and quality of data, are too difficult or costly to use, or are otherwise deficient in meeting the needs of these customers, further sales of these systems to these early users may be limited, and sales to new users will be more difficult.

        For all of the foregoing reasons, we cannot assure you that our efforts to increase the adoption of our LabChip-based drug screening and automated electrophoresis systems, by both existing and new users, will be expeditious or effective.

        In summary, market acceptance of our LabChip systems will depend on many factors, including:

•

our ability to demonstrate the advantages and potential economic value of our LabChip drug discovery and automated electrophoresis separations systems over alternative, well-established technologies;

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•

our ability to penetrate new markets, such as next-gen sequencing laboratories and protein fermentation facilities, with our LabChip GX and GX II automated electrophoresis separations systems;

•

our ability to develop a broader range of standard assays and applications that enable customers and potential customers to perform many different types of experiments on a single LabChip instrument system;

•

our ability to develop new LabChip instrument systems designed for new applications; and

•

our ability to penetrate the market for secondary kinase screening with our EZ Reader systems and ProfilerPro reaction ready plates.

If our in vivo optical imaging products and services do not become more widely used by pharmaceutical, biotechnology and life sciences researchers, our revenue will grow more slowly than expected or decline and make it more difficult for us to achieve or maintain profitability.

        The commercial success of all of our IVIS imaging systems will depend upon the continuing adoption of our technology as a preferred method to perform in vivo biological assessment. Such continuing adoption depends upon these products meeting the technical and cost requirements for in vivo biological assessment within the life sciences industry. Widespread market acceptance will depend on many factors, including:

•

the willingness and ability of researchers and prospective customers to adopt a relatively new technology;

•

our ability to convince prospective strategic partners and customers that our technology is an attractive alternative to other methods of in vivo biological assessment; and

•

creating a belief on the part of our customers that our products can accelerate timelines and reduce costs in drug development.

        We cannot assure you that our IVIS imaging systems will achieve widespread market acceptance in a timely manner or at all, or to a degree that will allow our business to achieve success.

Failure to maintain our credit facility borrowing base, raise additional capital or generate the significant capital necessary to expand our operations and invest in new products could reduce our ability to compete and result in lower revenue.

        We anticipate that our existing capital resources, including amounts available under our credit facility, together with the revenue to be derived from our commercial partners and licensees and from commercial sales of our products and services, will enable us to maintain currently planned operations through at least March 31, 2011. However, this expectation is based on our current operating plan, and our ability to maintain our borrowing base and remain in compliance with various covenants of our bank credit facility, which may change as a result of many factors, including conditions in the market for our products and services as well as the prospect of future acquisitions or other investing activities that could require substantial additional financing. Consequently, we may need additional funding sooner than anticipated. The virtually unprecedented turmoil in the world's financial markets, which began in 2008 and continued through 2009, may make it difficult or impossible for us to raise additional capital. Our inability to raise needed capital would seriously harm our business and product development efforts. Alternatively, in the event that we are able to do so, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in dilution to our stockholders.

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        In addition, to the extent that operating and capital resources are insufficient to meet future requirements, we will have to raise additional funds to continue the development and commercialization of our technologies. These funds may not be available on favorable terms, or at all. If adequate funds are not available on attractive terms, we may be required to curtail operations significantly or to obtain funds by entering into financing, supply or collaboration agreements on unattractive terms.

Failure to remain in compliance with the covenants included in our revolving credit facility could interfere with or prevent our ability to obtain additional advances under this credit facility.

        On December 11, 2009, we entered into a First Loan Modification Agreement with a bank, amending our credit facility, which is reflected by the Second Amended and Restated Loan and Security Agreement dated as of March 6, 2009. We utilize the credit facility as a source of capital for ongoing operations and working capital needs. The principal effect of this modification was to extend the maturity date of the credit facility from November 30, 2010 to April 1, 2011. The modification also established financial covenants for us for the quarter ending March 31, 2011, as well as modified certain of the existing financial reporting covenants that are tested as of the last day of each quarter. The Agreement is filed as an exhibit to this Annual Report on Form 10-K.

        The credit facility with the bank permits us to borrow up to $25 million in the form of revolving loan advances, including up to $5 million in the form of letters of credit. Principal borrowings under the credit facility accrue interest at a floating annual rate equal to the prime rate plus one percent if our unrestricted cash held at the bank exceeds or is equal to $20 million, or prime plus two percent if our unrestricted cash held at the bank is below $20 million. Under the credit facility, we are permitted to borrow up to $25 million, subject to a borrowing base limit consisting of (a) 80% of Eligible Accounts Receivable, as defined in the credit facility, plus (b) the lesser of 70% of our unrestricted cash at the bank or $12 million; provided, that on each of the first three business days and each of the last three business days of each fiscal quarter, the borrowing base is (a) 80% of eligible accounts receivable, as defined, plus (b) the lesser of 90% of our unrestricted cash at SVB or $12 million.

        The credit facility contains traditional lending and reporting covenants through the maturity date, including certain financial covenants applicable to Caliper's liquidity and earnings that are tested as of the last day of each quarter. The credit facility includes rights for the bank to accelerate the maturity of the debt, lower the borrowing base or stop making advances, if the bank determines, based upon its good faith business judgment, that events or conditions may adversely affect the value of the collateral securing the credit facility or our ability to repay amounts outstanding under the credit facility. The credit facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at the interest rate in effect as of the date of default plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank's right to declare all outstanding obligations immediately due and payable.

        Our ability to remain in compliance with applicable loan covenants through the credit facility's maturity in April 2011 depends upon our ability to achieve results that are materially consistent with our internal operating plans. If a material adverse change occurs within our business, or we fail to achieve our anticipated operating results, we may become in default of one or more covenants under the credit facility, which would require us to ask the bank to waive the covenants and these waivers may or may not be granted. If such events were to occur, we have no alternative committed sources of capital.

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We receive significant revenue from out-licensing our patent estates for microfluidic technology and in vivo optical imaging methods, and may not be able to replace such revenue upon the expiration of those patents.

        We own or exclusively in-license a number of patents for which we have received significant revenue by out-licensing such patents to third parties, including the patents for in vivo optical imaging methods that we exclusively in-license from Stanford University mentioned above, as well as patents in our extensive microfluidics technology patent estate. Certain of these patents will begin to expire in the next four- to eight-year period, and our revenue growth rate will be adversely impacted by the loss of license revenue as these patents expire, especially if we are not be able to develop new products or new technologies for out-licensing that can be used to offset the decline in license revenue due to the expiration of our existing patents.

We receive significant licensing revenue from commercial users of our patented in vivo optical imaging methods, and our ability to continue to receive this licensing revenue in the future will depend upon our ability to convince commercial users of the value of our patented imaging methods and our ability to enforce and defend the validity of such patents.

        We exclusively in-license from Stanford University a portfolio of patents covering a broad range of methods for in vivo, noninvasive imaging of light generated from within mammals, which portfolio of patents include U.S. Patent No. 5,650,135 and a number of other patents that issued from continuation applications relating to the '135 patent. The patents in this portfolio cover broad methods of in vivo imaging of generated light. We actively out-license these patents to entities performing preclinical drug discovery and development research. These licenses, in the case of commercial entities, require the payment of fees in order to perform the patented imaging methods. Our ability to maintain and increase the revenue we obtain from this licensing program will depend upon our continuing ability to convince researchers of the value of these patented imaging methods, as well as our ability to successfully defend the validity of the patents in this portfolio. It is possible that entities will seek to invalidate one or more patents included in this portfolio, either through litigation or through a reexamination process with the USPTO to challenge the patentability of the patent claims. For example, in November 2007 VisEn Medical filed a request with the USPTO for an inter partes reexamination of U.S. Patent No. 7,255,851. In January 2008, the USPTO granted VisEn's request for a reexamination of the '851 patent, and in February 2009 the USPTO issued an "Action Closing Prosecution" which rejected the claims of the '851 patent. The rejected claims of the '851 patent were substantially different from the claims in the remaining patents in the '135 patent family. However, there can be no assurance that one or more of the other patents included in our in vivo imaging patent portfolio could be held to be invalid, or the scope of their claim coverage could be a narrowed through similar legal action taken by other competitors. If this occurs, our revenue from out-licensing this portfolio may decline.

Because we receive revenue principally from pharmaceutical and biotechnology companies and biomedical research institutions, the current economic conditions faced by and regulatory requirements imposed upon those companies and institutions, as well as their capital spending policies, may have a significant effect on the demand for our products.

        We market our products to pharmaceutical and biotechnology companies and to academic and other biomedical research institutions, and the changes to capital spending policies of these entities could have a significant effect on the demand for our products. These policies vary significantly among different customers and are based on a wide variety of factors, including the resources available for purchasing research equipment, the spending priorities among various types of research companies and the policies regarding capital expenditures. In particular, economic conditions and regulatory requirements faced by pharmaceutical and biotechnology companies have at certain times directly affected their capital spending budgets. In addition, continued consolidation within the pharmaceutical

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industry, including the cost reductions often implemented during such consolidations, will likely delay and may potentially reduce capital spending by pharmaceutical companies involved in such consolidations. During the past several years, many of our customers and potential customers, particularly in the biopharmaceutical industry, have reduced their capital spending budgets because of generally adverse prevailing economic conditions, consolidation in the industry and increased pressure on the profitability of such companies, due in part to competition from generic drugs. If our customers and potential customers do not increase their capital spending budgets, because of continuing adverse economic conditions or further consolidation in the industry, we could face weak demand for our products. Similarly, a decrease in the availability of grant money, as well as reductions in the value of university endowments due to recent significant worldwide declines in the value of financial and real estate assets, may impact our sales to academic customers. Developments involving safety issues for widely used drugs, including actual and/or threatened litigation, also may affect capital spending by pharmaceutical companies. Any decrease or delay in capital spending by life sciences or chemical companies or biomedical researchers could cause our revenue to decline and harm our profitability.

        In addition, consolidation within the pharmaceutical industry may not only affect demand for our products, but also existing business relationships. For example, if two or more of our present or future optical imaging customers merge, we may not receive the same aggregate amount of fees under one license agreement with the combined entity that we received under separate license agreements with these customers prior to their combination. Moreover, if one of our optical imaging customers merges with an entity that is not such a customer, the new combined entity may seek to terminate or not renew our license agreement. Any of these developments could cause our revenue to decline, or to grow more slowly than we anticipate.

Our future revenue is unpredictable and could cause our operating results to fluctuate significantly from quarter to quarter.

        Our quarterly and annual operating results have fluctuated in the past and are likely to do so in the future. Our operating results have been historically strongest in the fourth quarter due to customer budget cycles and are also influenced in the second and fourth quarters by academic grant funding cycles. The sale of many of our products typically involves a scientific evaluation and commitment of capital by customers. Accordingly, the initial sales cycles of many of our products are lengthy and subject to a number of significant risks that are beyond our control, including customers' budgetary constraints and internal acceptance reviews. As a result of this lengthy and unpredictable sales cycle, our operating results have historically fluctuated significantly from quarter to quarter, and we expect this trend to continue. In addition, a large portion of our expenses are relatively fixed. Historically, customer buying patterns and our revenue growth have caused a substantial portion of our revenues to occur in the last month of the quarter. Delays in the receipt of orders, our recognition of product or service revenue, or manufacturing delays near the end of the quarter could cause quarterly revenues to fall short of anticipated levels. Because our operating expenses are based on anticipated revenue levels and a high percentage of our expenses are relatively fixed, lower than anticipated revenues for a quarter could have a significant adverse impact on our operating results. Accordingly, if our revenue declines or does not increase as we anticipate, we might not be able to correspondingly reduce our operating expenses in a timely enough manner to avoid incurring additional losses. Our failure to achieve our anticipated level of revenue could significantly harm our operating results for a particular fiscal period.

        The following are some of the factors that could cause our operating results to fluctuate significantly from period to period:

•

changes in the demand for, and increased pricing for, our products and services;

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•

lengthy sales cycles and buying patterns of our customers, which may cause a decrease in our operating results for a quarterly period;

•

termination, non-renewal, or changes in the terms of our renewable contracts, including licenses;

•

our ability to find new partners to out-license our microfluidics intellectual property technology under our Caliper Driven licensing program, which license agreements generally include substantial upfront fees as well as future royalties based on sales of licensed products;

•

our ability to obtain key components for products and manufacture and install them on a timely basis to meet demand;

•

decreases in the research and development budgets of our customers;

•

commercial customer resistance to paying technology licensing fees in conjunction with future IVIS imaging system purchases;

•

acquisition, licensing and other costs related to the expansion of our product portfolio;

•

expenses related to patent infringement litigation and defense of our patents; and

•

expenses related to, and the results of, patent filings and other proceedings relating to intellectual property rights.

        Due to the possibility of fluctuations in our revenue and expenses, we believe that quarter to quarter or annual comparisons of our operating results are not a good indication of our future performance.

Our intellectual property rights may not provide meaningful commercial protection for our products, which could enable third parties to use our technology, or very similar technology, and could reduce our ability to compete in the market.

        We rely on patent, copyright, trade secret and trademark laws to limit the ability of others to compete with us using the same or similar technology in the U.S. and other countries. However, these laws afford only limited protection and may not adequately protect our rights to the extent necessary to sustain any competitive advantage we may have. In addition, our current and future patent applications may not result in the issuance of patents in the U.S. or foreign countries. The laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the U.S., and many companies have encountered significant problems in protecting their proprietary rights abroad. These problems can be caused by the absence of adequate rules and methods for defending and enforcing intellectual property rights.

        We will be able to protect our technology from unauthorized use by third parties only to the extent that they are covered by valid and enforceable patents or are effectively maintained as trade secrets. The patent positions of companies developing tools for pharmaceutical, biotechnology, and biomedical industries generally are uncertain and involve complex legal and factual questions, particularly as to questions concerning the enforceability of such patents against alleged infringement. The biotechnology patent situation outside the U.S. is even more uncertain. Changes in either the patent laws or in interpretations of patent laws in the U.S. and other countries may therefore diminish the value of our intellectual property. Moreover, our patents and patent applications may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. We also face the risk that others may independently develop similar or alternative technologies or design around our patented technologies.

        We own, or control through exclusive licenses, a variety of issued patents and pending patent applications. However, the patents on which we rely may be challenged and invalidated, and our patent applications may not result in issued patents.

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        We have taken measures to protect our proprietary information, especially proprietary information that is not covered by patents or patent applications. These measures, however, may not provide adequate protection of our trade secrets or other proprietary information. We seek to protect our proprietary information by entering into confidentiality agreements with employees, collaborators, customers and consultants. Nevertheless, employees, collaborators, customers or consultants may still disclose our proprietary information, and we may not be able to protect our trade secrets in a meaningful way. If we lose employees, we may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by those former employees despite the existence of nondisclosure and confidentiality agreements and other contractual restrictions to protect our proprietary technology. In addition, others may independently develop substantially equivalent proprietary information or techniques.

We have previously been and are currently involved in patent litigation. In connection with this litigation, the patents on which we rely may be challenged and invalidated. We may need to initiate other lawsuits to protect or enforce our patents or other proprietary rights. Patent litigation tends to be expensive and, if we lose, may cause us to lose some of our intellectual property rights, which would reduce our ability to compete in the market and may cause our stock price to decline.

        In order to protect or enforce our patent rights, we may initiate patent infringement litigation against third parties. For example, in January 2009 we initiated litigation against Shimadzu Corporation and its U.S. subsidiary alleging that Shimadzu's importing, marketing and selling of its MCE-202 MultiNA microchip electrophoresis system infringes 11 different U.S. patents owned by us, and in February 2010, we and Stanford University filed a complaint against Carestream Health, Inc. seeking a finding of willful infringement against Carestream based on Carestream's ongoing and unauthorized use of a number of U.S. patents that we exclusively license from Stanford University. Patent infringement lawsuits tend to be expensive, take significant time and can divert management's attention from other business concerns. This risk is exacerbated by the fact that the other parties involved in the lawsuits may have access to substantially greater financial resources than we have to conduct such litigation. These lawsuits put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Additionally, we may suffer reduced instrumentation sales and/or license revenue as a result of pending lawsuits or following final resolution of lawsuits. Further, these lawsuits may also provoke these third parties to assert claims against us. Attempts to enforce our patents may trigger third party claims that our patents are invalid. We may not prevail in any of these suits and any damage or other remedies awarded to us, if any, may not be commercially valuable. During the course of these suits, there may be public announcements of results of hearings, motions and other interim proceedings or developments in the litigation. If securities analysts or others perceive any of these results to be negative, such perception could cause our stock price to decline.

Acquisitions may have unexpected consequences or impose additional costs on us.

        Our business is highly competitive and our growth is dependent upon market growth and our ability to enhance our existing products, introduce new products on a timely basis and offer our customers products that provide a more complete solution. One of the ways we may address the need to develop new products is through acquisitions of complementary businesses and technologies, such as our acquisition of Zymark in July 2003, our acquisition of NovaScreen in October 2005, and our acquisition of Xenogen in August 2006. From time to time, we consider and evaluate potential business combinations involving our acquisition of another company and transactions involving the sale of our company through, among other things, a possible merger or consolidation of our business into that of another entity.

        Acquisitions involve numerous risks, including the following:

•

difficulties in integration of the operations, technologies and products and services of the acquired companies;

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•

the risk of diverting management's attention from normal daily operations of the business;

•

potential cost and disruptions caused by the integration of financial reporting systems and development of uniform standards, controls, procedures and policies;

•

accounting consequences, including amortization of acquired intangible assets or other required purchase accounting adjustments, resulting in variability or reductions of our reported earnings;

•

potential difficulties in completing projects associated with purchased in-process research and development;

•

risks of entering markets in which we have no or limited direct prior experience and where competitors in these markets have stronger market positions;

•

the potential loss of our key employees or those of the acquired company due to the employment uncertainties inherent in the acquisition process;

•

the assumption of known and potentially unknown liabilities of the acquired company;

•

the risk that we may find that the acquired company or business does not further our business strategy or that we paid more than what the company or business was worth;

•

our relationship with current and new employees and customers could be impaired;

•

the acquisition may result in litigation from terminated employees or third parties who believe a claim against us would be valuable to pursue;

•

our due diligence process may fail to identify significant issues with product quality, product architecture and legal contingencies, among other matters; and

•

revenues to offset increased expenses associated with acquisitions may be insufficient.

        Acquisitions may also cause us to issue common stock that would dilute our current stockholders' percentage ownership; record goodwill and non-amortizable intangible assets that will be subject to impairment testing and potential periodic impairment charges; incur amortization expenses related to certain intangible assets; or incur other large and immediate write-offs.

        We cannot assure you that future acquisitions will be successful and will not adversely affect our business. We must also maintain our ability to manage growth effectively. Failure to manage growth effectively and successfully integrate acquisitions that we make could harm our business.

Business divestitures may have unexpected consequences or impose additional costs on us.

        Business divestitures involve significant risks, including the fact that indemnification requirements could result in a reduction of expected proceeds from the sale transaction. In addition, the sale of certain components of our business could reduce future operating cash flows, and increase our reliance on growth in our core remaining business operations to make up for reductions in revenues, operating gross margin and cash flows. Business divestitures may also negatively impact the price of our common stock. We cannot assure you that future business divestitures will be successful and will not adversely affect our business.

The delay, termination or non-renewal of a large multi-year contract or the loss of, or a significant reduction in, sales to any of our significant customers could harm our operating results.

        We currently derive, and we expect to continue to derive, a significant percentage of our total revenue from a relatively small number of customers. If any one of these customers terminates or substantially diminishes its relationship with us, our revenue could decline significantly. We have contractual arrangements with certain customers that encompass the sale of products and licensing of

30

imaging intellectual property pursuant to agreements that are renewable on an annual or multi-year basis. Failure to renew or the cancellation of these agreements by any one of our larger customers could result in a significant loss of revenue. In addition, in April 2007 we entered into a contract with the Environmental Protection Agency (EPA) to perform in vitro compound toxicity screening pursuant to which the EPA periodically issues task orders to us. We have experienced significant, unanticipated delays in the receipt of, or authorization to initiate work with respect to, certain orders under the EPA contract. If the EPA experiences a reduction in its federal funding, elects not to proceed with the program or elects to reduce the number of compounds to be screened by us pursuant to this contract, our revenue may decline or grow more slowly than we currently expect.

The temporary or permanent closure of a leased facility could harm our operating results.

        We currently manufacture our products in various leased facilities. We rely on a single manufacturing location to produce our microfluidic chips in Mountain View, California, and a single manufacturing location in Hopkinton, Massachusetts to produce laboratory automation, microfluidic instrument, imaging and robotics systems, with no alternative facilities. We rely on our facility in Alameda, California to produce Bioware cells and microorganisms. Our in vitro screening services are performed at a single facility located in Hanover, Maryland. These facilities and some pieces of manufacturing equipment are difficult to replace and could require substantial replacement lead-time. If any of our facilities are closed on a temporary or permanent basis, our revenue could decline significantly.

Our success will depend partly on our ability to operate without infringing or misappropriating the proprietary rights of others.

        We may be exposed to future litigation by third parties based on claims that our products or services infringe the intellectual property rights of others. This risk is exacerbated because there are numerous issued and pending patents in the life sciences industry and the validity and breadth of life sciences patents involve complex legal and factual questions. Our competitors may assert that their U.S. or foreign patents may cover our products and the methods we employ. For example, until February 2008 we were involved in patent litigation with AntiCancer, Inc. in which AntiCancer had alleged that we have infringed certain of its patents. Although this litigation was resolved through a settlement and cross-license agreement between the parties, there can be no assurance that we will be able to settle other infringement claims on a favorable basis in the future. Also, because patent applications can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products may infringe. There could also be existing patents of which we are not aware that one or more of our products may inadvertently infringe.

        From time to time, we have received, and may receive in the future, letters from third parties asking us to license certain technologies that the third party believes we may be using or would like us to use. If we do not accept a license, we may be subject to claims of infringement, or may receive letters alleging infringement. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate and can divert management's attention from our core business.

        If we lose a patent infringement lawsuit, we could be prevented from selling our products unless we can obtain a license to use technology or ideas covered by such patent or are able to redesign the products to avoid infringement. A license may not be available at all or on terms acceptable to us, or we may not be able to redesign our products to avoid any infringement. If we are not successful in obtaining a license or redesigning our products, we may be unable to sell our products and our business could suffer.

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Our rights to the use of technologies licensed to us by third parties are not within our control, and without these technologies, our products and programs may not be successful and our business prospects could be harmed.

        We rely on licenses to use various technologies that are material to our business, including licenses, with sublicense rights, to certain microfluidic technologies and in vivo imaging methods, licenses to the use of certain biological materials, and licenses to engineer and commercialize transgenic animals. We do not own the patents that underlie these licenses. Our rights to use these technologies and employ the inventions claimed in the licensed patents are subject to the continuation of compliance with the terms of those licenses. In some cases, we do not control the prosecution or filing of the patents to which we hold licenses, or the enforcement of these patents against third parties. For example, under the Promega Corporation and The Regents of the University of California licenses for one or more patented forms of firefly luciferase used in our Bioware cell lines and LPTA animal models, we do not have the right to enforce the patent, and neither licensor is obligated to do so on our behalf. Certain of our licenses contain diligence obligations, as well as provisions that allow the licensor to terminate the license upon specific conditions. Some of the licenses under which we have rights, such as our licenses from the University of Pennsylvania and from UT Battelle for certain microfluidic technologies, and from Stanford University for certain optical imaging methods, provide us with exclusive rights in specified fields, including the right to enforce the licensed patents, but the scope of our rights and obligations under these and other licenses may become subject to dispute by our licensors or third parties. For example, in 2006, Stanford raised an issue regarding the scope of products that we sell which are subject to the royalty provisions of our Stanford license agreement. Although we believe Stanford's interpretation of the license agreement is incorrect, as a result of Stanford's view of the license agreement we may amend the license agreement to change the royalties we pay to Stanford for future sales. The amendment may also include the payment of back royalties to Stanford for products we have already sold. While we have not discussed with Stanford the specific terms and conditions of an amendment or the amount of any back royalty payments, any increase in the royalties we pay to Stanford would negatively impact our gross margins.

Our tax net operating losses and credit carryforwards may expire if we do not achieve or maintain profitability, or if tax regulations are changed such that they no longer allow previously generated tax net operating losses to be utilized.

        As of December 31, 2009, we had federal and state net operating loss carryforwards of approximately $282.7 million and $123.1 million, respectively. We also had federal and state research and development tax credit carryforwards of approximately $7.9 million and $5.1 million, respectively. The federal net operating loss and credit carryforwards will expire at various dates through 2028 if not utilized. The current remaining state net operating losses have varying expiration dates through 2029. In 2009, the State of California suspended the use of net operating losses by corporations to reduce taxable net income which is apportioned to California. In 2009, we incurred a state tax liability in California as a result of not being able to utilize previously generated losses. As of December 31, 2009, our California tax net operating losses amounted to $44.5 million.

        Utilization of the federal and state net operating losses and credits may be subject to a substantial limitation due to the change in ownership provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. Because of our lack of earnings history and the uncertainty of realizing these net operating losses, the deferred tax assets have been substantially offset by a valuation allowance.

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If we are unable to meet customer demand, it would adversely impact our financial results and restrict our sales growth.

        We may not be able to meet the expectations of our customers for a number of reasons. For example, our lab automation, microfluidic, and IVIS imaging instruments are all relatively complex systems, and certain components of these systems are specially manufactured by our limited and/or single-source suppliers. Supply of these parts to us requires adequate lead-time that can result in production delays. If we experience unexpected shifts in customer demand that require increases to planned manufacturing, we may experience production delays that could restrict our sales growth. Also, if we do not consistently manufacture these systems at a sufficiently high level of quality, we could lose customers and fail to acquire new customers if they choose a competitor's product because our systems do not perform in accordance with our customers' expectations. If we are unable to meet customer expectations for any of our instrument systems, it would adversely affect our financial results and restrict our sales growth.

We depend on a limited number of suppliers for components of IVIS imaging systems, and we will be unable to manufacture or deliver our products if shipments from these suppliers are interrupted or are not supplied on a timely basis.

        We use original equipment manufacturers, or OEMs, to supply various components of our IVIS imaging systems, including the cameras, imaging chambers, and certain subassemblies, filters and lenses. We obtain these key components from a small number of sources. For example, the lens for our IVIS Spectrum is obtained from a single source on a purchase order basis, and the CCD cameras for all of our IVIS imaging systems are obtained from a single source pursuant to a binding supply agreement. From time to time, we may experience delays in obtaining components from certain of our suppliers, which may have a negative impact on our ability to produce imaging systems. In the event of a disruption or discontinuation in supply, we believe that alternative sources for certain of these components would not be available on a timely basis, which would disrupt our operations and impair our ability to manufacture and sell our IVIS imaging systems.

        Our dependence upon outside suppliers and OEMs exposes us to risks, including:

•

the possibility that one or more of our suppliers could terminate their services at any time;

•

the potential inability of our suppliers to obtain required components or products;

•

reduced control over pricing, quality and timely delivery due to the difficulties in switching to alternative suppliers;

•

the potential delays and expense of seeking alternative suppliers; and

•

increases in prices of key components.

Accounting for the potential impairment of goodwill and other intangible assets may have a significant adverse effect on us.

        In accordance with the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Accounting for the Impairment or Disposal of Long-Lived Assets, we assess the recoverability of identifiable intangibles with finite lives and other long-lived assets, such as property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In accordance with FASB ASC 350, Goodwill and Other Intangible Assets, goodwill and intangible assets with indefinite lives from acquisitions are evaluated annually, or more frequently, if events or circumstances indicate there may be an impairment, to determine whether any portion of the remaining balance of goodwill and indefinite lived intangibles may not be recoverable. If it is determined in the future that a portion of our goodwill and other

33

intangible assets is impaired, we will be required to write off that portion of the asset according to the methods defined by FASB ASC 360 and FASB ASC 350, which will have an adverse effect on our reported GAAP net income for the period in which the write-off occurs.

        The goodwill impairment analysis is a two-step process. We are comprised of a single reporting unit, and as such the first step used to identify potential impairment involves comparing the entity's estimated fair value to its carrying value, including goodwill. Fair value is determined by utilizing information about our Company as well as publicly available industry information. In our annual determination, we principally rely on the income approach, pursuant to which we determine fair value based on the estimated future cash flows, discounted by an estimated weighted-average cost of capital which reflects the overall level of inherent risk of the Company and the rate of return an outside investor would expect to earn. Determining fair value involves judgment by our management and requires the use of significant estimates and assumptions, including point-in-time estimates of revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures and future market conditions, among others. Our projections are based on an internal strategic review. Key assumptions, strategies, opportunities and risks from this strategic review along with a market evaluation are the basis for our assessment. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not considered to be impaired. However, if the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment.

        The second step of the goodwill impairment process involves the calculation of an implied fair value of goodwill. The implied fair value of goodwill is determined in a manner that is similar to how goodwill is calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit as calculated in step one, over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. In determining the fair value of our net assets we determined the fair value of leases and certain intangible assets, including trademarks, patents, core and developed technologies and customer relationships.

        Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the contemporaneous sales of our PDQ and AutoTrace product lines in the fourth quarter of 2008, which met the criteria for assets held for sale prior to the goodwill impairment test date, we first determined the amount of goodwill ($14.3 million) that was to be allocated to these divestitures based upon a relative fair value basis considering their recent transaction values, and then applied our annual goodwill impairment analysis to the remaining goodwill balance ($66.3 million) which resulted in the determination that the fair value of the entity was less than its carrying value. The second step of the goodwill impairment test involved us calculating the implied goodwill for the entity. The carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million, which has been recorded in our results of operations in the fourth quarter of 2008. The goodwill impairment charge is non-cash in nature and does not affect our liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations.

        Goodwill is not amortized, but is reviewed for impairment at least annually. The results of this year's impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines further, this could impact the assumptions used in calculating the fair value in subsequent years. To the extent goodwill is impaired in future periods, its carrying value will be further written down to its implied fair value and a charge will be made to our earnings. Such an impairment charge would materially and adversely affect our GAAP reported operating results. As of December 31, 2009, we had recorded goodwill and other intangibles of $46.2 million in our consolidated balance sheet.

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        In the fourth quarter of 2009, we recorded an impairment charge of $0.4 million related to certain intangible assets of NovaScreen based upon our annual impairment assessment. As a result of the assessment, there were indicators of impairment which required analysis on the fair value of the NovaScreen asset group, which primarily included working capital, fixed assets and intangible assets. We completed our assessment of fair value relative to the NovaScreen asset group which resulted in the impairment of the NovaScreen developed technologies. The results of the impairment test are as of a point in time. If the future growth and operating results of the NovaScreen asset group are not as strong as anticipated, this could impact the assumptions used in calculating the fair value in subsequent years.

If our accounting estimates are incorrect, our financial results could be adversely affected.

        Management judgment and estimates are necessarily required in the application of our critical accounting policies. We discuss these estimates in Item 7 of this Annual Report on Form 10-K in the subsection entitled "Critical Accounting Estimates." If our estimates are incorrect, our future financial operating results and financial condition could be adversely affected.

Terrorist acts, acts of war and natural disasters may seriously harm our business and revenues, costs and expenses and financial condition.

        We rely on a single manufacturing location to produce our microfluidic chips and drug discovery systems, and a single location to produce laboratory automation, imaging and robotics systems, with no alternative facilities. We rely principally on our facility in Alameda, California to produce Bioware cells and microorganisms. These facilities and some pieces of manufacturing equipment are difficult to replace and could require substantial replacement lead-time. Our manufacturing facilities may be affected by natural disasters, such as earthquakes and floods. Earthquakes are of particular significance because our LabChip product manufacturing facility is located in Mountain View, California, an earthquake-prone area. In the event that our existing manufacturing facilities or equipment are affected by man-made or natural disasters, we would be unable to manufacture products for sale, meet customer demands or meet sales projections, which would harm our business.

        Terrorist acts, acts of war and natural disasters (wherever located around the world) may cause damage or disruption to us, our employees, facilities, partners, suppliers, distributors and customers, any and all of which could significantly impact our revenues, expenses and financial condition. The terrorist attacks that took place in the United States on September 11, 2001 were unprecedented events that have created many economic and political uncertainties. The potential for future terrorist attacks, the national and international responses to terrorist attacks and other acts of war or hostility have created many economic and political uncertainties that could adversely affect our business and results of operations that cannot presently be predicted. We are largely uninsured for losses and interruptions caused by terrorist acts, acts of war and natural disasters.

We use hazardous materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly.

        Our research and development processes, our anesthesia systems used with our optical imaging systems to anesthetize the animals being imaged, and our general biology operations involve the controlled storage, use and disposal of hazardous materials including, but not limited to, biological hazardous materials and radioactive compounds. We are subject to federal, state and local regulations governing the use, manufacture, storage, handling and disposal of these materials and waste products. Although we believe that our safety procedures for handling and disposing of these hazardous materials comply with the standards prescribed by law and regulation, the risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result, and any liability could exceed the limits or fall outside the

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coverage of our insurance. We currently maintain a limited pollution cleanup insurance policy in the amount of $2.0 million. We may not be able to maintain insurance on acceptable terms, or at all. We could be required to incur significant costs to comply with current or future environmental laws and regulations.

Compliance with governmental regulations could increase our operating costs, which would adversely affect the commercialization of our technology.

        Many of our pharmaceutical and biotechnology licensees employ our technology to develop preclinical animal data on therapeutic products in development that may be submitted to governmental agencies as part of a regulatory application to commence human clinical testing or to commercialize their products. It is our belief that preclinical data collected using our technology has been submitted by several of our clients and accepted by the FDA to support commencement of clinical trials, and that in several cases regulatory approval has been received for a therapeutic product based, in part, on data collected using our technology. There can be no assurance that the FDA or other regulatory agencies will continue to accept preclinical data collected using our technology and submitted as part of an application to support initiation of clinical trials, or that such data can or will be used to support regulatory approval to commercialize therapeutic products.

        Additionally, exports of certain products and biological reagents to foreign customers and distributors are governed by the International Traffic in Arms Regulations, the Export Administration Regulations, the Patriot Act and the Bioterrorism Safety Act. Although these laws and regulations do not restrict our present foreign sales programs, there can be no assurance that future changes to these regulatory regimes will not affect or limit our foreign sales.

        Exports of our optical imaging systems and biological reagents to foreign customers and distributors are governed by the International Traffic in Arms Regulations, the Export Administration Regulations, Patriot Act and Bioterrorism Safety Act. Although these laws and regulations do not restrict our present foreign sales programs, any future changes to these regulatory regimes may negatively affect or limit our foreign sales.

Public perception of ethical and social issues may limit or discourage the use of mice for scientific experimentation, which could reduce our revenues and adversely affect our business.

        Governmental authorities could, for social or other purposes, limit the use of genetic modifications or prohibit the practice of our technology. Public attitudes may be influenced by claims that genetically engineered products are unsafe for use in research or pose a danger to the environment. The subject of genetically modified organisms, like genetically altered mice and rats, has received negative publicity and aroused significant public debate. In addition, animal rights activists could protest or make threats against our facilities, which may result in property damage. Ethical and other concerns about our methods, particularly our use of genetically altered mice and rats, could adversely affect our market acceptance.

Risks Related to Owning Our Common Stock

Our stock price is extremely volatile, and you could lose a substantial portion of your investment.

        Our stock has been trading on the NASDAQ Global Market since mid-December 1999. We initially offered our common stock to the public at $16.00 per share. Since then our stock price has been extremely volatile and has ranged, through February 28, 2010 from a high of approximately $202.00 per share on March 2, 2000 to a low of $0.63 per share on November 21, 2008. Our stock price

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may drop substantially following an investment in our common stock. We expect that our stock price will remain volatile as a result of a number of factors, including:

•

announcements by analysts regarding their assessment of us and our prospects;

•

announcements by our competitors of complementary or competing products and technologies;

•

announcements of our financial results, particularly if they differ from investors' expectations; and

•

general market volatility for technology stocks.

        These factors and fluctuations, as well as general economic, political and market conditions, may materially adversely affect the market price of our common stock.

Provisions of our charter documents and Delaware law may inhibit a takeover, which could limit the price investors might be willing to pay in the future for our common stock.

        Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing an acquisition in which we are not the surviving company or which results in changes in our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law. These provisions may prohibit stockholders owning 15% or more of the outstanding voting stock, from consummating a merger or combination which includes us. These provisions could limit the price that investors might be willing to pay in the future for our common stock.

Item 1B.    Unresolved Staff Comments

        None.

Item 2.    Properties

        All of our operations are carried out in properties which we lease from others. We do not currently own any real estate properties. We believe that, based upon our long-term strategic facilities plan, our current facilities are adequate for our needs for the foreseeable future.

        Our business locations as of December 31, 2009 were as follows:

Location	Principal Activities	Square Footage	Lease Expiration
Corporate Headquarters Hopkinton, MA	—Manufacturing	108,000 occupied	December 2015; plus two
	—Research & development	19,000 idled	5-year renewal options
	—Selling, general and administrative	11,000 sublet
	Functions
Mountain View, CA	—LabChip Manufacturing	17,000 occupied	November 2013; plus option
		26,300 idled	for 5-year renewal
Alameda, CA	—Molecular imaging, microfluidic	53,000 occupied	March 2019
	and biology research and	24,000 sublet
	development
Hanover, MD	—In vitro services business	47,000 occupied	February 2017
	(office and laboratory space)
St. Louis, MO	—Idled facility	25,000 (100% sublet)	April 2010
International	—Sales and service operations	Approximately 31,000	Various through 2019
	—General and administrative	in the aggregate
	Functions

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Item 3.   Legal Proceedings

        Commencing on June 7, 2001, Caliper and three of its then officers and directors (David V. Milligan, Daniel L. Kisner and James L. Knighton) were named as defendants in three securities class action lawsuits filed in the United States District Court for the Southern District of New York. The cases have been consolidated under the caption, In re Caliper Technologies Corp. Initial Public Offering Securities Litigation, 01 Civ. 5072 (SAS) (GBD). Similar complaints were filed against approximately 300 other public companies that conducted initial public offerings of their common stock during the late 1990s (the "IPO Lawsuits"). On August 8, 2001, the IPO Lawsuits were consolidated for pretrial purposes before United States Judge Shira Scheindlin of the Southern District of New York. Together, those cases are denominated In re Initial Public Offering Securities Litigation, 21 MC 92(SAS). On April 19, 2002, a Consolidated Amended Complaint was filed alleging claims against Caliper and the individual defendants under Sections 11 and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. The Consolidated Amended Complaint also names certain underwriters of Caliper's December 1999 initial public offering of common stock as defendants. The Complaint alleges that these underwriters charged excessive, undisclosed commissions to investors and entered into improper agreements with investors relating to aftermarket transactions. The Complaint seeks an unspecified amount of money damages. Caliper and the other issuers named as defendants in the IPO Lawsuits moved on July 15, 2002, to dismiss all claims on multiple grounds. By Stipulation and Order dated October 9, 2002, the claims against Messrs. Milligan, Kisner and Knighton were dismissed without prejudice. On February 19, 2003, the Court granted Caliper's motion to dismiss all claims against it. Plaintiffs were not given the right to replead the claims against Caliper. In March 2009, all of the plaintiffs, underwriters and issuers involved in this litigation entered into a new global settlement agreement. On October 5, 2009, Judge Scheindlin issued an Opinion and Order approving the settlement agreement, which requires no payment by Caliper or any of the other issuers. Several appeals were filed and remain pending with respect to the October 5, 2009 Opinion and Order. On November 30, 2009 an Order and Final Judgment with respect to the cases brought against Caliper was filed with the Court. No appeals relating to this Order and Final Judgment were filed during the following 30-day appeal period. As a result, the dismissal of the claims asserted against Caliper is now final.

        On January 23, 2009, Caliper filed a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. The complaint was promptly served upon Shimadzu's U.S. subsidiary, and subsequently served on Shimadzu Corporation in Japan. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system, which performs electrophoretic separations analysis of nucleic acids, infringes 11 different U.S. patents owned by Caliper. In its answer to this complaint, Shimadzu denied infringement of any valid claim of any of the 11 patents asserted against Shimadzu by Caliper, and alleged that each patent asserted by Caliper is invalid and/or unenforceable. Caliper filed its preliminary infringement contentions with the Court on February 10, 2009, and Shimadzu filed its preliminary invalidity contentions with the Court on July 23, 2009. In March 2010, Caliper entered into a settlement agreement with Shimadzu pursuant to which Caliper agreed to dismiss its complaint against Shimadzu and Shimadzu agreed to discontinue sales of the MCE-202 MultiNA system in the United States.

        On July 13, 2009, HandyLab, Inc., a private company based in Ann Arbor, Michigan, filed a complaint against Caliper in United States District for the Court Eastern District of Michigan, Southern Division, seeking declaratory judgment that either (i) HandyLab's Raider™ and Jaguar™ systems and related consumable products do not infringe 13 patents owned or licensed by Caliper and/or (ii) the claims of the 13 patents identified in HandyLab's complaint are invalid. The complaint filed by HandyLab did not contain any other claims against Caliper. On August 6, 2009, HandyLab and

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Caliper entered into a Standstill and Tolling Agreement pursuant to which the parties agreed to postpone the formal service of the complaint filed by HandyLab or the filing or commencement of new claims concerning HandyLab's products or either party's microfluidic technology while the parties discuss a potential licensing arrangement. In November, 2009, HandyLab was acquired by Becton Dickinson & Company ("BD"). In December, 2009, Caliper entered into a settlement agreement with BD pursuant to which Caliper granted a non-exclusive license to BD, BD agreed to pay to Caliper a license fee and royalties based on BD's future sales of licensed products, and BD agreed to a dismissal of its complaint against Caliper.

        On February 23, 2010, Caliper, its wholly owned subsidiary Xenogen Corporation, and Stanford University filed a complaint against Carestream Health, Inc. ("Carestream") for patent infringement in the U.S. District Court for the Eastern District of Texas. In the suit, Caliper, Xenogen and Stanford University seek a finding of willful infringement by Carestream, compensatory damages, a trebling due to willfulness, a permanent injunction and attorneys' fees against Carestream for the ongoing, unauthorized and willful use of a number of United States patents that Caliper, through Xenogen, exclusively licenses from Stanford University. This complaint was served on Carestream on February 26, 2010. Carestream's answer to this complaint is due to be filed by Carestream on March 19, 2010.

        From time to time Caliper is involved in litigation arising out of claims in the normal course of business, and when a probable loss contingency arises, records a loss provision based upon actual or possible claims and assessments. The amount of possible claim recorded is determined on the basis of the amount of the actual claim, when the amount is both probable and the amount of the claim can be reasonably estimated. If a loss is deemed probable, but the range of potential loss is wide, Caliper records a loss provision based upon the low end estimate of the probable range and may adjust that estimate in future periods as more information becomes available. Litigation loss provisions, when made, are reflected within general and administrative expenses in our statement of operations and are included within accrued legal expenses in the accompanying balance sheet. Based on the information presently available, management believes that there are no outstanding claims or actions pending or threatened against Caliper, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or results of operations, although the results of litigation are inherently uncertain, and adverse outcomes are possible.

Item 4.    Reserved

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PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

        Our common stock is traded on the NASDAQ Global Market under the symbol "CALP." The following table shows the high and low close prices per share of our common stock as reported by the NASDAQ Global Market for the periods indicated.

		High		Low
Fiscal 2009:
	First Quarter	$	1.62	$	0.78
	Second Quarter	$	1.91	$	0.94
	Third Quarter	$	3.01	$	1.41
	Fourth Quarter	$	2.92	$	2.12
Fiscal 2008:
	First Quarter	$	5.58	$	3.67
	Second Quarter	$	4.15	$	2.59
	Third Quarter	$	4.19	$	2.24
	Fourth Quarter	$	3.12	$	0.81

Stockholders

        As of February 28, 2010, there were approximately 295 holders of record of the 49,325,480 outstanding shares of our common stock.

Dividends

        We have never declared or paid any dividends on our capital stock. We currently expect to retain future earnings, if any, for use in the operation and expansion of our business. Although we have no restrictions on paying cash dividends, we do not anticipate paying any cash dividends in the foreseeable future.

Unregistered Sales of Securities

        There were no sales of unregistered securities during the year ended December 31, 2009.

Issuer Purchases of Equity Securities

        None.

Performance Graph.

        The following graph shows the total stockholder return of an investment of $100 in cash on December 31, 2004 for (i) Caliper's common stock, (ii) the NASDAQ Composite Index, (iii) The

40

Caliper Peer Group and (iv) the NASDAQ Pharmaceutical Index. All values assume reinvestment of the full amount of all dividends and are calculated as of December 31 of each year:

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2009

        This Section is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of Caliper under the 1933 Act or the 1934 Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

        In 2009, a new, expanded Peer Group was selected, which we believe shows a more accurate comparison to our peers. Our Old Peer Group consisted of the following companies, listed by ticker symbol: A, AFFX, BEC, BIO, HBIO, MDZ, PKI and TMO. Our New Peer Group consists of the following companies, listed by ticker symbol: A, AFFX, BEC, BIO, HBIO, LIFE, LMNX, PKI and TMO.

Item 6.    Selected Financial Data

        The following table sets forth selected consolidated financial data for each of our last five fiscal years. The selected financial data for each of the five years in the period ended December 31, 2009 have been derived from the consolidated financial statements of the Company, which financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm. The aforementioned consolidated financial statements and the report thereon are included elsewhere in this Annual Report on Form 10-K. This data should be read in conjunction with the detailed information, financial statements and related notes, as well as "Management's Discussion and Analysis

41

of Financial Condition and Results of Operations" included in Item 7. The historical results are not necessarily indicative of the results of operations to be expected in the future.

	Years Ended December 31,
	2009			2008			2007			2006			2005
	(In thousands, except share data)
Statements of Operations Data(1)(2):
Revenues	$	130,412		$	134,054		$	140,707		$	107,871		$	87,009
Costs and expenses		142,616			203,585			164,535			137,856			101,558
Operating loss		(12,204	)		(69,531	)		(23,828	)		(29,985	)		(14,549	)
Interest income (expense), net		(681	)		(794	)		(547	)		478			895
Other income (expense), net		4,879			2,640			579			469			(689	)
Loss before income taxes		(8,006	)		(67,685	)		(23,796	)		(29,038	)		(14,343	)
Benefit (provision) for income taxes		(219	)		(607	)		(284	)		104			(114	)
Net loss	$	(8,225	)	$	(68,292	)	$	(24,080	)	$	(28,934	)	$	(14,457	)
Net loss per common share, basic and diluted	$	(0.17	)	$	(1.42	)	$	(0.51	)	$	(0.75	)	$	(0.46	)
Shares used in computing net loss per common share, basic and diluted		48,896			48,114			47,301			38,743			31,313

	As of December 31,
	2009		2008		2007		2006		2005
	(In thousands)
Balance Sheet Data(1)(2):
Cash, cash equivalents, marketable securities and short-term restricted cash	$	38,047	$	26,701	$	18,955	$	24,937	$	31,704
Total assets		134,472		143,078		207,929		225,053		158,209
Total stockholders' equity		73,010		76,738		141,186		157,409		118,438

(1)

The statement of operations data includes the results of NovaScreen beginning October 3, 2005, and the results of Xenogen beginning August 9, 2006, the respective dates of these acquisitions. The balance sheet data incorporates the effects of these acquisitions as of December 31 of the year in which each respective acquisition was completed.

(2)

The statement of operations data excludes the results of the PDQ and AutoTrace product lines beginning November 10, 2008, the date of these divestitures. The statement of operations data also excludes the results of the Xenogen Biosciences operations beginning December 11, 2009, the date of this divestiture. The balance sheet data incorporates the effects of these divestitures as of December 31 of the year in which each respective divestiture was completed.

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read with "Selected Financial Data" and our financial statements and notes included elsewhere in this Annual Report on Form 10-K. The discussion in this Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Annual Report on Form 10-K should be read as applying to all related forward-looking statements wherever they appear in this Annual Report on Form 10-K. Our actual results could differ materially from those discussed here. Factors that could cause or contribute to these differences include those discussed in Part I, Item 1A, "Risk Factors," and "Factors Affecting Operating Results" below, as well as those discussed elsewhere.

        The following discussion and analysis is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

Overview

        Caliper develops and sells innovative and enabling products and services to the life sciences research community, a customer base that includes pharmaceutical and biotechnology companies, and government and other not-for-profit research institutions. We believe our integrated systems, consisting of instruments, software and reagents, our laboratory automation tools and our assay development and discovery services enable researchers to better understand the basis for disease and more effectively discover safe and effective drugs. Our strategy is to transform drug discovery and development by offering technologies and services that ultimately enhance the ability to predict the effects that new drug candidates will have on humans. Our offerings leverage our extensive portfolio of molecular imaging, microfluidics, automation and liquid handling technologies, and scientific applications expertise to address key opportunities and challenges in the drug discovery and development process—namely, the complex and costly process to conceive of and bring a new drug to market.

        We believe that increasing the clinical relevance of drug discovery experimentation, whether at early stage, lower cost in vitro (in an artificial environment) testing or later stage, more expensive, preclinical in vivo (in a living organism) testing, will have a profound impact in helping our customers to determine the ultimate likelihood of success of drugs in treating humans. With enabling offerings in both the in vitro and in vivo testing arenas, and a unique strategy of enhancing the "bridge" or linkages between in vitro and in vivo research testing and between research testing and clinical diagnostic testing, we expect to continue to address growing, unmet needs in the market and drive on-going demand for our products and services. These market needs are underscored by key challenges that face the pharmaceutical and biotechnology industry, including late-stage drug failures and unforeseen side effects coming to light late in the development process or even after drugs are on the market.

        We offer an array of products and services, many of which are based on our own proprietary technologies, to address critical experimental needs in drug discovery and preclinical development. Our technologies are also enabling for other life sciences applications beyond drug discovery, such as environmental-related testing, and in applied markets such as agriculture and forensics. We also believe that our technology platforms may be able to provide ease of use, cost and data quality benefits for certain in vitro and in vivo diagnostic applications.

        We have multiple channels of distribution for our products: direct to customers, indirect through our international network of distributors, through partnership channels under our Caliper Driven program and through joint marketing agreements. Through our direct and indirect channels, we sell products, services and complete system solutions, developed by us, to end customers. Our Caliper Driven program is core to our business strategy and complementary to our direct sales and distribution network activities, as it enables us to extend the commercial potential of our LabChip and advanced liquid handling technologies into new industries and new applications with experienced commercial

43

partners. We also utilize joint marketing agreements to enable others to market and distribute our products. By using direct and indirect distribution, and out-licensing our technology under our Caliper Driven program, we seek to maximize penetration of our products and technologies into the marketplace and position Caliper as a leader in the life sciences tools market.

        Our product and service offerings are organized into three core business areas—Imaging, Discovery Research (Research), and Caliper Discovery Alliances and Services (CDAS)—with the goal of creating a more scalable infrastructure while putting increased focus on growth and profitability.

•

The Imaging business holds, we believe, a global leadership position in the high-growth optical molecular imaging market. Principal activities of this business area include the expansion of the IVIS imaging instrument system and related reagent product lines, development of new therapeutic area applications and facilitating additional imaging modalities.

•

The Research business area is responsible for utilizing Caliper's core automation and microfluidic technologies to address an expanding array of opportunities in drug discovery and life science research, including molecular biology sample preparation and analysis for genomics, proteomics, diagnostics, cellular screening and forensics.

•

The CDAS business area is responsible for expanding drug discovery collaborations and alliances, and increasing sales of drug discovery services. The focus of CDAS is to capitalize on market "outsourcing" trends, and to offer complementary services to Caliper's Imaging and Research platform solutions.

2009 Key Highlights

XenBio Divestiture

        On December 11, 2009, we completed the sale of our preclinical in vivo contract research services operations, Xenogen Biosciences Corporation (XenBio), to Taconic Farms Inc., which is one of the largest providers of rodents for laboratory use in the world. XenBio was a wholly-owned subsidiary of Xenogen Corporation which we acquired in August 2006. The transaction strengthens our IVIS imaging tools business, and represents another step in our continuing strategy to divest non-core assets in order to further enhance our focus on our core products, applications and services strengths. In connection with this divestiture, we granted Taconic distribution rights to supply our LPTA models for our IVIS customers. The transaction price was $10.8 million, which included $9.7 million in cash paid to us at closing together with $1.1 million placed into an escrow account until April 30, 2011. We realized a $4.2 million gain on the sale of XenBio based upon the net proceeds received to date, which excludes the $1.1 million escrow, in excess of total divested net assets.

2009 Summary Financial Performance

        Our total revenues for 2009 declined by approximately $3.7 million to $130.4 million, from $134.1 million in 2008 as a result of recent strategic divestitures. The divestiture of our former PDQ and AutoTrace product lines in November of 2008 and, to a lesser extent, our XenBio operations in December of 2009 accounted for $11.9 million of revenue decline. Excluding the revenue impact of divestitures, total revenue for our ongoing business operations increased by approximately $8.2 million, or 7% in comparison to revenues in 2008 (see non-GAAP revenue table and related discussion below). This $8.2 million increase included revenue increases in our Research and Imaging business units of $5.1 million and $6.2 million, respectively, offset by a decline in revenue from our in vitro contract research services of approximately $3.1 million.

•

Product gross margins increased to 42% in 2009 versus 39% in 2008. This improvement resulted from favorable product mix changes toward higher gross margin instruments (LabChip and

44

IVIS), increased revenue from consumable sales, and lower material costs resulting from low-cost product sourcing initiatives.

•

Service gross margins decreased to 32% in 2009 from 34% in 2008 due principally to reduced sales experienced by our NovaScreen operation which resulted in reduced cost leverage.

•

Research and development operating expenses decreased $2.0 million in 2009 in comparison to 2008. Of this decrease, approximately $0.4 million resulted from divestitures (principally the sale of the PDQ product line in the fourth quarter of 2008). The remaining $1.6 million of decreased spending resulted from the full year benefit of consolidation and cost reduction efforts implemented in 2008.

•

Selling, general and administrative operating expenses decreased by $4.1 million in 2009 in comparison to 2008. Of this decrease, approximately $0.8 million resulted from divestitures (principally the sale of the PDQ product line in the fourth quarter of 2008). The remaining $3.3 million of decreased spending was comprised of $0.5 million from lower personnel costs related to cost reduction initiatives designed to align our business along strategic business units (net of a $2.1 million increase in provisions for bonuses based on 2009 performance), $1.0 million in reduced travel spending and $1.8 million in reductions of all other operating costs.

•

During 2009, we recorded a net restructuring charge of $0.7 million. The net charge was comprised of a $1.0 million charge in the third quarter of 2009 to consolidate our Hopkinton, Massachusetts manufacturing facility, a $0.9 million charge in the fourth quarter of 2009 to correct our future sublease income assumptions relating to our Mountain View, California facility, and a $1.2 million credit in the fourth quarter of 2009 recorded to correct an error in the original measurement of restructuring charges which were recorded in 2008 (see Note 17 in the Notes to the Consolidated Financial Statements for further discussion).

•

Net loss for 2009 was $8.2 million, or $0.17 per share, compared to net loss of $68.3 million, or $1.42 per share in 2008. The decrease in net loss was primarily due to the goodwill impairment charge of $43.4 million that was taken in 2008 and other factors discussed above.

Revenue Performance by Strategic Business Unit

        The table below provides a reconciliation of our GAAP basis revenue to pro forma non-GAAP revenue results for 2009 and 2008, after giving effect to the divestures of the PDQ and AutoTrace product lines which occurred in 2008 and the divestiture of XenBio in December 2009. We believe this reconciliation provides a useful comparison for evaluating revenue performance between fiscal periods, but these non-GAAP comparisons are not intended to substitute for GAAP financial measures.

	Year Ended December 31,
	GAAP				Non-GAAP Adjustments(1)						Non-GAAP
					(in thousands)
															GAAP % Chg			Non- GAAP % Chg(2)
	2009		2008		2009			2008			2009		2008
Imaging	$	51,837	$	45,765	$	(215	)	$	(342	)	$	51,622	$	45,423		13	%		14	%
Research		62,706		68,519		(342	)		(11,308	)		62,364		57,211		(8	)%		9	%
CDAS		15,869		19,770		(10,127	)		(10,896	)		5,742		8,874		(20	)%		(35	)%
Total revenue	$	130,412	$	134,054	$	(10,684	)	$	(22,546	)	$	119,728	$	111,508		(3	)%		7	%

(1)

For purposes of comparing growth rates for each of the three principal areas of our business, the above non-GAAP table reconciliations exclude revenues related to the PDQ and AutoTrace

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product lines divested in November 2008, as well as revenues related to XenBio which was divested in December 2009.

(2)

Currency effects reduced the above growth rates by 1% for both the Research and Imaging strategic business units, and by 2% on a total revenue basis for the full year.

        Imaging revenues, net of divestiture effects, increased by 14% on a Non-GAAP basis to $51.6 million during 2009 from $45.4 million during 2008. Imaging growth was driven by continued strong global demand for our IVIS instruments, including the benefit of recent product introductions which included the IVIS Kinetic and IVIS XR systems, and accessories, reagents and services which are used to profile molecular biology conditions or events in small living mammals, primarily mice, or cells.

        Research revenues, net of divestiture effects, increased by 9% on a non-GAAP basis to $62.4 million during 2009 from $57.2 million during 2008. Overall Research growth was primarily attributable to strong market demand for our LabChip GX instruments, increased revenues from microfluidic consumables (chips, kits and reagents), increased sales of our Zephyr liquid handling instrument and an increase in microfluidic contract and license revenue. We attribute our growth in each of these sources of revenue to the differentiated capabilities of our products and evolving market interest in the benefits and technological advantages of microfluidics for use in various molecular biology research application areas, such as protein characterization.

        CDAS revenues, net of divestiture effects, decreased by 35% to $5.7 million during 2009 from $8.9 million during 2008. The net decrease resulted from the completion of government services contracts which ended in 2008, resulting in a $3.0 million decline in 2009 revenue, and task order delays under our ongoing contract with the Environmental Protection Agency (EPA) related to its ToxCast screening program, comprising $1.0 million of the decrease in 2009. These revenue decreases were partially offset by in vitro commercial service revenue growth related to a large oncology project with a single customer.

Overall Economic Outlook

        During 2009, we experienced strong growth and momentum as a result of our positioning in certain markets, such as genomics and molecular imaging, where life science research spending appears to remain strong. Conversely, our CDAS business unit experienced a slowdown of revenue due principally to a revenue decline in the area of government contracts. In November 2009, we received a new task order for $1.8 million under our services contract with the EPA under its ToxCast program, but we have yet to receive definitive communication from the EPA with respect to the availability of the compounds in order for us to begin work under this task order. We had expected that our work on this order under the ToxCast program would begin early in the second quarter of 2010, and now expect that this work will be further delayed into the second half of 2010. For the most part, market demand for our products and services has not materially benefitted from the American Reinvestment and Recovery Act of 2009 (Stimulus Package), which we had hoped would stimulate even further demand from end market customers such as government and academic laboratories which draw upon NIH funding. Over the second half of 2009, we believe that there was a general easing with respect to capital equipment and outsourced services budgets. However, we remain cautious with respect to ongoing market demand in light of current general economic conditions and continuing integration among recently merged pharmaceutical companies. Aside from the timing uncertainty with respect to the EPA project, we expect that market conditions and demand for our products and services will remain relatively stable over the course of 2010, and in addition we expect that our revenues will benefit 1 to 2% from the recent weakening trend in the U.S. dollar compared to 2009, with most of this favorable currency benefit occurring in the first half of the year.

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Results of Operations

Revenue

	Year Ended December 31, 2009		$ Change			% Change			Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007
	(In thousands)
Product revenue	$	86,149	$	1,000			1	%	$	85,149	$	2,188			3	%	$	82,961
Service revenue		31,471		(6,263	)		(17	)%		37,734		177			—	%		37,557
License fees and contract revenue		12,792		1,621			15	%		11,171		(9,018	)		(45	)%		20,189
Total revenue	$	130,412	$	(3,642	)		(3	)%	$	134,054	$	(6,653	)		(5	)%	$	140,707

        Product Revenue.    Product revenue increased by $1.0 million, which was comprised of a $7.6 million increase in continuing product lines and a $6.6 million decrease due to divested product lines. This decrease principally related to revenue of our former PDQ and AutoTrace product lines which we sold in the fourth quarter of 2008. The $7.6 million increase in current product offering revenues included increases of, $5.0 million, or 16%, from 2008 Imaging product sales and $2.6 million, or 5%, from 2008 Research product sales. The Imaging product sales increase was due to a 9% increase in IVIS instrument placements as well as a 14% increase in reagent sales related to the IVIS product lines. The IVIS instrument product mix during 2009 was more heavily comprised of IVIS Spectrum and new IVIS Kinetic instruments. The combination of these two factors resulted in a higher average selling price in addition to an increase in total units sold. The increase in Research product sales was comprised of an increase in microfluidic product revenues of $5.0 million, or 29%, while automation product revenues decreased by $2.5 million, or 9%. The increase in microfluidic revenues during 2009, compared to 2008, was primarily due to (a) a $2.2 million increase in sales of our LabChip GX instruments which was driven by an increase in instrument placements (109 units in 2009 compared to 62 units in 2008); and (b) a $2.8 million, or 68%, increase in sales of microfluidic consumables (chips, kits and reagents) resulting from growth in the installed base of LabChip instruments as well as an increase in the usage of Profiler Pro consumables by a single customer in 2009. The decrease in automation product revenues during 2009 compared to 2008 was primarily due to (a) a $1.6 million decrease in revenue from sales of our Staccato Automated Workstation instruments which was primarily the result of a single system sale in the second quarter of 2008; (b) a $0.7 million decrease in TurboVap instrument sales primarily within our European distribution channel as a result of the economic climate and the fact that the majority of sales are government funded where budgets were limited in 2009; and (c) a $1.2 million decrease in other automation revenues, primarily within accessory sales for liquid handling instrumentation. These decreases were offset in part by a $0.7 million increase in sales of our Zephyr liquid handling instrument and a $0.3 million increase in sales of our RapidTrace instrument.

        Product revenue increased during 2008 compared to 2007, primarily due to strong imaging sales which increased by $2.9 million, or 10%, driven by IVIS instrument growth, including an 8% increase in instrument placements. Research product sales decreased $0.7 million, or 1%, during 2008 as compared to 2007, primarily as a result of sales decreases caused by (a) weaker sales of non-core products, including the PDQ and AutoTrace product lines, which we divested in November 2008, which decreased by $3.8 million in 2008; (b) lower revenue from kinase screening products (LabChip 3000 systems and EZ Reader instruments) due to increased competition from kinase screening outsourcing, which decreased by $0.3 million; and (c) overall decreases within our OEM relationships and other research product lines, which decreased by $2.5 million, of which $1.1 million was related to lost datapoint revenues from a single customer that is no longer in business. Offsetting these decreases within Research were (a) strong sales in our automated sample preparation solutions led by sales of

47

Staccato Automated Workstations and Zephyr liquid handling instruments, which increased by $4.9 million; and (b) sales of LabChip GX and GXII, our latest microfluidic benchtop instruments launched in mid-2008 for genomic sample preparation and analysis, which resulted in a $1.0 million increase.

        Service Revenue.    Service revenue decreased $6.3 million during 2009 compared to 2008, which was comprised of a $5.1 million decrease from divested service offerings and a $1.2 million net decrease from continuing service platforms. The divested service offerings decrease was comprised of $4.4 million in service contract and billable revenue associated with the divested PDQ and AutoTrace product lines that was recognized in 2008 prior to the divestiture of those businesses and $0.7 million in in vivo corporate service revenues related to the divestiture of XenBio. The $1.2 million net decrease from current offerings was comprised of a $2.7 million decrease in CDAS service revenues and a $1.5 million increase in instrument service revenues from Imaging and Research product offerings. The CDAS decrease was comprised of a $2.5 million decline in government contract services related to a contract that ended in 2008 and $1.0 million of reduced revenue under our contract with the EPA for its ToxCast screening program. These government services declines were partially offset by a $0.9 million increase in commercial in vitro screening contracts revenues which was attributed to a large oncology project with a single customer. The $1.5 million increase in instrument service revenues was primarily due to a $0.5 million increase in service contract revenues generated from the Imaging installed base, a $0.5 million increase within automation billable service revenues and a $0.5 million increase from all other service contract and billable revenues.

        Service revenue was flat during 2008 compared to 2007, consisting of a $1.8 million increase from instrument-based services driven primarily by increases in the installed bases of IVIS imaging and LabChip microfluidic instruments, net of a $0.8 million decrease from service revenues related to the PDQ and AutoTrace product lines which were sold in the fourth quarter of 2008 and a $0.8 million decrease in CDAS service revenues. The CDAS revenue decline included the loss of $1.7 million from a single customer contract that was not renewed in 2008, a $1.5 million decrease related to timing delays under a single contract with a particular customer in comparison to similar prior year revenues, and a $1.0 million decrease under the EPA ToxCast screening contract in comparison to 2007 revenues. The effects of these declines were partially offset by revenue increases from other CDAS service platforms including imaging studies, transgenic animal production, and in vitro screening projects.

        License Fees and Contract Revenue.    License fees and contract revenue increased $1.6 million during 2009 compared to 2008 primarily from an increase in microfluidic license revenues of approximately $1.9 million, net of a decline in CDAS government grant revenues of approximately $0.5 million related to expired contracts. In general, we have experienced increased interest from biotechnology companies in obtaining access to our portfolio of microfluidic patent rights spurred by expansion of platforms which benefit from the technological advantages of microfluidics.

        License fees and contract revenue decreased during 2008 compared to 2007 primarily as a result of anticipated declines in both non-recurring microfluidic license revenues of $8.7 million and contract research collaboration revenue of $2.5 million. These declines were due to collaboration arrangements completed in 2007, including related license revenues stemming from these arrangements. These decreases were partially offset by increases in imaging license revenues of $2.7 million during 2008 compared to 2007. The increase in imaging license revenue was due in part to favorable purchase accounting effects of $1.1 million which resulted from contract renewals at "full" value versus the lower recorded "fair" value of such contracts pursuant to purchase accounting rules applied to the purchase of Xenogen in 2006.

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Cost of Revenue

		Year Ended December 31, 2009		$ Change			% Change			Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007
		(In thousands)
Cost of
	Product revenue	$	49,636	$	(2,542	)		(5	)%	$	52,178	$	2,418			5	%	$	49,760
	Service revenue		21,398		(3,341	)		(14	)%		24,739		2,382			11	%		22,357
	License revenue		1,487		10			1	%		1,477		(1,038	)		(41	)%		2,515
Total cost of revenue		$	72,521	$	(5,873	)		(7	)%	$	78,394	$	3,762			5	%	$	74,632

        Cost of Product Revenue.    Cost of product revenue decreased by $2.5 million in 2009 compared to 2008, primarily as a result of a 3.3% decrease in material costs as a percentage of sales, and to a small extent from reductions in manufacturing labor costs. The reduction in materials costs was attributable to favorable product mix changes (increased LabChip and IVIS instrument sales) and sourcing initiatives to reduce the cost of materials.

        Cost of product revenue increased during 2008 compared to 2007, primarily due to the overall increase in product sales. The impact of increased revenues, however, was further affected by higher material costs which resulted from third-party manufactured components which comprise Staccato system sales which accounted for a substantial portion of the product revenue increase as discussed above. Material costs within cost of product revenue were approximately 34.1% of sales in 2008 versus 33.6% in 2007, while other variable product costs were approximately 10.7% of product sales versus 9.0% in 2007, reflecting increased inventory reserve allowance and other manufacturing variances. Offsetting these higher material and other variable costs was a $0.7 million decrease in installation and product warranty labor costs compared to 2007.

        Cost of Service Revenue.    Cost of service revenue decreased during 2009 as compared to 2008, primarily due to personnel reductions resulting from divested product lines, as well as a $0.6 million reduction from our divestiture of XenBio in December 2009. In addition, during 2009, cost of service revenue decreased by $0.9 million related to reduced spending within our in vitro services business, primarily as a result of the decrease in revenues and the related purchase of materials.

        Cost of service revenue increased during 2008 as compared to 2007 primarily related to increases in facility costs of our CDAS businesses which increased by $1.0 million over 2007 as a result of the renewal of leases in both our Cranbury, New Jersey and Hanover, Maryland locations, coupled with an expansion of space in Hanover. In addition, an increase in project materials spending accounted for an additional $0.2 million of the overall increase. Beyond these factors, the remaining increase is driven by the allocation of resources to support instrument-driven service revenues (service contracts, billables and training) due in large part to the increase in the installed base of IVIS imaging and micro fluidic instruments being serviced.

        Cost of License Revenue.    Cost of license revenue, which is comprised of royalty payments to third parties as a result of our licensing activities, was flat in 2009 compared to 2008 primarily as a result of the obligations to third parties on fees received being relatively unchanged. Although the contract and license revenues from microfluidic and imaging technologies increased by $2.0 million, not all these revenues were subject to third party royalties and the license revenues within 2009 represented a greater concentration of internally developed patents versus third party patents, compared to 2008. Cost of license revenue decreased during 2008 compared to 2007 primarily as a result of the substantial microfluidic revenue decline discussed above.

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        Gross Margins.    Gross margin on product revenue was 42% for 2009, which was an improvement of 3 percentage points, compared to the same period in 2008. The improvement was driven by favorable product mix (i.e., instruments with lower cost relative to average selling price) and the benefit of volume leverage of fixed costs and ongoing sourcing initiatives to lower our material costs. Gross margin on service revenue was 32% for 2009, as compared to 34% for 2008. This decreased service margin resulted primarily from reduced cost leverage within the CDAS in vitro services business during 2009.

        Product gross margins decreased to 39% in 2008, from 40% in 2007, despite the overall increase in product revenues and a $0.7 million reduction in manufacturing spending as noted in Cost of Revenues above. The primary reason for this decrease was the mix of revenues, which featured, for example, a greater percentage of sales from Staccato automated workstations compared to 2007, which carried much higher material cost content. Gross margin on service revenue was 34% for 2008 and 41% for 2007. Approximately 500 basis points of the decrease in service margin resulted primarily from higher facility costs and project material costs within CDAS, and the effect of lower revenues in relation to fixed spending levels as a result of certain contract delays that resulted during the year. The remaining decline in service gross margin was driven by an increase of labor and material costs incurred related to instrument service revenues.

Operating Expenses

	Year Ended December 31, 2009		$ Change			% Change			Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007
	(In thousands)
Research and development	$	17,881	$	(2,040	)		(10	)%	$	19,921	$	(4,870	)		(20	)%	$	24,791
Selling, general and administrative		44,886		(4,101	)		(8	)%		48,987		(5,967	)		(11	)%		54,954
Impairment of goodwill		—		(43,365	)		nm			43,365		43,365			nm			—
Amortization of intangible assets		6,589		(1,724	)		(21	)%		8,313		(1,793	)		(18	)%		10,106
Restructuring charges, net		739		(3,866	)		(84	)%		4,605		4,553			nm	%		52
	$	70,095	$	(55,096	)		(44	)%	$	125,191	$	35,288			39	%	$	89,903

        Research and Development Expenses.    Research and development spending decreased by $2.0 million during the year ended December 31, 2009, compared to the same period in 2008, primarily as a result of $0.7 million in reduced facilities costs, relating to the consolidation and cost reduction efforts initiated in 2008, $0.7 million in reduced material and operating supplies, a $0.5 million reduction in severance costs during 2009 which related to actions taken in the first quarter of 2008 and a decrease in all other costs of $0.1 million.

        Research and development spending decreased by $4.9 million during the year ended December 31, 2008 compared to the same period in 2007. These cost reductions were the result of reduced spending related to microfluidic collaboration projects that ended in 2007, savings from cost reduction initiatives implemented in the second quarter of 2007, and the consolidation of our West Coast research and development operations in the first quarter of 2008. The overall net decrease was comprised of cost reductions including $3.0 million in personnel related costs, $1.0 million in material and operating supplies, $1.1 million in allocated facility and information technology costs, and $0.2 million of all other costs, which were partially offset by $0.4 million of severance charges.

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        We continue to evaluate research and development spending based on anticipated revenues and market opportunities. As a percentage of revenues, we expect research and development spending to generally decrease in the future, to the extent our revenues continue to grow, and as we continue to closely manage discretionary spending on research programs with attractive commercial potential.

        Selling, General and Administrative Expenses.    Selling, general and administrative expenses decreased by $4.1 million during the year ended December 31, 2009, compared to the same period in 2008, due primarily to a $4.0 million reduction in selling and marketing costs. This decrease in selling and marketing costs consist of a $2.2 million reduction in salaries and related costs due to reduced headcount from the divested product lines as well as cost reduction initiatives in 2008 to align our selling and marketing resources along strategic business units (net of a $0.6 million increase in provisions for bonuses based on 2009 performance), a $1.1 million reduction in travel and related costs, a $0.4 million reduction in costs relating to materials, office and operating supplies and a reduction of $0.3 million in all other costs. General and administrative expenses decreased by $0.1 million during 2009 as compared to 2008, primarily due to a reduction in consulting and other professional fees, net of an increase in personnel-related costs, primarily provisions for bonuses based upon 2009 performance.

        Selling, general and administrative expenses decreased by $6.0 million during the year ended December 31, 2008 compared to the same period in 2007. This decrease was primarily general and administration related ($5.6 million) and included $1.4 million reduction of litigation costs related to a settlement charge incurred in 2007 and paid in 2008, a $1.5 million reduction in litigation defense costs which included $1.0 million of proceeds from a mediated settlement in our favor, a $0.6 million reduction for legal and advisory services related to merger and acquisition activities in 2007, a $0.8 million reduction in personnel-related costs due to headcount reductions, a $0.7 million reduction in stock compensation expense, and a decrease in all other general and administrative costs of $0.6 million. In addition to the foregoing, selling and marketing expenses decreased by $0.4 million during 2008 primarily due to the decrease in stock compensation expense.

        Impairment of Goodwill.    We perform an annual impairment analysis of goodwill to determine if impairment exists, and may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. No impairment of goodwill was identified in fiscal years 2009 and 2007. In 2008, as a result of our annual goodwill impairment analysis, we determined that goodwill was impaired by $43.4 million. The goodwill impairment assessment is more fully discussed in Footnote 7 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

        Amortization of Intangible Assets.    Amortization expense was $6.6 million, $8.3 million and $10.1 million during the years ended December 31, 2009, 2008 and 2007, respectively, related to assets acquired with our acquisitions of Zymark, NovaScreen and Xenogen. During 2009, we recorded an impairment charge of $0.4 million related to NovaScreen intangibles that was recorded within amortization expense (see Footnote 7 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K). The decreases in amortization during 2009 and 2008 are primarily related to the fact that the Zymark intangibles were 100% amortized as of July 13, 2008. The decrease in amortization is also due, in part, to certain intangibles amortization being computed based upon the estimated timing of the undiscounted cash flows used to value each respective asset over the estimated useful life of the particular intangible asset, which results in reducing amortization over the life of the assets.

        Restructuring Charges, net.    We incurred restructuring charges in 2009, 2008 and 2007 related to consolidation of facilities, as well as acquisition and integration activities that are more fully discussed in Footnote 11 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on

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Form 10-K. During 2009, we recorded a restructuring charge of $1.0 million in the third quarter related to the consolidation of manufacturing operations at our Hopkinton, Massachusetts, facility which was enabled by the product line divestitures completed in the fourth quarter of 2008 and continued efforts to reduce operating costs. We estimate that ongoing facility-related cash outflow, primarily rent payments net of sublease income, will be spread over the 6.5 years remaining on our Hopkinton, Massachusetts lease. This partial facility closure has been accounted for in accordance with FASB ASC 420, pursuant to which we have recorded a liability equal to the fair value of the remaining lease payments, net of expected sublease payments, as of the cease-use date. We expect this initiative to result in lower expensed facility costs of approximately $0.2 million per year. In addition, in 2009, we revised our assumptions around the restructuring charge taken in 2008 regarding our Mountain View, California facility. The effect of the change was to update the sublease timing and rates assumed as a result of the current real estate market, which resulted in a charge of $0.9 million. In addition, we recorded a credit of $1.2 million to restructuring charges to correct an error that we identified in the fourth quarter of 2009 related to the original restructuring charges taken in 2008. The net effect of these adjustments and the error correction was a credit of $0.4 million within the fourth quarter of 2009.

        Restructuring charges during 2008 related to recording a restructuring charge of $4.6 million for our West Coast consolidation which included a $2.8 million charge in the third quarter along with a revision to the sublease assumption of $1.8 million during the fourth quarter based on the deteriorating sublease market in Mountain View, California, and the related abandonment of approximately 36,500 square feet of space in Mountain View, California. This facility closure has been accounted for in accordance with FASB ASC 420, pursuant to which we have recorded a liability equal to the fair value of the remaining lease payments, net of expected sublease payments, as of the cease-use date. We expect this initiative to result in lower expensed facility costs of approximately $1.3 million per year. Restructuring charges during 2007 related to accretion of interest on facilities, net of sub-lease income.

Interest and Other Income and Expenses

	Year Ended December 31, 2009			$ Change			% Change			Year Ended December 31, 2008			$ Change			% Change			Year Ended December 31, 2007
	(In thousands)
Interest income	$	58		$	(201	)		(78	)%	$	259			(391	)		(60	)%	$	650
Interest expense		(739	)		314			30	%		(1,053	)		144			12	%		(1,197	)
Gain on divestitures		4,942			2,823			133	%		2,119			2,119			nm			—
Other income (expense), net		(63	)		(584	)		(112	)%		521			(58	)		(10	)%		579
	$	4,198		$	2,352			127	%	$	1,846		$	1,814			nm		$	32

        Interest Income.    Interest income decreased in both 2009 and 2008 primarily due to reduced interest yields and a shorter overall maturity duration with respect to our cash equivalent and marketable securities investments.

        Interest Expense.    Interest expense decreased during 2009 compared to 2008, as a result of a decrease in our weighted average outstanding credit facility borrowings which were $8.5 million during 2009 compared to $13.6 million during 2008. During 2009, we sought to maintain lower average outstanding borrowings in order to mitigate interest costs, especially in light of limited yields available on cash equivalent and marketable security investment opportunities. Interest expense modestly declined during 2008 compared to 2007 primarily as a result of the decrease in the prime interest rate, even though outstanding borrowings increased by $2.0 million in 2008.

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        Gain on Divestitures.    In December 2009, we divested our XenBio subsidiary and recorded a gain of $4.2 million, which is more fully discussed in Note 3 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K. In November 2008, we divested our PDQ and AutoTrace product lines and recorded a gain of $2.1 million and an additional gain of $0.7 million in 2009 when funds were released from escrow, which is more fully discussed in Note 3 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

        Other Income (Expense), Net.    Net other income (expense), net decreased in 2009 compared to 2008 due primarily to an increase in transaction losses on foreign denominated accounts receivable resulting from a weaker U.S. dollar, on average for 2009, in comparison to primarily the Euro, the British Pound and Swiss Franc, offset in part by a stronger U.S. dollar, on average for 2009, in comparison to the Japanese Yen. During 2009, we incurred foreign currency transaction losses of approximately $339,000 compared to gains of $466,000 in 2008. This increase in expense was offset in part by a $0.1 million increase in sublease income from our St. Louis, Missouri facility. Other income (expense), net decreased $0.1 million in 2008 compared to 2007 primarily from reduced gains on account balances denominated in non-U.S. currencies.

Liquidity and Capital Resources

        As of December 31, 2009, we had $38.0 million in cash, cash equivalents, marketable securities and short-term restricted cash in addition to approximately $9.3 million of additional borrowing capacity under our existing credit facility described below, under which we had outstanding borrowings of $14.9 million and outstanding letter of credits of approximately $1.4 million as of December 31, 2009.

        On December 11, 2009, we entered into a First Loan Modification Agreement with a bank, amending our credit facility, which is reflected by the Second Amended and Restated Loan and Security Agreement dated as of March 6, 2009. The principal effect of this modification was to extend the maturity date of the credit facility from November 30, 2010 to April 1, 2011. The modification also established financial covenants for us for the quarter ending March 31, 2011, as well as modified certain of the existing financial reporting covenants that are tested as of the last day of each quarter.

        The credit facility permits us to borrow up to $25 million in the form of revolving loan advances, including up to $5 million in the form of letters of credit and other contingent reserves. Principal borrowings under the credit facility accrue interest at a floating annual rate equal to the prime rate plus one percent if our unrestricted cash held at the bank exceeds or is equal to $20 million, or prime plus two percent if our unrestricted cash held at the bank is below $20 million. Under the credit facility, we are permitted to borrow up to $25 million, subject to a borrowing base limit consisting of (a) 80% of eligible accounts receivable plus (b) the lesser of 70% of our unrestricted cash at the bank or $12 million; provided, that on each of the first three (3) business days and each of the last three (3) business days of each fiscal quarter, the borrowing base is (a) 80% of eligible accounts receivable plus (b) the lesser of 90% of our unrestricted cash at the bank or $12 million. Eligible accounts receivable do not include internationally billed receivables, unbilled receivables, and receivables aged over 90 days from invoice date. The credit facility serves as a source of capital for ongoing operations and working capital needs.

        The credit facility includes traditional lending and reporting covenants including that certain financial covenants applicable to liquidity and earnings are to be maintained by us and tested as of the last day of each quarter. We expect to remain in compliance with the covenants through the credit facility's maturity date based on current forecasts.

        The credit facility also includes subjective rights for the bank to accelerate the maturity date of the debt, lower the borrowing base or stop making advances, which are typical within asset based lending arrangements. We do not believe the bank will exercise these rights as long as we are meeting our covenants and are achieving our forecasts. The credit facility also includes several potential events of

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default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at the interest rate in effect as of the date of default plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank's right to declare all outstanding obligations immediately due and payable, to modify the borrowing base formula described above to reduce credit availability, or to cease making advances to us. Should an event of default occur, including the exercise of a material adverse change condition, and based on such default the bank were to decide to either (i) declare all outstanding obligations immediately due and payable, (ii) reduce our borrowing base, or (iii) stop making credit advances to us, we may be required to significantly reduce our costs and expenses, sell additional equity or debt securities, or restructure portions of our business which could involve the sale of certain assets. We believe, based on our current projections that the bank will continue to lend to us subject to the terms and conditions of the credit facility. The sale of additional equity or convertible debt securities may result in additional dilution to our stockholders. Furthermore, additional capital may not be available on terms favorable to us, if at all. In this circumstance, if we could not significantly reduce our costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of our business, our business would be adversely affected. In addition, the amount of available capital that we are able to access under the credit facility at any particular time is dependent upon the borrowing base formula, which ultimately relies on the underlying performance of the business. If economic conditions worsen and our business performance is not as strong as anticipated, then we could experience an event of default or a reduction in borrowing capacity under the credit facility, which if not cured to the bank's satisfaction, could have a potential adverse impact on our ability to access capital under our credit facility in order to fund 2010 operations. If such events were to occur, our business would be adversely affected.

        We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities. Our primary ongoing cash requirements will be to fund operating activities, capital expenditures, investments in businesses, product development, restructured facility obligations, and debt service. Our primary sources of liquidity are internally generated cash flows and borrowings under our credit facility. Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, a decrease in demand for our products, our ability to integrate acquisitions, deterioration in certain financial ratios, and market changes in general.

        We believe our cash balance, working capital on hand at December 31, 2009 and access to available capital under our credit facility will be sufficient to fund continuing operations through at least March 31, 2011. Nevertheless, our actual cash needs could vary considerably, depending on opportunities and circumstances that arise over time. If, at any time, cash generated by operations is insufficient to satisfy our liquidity requirements, we may need to reduce our costs and expenses, sell additional equity or debt securities or draw down on our current credit facility if we have borrowing capacity. The inability to obtain additional financing may force other actions such as the sale of certain assets, or, ultimately, cause us to cease operations.

        On November 21, 2007, we filed, and the Securities and Exchange Commission subsequently declared effective, a universal shelf registration statement on Form S-3 that will permit us to raise up to $100 million of any combination of common stock, preferred stock, debt securities, warrants or units, either individually or in units, as described by the prospectus. The sale of additional equity or convertible debt securities may result in additional dilution to our stockholders. Furthermore, additional capital may not be available on terms favorable to us, if at all. Accordingly, no assurances can be given that we will be successful in these endeavors.

        We maintain cash balances in many subsidiaries through which we conduct our business. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences.

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However, these cash balances are generally available without legal restrictions to fund ordinary business operations. We have transferred, and will continue to transfer, cash from our subsidiaries to us and to other international subsidiaries when it is cost effective to do so.

Cash Flows

	Year Ended December 31, 2009		$ Change			Year Ended December 31, 2008			$ Change			Year Ended December 31, 2007
	(In thousands)
Cash provided by (used in)
Operating Activities	$	1,943	$	13,140		$	(11,197	)	$	(1,085	)	$	(10,112	)
Investing Activities	$	8,458	$	(7,336	)	$	15,794		$	8,801		$	6,993
Financing Activities	$	609	$	(2,466	)	$	3,075		$	(3,933	)	$	7,008

        Operating Activities.    In 2009 we generated $1.9 million of cash from operating activities which was primarily from net cash generated from daily operations of $1.4 million. In 2009, we also focused on working capital (especially inventory) to preserve cash which resulted in a net $2.1 million in cash generation which is net of payments of approximately $1.6 million on idle leased space.

        Investing Activities.    During 2009, net proceeds from the sale of Xenogen Biosciences generated $9.7 million of cash and the release of funds from escrow related to the sale of the PDQ product line generated $0.7 million in proceeds. Purchases, sales and maturities of marketable securities utilized $0.5 million of cash, which we used primarily for operations. Our primary investing activities were the purchases of $1.6 million of property and equipment which mainly consisted of information systems and leasehold improvements within our current facilities.

        Financing Activities.    During 2009, financing cash proceeds were from stock proceeds realized from employee participation in our employee stock purchase plan and option exercises.

Contractual Obligations

        As of December 31, 2009, we had commitments under leases and other contractual obligations as follows (in thousands):

		Payments due by Period
Contractual Obligations		Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 years
Borrowings under credit facility		$	14,900	$	14,900	$	—		—	$	—
Operating lease obligations			32,798		4,860		8,962		7,991		10,985
Idle facility obligations			4,234		1,589		1,858		694		93
	Total obligations	$	51,932	$	21,349	$	10,820	$	8,685	$	11,078

        In addition to the commitments in the table above, as of December 31, 2009, we had a non-cancelable purchase commitment in the amount of approximately $0.4 million with the foreign supplier of our glass stock used in the manufacturing of certain types of chips and approximately $2.5 million with our suppliers of cameras and filters for in vivo imaging instrumentation. These commitments are excluded from the above table due to the fact they are not specifically related to a given time period. We also have minimum royalty obligations under separate license agreements with UT-Battelle, LLC, the Trustees of the University of Pennsylvania, Monogram Biosciences, Inc., and certain other licensors that in the aggregate are approximately $0.2 million per year, at a minimum. As of December 31, 2009, we have established $1.4 million in standby letters-of-credit, which restrict available borrowing under our credit facility, related to facility leases and customer deposits.

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        Our capital requirements depend on numerous factors, including market acceptance of our products, the resources we devote to developing and supporting our products, and acquisitions. We expect to devote substantial capital resources to continuing our research and development efforts, expanding our support and product development activities, and for other general corporate activities. Our future capital requirements will depend on many factors, including:

•

continued market acceptance of our microfluidic and lab automation products, and the demand for our services;

•

the magnitude and scope of our research and product development programs;

•

our ability to maintain existing, and establish additional, corporate partnerships and licensing arrangements;

•

the time and costs involved in expanding and maintaining our manufacturing facilities;

•

the potential need to develop, acquire or license new technologies and products; and

•

other factors not within our control.

2010 Financial Projections

        Caliper is currently projecting organic revenue growth of between 3-6% in 2010 over 2009 pro forma revenue of $119.7 million. Assuming current exchange rates, foreign currency is expected to have a positive impact of 1 to 1.5 percentage points on revenue growth in the first half of 2010, and a slightly unfavorable impact on revenue growth on a full year basis. We anticipate that timing of service revenues within the year will vary based upon the receipt of compounds related to services to be performed under our EPA ToxCast screening contract.

        The financial projections that we have provided above are forward-looking statements that are subject to risks and uncertainties, and are only made as of the date of the filing of this Annual Report on Form 10-K. These projections are based upon assumptions that we have made and believe to be reasonable. However, actual results may vary significantly from these projections due to the risks and uncertainties inherent in our business as described in Item 1A, "Risk Factors".

Impact of Inflation

        The effect of inflation and changing prices on our operations was not significant during the periods presented.

Off-Balance Sheet Arrangements

        As of December 31, 2009, Caliper did not have any "off-balance sheet arrangements," as that term is defined in the rules and regulations of the SEC.

Critical Accounting Estimates

        Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses, and assets and liabilities during the periods reported. We use estimates when accounting for certain items such as warranty expense, sales and marketing programs, employee compensation programs, depreciation and amortization periods, taxes, inventory values, and valuations of investments and intangible assets. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates due to changing

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conditions or the validity of our assumptions. We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

        Revenue Recognition.    Revenue arrangements that include multiple deliverables are divided into separate units of accounting if the deliverables meet certain criteria. We allocate the consideration among the separate units of accounting based on their relative selling prices, and consider the applicable revenue recognition criteria separately for each of the separate units of accounting. We adopted ASU No. 2009-13 and ASU 2009-14 in the third quarter of 2009, both prospectively and effective beginning on January 1, 2009. This new revenue guidance establishes a selling price hierarchy for determining the selling price of a deliverable in a sale arrangement. The selling price for each deliverable is based on vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or estimated selling price if neither VSOE or TPE is available. The amendments in this ASU eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionately to each deliverable on the basis of the deliverable's selling price. The amount of our product revenue is affected by our judgments as to whether an arrangement includes multiple elements and if so, the selling price hierarchy for those elements. Changes to the elements in an arrangement and the ability to establish the selling price for those elements could affect the timing of revenue recognition. These conditions are sometimes subjective and actual results could vary from the estimated outcome, requiring future adjustments to revenue.

        We recognize certain service and contract revenue for certain arrangements based upon proportional performance which requires that we estimate resources required to perform the work. The extent to which our resource estimates prove to be inaccurate could affect the timing of the revenue recognition for a particular contract arrangement. Our revenue recognition policies are more fully discussed in Footnote 2 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

        Goodwill.    We perform an annual impairment analysis of goodwill to determine if impairment exists. We may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. The goodwill impairment analysis is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. Caliper is comprised of a single segment which is our sole reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying value exceeds estimated fair value, there is an indication of potential impairment and a second step is performed to measure the amount of impairment. Fair value is determined by utilizing information about our company as well as publicly available industry information. Determining fair value involves judgments by our management and requires the use of significant estimates and assumptions, including point-in-time estimates of revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures and future market conditions, among others. Our projections are based on an internal strategic review. Key assumptions, strategies, opportunities and risks from this strategic review along with a market evaluation are the basis for our assessment.

        The second step of the goodwill impairment process involves the calculation of an implied fair value of goodwill. The implied fair value of goodwill is determined in a manner that is similar to how goodwill is calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit as calculated in step one, over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. In determining the fair value of net assets we determined the fair value of leases and certain intangible assets, including trademarks, patents, core and developed technologies and customer relationships.

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        Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. Goodwill is not amortized, but is reviewed for impairment at least annually. The results of the impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines, this could impact the assumptions used in calculating the fair value in subsequent years, and additional impairment charges may need to be recorded. To the extent goodwill is impaired, its carrying value will be further written down to its implied fair value and a charge will be made to our results of operations. Such an impairment charge would materially and adversely affect our GAAP reported operating results. As of December 31, 2009, we had recorded goodwill of $21.0 million in our consolidated balance sheet. No impairment of goodwill was identified in fiscal years 2009 and 2007.

        In 2008, with the sales of our PDQ and AutoTrace product lines in the fourth quarter of that year, which met the criteria for assets held for sale in October 2008, prior to our goodwill impairment test date, we first determined the amount of goodwill ($14.3 million) that was to be allocated to these product groupings based upon their recent transaction values, and then applied our annual analysis to the remaining goodwill balance ($66.3 million), which resulted in the determination that impairment had occurred. The second step of the goodwill impairment test involved us calculating the implied goodwill. The carrying value of the goodwill exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million. The goodwill impairment charge is non-cash in nature and does not affect our liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations.

        Valuation of Intangibles.    Our business acquisitions have resulted in intangible assets, net of accumulated amortization of $25.2 million as of December 31, 2009. The determination of the value of such assets requires management to make estimates and assumptions that affect our consolidated financial statements.

        We acquired Xenogen on August 9, 2006. In connection with this acquisition we used an independent appraisal to determine the fair value of intangibles related to the Xenogen business. The fair value was determined based upon projected future discounted cash flows of identified intangible assets taking into account risks related to the characteristics and applications of the technology, existing and future markets and assessments of the life cycle stage of developed technology. The valuation approach took into consideration discount rates commensurate with the inherent risk and projected financial results associated with each identified intangible asset. Applicable discount rates used ranged from 20% to 23%.

        Impairment.    We review long-lived assets and identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment exist, we assess recoverability of assets to be held and used by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. We perform the recoverability measurement and estimate undiscounted cash flows at the lowest possible level for which there are identifiable assets. If the aggregate undiscounted cash flows are less than the carrying value of the asset, we calculate the resulting impairment charge to be recorded based on the amount by which the carrying amount of assets exceeds the fair value of the assets. Actual cash flows could vary from the assumptions used in our assessment which could require future adjustments to our valuation of the assets. We report assets to be disposed of at the lower of the carrying amount or fair value less costs to sell.

        During 2009, there was a $0.4 million impairment charge related to NovaScreen intangibles that was recorded within amortization expense (see Footnote 17 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K).

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        Stock-Based Compensation.    We account for stock-based compensation in accordance with FASB ASC 718, which requires all share-based payments, including grants of stock options, to be recognized in the income statement as an operating expense, based on their fair values.

        We estimate the fair value of each option award on the date of grant using a Black-Scholes-Merton based option-pricing model. Various assumptions are used in these estimations, including:

•

Expected volatility, which is based on historical volatility of our stock and warrants;

•

Expected option term, which is based on our historical option exercise data taking into consideration the exercise patterns of the option holders during the option's life;

•

Risk-free interest rate, based on the U.S. Treasury yield curve in effect at the time of the grant; and

•

Forfeiture rate.

        A 10% unfavorable change in expected volatility and option term, which represent the most sensitive and judgmental assumptions, would not have a material effect on our financial statements.

        Accounts Receivable Reserves.    We grant credit to customers based on evaluations of their financial condition, generally without requiring collateral. We attempt to limit credit risk by monitoring our exposure for credit losses. This analysis may involve review of historical bad debts, customer concentrations, customer credit-worthiness, and current economic trends. We establish allowances for those accounts considered uncollectible based on the analysis of the recoverability of our trade accounts receivable performed at the end of each reporting period. Establishing an adequate allowance for doubtful accounts involves the use of considerable judgment and subjectivity. Actual results could vary from the assumptions we use to estimate the adequacy of our accounts receivable reserves which could require future adjustment to our reserve provisions. Our allowance for doubtful accounts was $0.8 million, and $0.7 million as of December 31, 2009 and 2008, respectively. We wrote off $175,000, $719,000 and $55,000 of accounts deemed uncollectible in 2009, 2008 and 2007, respectively. The write off in 2008 relates to a distributor of our PDQ product line. The amount of the write off was fully reserved in prior years and was written off in 2008 as it was deemed uncollectible.

        Inventory Reserves.    We reserve or write off 100% of the cost of inventory that we specifically identify and consider obsolete or excess. We define obsolete inventory as inventory that will no longer be used in the manufacturing process. Excess inventory is generally defined as inventory in excess of projected usage, and is determined using management's best estimate of future demand at the time, based upon information then available to us. We use a twelve-month demand forecast and, in addition to the demand forecast, we also consider: (1) parts and subassemblies that can be used in alternative finished products; (2) parts and subassemblies that are unlikely to be impacted by engineering changes; and (3) known design changes which would reduce our ability to use the inventory as planned. Determination of the excess balance is highly subjective and relies in part on the accuracy of our forecasts and our assessment of market conditions. If actual conditions are less favorable than conditions upon which we base our estimates, additional write-downs may be required. Conversely, if conditions are more favorable than conditions upon which we base our estimates, inventory previously written down may be sold, resulting in lower cost of sales and higher income from operations in that period. During 2009, 2008 and 2007, respectively, we recorded charges of $2.2 million, $1.7 million and $1.3 million, respectively, to cost of product revenues for excess and obsolete inventories. The increases in excess and obsolete inventories occurred primarily as a result of product evolution and new product introductions.

        Warranty Provision.    At the time revenue is recognized, we establish an accrual for estimated warranty expenses associated with sales, recorded as a component of cost of revenue. We offer a one-year limited warranty on instrumentation products and a 90-day warranty on chips, which is

59

included in the sales price of many of its products. Our standard limited warranty covers repair or replacement of defective goods, a preventative maintenance visit on certain products, and telephone based technical support. No upgrades are included in the standard warranty. Provision is made for estimated future warranty costs at the time of sale.

        Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust amounts as necessary. During 2009, 2008 and 2007, respectively, we recorded charges of $1.8 million, $1.8 million and $1.1 million to cost of product revenues for estimated warranty costs. The increase in 2008 relates primarily to the increase in product sales of liquid handling and automation products. Actual results could vary from the assumptions we use to establish the warranty liability which could require future adjustments to our reserve positions.

        Restructuring Charges.    During the years ended December 31, 2009, 2008 and 2007, we recorded restructuring charges of $0.7 million, $4.6 million and $0.1 million, respectively, for exit plan activities which took place in the period 2007-2009 and accounted for these plans in accordance with Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Benefits and Other Costs to Exit an Activity (including Certain Costs incurred in a Restructuring), FASB ASC 420, Accounting for Costs Associated with Exit or Disposal Activities, and SEC Staff Accounting Bulletin No. 100 (SAB 100), Restructuring and Impairment. In accordance with such standards, management makes certain judgmental estimates related to these restructuring charges. For example, the consolidation of facilities required us to make estimates including with respect to contractual rental commitments or lease buy-outs for office space being vacated and related costs, and ability of the tenant to pay leasehold improvement write-downs, offset by estimated sublease income. We review on at least a quarterly basis our sublease assumptions. These estimates include anticipated rates to be charged to a sub-tenant and the timing of the sublease arrangement. If the rental markets change, our sublease assumptions may not be accurate and changes in these estimates might be necessary and could materially affect our financial condition and results of operations. For a further discussion of our restructuring activities, see Note 11 of the Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

Recent Accounting Pronouncements

Newly Adopted Accounting Pronouncements

        During the third quarter of 2009, Caliper adopted the guidance of ASU No. 2009-23, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements, and ASU No. 2009-14, Software (Topic 985): Certain Revenue Arrangement That Include Software Elements which were ratified by the Financial Accounting Standards Board ("FASB") Emerging Issues Task Force on September 23, 2009. ASU No. 2009-13 affects accounting and reporting for all multiple-deliverable arrangements. It also affects companies that are affected by the amendments of ASU No. 2009-14. The impact of these standards was not material to our reported results of operations. Refer to our revenue recognition policies for further discussion.

        In June 2009, the FASB issued the Accounting Standards Codification ("ASC") as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with U.S. GAAP. While the adoption of the ASC as of September 30, 2009 changes how we reference accounting standards, the adoption did not have an impact on our financial position, results of operations, cash flows, or accounting policies.

        In May 2009, the FASB issued ASC 855-10, Subsequent Events. ASC 855-10 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The adoption of ASC 855-10 had no impact on our financial condition or results of operations.

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        In December 2007, the FASB issued ASC 805-10, Business Combinations. ASC 805-10 is effective for fiscal years beginning on or after December 15, 2008 and applies to all business combinations. ASC 805-10 provides that, upon initially obtaining control, an acquirer shall recognize 100 percent of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100 percent of its target. As a consequence, the current step acquisition model will be eliminated. Additionally, ASC 805-10 changes current practice, in part, as follows: (1) contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration; (2) transaction costs will be expensed as incurred, rather than capitalized as part of the purchase price; (3) pre-acquisition contingencies, such as legal issues, will generally have to be accounted for in purchase accounting at fair value; (4) in order to accrue for a restructuring plan in purchase accounting, the requirements in ASC 420-10, Exit or Disposal Cost Obligations, would have to be met at the acquisition date; and (5) in-process research and development charges will no longer be recorded. With the adoption of ASC 805-10 goodwill is no longer reduced when utilizing net operating loss carry forwards for which a full valuation allowance exists. The adoption of ASC 805-10 did not materially affect our results as we did not complete any business combinations in 2009. However, it may have a material impact on how we account for future business combinations.

        In April 2009, the FASB issued FASB Staff Position No. 141(R)-1 ("FSP FAS 141(R)-1"), Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies (subsequently this standard has been codified under FASB ASC Topic 805). The revised authoritative guidance provides additional clarification on the initial recognition and measurement of assets acquired and liabilities assumed in a business combination that arise from contingencies. The revised authoritative guidance is effective for all fiscal years beginning on or after December 15, 2008. To date, the revised authoritative guidance has not had a significant impact on the accounting for any businesses that we have acquired. However, it may have a material impact on how we account for future acquisitions.

        In November 2007, the EITF issued EITF Issue No. 07-1 (EITF No. 07-1), Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property. Companies may enter into arrangements with other companies to jointly develop, manufacture, distribute, and market a product. Often the activities associated with these arrangements are conducted by the collaborators without the creation of a separate legal entity (that is, the arrangement is operated as a "virtual joint venture"). The arrangements generally provide that the collaborators will share, based on contractually defined calculations, the profits or losses from the associated activities. Periodically, the collaborators share financial information related to product revenues generated (if any) and costs incurred that may trigger a sharing payment for the combined profits or losses. The consensus requires collaborators in such an arrangement to present the result of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable GAAP or, in the absence of other applicable GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. EITF No. 07-1 is effective for collaborative arrangements in place at the beginning of the annual period beginning after December 15, 2008. As our collaborative agreements do not incorporate such revenue- and cost-sharing arrangements, the adoption of EITF No. 07-1 did not have a material impact on our financial statements.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

        As a multinational company, we are subject to changes in foreign currency fluctuations. We have operations in the United Kingdom, France, Germany, Belgium, Switzerland, Canada and Japan. To the extent our sales and operating expenses are denominated in foreign currencies, our operating results

61

may be adversely impacted by changes in exchange rates. While foreign exchange gains and losses have historically been immaterial, we cannot predict whether such gains and losses will continue to be immaterial. We performed a sensitivity analysis assuming a hypothetical 10% movement in exchange rates applied to our projected foreign operations for the fiscal year 2009. A hypothetical 10% movement in exchange rates could materially impact our reported sales. However, because both sales and expenses are denominated in local currency, this analysis indicated that such movement would not have a material effect on net operating results or financial condition. Translation gains and losses related to our foreign subsidiaries are accumulated as a separate component of stockholders' equity. We do not currently engage in foreign currency hedging transactions, but may do so in the future.

Interest Rate Sensitivity

        Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. Fixed rate securities may have their fair market value adversely impacted due to fluctuations in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced to sell securities that have declined in market value due to changes in interest rates.

        The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. We estimate that such hypothetical adverse 100 basis point movement would not have materially impacted net income or materially affected the fair value of interest rate sensitive instruments at either December 31, 2009 or 2008.

        As of December 31, 2009 we had $14.9 million in debt outstanding under our credit facility. The interest rate on the facility is based on the prime rate (currently 3.25%) and therefore has direct and immediate response to changes in interest rates.

        Our primary investment objective is to preserve principal while at the same time maximizing yields without significantly increasing risk. Our portfolio includes money markets funds, commercial paper, medium-term notes, corporate notes, government securities, and corporate bonds. Our portfolio excludes auction rate securities. The diversity of our portfolio helps us to achieve our investment objective. As of December 31, 2009 and 2008, the average remaining maturities of our investment portfolio were approximately six and one months, respectively. All of our instruments are held other than for trading purposes. As of December 31, 2009 and 2008, unrealized losses were considered to be temporary due to the fact that although they are available to be sold to meet operating needs or otherwise, securities are generally held to maturity.

        The following table presents by year of maturity the amounts of our cash equivalents and investments, and related weighted average interest rates that may be subject to interest rate risk as of December 31, 2009:

			2010			2011			Total			Fair Value December 31, 2009
Cash and money market funds:
	Fixed rate securities (in thousands)		$	34,522		$	—		$	34,522		$	34,522
		Average interest rate		0.00	%		—			0.00	%
Available for sale marketable securities:
	Fixed rate securities (in thousands)		$	3,502		$	23		$	3,525		$	3,525
		Average interest rate		0.34	%		0.00	%		0.34	%
Total securities (in thousands)			$	38,024		$	23		$	38,047		$	38,047
		Average interest rate		0.03	%		0.00	%		0.03	%

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        This differs from our position at December 31, 2008, which the following table presents (dollars in thousands):

			2009			2010			Total			Fair Value December 31, 2008
Cash and money market funds:
	Fixed rate securities (in thousands)		$	23,667		$	—		$	23,667		$	23,667
		Average interest rate		0.02	%					0.02	%
Available for sale marketable securities:
	Fixed rate securities (in thousands)		$	2,801		$	233		$	3,034		$	3,034
		Average interest rate		2.84	%		6.68	%		3.12	%
Total securities (in thousands)			$	26,468		$	233		$	26,701		$	26,701
		Average interest rate		0.32	%		6.68	%		0.37	%

Item 8.    Financial Statements and Supplementary Data

(a)

The following documents are filed as a part of this Annual Report on Form 10-K:

(1)

Financial Statements:

        The financial statements and supplementary data are included herein under Item 6 and in the Consolidated Financial Statements and related notes thereto. See Item 15 of this Annual Report on Form 10-K.

(2)

Financial Statement Schedules:

        Schedule II, "Valuation and Qualifying Accounts" is included on page F-44 of this Annual Report on Form 10-K. All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        Not applicable.

Item 9A.    Controls and Procedures

        Evaluation of disclosure controls and procedures.    We have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Our officers concluded that our disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the chief executive officer and chief financial officer to allow timely decisions regarding required disclosure.

        Based on their evaluation as of December 31, 2009, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

        Limitations on the Effectiveness of Disclosure Controls and Procedures.    Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system can provide

63

only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Caliper have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

        Changes in internal controls.    There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the fourth quarter of our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

        Management's report on internal control over financial reporting.    Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f), and 15d-15(f) for Caliper. As part of that process, as of December 31, 2009, the end of the fiscal year covered by this annual report on Form 10-K, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we carried out an assessment of the effectiveness of Caliper's internal control over financial reporting. The assessment was conducted following the framework in Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control—Integrated Framework (1992). The assessment did not identify any material weaknesses in our internal control over financial reporting and our management concluded that our internal control over financial reporting was effective as of December 31, 2009. The effectiveness of our internal control over financial reporting as of December 31, 2009 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Caliper Life Sciences, Inc.

        We have audited Caliper Life Sciences' internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Caliper Life Sciences' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, Caliper Life Sciences maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Caliper Life Sciences as of December 31, 2008 and 2009, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2009 of Caliper Life Sciences and our report dated March 12, 2010 expressed an unqualified opinion thereon.

	/s/ Ernst & Young LLP
Boston, Massachusetts March 12, 2010

Item 9B.    Other Information

        Not applicable.

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        Information concerning our Executive Officers is set forth under "Executive Officers of the Registrant" in Part I of this Annual Report on Form 10-K and is incorporated by reference here. The remainder of the response to this item is incorporated by reference from the discussion responsive thereto under the captions "Executive Officers and Key Employees," "Section 16(a) Beneficial Ownership Reporting Compliance," "Code of Business Conduct and Ethics," and "Nominating and Corporate Governance Committee" in the Proxy Statement for our 2010 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

        We have adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available for free on our website at www.caliperLS.com under "Investor Relations." If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver in a Current Report on Form 8-K.

Item 11.    Executive Compensation

        Information concerning director and executive compensation required by this Item 11 will be set forth in the sections entitled "Directors Compensation," "Summary of Compensation," "Compensation Committee Interlocks and Insider Participation," "Compensation Committee Report" and "Compensation Practices and Policies Relating to Risk Management" contained in our Proxy Statement for our 2010 Annual Meeting of Stockholders or contained in a future amendment to this Annual Report on Form 10-K and incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

        Information concerning security ownership of certain beneficial owners and management required by this Item 12 will be set forth in the section entitled "Security Ownership of Certain Beneficial Owners and Management" contained in our Proxy Statement for our 2010 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

        Information concerning securities authorized for issuance under equity compensation plans required by this Item 12 will be set forth in the table entitled "Equity Compensation Plan Information" and information thereunder contained in our Proxy Statement for our 2010 Annual Meeting of Stockholders or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions and Director Independence

        Information concerning certain relationships and related transactions required by this Item 13 will be set forth in the section entitled "Certain Relationships and Related Transactions" and "Compensation Discussion and Analysis" contained in our Proxy Statement for our 2010 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

Item 14.    Principal Accountant Fees and Services

        Information concerning principal accountant fees and services required by this Item 14 will be set forth in the section entitled "Principal Accountant Fees and Services" contained in our Proxy Statement for our 2010 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

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PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a)

The following documents are filed as a part of this Annual Report on Form 10-K:

(1)

Financial Statements:

        See "Index to Consolidated Financial Statements and Financial Statement Schedules" at Item 8 to this Annual Report on Form 10-K. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.

	Page
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at December 31, 2009 and 2008	F-2
Consolidated Statements of Operations—For the Years Ended December 31, 2009, 2008 and 2007	F-3
Consolidated Statement of Stockholders' Equity—For the Years Ended December 31, 2009, 2008 and 2007	F-4
Consolidated Statements of Cash Flows—For the Years Ended December 31, 2009, 2008 and 2007	F-5
Notes to Consolidated Financial Statements	F-6

(2)

Financial Statement Schedules:

        Schedule II, "Valuation and Qualifying Accounts" is included on page F-44 of this report. All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(3)

Exhibits:

        The following is a list of exhibits filed as part of this Annual Report on Form 10-K:

Exhibit Number			Description of Document
	2.1	(18)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Holdings, Inc. and Xenogen Corporation, dated as of February 10, 2006.
	2.2	(17)(31)	Asset Sale and Purchase Agreement, dated as of October 29, 2008, by and between Sotax Corporation and Caliper Life Sciences, Inc.
	2.3	(17)(32)	Asset Purchase Agreement, dated as of November 10, 2008, by and between Dionex Corporation and Caliper Life Sciences, Inc.
	2.4	(17)	Stock Purchase Agreement, dated December 11, 2009, by and between Taconic Farms, Inc., Xenogen Corporation and Caliper Life Sciences, Inc.
	3.1	(14)	Amended and Restated Certificate of Incorporation of Caliper.
	3.2	(7)	Certificate of Designation of Series A Junior Participating Preferred Stock.
	3.3	(21)	Amended and Restated Bylaws of Caliper.
	4.1		Reference is made to Exhibits 3.1, 3.2 and 3.3.
	4.2	(15)	Specimen Stock Certificate.
	4.3	(8)	Rights Agreement, dated as of December 18, 2001, between Caliper and Wells Fargo Bank Minnesota, N.A., as Rights Agent.

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Exhibit Number			Description of Document
	4.11	(22)	Registration Rights Agreement by and between Caliper and The Berwind Company LLC, dated as of December 18, 2007.
	10.1	(1)	Lease Agreement, dated December 1, 1998, between Caliper and 605 East Fairchild Associates, L.P.
	10.2	(1)(2)	1996 Equity Incentive Plan.
	10.3	(1)(2)	1999 Equity Incentive Plan.
	10.4	(1)(2)	1999 Employee Stock Purchase Plan.
	10.5	(2)(19)	1999 Non-Employee Directors' Stock Option Plan.
	10.6	(2)(15)	Form of Grant Agreement for 1999 Equity Incentive Plan—Option Awards.
	10.7	(2)(15)	Form of Grant Agreement for 1999 Equity Incentive Plan—Restricted Stock Unit Awards.
	10.8	(2)(15)	Form of Grant Agreement for 1999 Non-Employee Directors' Stock Option Plan.
	10.9	(1)(2)	Form of Indemnification Agreement entered into between Caliper and its directors and executive officers.
	10.10	(1)(3)	Collaboration Agreement, dated May 2, 1998, between Caliper and Hewlett-Packard Company (now Agilent Technologies, Inc.).
	10.11	(2)(15)	Form of Stock Option Grant Agreement for Acquisition Equity Incentive Plan.
	10.12	(2)(15)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (pro rata vesting).
	10.13	(2)(15)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (5 year cliff vesting).
	10.14	(29)	Lease Agreement, dated as of April 25, 2005, between Caliper and BCIA New England Holdings LLC.
	10.17	(2)(15)	Non-Employee Directors' Cash Compensation Plan.
	10.18	(2)	Caliper Performance Bonus Plan.
	10.23	(1)(2)	The Corporate Plan for Retirement Select Plan Adoption Agreement and related Basic Plan Document.
	10.29	(2)(15)	Key Employee Change of Control and Severance Benefit Plan.
	10.30	(4)(7)	Cross-License Agreement, dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.32	(3)(6)	Settlement Agreement and Mutual General Release dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.39	(2)(8)	2001 Non-Statutory Stock Option Plan.
	10.46	(2)(15)	Form of Grant Agreement for 2001 Non-Statutory Stock Option Plan.
	10.52	(3)(12)	Sole Commercial Patent License Agreement, effective September 1, 1995, between UT-Battelle, LLC, the successor to Lockheed Martin Energy Research Corporation, and Caliper, as amended on November 1, 2002.

68

Exhibit Number			Description of Document
	10.55	(3)(9)	Collaboration Agreement, dated June 4, 2003, between Caliper and Bio-Rad Laboratories, Inc.
	10.56	(2)(10)	Key Employee Agreement, dated July 14, 2003, between Caliper and E. Kevin Hrusovsky.
	10.62	(2)(11)	Acquisition Equity Incentive Plan.
	10.64	(2)(13)	Consulting Agreement, dated January 1, 2004, between Caliper and Dr. David V. Milligan.
	10.67	(2)(30)	Offer Letter dated September 7, 2005 between Caliper Life Sciences, Inc. and David M. Manyak, Ph.D.
	10.71	(3)(16)	Agreement, dated as of May 5, 2000, between the Board of Trustees of the Leland Stanford Junior University and Xenogen Corporation.
	10.73	(23)	Amended and Restated Loan and Security Agreement, dated as of February 15, 2008, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation and NovaScreen Biosciences Corporation.
	10.74	(24)	Amendment to Lease Agreement dated as of March 18, 2008, by and between 605 Fairchild Associates, L.P., as landlord, and Caliper Life Sciences, Inc., as tenant.
	10.78	(25)	Amendment to Lease Agreement dated as of June 27, 2008, by and between Cedar Brook 5 Corporate Center, L.P., as landlord and Caliper Life Sciences, Inc., as tenant.
	10.79	(26)	2009 Equity Incentive Plan.
	10.80	(2)	Form of Stock Award Agreement for 2009 Equity Incentive Plan.
	10.81	(2)	Form of Grant Award Agreement for 2009 Equity Incentive Plan.
	10.82	(27)	Second Amended and Restated Loan and Security Agreement, dated as of March 6, 2009, by and among Silicon Valley Bank, Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation, Xenogen Biosciences Corporation and Caliper Life Sciences, Ltd.
	10.83		First Loan Modification Agreement, dated as of December 11, 2009, by and among Silicon Valley Bank, Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation, and Caliper Life Sciences,  Ltd.
	10.84	(28)	Non-Employee Director Compensation Policy
	21.1	(20)	Subsidiaries of the Registrant.
	23.1		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	24.1		Power of Attorney (reference is made to the signature page of this report).
	31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a)
	31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).
	32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

69

Exhibit Number		Description of Document
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-1, as amended, File No. 333-88827, filed on October 12, 1999 and incorporated by reference herein.

(2)

Management contract or compensatory plan or arrangement.

(3)

Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.

(4)

Previously filed as the like-numbered exhibit to Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated by reference herein.

(5)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-1, as amended, File No. 333-45942, filed on September 15, 2000, and incorporated by reference herein.

(6)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended March 31, 2001 and incorporated by reference herein.

(7)

Previously filed as Exhibit 99.1 to Current Report on Form 8-K filed December 19, 2001 and incorporated by reference herein.

(8)

Previously filed as Exhibit 99.1 to our Registration Statement on Form S-8, File No. 333-76636, filed January 11, 2002 and incorporated by reference herein.

(9)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended June 30, 2003 and incorporated by reference herein.

(10)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended September 30, 2003 and incorporated by reference herein.

(11)

Previously filed as Exhibit 99.1 to our Registration Statement on Form S-8, File No. 333-106946, filed June 10, 2003 and incorporated by reference herein.

(12)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2002 and incorporated by reference herein.

(13)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2003 and incorporated by reference herein.

(14)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended March 31, 2004 and incorporated by reference herein.

(15)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2004 and incorporated by reference herein.

(16)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(17)

Confidential treatment has been requested for certain portions of this exhibit which portions have been omitted and filed separately with the Securities and Exchange Commission.

(18)

Previously filed as Exhibit 2.5 to Form 10-K for the year ended December 31, 2005 and incorporated by reference herein.

(19)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended June 30, 2007 and incorporated by reference herein.

70

(20)

Previously filed as the like numbered Exhibit to Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.

(21)

Previously filed as Exhibit 3.1 to Current Report on Form 8-K filed on March 2, 2007 and incorporated by reference herein.

(22)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-3, as amended, File No. 333-147571, filed on November 21, 2007 and incorporated by reference herein.

(23)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended June 30, 2008 and incorporated by reference herein.

(24)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(25)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2008 and incorporated by reference herein.

(26)

Previously filed as Exhibit 10.1 to Current Report on Form 8-K filed on July 7, 2009 and incorporated by reference herein.

(27)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended March 31, 2009 and incorporated by reference herein.

(28)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended March 31, 2009 and incorporated by reference herein.

(29)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

(30)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2005 and incorporated by reference herein.

(31)

Previously filed as Exhibit 2.6 to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

(32)

Previously filed as Exhibit 2.7 to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

71

SIGNATURES

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

	CALIPER LIFE SCIENCES, INC.
	By:	/s/ E. KEVIN HRUSOVSKY E. Kevin Hrusovsky Chief Executive Officer
Date: March 12, 2010

        Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ E. KEVIN HRUSOVSKY E. Kevin Hrusovsky	President and Chief Executive Officer and Director (Principal Executive Officer)	March 12, 2010
/s/ PETER F. MCAREE Peter F. McAree	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	March 12, 2010
/s/ JOSEPH H. GRIFFITH IV Joseph H. Griffith IV	Vice President, Finance and Corporate Controller (Principal Accounting Officer)	March 12, 2010
/s/ ROBERT C. BISHOP, PH.D Robert C. Bishop, Ph.D.	Chairman of the Board of Directors	March 12, 2010
/s/ VAN BILLET Van Billet	Director	March 12, 2010
/s/ DAVID W. CARTER David W. Carter	Director	March 12, 2010
/s/ ALLAN L. COMSTOCK Allan L. Comstock	Director	March 12, 2010

72

Signature	Title	Date
/s/ DAVID V. MILLIGAN, PH.D. David V. Milligan, Ph.D.	Director	March 12, 2010
/s/ KATHRYN A. TUNSTALL Kathryn A. Tunstall	Director	March 12, 2010

73

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Caliper Life Sciences, Inc.

        We have audited the accompanying consolidated balance sheets of Caliper Life Sciences as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Caliper Life Sciences at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

        As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue recognition with the adoption of the amendments to the FASB Accounting Standards Codification resulting from Accounting Standards Update No. 2009-13, Multiple-Deliverable Revenue Arrangements, effective January 1, 2009 and Accounting Standards Update No. 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements, effective January 1, 2009.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Caliper Life Sciences' internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2010 expressed an unqualified opinion thereon.

	/s/ Ernst & Young LLP
Boston, Massachusetts
March 12, 2010

F-1

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

				December 31,
				2009			2008
				(In thousands, except share and per share data)
ASSETS
Current assets:
	Cash and cash equivalents			$	34,522		$	23,667
	Marketable securities				3,525			3,034
	Accounts receivable, net of allowance for doubtful accounts of $804 and $740 in 2009 and 2008, respectively				26,816			27,396
	Inventories				11,525			17,579
	Prepaid expenses and other current assets				2,385			2,481
		Total current assets			78,773			74,157
Property and equipment, net					9,107			10,735
Intangible assets, net					25,222			34,399
Goodwill					21,011			22,905
Other assets					359			882
		Total assets		$	134,472		$	143,078
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	5,114		$	8,377
	Accrued compensation				8,085			5,175
	Other accrued liabilities				9,735			9,725
	Deferred revenue and customer deposits				12,390			14,284
	Current portion of accrued restructuring				1,449			1,806
	Borrowings under credit facility (Note 9)				14,900			14,900
		Total current liabilities			51,673			54,267
Noncurrent portion of accrued restructuring					2,232			2,670
Other noncurrent liabilities					6,429			8,275
Deferred tax liability					1,128			1,128
Commitments and contingencies (Note 10)
Stockholders' equity:
	Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding				—			—
	Common stock, $0.001 par value; 100,000,000 shares authorized; 49,324,699 and 48,596,233 shares issued and outstanding in 2009 and 2008, respectively				49			49
	Additional paid-in capital				383,306			378,919
	Accumulated deficit				(310,637	)		(302,412	)
	Accumulated other comprehensive income				292			182
		Total stockholders' equity			73,010			76,738
			Total liabilities and stockholders' equity	$	134,472		$	143,078

See accompanying notes.

F-2

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

			Years Ended December 31,
			2009			2008			2007
			(In thousands, except per share data)
Revenue:
	Product revenue		$	86,149		$	85,149		$	82,961
	Service revenue			31,471			37,734			37,557
	License fees and contract revenue			12,792			11,171			20,189
		Total revenue		130,412			134,054			140,707
Costs and expenses:
	Cost of product revenue			49,636			52,178			49,760
	Cost of service revenue			21,398			24,739			22,357
	Cost of license revenue			1,487			1,477			2,515
	Research and development			17,881			19,921			24,791
	Selling, general and administrative			44,886			48,987			54,954
	Impairment of goodwill (Note 7)			—			43,365			—
	Amortization of intangible assets			6,589			8,313			10,106
	Restructuring charges, net			739			4,605			52
		Total costs and expenses		142,616			203,585			164,535
Operating loss				(12,204	)		(69,531	)		(23,828	)
	Interest income			58			259			650
	Interest expense			(739	)		(1,053	)		(1,197	)
	Gain on divestitures (Note 3)			4,942			2,119			—
	Other (expense) income, net			(63	)		521			579
Loss before income taxes				(8,006	)		(67,685	)		(23,796	)
Provision for income taxes				(219	)		(607	)		(284	)
Net loss			$	(8,225	)	$	(68,292	)	$	(24,080	)
Net loss per common share, basic and diluted			$	(0.17	)	$	(1.42	)	$	(0.51	)
Shares used in computing net loss per common share, basic and diluted				48,896			48,114			47,301

See accompanying notes.

F-3

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

		Stockholders' Equity
		Common Stock
						Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income/(Loss)			Total Stockholders' Equity
		Shares		Amount
		(In thousands, except shares)
Balances at December 31, 2006			46,812,315	$	47	$	366,942	$	(210,040	)	$	460		$	157,409
	Net loss		—		—		—		(24,080	)		—			(24,080	)
	Foreign currency translation gain		—		—		—		—			148			148
	Change in unrealized gain on available-for-sale securities		—		—		—		—			21			21
	Comprehensive loss														(23,911	)
	Issuance of common stock pursuant to stock plans		866,296		1		2,526		—			—			2,527
	Stock-based compensation expense		—		—		5,161		—			—			5,161
Balances at December 31, 2007			47,678,611		48		374,629		(234,120	)		629			141,186
	Net loss		—		—		—		(68,292	)		—			(68,292	)
	Foreign currency translation loss		—		—		—		—			(400	)		(400	)
	Change in unrealized loss on available-for-sale securities		—		—		—		—			(47	)		(47	)
	Comprehensive loss														(68,739	)
	Issuance of common stock pursuant to stock plans		917,622		1		710		—			—			711
	Stock-based compensation expense		—		—		3,580		—			—			3,580
Balances at December 31, 2008			48,596,233		49		378,919		(302,412	)		182			76,738
	Net loss		—		—		—		(8,225	)		—			(8,225	)
	Foreign currency translation gain		—		—		—		—			167			167
	Change in unrealized loss on available-for-sale securities		—		—		—		—			(57	)		(57	)
	Comprehensive loss														(8,115	)
	Issuance of common stock pursuant to stock plans		728,466		—		506		—			—			506
	Stock-based compensation expense		—		—		3,881		—			—			3,881
Balances at December 31, 2009			49,324,699	$	49	$	383,306	$	(310,637	)	$	292		$	73,010

See accompanying notes.

F-4

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Years Ended December 31,
				2009			2008			2007
				(In thousands)
Operating activities
Net loss				$	(8,225	)	$	(68,292	)	$	(24,080	)
Adjustments to reconcile net loss to net cash from operating activities:
	Depreciation and amortization				9,583			12,042			13,990
	Stock-based compensation expense, net				3,882			3,580			5,161
	Gain on divestitures				(4,942	)		(2,119	)		—
	Impairment of goodwill				—			43,365			—
	Non-cash restructuring charges, net				739			4,605			52
	Other charges				—			—			639
	Foreign currency transaction losses (gains)				338			(466	)		(576	)
	Changes in operating assets and liabilities, net of acquisitions:
		Accounts receivable			(1,200	)		2,125			1,402
		Inventories			6,105			(1,213	)		(538	)
		Prepaid expenses and other current assets			92			(254	)		304
		Accounts payable and other accrued liabilities			(3,349	)		(2,432	)		1,005
		Accrued compensation			3,399			(1,555	)		(1,141	)
		Deferred revenue and customer deposits			(1,619	)		646			30
		Other noncurrent liabilities			(1,211	)		1,457			979
		Payments of accrued restructuring obligations, net			(1,649	)		(2,686	)		(7,339	)
			Net cash from operating activities		1,943			(11,197	)		(10,112	)
Investing activities
Purchases of marketable securities					(5,702	)		(2,946	)		(2,366	)
Proceeds from sales of marketable securities					400			400			4,102
Proceeds from maturities of marketable securities					4,847			2,711			8,344
Other assets					55			729			—
Purchases of property and equipment					(1,572	)		(2,900	)		(2,087	)
Purchase of intangible and other assets					—			—			(1,000	)
Proceeds from divestitures					10,430			17,800			—
			Net cash from investing activities		8,458			15,794			6,993
Financing activities
Borrowings under credit facility					27,500			4,000			8,500
Payments of credit facility, loans payable and other obligations					(27,500	)		(2,000	)		(4,285	)
Proceeds from issuance of common stock					609			1,075			2,793
			Net cash from financing activities		609			3,075			7,008
Effect of exchange rates on changes in cash and cash equivalents					(155	)		286			186
Net increase in cash and cash equivalents					10,855			7,958			4,075
Cash and cash equivalents at beginning of year					23,667			15,709			11,634
Cash and cash equivalents at end of year				$	34,522		$	23,667		$	15,709
Supplemental disclosure of cash flow information
Interest paid				$	902		$	1,220		$	1,099
Income taxes paid				$	77		$	415		$	457
Purchase price adjustment for acquisitions				$	—		$	—		$	(61	)

See accompanying notes.

F-5

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

        Caliper Life Sciences, Inc. (Caliper) was incorporated in the state of Delaware on July 26, 1995. Caliper develops and sells innovative and enabling products and services to the life sciences research community, a customer base that includes pharmaceutical and biotechnology companies, and government and other not-for-profit research institutions. Caliper's strategy is to transform drug discovery and development by offering technologies and services that ultimately enhance the ability to predict the effects that new drug candidates will have on humans. Caliper believes that its integrated systems, consisting of instruments, software and reagents, laboratory automation tools and assay and discovery services enable researchers to better understand the basis for disease and more effectively discover safe and effective drugs.

Financial Statement Presentation and Principles of Consolidation

        Caliper's financial statements include the accounts of its wholly owned operating subsidiaries including Xenogen Corporation (Xenogen), NovaScreen Biosciences Corporation (NovaScreen), Caliper Life Sciences Limited (United Kingdom), Caliper Life Sciences Ltd. (Canada), Caliper Life Sciences N.V. (Belgium), Caliper Life Sciences GmbH (Germany), Caliper Life Sciences SA (France), and Caliper Life Sciences AG (Switzerland). All significant intercompany balances and transactions have been eliminated in consolidation. Caliper's financial statements include the results of operation of its divested subsidiary, Xenogen Biosciences Corporation (XenBio) up to and through December 11, 2009, the date of the divestiture.

        As shown in the consolidated financial statements, at December 31, 2009, Caliper has a total cash, cash equivalents and marketable securities balance of $38.0 million and outstanding borrowings under its credit facility of $14.9 million (see Note 9). The accompanying financial statements assume that Caliper's cash, cash equivalents and marketable securities balance at December 31, 2009 and access to available capital under its credit facility are sufficient to fund operations through at least March 31, 2011, based upon its current operating plan. As more fully described in Note 9, certain conditions associated with Caliper's credit facility could have a potential adverse impact on its ability to access capital under its credit facility in order to fund planned 2010 operations.

2. Summary of Significant Accounting Policies

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash Equivalents and Marketable Securities

        Caliper considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. Management determines the appropriate classification of its investment securities at the time of purchase and re-evaluates such determination at each reporting date. Management has classified Caliper's marketable securities as available-for-sale securities in the accompanying financial statements. Available-for-sale securities are carried at fair value based on quoted market prices, with unrealized gains and losses reported in a separate component of stockholders' equity. Realized gains and losses and declines in value, if any, judged to be other than

F-6

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

temporary on available-for-sale securities are reported in other income or expense. The cost of securities sold is based on the specific identification method.

        Caliper invests its excess cash in U.S. government and agency securities, debt instruments of financial institutions and corporations, and money market funds with strong credit ratings. Caliper has established guidelines regarding diversification of its investments and their maturities to maintain safety and liquidity.

Customer Accounts Receivable

        Customer accounts receivable are stated at billed amounts, net of related reserves. No collateral is required on these trade receivables. The majority of sales made by Caliper do not include any return rights or privileges. Caliper has historically not experienced significant credit losses in connection with its customer receivables but does consider historic trends and existing economic conditions in establishing reserve requirements.

Inventories

        Inventories for use in the manufacture of Caliper's instruments include electronic and optical components, devices and accessories either produced or purchased from original equipment manufacturers. Inventories for use in the manufacture of LabChip technologies consist primarily of glass, quartz and reagents. Inventories are stated at the lower of cost or market, reflect appropriate reserves for potential obsolete, slow moving or otherwise impaired material, and include appropriate elements of material, labor and overhead.

Property and Equipment

        Additions to property and equipment are recorded at cost. Major replacements and improvements are capitalized, while general repairs and maintenance are expensed as incurred. Depreciation commences once the assets have been placed in service, and is computed using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets, which primarily range from three to five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the assets or the lease term, generally four to ten years.

Impairment of Long-Lived Assets

        Caliper reviews long-lived assets and identifiable intangibles which have definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment exist, recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimating of undiscounted cash flows is done at the lowest possible levels for which there are identifiable cash flows. This is referred to as the "asset group." If the aggregate undiscounted cash flows are less than the carrying value of the asset group, the next step is to determine the fair value of the asset group. If the fair value of the asset group is less than the carrying value of the asset group, impairment exists and that impairment is allocated to each individual asset in the group based on its relative book value; however, in no circumstances would an individual asset be written down below its fair value. Caliper also performs an annual assessment of impairment for all indefinitely-lived intangible assets. If the fair value

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2. Summary of Significant Accounting Policies (Continued)

exceeds the carrying value of the asset, then the intangible is not impaired. If the fair value is less than the carrying value, then an impairment charge is recorded equal to the difference. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As discussed in Note 7, Caliper recorded an impairment charge of $0.4 million during 2009 related to a developed technology intangible asset.

Fair Value of Financial Instruments

        The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other accrued expenses approximate fair value due to their short-term maturities. Caliper's available-for-sale marketable securities are carried at fair value based on quoted market prices, consistent with the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320, Accounting for Certain Investments in Debt and Equity Securities. Caliper's credit facility is carried at book value as outstanding amounts approximate fair value as monthly interest payments are indexed based on the prime rate.

Revenue Recognition

General Policy

        Caliper recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and collectability is reasonably assured or probable, as applicable. Product revenue is recognized upon passage of title, which for the majority of sales occurs when goods are shipped under Caliper's standard terms of "FOB origin." Revenue associated with customer product purchases delivered under terms of "FOB destination" is deferred until the product is received by the customer. Revenues on shipments subject to customer acceptance provisions are recognized only upon customer acceptance provided all other revenue recognition criteria are met. In general, sales made by Caliper do not include general return rights or privileges. In the limited circumstance where a right of return exists, Caliper recognizes revenue when the right has lapsed. Based upon Caliper's prior experiences, sales returns have not been significant and therefore a general provision for sales returns or other allowances is not recorded at the time of sale. Revenue from services offered by Caliper is generally recognized as the services are performed (or, as applicable, ratably over the contract service term in the case of annual maintenance contracts). Provision is made at the time of sale for estimated costs related to Caliper's warranty obligations to customers.

        Cash received from customers as advance deposits for undelivered products and services including contract research and development services, is recorded within customer deposits until revenue is recognized. Revenue related to annual maintenance contracts or other remaining undelivered performance obligations is deferred and recognized upon completion of the underlying performance criteria.

Product Revenue

        Product revenue is recognized upon the shipment and transfer of title to customers and is recorded net of discounts and allowances. Revenues on shipments subject to customer acceptance provisions are recognized only upon customer acceptance provided all other revenue recognition criteria are met. Customer product purchases are generally delivered under standardized terms of "FOB origin" with

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2. Summary of Significant Accounting Policies (Continued)

the customer assuming the risks and rewards of product ownership at the time of shipping from Caliper's warehouse. Revenue associated with customer product purchases delivered under terms of "FOB destination" is deferred until product is delivered to the customer. In accordance with Accounting Standards Update (ASU) No. 2009-13, Caliper defers the relative selling price of any elements that remain undelivered after product shipment and/or acceptance (as applicable), such as remaining services to be performed.

Service and Annual Maintenance Agreements

        Caliper's general policy is to recognize revenue as services are performed, typically using the proportional performance method based upon defined outputs or other reasonable measures as applicable, or ratably over the contract service term in the case of annual maintenance contracts. Customers may purchase optional warranty coverage during the initial standard warranty term and annual maintenance contracts beyond the standard warranty expiration. These optional service offerings are not included in the price Caliper charges customers for the initial product purchase. Under Caliper's standard warranty, the customer is entitled to repair or replacement of defective goods.

Licensing and Royalty

        Revenue from up-front license fees is recognized when the earnings process is complete and no further obligations exist. If further obligations exist, the up-front license fee is recognized ratably over the obligation period. Royalties and milestone payments under licenses are recorded as earned in accordance with contract terms, when third-party results are reliably measured and collectability is reasonably assured. Imaging patent rights granted to commercial imaging customers are recognized ratably over the term of the license.

Contract Revenue

        Revenue from contract research and development services is recognized as earned based on the performance requirements of the contract. Non-refundable contract fees, unless based upon time and materials, time and expense, or substantive milestones, are generally recognized using the proportional performance method.

Multiple Element Arrangements

        Caliper's revenue arrangements often include the sale of an instrument, consumables, software, service, technology licenses, installation and training. Revenue arrangements may include one of these single elements, or may incorporate one or more elements in a single transaction or combination of related transactions. During the third quarter of 2009, Caliper adopted the guidance of ASU No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements, and ASU No. 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements which were ratified by the Financial Accounting Standards Board (FASB) Emerging Issues Task Force on September 23, 2009. ASU No. 2009-13 affects accounting and reporting for all multiple-deliverable arrangements. It also affects companies that are affected by the amendments of ASU No. 2009-14.

        The amendments in ASU No. 2009-14 provide that tangible products containing software components and non-software components that function together to deliver the tangible product's essential functionality are no longer within the scope of the software revenue guidance in

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Subtopic 985-605. In addition, the amendments require that hardware components of a tangible product containing software components always be excluded from the software revenue guidance.

        ASU No. 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable in a sale arrangement. The selling price for each deliverable is based on vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or estimated selling price if neither VSOE or TPE is available. The amendments in this ASU eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionately to each deliverable on the basis of the deliverable's selling price.

        Caliper adopted these standards in the third quarter of 2009, effective as of January 1, 2009 and on a prospective basis thereafter. The adoption of these standards did not materially affect any of the quarterly periods in 2009.

Imaging

        Caliper's Imaging products typically contain the following elements: the imaging instrument, software, installation services, training services, post-contract support services (PCS), and for Caliper's commercial customers, a method patent license. Prior to ASU 2009-14, Caliper accounted for these instruments under the software revenue recognition guidance as the software was determined to be more than incidental to the instrument. As a result of the adoption of ASU 2009-14, Caliper has concluded that the software functions together with the instrument to deliver the instrument's essential functionality, and thus is no longer subject to the guidance of Subtopic 985-605. As such, Caliper now uses the guidance of ASC 605-25, as updated by ASU 2009-13, to allocate arrangement consideration to each element of the arrangement.

        As required by ASU 2009-13, when allocating arrangement consideration, a determination of selling price must be made for each element of the arrangement. Where VSOE exists for an element, Caliper has used VSOE as the selling price. Caliper generally and historically has demonstrated VSOE for installation services, training services, PCS, and its method patents. Caliper's Imaging instruments are always delivered together with software. As such, VSOE does not exist for these elements. Caliper concluded that sufficient TPE does not exist to serve as a basis for determining selling price due to the unique and proprietary technologies offered in its products; however, Caliper has considered any TPE information that is available in its estimates of selling price. As a result, Caliper has estimated the selling price of the combined Imaging instrument and software. In estimating selling prices, Caliper considers a number of factors including: Caliper's pricing policies and objectives, information gathered from its experience in customer negotiations, market research and information, recent technological trends and innovation, the nature of any services purchased by the customer, and competitor pricing (where available).

Research

        Caliper's Research products, which include microfluidic and automation offerings, typically contain the following elements: the instrument, software, installation services, training services and for Caliper's microfluidic customers, the microfluidic chip. Caliper uses the guidance of ASC 605-25, as updated by ASU 2009-13, to allocate arrangement consideration to each element of the arrangement.

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        As required by ASU 2009-13, when allocating arrangement consideration, a determination of selling price must be made for each element of the arrangement. Where VSOE exists for an element, Caliper has used VSOE as the selling price. Caliper generally and historically has demonstrated VSOE for installation services, training services and its microfluidic chips. Caliper's Research instruments and software are rarely sold separately. As such, VSOE does not exist for these elements. Caliper concluded that sufficient TPE does not exist to serve as a basis for determining selling price due to the unique and proprietary technologies offered in its products; however, Caliper has considered any TPE information that is available in its estimates of selling price. Caliper has estimated the selling price of the combined Research instrument and software. In estimating selling prices, Caliper considers a number of factors including: Caliper's pricing policies and objectives, information gathered from our experience in customer negotiations, market research and information, recent technological trends and innovation, the nature of any services purchased by the customer, and competitor pricing (where available).

Segment Reporting

        Caliper currently operates in one business segment, the development and commercialization of life science instruments and related consumables and services for use in drug discovery and other life sciences research and development. Caliper's entire business is comprehensively managed by a single management team that reports to the Chief Executive Officer. Caliper does not operate its core lines of product and services as separate business entities, nor does it accumulate discrete financial information with respect to separate product and service areas. As such, Caliper does not have separately reportable segments as defined by FASB ASC 280, Disclosure about Segments of an Enterprise and Related Information. Refer to Note 16 for discussion regarding Caliper's geographical activities.

Goodwill

        In accordance with FASB ASC 805, Business Combinations, and FASB ASC 350, Goodwill and Other Intangible Assets, goodwill and certain other intangibles are not amortized but are instead subject to periodic impairment assessments. Caliper performs a test for the impairment of goodwill annually following the related acquisition, or more frequently if events or circumstances indicate that goodwill may be impaired. Because Caliper has a single operating segment which is the sole reporting unit, Caliper performs this test by comparing the fair value of Caliper with its carrying value, including goodwill. If the fair value exceeds the carrying value, goodwill is not impaired. If the book value exceeds the carrying value, Caliper would calculate the potential impairment loss by comparing the implied fair value of goodwill with the book value of goodwill. If the implied fair value of goodwill is less than the book value, an impairment charge would be recorded equal to the difference. Caliper recorded an impairment charge of $43.4 million in 2008. Refer to Note 7 for further discussion.

        Caliper performs an annual impairment analysis of goodwill to determine if impairment exists, and may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. The goodwill impairment analysis is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. Caliper is comprised of a single segment which is the sole reporting unit. Caliper determines the fair value of the reporting unit using the concepts of ASC 820, which includes the appropriate weighting of acceptable indicators of fair value, primarily market and income based indicators of fair value. If the fair value of a reporting unit exceeds

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2. Summary of Significant Accounting Policies (Continued)

its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying value exceeds estimated fair value, there is an indication of potential impairment and a second step is performed to measure the amount of impairment. Fair value is determined by utilizing information about the Company as well as publicly available industry information. Determining fair value involves judgments by Caliper's management and requires the use of significant estimates and assumptions, including point-in-time estimates of revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures and future market conditions, among others.

        The second step of the goodwill impairment process involves the calculation of an implied fair value of goodwill. The implied fair value of goodwill is determined in a manner that is similar to how goodwill is calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit as calculated in step one, over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. In determining the fair value of its net assets Caliper determined the fair value of leases and certain intangible assets, including trademarks, patents, core and developed technologies and customer relationships.

Foreign Currency Translation

        The financial statements of Caliper's foreign subsidiaries are translated in accordance with FASB ASC 830, Foreign Currency Translation. In translating the accounts of the foreign subsidiaries into U.S. dollars, stockholders' equity is translated at historical rates, while assets and liabilities are translated at the rate of exchange in effect as of the end of the period. Revenue and expense transactions are translated using the weighted-average exchange rate in effect during the period in which they arise. The resulting foreign currency translation adjustments are reflected within comprehensive income (loss) as a separate component of stockholders' equity.

        Foreign currency transaction gains and losses from the settlement of account balances denominated in another currency are included in current period other income, net, as incurred. Foreign currency gains and losses on intercompany accounts are included in current period income to the extent that settlement of these accounts is anticipated in the future.

Research and Development

        Caliper charges research and development costs to expense as incurred. Research and development costs consist primarily of salaries and related personnel costs, fees paid to consultants and outside service providers for development, material cost of prototypes and test units, facility and other research-related allocation expenses, and other expenses related to the design, development, testing and enhancement of Caliper's products.

Warranty Obligations

        Caliper provides for estimated warranty expenses as a component of cost of revenue at the time product revenue is recognized in accordance with FASB ASC 450, Accounting for Contingencies and FASB ASC 460, Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others. Caliper offers a one-year limited warranty on most products, which is included in the selling price. Caliper's standard limited warranty covers repair or replacement

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2. Summary of Significant Accounting Policies (Continued)

of defective goods, a preventative maintenance visit on certain products, and telephone-based technical support. Factors that affect Caliper's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. Caliper periodically assesses the adequacy of its recorded warranty liabilities and adjusts amounts as necessary.

Other Income (Expense)

        Other income (expense), net consists of the following (in thousands):

	Years Ended December 31,
	2009			2008		2007
Foreign currency transaction gains (losses), net	$	(338	)	$	466	$	576
Other income, net		275			55		3
	$	(63	)	$	521	$	579

Guarantees and Indemnifications

        Caliper recognizes liabilities for guarantees in accordance with FASB ASC 460 that requires upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligations it assumes under that guarantee.

        Caliper has certain indemnification obligations related to the divestiture of the Xenogen Biosciences Corporation ("XenBio") operations. The divestiture agreements also contain representations, warrants and indemnities that are customary in stock purchase transactions.

        Caliper, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at Caliper's request in such capacity. The term of the indemnification period is the officer's or director's lifetime. Caliper may terminate the indemnification agreements with its officers and directors upon 90 days written notice, but termination will not affect claims for indemnification relating to events occurring prior to the effective date of termination. The maximum amount of potential future indemnification is unlimited; however, Caliper has a director and officer insurance policy that limits its exposure and may enable it to recover a portion of any future amounts paid. Caliper believes the fair value of these indemnification agreements is minimal. Accordingly, Caliper has not recorded any liabilities for these agreements as of December 31, 2009 and 2008.

Shipping and Handling Fees and Costs

        Shipping and handling fees billed to customers for product shipments are recorded in "Product revenue" in the accompanying consolidated statements of operations. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in "Cost of revenue" in the accompanying consolidated statements of operations.

Advertising Expense

        Caliper expenses costs of advertising as incurred. Advertising costs were $1.7 million, $1.8 million and $1.9 million during 2009, 2008 and 2007, respectively.

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Risk Management

        Caliper has purchased commercial insurance to cover its estimated future legal costs and settlements related to workers' compensation, product, general, auto, general liability and directors' and officers' liability claims. Caliper's management decides the amount of insurance coverage to purchase from unaffiliated companies and the appropriate amount of risk coverage based on the cost and availability of insurance and the likelihood of a loss. Management believes that the levels of risk that Caliper has provided insurance coverage for are consistent with those of other companies in its industry. There can be no assurance that Caliper will not incur losses beyond the limits, or outside the coverage, of its insurance.

Significant Concentrations, Credit and Other Risks

        Certain financial instruments, such as cash equivalents and marketable securities, investments and accounts receivable, may potentially subject Caliper to concentrations of credit risk. Caliper believes that its investments bear minimal risk. These investments are of a short-term nature and include investments in commercial paper and government and corporate debt securities. By policy, the amount of credit exposure to any one institution or issuer is limited. These investments are generally not collateralized and primarily mature within three years. Caliper has not experienced any losses due to institutional failure or bankruptcy.

        Caliper's allowance for doubtful accounts at December 31, 2009 and 2008 was $0.8 million and $0.7 million, respectively. Caliper grants credit to customers based on evaluations of their financial condition, generally without requiring collateral. However, credit risk is reduced through Caliper's efforts to monitor its exposure for credit losses and maintain allowances, if necessary. In 2009 and 2008, no customer accounted for greater than 10% of total revenues or gross accounts receivable. Caliper's policy is to perform an analysis of the recoverability of its trade accounts receivable at the end of each reporting period and to establish allowances for those accounts considered uncollectible. Caliper analyzes historical bad debts, customer concentrations, customer credit-worthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.

        Caliper's products include certain components that are currently sourced from single vendors. Caliper believes that other vendors would be able to provide similar equipment, however the qualification of such vendors may require start-up time. In order to mitigate any adverse impacts from a disruption of supply, Caliper attempts to maintain an adequate supply of critical single-sourced equipment.

Comprehensive Income (Loss)

        Caliper accounts for comprehensive income (loss) in accordance with FASB ASC 220, Reporting Comprehensive Income. The components of comprehensive income (loss) are unrealized gains and losses on available-for-sale securities and foreign currency translation adjustments. Comprehensive income (loss) has been disclosed in the Statement of Stockholders' Equity. As of December 31, 2009, accumulated other comprehensive income included $293,000 in foreign currency translation gains and $1,000 in unrealized losses on available-for-sale securities. As of December 31, 2008, accumulated other comprehensive income included $127,000 in foreign currency translation gains and $56,000 in unrealized gains on available-for-sale securities.

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2. Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation

        Caliper accounts for stock-based compensation in accordance with FASB ASC 718, Share-Based Payment, which requires all share-based payments, including grants of stock options, to be recognized in the income statement as an operating expense, based on their fair values. Caliper estimates the fair value of each option award on the date of grant using the Black-Scholes-Merton based option-pricing model.

Net Loss Per Share

        Basic earnings per share is calculated based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share would give effect to the dilutive effect of common stock equivalents consisting of stock options, unvested restricted stock, unvested restricted stock units and warrants (calculated using the treasury stock method).

        Common stock equivalents equal to 16.2, 14.4 and 14.0 million shares (prior to the application of the treasury stock method) were excluded from the computation of net loss per share in each of the three year periods ended December 31, 2009, 2008 and 2007, respectively, as they would have an antidilutive effect due to Caliper's net loss.

Income Taxes

        Caliper accounts for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes, and accounts for uncertainty in income taxes recognized in financial statements in accordance with FASB ASC 740, Accounting for Uncertainty in Income Taxes. FASB ASC 740 prescribes a comprehensive model for the recognition, measurement, and financial statement disclosure of uncertain tax positions. Unrecognized tax benefits are the difference between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes pursuant to FASB ASC 740. Caliper classifies uncertain tax positions as short-term liabilities within accrued expenses. During the fiscal years ended December 31, 2009, 2008 and 2007, Caliper's tax provisions primarily relate to foreign taxes in jurisdictions where its wholly owned subsidiaries are profitable and state taxes in the State of California.

Recent Accounting Pronouncements

Newly Adopted Accounting Pronouncements

        During the third quarter of 2009, Caliper adopted the guidance of ASU No. 2009-23, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements, and ASU No. 2009-14, Software (Topic 985): Certain Revenue Arrangement That Include Software Elements which were ratified by the Financial Accounting Standards Board ("FASB") Emerging Issues Task Force on September 23, 2009. ASU No. 2009-13 affects accounting and reporting for all multiple-deliverable arrangements. It also affects companies that are affected by the amendments of ASU No. 2009-14. The impact of these standards was not material to our reported results of operations. Refer to our revenue recognition policies for further discussion.

        In June 2009, the FASB issued the ASC as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with U.S. GAAP. While the adoption of the ASC as of September 30, 2009

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2. Summary of Significant Accounting Policies (Continued)

changes how we reference accounting standards, the adoption did not have an impact on our financial position, results of operations, cash flows, or accounting policies.

        In May 2009, the FASB issued ASC 855-10, Subsequent Events. ASC 855-10 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The adoption of ASC 855-10 had no impact on our financial condition or results of operations.

        In December 2007, the FASB issued ASC 805-10, Business Combinations. ASC 805-10 is effective for fiscal years beginning on or after December 15, 2008 and applies to all business combinations. ASC 805-10 provides that, upon initially obtaining control, an acquirer shall recognize 100 percent of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100 percent of its target. As a consequence, the current step acquisition model will be eliminated. Additionally, ASC 805-10 changes current practice, in part, as follows: (1) contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration; (2) transaction costs will be expensed as incurred, rather than capitalized as part of the purchase price; (3) pre-acquisition contingencies, such as legal issues, will generally have to be accounted for in purchase accounting at fair value; (4) in order to accrue for a restructuring plan in purchase accounting, the requirements in ASC 420-10, Exit or Disposal Cost Obligations, would have to be met at the acquisition date; and (5) in-process research and development charges will no longer be recorded. With the adoption of ASC 805-10 goodwill is no longer reduced when utilizing net operating loss carry forwards for which a full valuation allowance exists. The adoption of ASC 805-10 did not materially affect our results as we did not complete any business combinations in 2009. However, it may have a material impact on how we account for future business combinations.

        In April 2009, the FASB issued FASB Staff Position No. 141(R)-1 ("FSP FAS 141(R)-1"), Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies (subsequently this standard has been codified under FASB ASC Topic 805). The revised authoritative guidance provides additional clarification on the initial recognition and measurement of assets acquired and liabilities assumed in a business combination that arise from contingencies. The revised authoritative guidance is effective for all fiscal years beginning on or after December 15, 2008. To date, the revised authoritative guidance has not had a significant impact on the accounting for any businesses acquired. However, it may have a material impact on how we account for future acquisitions.

        In November 2007, the EITF issued EITF Issue No. 07-1 (EITF No. 07-1), Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property. Companies may enter into arrangements with other companies to jointly develop, manufacture, distribute, and market a product. Often the activities associated with these arrangements are conducted by the collaborators without the creation of a separate legal entity (that is, the arrangement is operated as a "virtual joint venture"). The arrangements generally provide that the collaborators will share, based on contractually defined calculations, the profits or losses from the associated activities. Periodically, the collaborators share financial information related to product revenues generated (if any) and costs incurred that may trigger a sharing payment for the combined profits or losses. The consensus requires collaborators in such an arrangement to present the result of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable GAAP or, in the absence of other applicable GAAP, based on

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2. Summary of Significant Accounting Policies (Continued)

analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. EITF No. 07-1 is effective for collaborative arrangements in place at the beginning of the annual period beginning after December 15, 2008. As Caliper's collaborative agreements do not incorporate such revenue- and cost-sharing arrangements, Caliper's adoption of EITF No. 07-1 did not have a material impact on our financial statements.

3. Divestitures

Xenogen Biosciences Divestiture

        On December 11, 2009, Caliper entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Taconic Farms, Inc., ("Taconic"), a New York corporation. The Stock Purchase Agreement provided for the sale of Caliper's XenBio operations to Taconic for a purchase price of approximately $10.8 million, which included $9.7 million in cash together with $1.1 million which was placed into an escrow account until April 30, 2011. The escrow secures Caliper's indemnification obligations to Taconic, if any, under the Stock Purchase Agreement. The Stock Purchase Agreement also contains representations, warranties and indemnities that are customary in stock purchase transactions. As of the transaction date, XenBio had net assets of $4.9 million comprised of $2.6 million in identified intangibles, $1.9 million of goodwill allocated on a relative fair value basis, and $0.4 million of other net assets. The sale of XenBio resulted in a $4.2 million gain based upon the net proceeds received to date, excluding the amount held in escrow, in excess of total divested net assets.

PDQ Product Line Divestiture

        On October 29, 2008, Caliper entered into an Asset Sale and Purchase Agreement (the "Purchase Agreement") with Sotax Corporation ("Sotax"), a Virginia corporation and a privately-owned subsidiary of SOTAX Holding A.G. based in Switzerland. The Purchase Agreement provided for the sale of Caliper's Pharmaceutical Development and Quality ("PDQ") product line to Sotax for a purchase price of approximately $15.8 million, including $13.8 million in cash together with certain assumed liabilities upon closing which were approximately $2.0 million (the "Purchase Price"). Pursuant to the Purchase Agreement, $1.0 million of the Purchase Price was placed into an escrow account until the first anniversary of November 10, 2008, the closing date. The escrow secured Caliper's indemnification obligations to Sotax, if any, under the Purchase Agreement. The Purchase Agreement also contains representations, warranties and indemnities that are customary in asset sale transactions. Caliper realized approximately $12.6 million in net cash proceeds from the sale of its PDQ product line upon closing, after the escrow account deposit and transaction expenses. As of the transaction date, net assets of the PDQ product line were approximately $11.0 million consisting of $10.5 million of goodwill allocated on a relative fair value basis, and $0.5 million of inventory, net of deferred revenue and accrued expenses. The sale of the PDQ product line resulted in a $1.4 million gain in 2008 based upon the net proceeds received to date, excluding the amount held in escrow, in excess of total divested net assets. In November 2009, upon the anniversary of the closing, Caliper recorded an additional gain of $0.7 million based upon the release from escrow after the parties reached agreement related to indemnification claims made by Sotax in connection with the Purchase Agreement. The additional gain was recorded within other income in Caliper's statement of operations.

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3. Divestitures (Continued)

AutoTrace Product Line Divestiture

        On November 10, 2008, Caliper entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Dionex Corporation ("Dionex"), a publicly traded Delaware corporation. The Asset Purchase Agreement provided for the sale of Caliper's AutoTrace product line to Dionex for a purchase price of approximately $5.0 million. As of the transaction date, net assets of the AutoTrace product line were approximately $4.1 million consisting of $3.8 million of goodwill allocated on a relative fair value basis, and $0.5 million of inventory, net of deferred revenue and accrued expenses. The sale of the AutoTrace product line resulted in a $0.7 million gain in 2008 based upon the net proceeds received in excess of total divested net assets.

4. Cash, Cash Equivalents and Marketable Securities

        Caliper's cash, cash equivalents and marketable securities are invested in a diversified portfolio of financial instruments, including money market instruments, corporate notes and bonds, government or government agency securities and other debt securities issued by financial institutions and other issuers with strong credit ratings. Marketable securities are freely tradable at any time, irrespective of their maturity dates. Caliper's marketable securities are classified within current assets as such investments are available to be sold in response to operating cash needs, or as a result of changes in the availability of and the yield on alternative investments. By policy, the amount of credit exposure to any one institution is limited. Investments are generally not collateralized and primarily mature within three years. As of December 31, 2009, the majority of Caliper's marketable securities mature within one year.

        The following is a summary of cash and available-for-sale securities as of December 31, 2009 (in thousands):

	Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Cash and money market funds(1)	$	34,522	$	—		$	—	$	34,522
Commercial paper(2)		1,797		—			—		1,797
Corporate debt securities(2)		1,729		(1	)		—		1,728
	$	38,048	$	(1	)	$	—	$	38,047

(1)

Reported as cash and cash equivalents

(2)

Reported as marketable securities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Cash, Cash Equivalents and Marketable Securities (Continued)

        The following is a summary of cash and available-for-sale securities as of December 31, 2008 (in thousands):

	Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Cash and money market funds(1)	$	23,667	$	—		$	—	$	23,667
Commercial paper(2)		1,023		—			—		1,023
Corporate debt securities(2)		1,513		(30	)		1		1,484
Other(2)		528		(1	)		—		527
	$	26,731	$	(31	)	$	1	$	26,701

(1)

Reported as cash and cash equivalents

(2)

Reported as marketable securities

        Gross realized gains and losses on sales of available-for-sale securities have been included within other income in Caliper's statement of operations and were not material in 2009, 2008 and 2007. Caliper utilizes the specific identification basis to reclassify amounts out of accumulated other comprehensive income into earnings.

        As of December 31, 2009 and 2008, Caliper held available-for-sale securities having an aggregate value of $3.5 million and $3.0 million, respectively. Unrealized gains and losses pertaining to underlying individual securities were not material in either year. Although available to be sold to meet operating needs or otherwise, securities are generally held through maturity. Therefore, such unrealized losses are deemed temporary and have been included within accumulated other comprehensive income.

        In September 2006, the FASB issued ASC 820, Fair Value Measurements, effective for financial statements issued for fiscal years beginning after November 15, 2007. FASB ASC 820 replaces multiple existing definitions of fair value with a single definition, establishes a consistent framework for measuring fair value and expands financial statement disclosures regarding fair value measurements. FASB ASC 820 applies only to fair value measurements that already are required or permitted by other accounting standards and does not require any new fair value measurements. In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2 ("FSP No. 157-2"), which delayed until the first quarter of 2009 the effective date of FASB ASC 820 for nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis. Our nonfinancial assets and liabilities that meet the deferral criteria set forth in FSP No. 157-2 include goodwill, intangible assets and property, plant and equipment.

        In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of FASB ASC 820 in an inactive market and illustrates how an entity would determine fair value when the market for a financial asset is not active. The Staff Position is effective immediately and applies to prior periods for which financial statements have not been issued, including interim or annual periods ending on or before September 30, 2008. The implementation of SFAS 157-3 did not have a material impact on our consolidated financial position, results of operations and cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Cash, Cash Equivalents and Marketable Securities (Continued)

        In accordance with the provisions of FASB ASC 820, Caliper measures fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Statement prioritizes the assumption that market participants would use in pricing the asset or liability (the "inputs") into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exists, requiring companies to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1, and include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management's interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

        On December 31, 2009, Caliper's investments were valued in accordance with the fair value hierarchy as follows (in thousands):

		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Money market funds		$	8,456	$	8,456	$	—	$	—
Commercial paper			1,797		—		1,797		—
U.S. corporate notes and bonds			1,728		—		1,728		—
	Total	$	11,981	$	8,456	$	3,525	$	—

        Investments are generally classified Level 1 or Level 2 because they are valued using quoted market prices, broker or dealer quotations, market prices received from industry standard pricing data providers or alternative pricing sources with reasonable levels of price transparency. Investments in U.S. Treasury Securities and overnight money market mutual funds have been classified as Level 1 because these securities are value based upon quoted prices in active markets or because the investments are actively traded.

        Caliper held four investments in debt securities that were in an unrealized loss position as of December 31, 2009, however, the losses are not material and management does not believe any individual unrealized loss at December 31, 2009 represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in the interest rates and the ongoing credit crisis which has created volatile market conditions. Caliper currently has both the intent and ability to hold the securities for a time necessary to recover the amortized cost. During the twelve months ended December 31, 2009, a total unrealized loss of $57,000 was recorded to accumulated other comprehensive income within the accompanying balance sheet.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Inventories

        Inventories are stated at the lower of cost (determined on a first-in, first-out basis, or "FIFO") or market. Amounts are relieved from inventory and recognized as a component of cost of sales on a FIFO basis. Inventories consist of the following (in thousands):

	December 31,
	2009		2008
Raw material	$	5,879	$	10,173
Work-in-process		859		907
Finished goods		4,787		6,499
Inventories	$	11,525	$	17,579

        Caliper reserves or writes off the cost of inventory which it specifically identifies and considers to be obsolete or excess. Caliper defines obsolete inventory as inventory that will no longer be used in the manufacturing process. Excess inventory is generally defined as inventory in excess of projected usage, and is determined using management's best estimate of future demand at the time, based upon information then available to Caliper. Caliper uses a twelve-month demand forecast and, in addition to the demand forecast, Caliper also considers: (1) parts and subassemblies that can be used in alternative finished products, (2) parts and subassemblies that are unlikely to be impacted by engineering changes, and (3) known design changes which would reduce Caliper's ability to use the inventory as planned. During 2009, 2008 and 2007, respectively, Caliper recorded charges of $2.2 million, $1.7 million and $1.3 million, respectively, to cost of product revenues for excess and obsolete inventories.

6. Property and Equipment

        Property and equipment consists of the following (in thousands):

		December 31,
Asset Classification	Estimated Useful Life	2009			2008
Machinery and equipment	2 - 5 years	$	9,425		$	10,541
Computers and information systems	3 - 5 years		7,617			7,267
Office equipment, furniture and fixtures	5 years		1,849			1,775
Leasehold improvements	Shorter of estimated useful life or life of lease		13,814			13,863
			32,705			33,446
Accumulated depreciation and amortization			(23,598	)		(22,711	)
Property and equipment, net		$	9,107		$	10,735

        Depreciation expense was $2.9 million, $3.6 million and $3.8 million for the years ended December 31, 2009, 2008, and 2007, respectively.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Intangible Assets

Goodwill

        Caliper performs an annual impairment analysis of goodwill to determine if impairment exists, and may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. The goodwill impairment analysis is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. Caliper is comprised of a single segment which is the sole reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying value exceeds estimated fair value, there is an indication of potential impairment and a second step is performed to measure the amount of impairment. Fair value is determined by utilizing information about the Company as well as publicly available industry information. Determining fair value involves judgments by Caliper's management and requires the use of significant estimates and assumptions, including point-in-time estimates of revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures and future market conditions, among others.

        The second step of the goodwill impairment process involves the calculation of an implied fair value of goodwill. The implied fair value of goodwill is determined in a manner that is similar to how goodwill is calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit as calculated in step one, over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. In determining the fair value of its net assets Caliper determined the fair value of leases and certain intangible assets, including trademarks, patents, core and developed technologies and customer relationships.

        Caliper's annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. Goodwill is not amortized, but is reviewed for impairment at least annually. The results of the impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or Caliper's market capitalization declines, this could impact the assumptions used in calculating the fair value in subsequent years. To the extent goodwill is impaired, its carrying value will be further written down to its implied fair value and a charge will be made to Caliper's earnings. Such an impairment charge would materially and adversely affect Caliper's GAAP reported operating results. As of December 31, 2009, Caliper had recorded goodwill of $21.0 million in its consolidated balance sheet. No impairment was identified in fiscal years 2009 and 2007.

        In 2009, with the sale of XenBio in the fourth quarter, Caliper first determined the amount of goodwill ($1.9 million) that was to be allocated to this divestiture based upon a relative fair value basis considering the transaction value. Caliper determined that the sale of the business resulted in an indicator of impairment under ASC 350 which required an interim goodwill impairment test, after such allocation. Caliper performed this test and concluded that after the sale of XenBio, the fair value of the reporting unit continues to exceed its carrying value, and thus a further test for impairment was not performed.

        In 2008, with the sales of its PDQ and AutoTrace product lines in the fourth quarter, Caliper first determined the amount of goodwill ($14.3 million) that was to be allocated to these divestitures based upon a relative fair value basis considering their recent transaction values, and then applied its annual

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Intangible Assets (Continued)

goodwill impairment analysis to the remaining goodwill balance ($66.3 million), which resulted in the determination that the second step of the test was required. The second step of the goodwill impairment test involved Caliper calculating the implied goodwill for the entity. The carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million. The goodwill impairment charge is non-cash in nature and does not affect Caliper's liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations.

Intangibles

        As of December 31, 2009, intangible assets consisted of the following (in thousands):

Asset Classification		Weighted Average Amortization Period	Cost		Accumulated Amortization			Net
Amortized intangible assets:
	Core technologies	8.8 years	$	30,113	$	(11,676	)	$	18,437
	Developed and contract technologies	6.8 years		7,375		(5,604	)		1,771
	Customer contracts, lists and relationships	6.8 years		5,056		(2,940	)		2,116
Other intangibles		2.3 years		226		(226	)		—
		8.2 years		42,770		(20,446	)		22,324
Trade name		Indefinite life		2,898		—			2,898
	Total intangible assets		$	45,668	$	(20,446	)	$	25,222

        Gross intangible assets of $5.4 million and accumulated amortization of $2.8 million were included in the calculation of the gain on the divestiture of XenBio.

        As of December 31, 2008, intangible assets consist of the following (in thousands):

Asset Classification		Weighted Average Amortization Period	Cost		Accumulated Amortization			Net
Amortized intangible assets:
	Core technologies	8.8 years	$	30,113	$	(8,233	)	$	21,880
	Developed and contract technologies	6.5 years		11,320		(5,436	)		5,884
	Customer contracts, lists and relationships	7.1 years		6,470		(2,746	)		3,724
Other intangibles		1.9 years		476		(463	)		13
		8.0 years		48,379		(16,878	)		31,501
Trade name		Indefinite life		2,898		—			2,898
	Total intangible assets		$	51,277	$	(16,878	)	$	34,399

        Amortization expense is computed based upon the estimated timing of the undiscounted cash flows used to value each respective asset over the estimated useful life of the particular intangible asset, or using the straight-line method over the estimated useful life of the intangible asset when the pattern of cash flows is not necessarily reflective of the true consumption rate of the particular intangible asset.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Intangible Assets (Continued)

        In the fourth quarter of 2009, Caliper recorded an impairment charge of $0.4 million related to certain intangible assets of NovaScreen based upon its annual impairment assessment. This charge is included within amortization of intangible assets on the accompanying statement of operations. As a result of this assessment, certain indicators of impairment were identified which required analysis on the fair value of the NovaScreen asset group, which primarily included working capital, fixed assets and intangible assets. Caliper completed its assessment of fair value relative to the NovaScreen asset group which resulted in the impairment of the NovaScreen developed technologies. The results of the impairment test are as of a point in time. If the future growth and operating results of the NovaScreen asset group are not as strong as anticipated, this could impact the assumptions used in calculating the fair value in subsequent years.

        Amortization expense was $6.6 million, $8.5 million and $10.2 million during the years ended December 31, 2009, 2008 and 2007, respectively. Scheduled amortization in future periods is as follows (in thousands):

Years ending December 31:
	2010	$	4,785
	2011		4,443
	2012		4,203
	2013		3,953
	2014		3,374
Thereafter			1,566
		$	22,324

8. Other Current and Non-current Liabilities

        Other current and non-current liabilities consist of the following (in thousands):

		December 31,
		2009		2008
Accrued legal		$	246	$	588
Accrued warranty			1,557		1,362
Accrued VAT and other taxes			1,885		1,462
Accrued royalties			1,772		1,501
Deferred rent			508		555
Accrued other			3,767		4,257
	Total other accrued liabilities	$	9,735	$	9,725
Deferred rent		$	5,158	$	5,781
Deferred revenue			1,141		2,290
Other			130		204
	Total other noncurrent liabilities	$	6,429	$	8,275

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Other Current and Non-current Liabilities (Continued)

Warranty Obligation

        Changes in Caliper's warranty obligation during the years ended December 31, 2009 and 2008 are as follows (in thousands):

Balance, December 31, 2007	$	1,684
Warranties issued during the period		1,767
Settlements and adjustments made during the period		(2,089	)
Balance, December 31, 2008		1,362
Warranties issued during the period		1,752
Settlements and adjustments made during the period		(1,557	)
Balance, December 31, 2009	$	1,557

Deferred Rent

        Deferred rent is principally comprised of i) deferred obligations established as a result of lease incentives, including tenant improvement financing and rent holidays (i.e., free rent), and ii) deferred obligations related to lease agreements with built-in rent escalations over time which are required to be accounted for on a straight-line basis under ASC 840, Accounting for Leases. Under i) above, the improvements funded by the landlord(s) are treated as lease incentives under FASB Technical Bulletin No. 88-1, Issues Relating to Accounting for Leases. Accordingly, the funding received from the landlord was recorded as fixed asset additions and a deferred rent liability on the consolidated balance sheet. The deferred rent liability is being amortized as a reduction to rent expense over the life of the lease. In accordance with FASB ASC 230, Statement of Cash Flows, cash flows from the landlord for the reimbursement of improvements have been reported within cash from operating activities, while cash flows remitted for the acquisition of leasehold improvements are classified within investing activity cash flows.

9. Credit Facility

        On March 6, 2009, Caliper entered into a Second Amended and Restated Loan and Security Agreement ("credit facility") with a bank, which permits Caliper to borrow up to $25 million in the form of revolving loan advances, including up to $5 million in the form of letters of credit and other contingent reserves. Principal borrowings under the credit facility accrue interest at a floating annual rate equal to the prime rate plus one percent if Caliper's unrestricted cash held at the bank exceeds or is equal to $20 million, or prime plus two percent if Caliper's unrestricted cash held at the bank is below $20 million. Under the credit facility, Caliper is permitted to borrow up to $25 million, subject to a borrowing base limit consisting of (a) 80% of eligible accounts receivable plus (b) the lesser of 70% of Caliper's unrestricted cash at the bank or $12 million; provided, that on each of the first three (3) business days and each of the last three (3) business days of each fiscal quarter, the borrowing base is (a) 80% of eligible accounts receivable plus (b) the lesser of 90% of Caliper's unrestricted cash at the bank or $12 million. Eligible accounts receivable do not include internationally billed receivables, unbilled receivables, and receivables aged over 90 days from invoice date. On December 11, 2009, Caliper entered into a First Loan Modification Agreement with the bank which extended the maturity of the credit facility to April 1, 2011 and set the amended covenants as a result of the XenBio

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Credit Facility (Continued)

divestiture and also established covenants for the quarter ended march 31, 2011. As of December 31, 2009, $14.9 million was outstanding under the credit facility. The credit facility serves as a source of capital for ongoing operations and working capital needs.

        The credit facility includes traditional lending and reporting covenants including that certain financial covenants applicable to liquidity and earnings are to be maintained by Caliper and tested as of the last day of each quarter. As of December 31, 2009, Caliper was in compliance with all of its covenants. The credit facility also includes a net liquidity clause. Under this clause, if Caliper's cash, cash equivalents and marketable securities, held at the bank, net of debt outstanding under the credit facility, is less than $0.5 million (Net Liquidity), the bank will apply all of Caliper's accounts receivable collections, received within its lockbox arrangement with the bank, to the outstanding principal. Such amounts are eligible to be re-borrowed by Caliper subject to the borrowing base limit described above.

        The credit facility also includes subjective rights for the bank to accelerate the maturity of the debt, lower the borrowing base or stop making advances, which are typical within asset based lending arrangements. Caliper does not believe the bank will exercise these rights as long as it is meeting its covenants and achieving its forecast. The credit facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at the interest rate in effect as of the date of default plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank's right to declare all outstanding obligations immediately due and payable. Should an event of default occur, including the exercise of a material adverse change condition, and based on such default the bank were to decide to declare all outstanding obligations immediately due and payable, Caliper may be required to significantly reduce its costs and expenses, sell additional equity or debt securities, or restructure portions of its business which could involve the sale of certain business assets. The sale of additional equity or convertible debt securities may result in additional dilution to Caliper's stockholders. Furthermore, additional capital may not be available on terms favorable to Caliper, if at all. In this circumstance, if Caliper could not significantly reduce its costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of its business, Caliper's business would be adversely affected. In addition, the amount of available capital that Caliper is able to access under the credit facility at any particular time is dependent upon the borrowing base formula, which ultimately relies on the underlying performance of the business. If economic conditions worsen and its business performance is not as strong as anticipated, then Caliper could experience an event of default or a reduction in borrowing capacity under the credit facility, which if not cured to the bank's satisfaction, could have a potential adverse impact on its ability to access capital under its credit facility fund in order to fund 2010 operations. If such events were to occur, Caliper's business would be adversely affected.

        Outstanding obligations under the credit facility were $14.9 million as of December 31, 2009 and 2008. The credit facility is classified as short-term consistent with Caliper's intent to utilize the credit facility to fund operations and working capital needs on a revolving loan basis and pay down the obligation within the year to minimize interest costs. Interest is due monthly and has ranged from 4.5% to 6.5% during 2009 and 4.5% to 7.5% during 2008.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Commitments and Contingencies

Leases

        As of December 31, 2009, future minimum payments under operating leases (excluding idled facilities accounted for within accrued restructuring) were as follows (in thousands):

Years ending December 31:
	2010	$	4,860
	2011		4,524
	2012		4,438
	2013		4,355
	2014		3,636
Thereafter			10,985
	Total minimum lease payments	$	32,798

        Rent expense relating to operating leases was approximately $5.3 million in 2009, $6.0 million in 2008 and $5.8 million in 2007.

Letters-of-Credit

        As of December 31, 2009, Caliper had outstanding standby letters-of-credit, which restrict available borrowing under its credit facility, in the outstanding amount of $1.4 million primarily securing facility operating leases.

Inventory Purchases

        As of December 31, 2009 and 2008, Caliper had a non-cancelable purchase commitment in the amount of approximately $0.4 million, with its foreign supplier for the purchase of glass stock used in the manufacture of certain types of its chips.

        As of December 31, 2009 and 2008, Caliper had non-cancelable purchase commitments in the amount of approximately $2.5 million and $2.9 million, respectively, with its CCD camera suppliers and filter supplier for the purchase of parts used in the manufacture of in vivo imaging instrumentation.

Royalty Arrangements

        On August 9, 2006, Stanford University provided Xenogen with the results of an audit performed pursuant to the exclusive license agreement between Stanford and Xenogen. The audit report, which was prepared by a third party consultant, asserted certain claims of underpayments during the period from 2002 through March 31, 2006 based upon a different interpretation of the scope of imaging products that are subject to the royalty provisions of the license than Caliper had used for the calculation of royalties since the beginning of this licensing arrangement in 1997. Upon review of the audit report, Caliper determined that additional royalties of $71,000 were owed to Stanford, and paid this obligation in 2006. Caliper is contesting the remaining payment obligation that is claimed in the Stanford audit report, and as a result, has not accrued for any additional liability. The amount of any remaining contingent obligation, if any, cannot currently be estimated, nor does Caliper believe that it is probable that a liability exists. At any time, either party may choose binding arbitration to resolve any dispute over the amount of back royalties owed, if any.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Commitments and Contingencies (Continued)

        Caliper has entered into royalty arrangements with several third parties whereby Caliper owes royalties related to revenues that are derived pursuant to in-licensed technologies. Royalty obligations are expensed when incurred or over the minimum royalty periods. Some of the arrangements include minimum royalties over a defined term. The future minimum royalty payments are as follows (in thousands):

Years ending December 31:
	2010	$	289
	2011		167
	2012		166
	2013		159
	2014		158
Thereafter			903
	Total minimum royalty payments	$	1,842

11. Restructuring Activities

        The following table summarizes the restructuring accrual activity (in thousands):

	Severance and Related			Facilities			Total
Balance, December 31, 2006	$	3,041			6,119		$	9,160
Restructuring (credits) charges		(187	)		612			425
Interest accretion and adjustments		—			372			372
Payments		(2,845	)		(4,494	)		(7,339	)
Balance, December 31, 2007		9			2,609			2,618
Restructuring charges		—			4,605			4,605
Interest accretion and adjustments		—			(61	)		(61	)
Payments		(9	)		(2,677	)		(2,686	)
Balance, December 31, 2008		—			4,476			4,476
Restructuring charges		—			1,747			1,747
Correction of prior period error (see Note 17)		—			(1,157	)		(1,157	)
Interest accretion and adjustments		—			264			264
Payments		—			(1,649	)		(1,649	)
Balance, December 31, 2009	$	—			3,681		$	3,681

        The restructuring liability as of December 31, 2009 reflects the minimum future payment obligations related to base lease rentals and operating charges, net of sub lease income, over the remaining lease lives through November 2015, discounted at the borrowing rate in effect at the time of the restructuring event (5% or 8.75%).

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Restructuring Activities (Continued)

        The remaining facility obligations are as follows (in thousands):

Years ending December 31:
	2010	$	1,589
	2011		1,237
	2012		621
	2013		597
	2014		97
	Thereafter		93
Total minimum payments			4,234
Less: Amount representing interest			553
Present value of future payments			3,681
Less: Current portion of obligations			1,449
Noncurrent portion of obligations		$	2,232

        Included within the above obligations is estimated future sublease income of $0.1 million in 2010 and $1.0 million annually in 2011 through 2013.

        The restructuring obligations reflected above resulted from the following actions:

Facility Closures

        During the first quarter of 2008, Caliper initiated the consolidation of its West Coast business operations to reduce overall facility costs and improve productivity and effectiveness of its research and development spending. The consolidation plan entailed vacating approximately 26,300 square feet of occupied space in Mountain View, California, which was completed in September 2008. This facility closure was accounted for in accordance with FASB ASC 420, Accounting for Costs Associated with Exit or Disposal Activities, pursuant to which Caliper recorded a liability equal to the fair value of the remaining lease payments as of the cease-use date. Fair value was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 5.5%) for the space no longer occupied, considering future estimated sublease income, estimated broker fees and required tenant improvements. Caliper calculated the fair value as $4.6 million and recorded this amount within restructuring charges, within the accompanying consolidated income statement. The restructuring charge includes a $2.8 million charge recorded during the third quarter along with a revision to the sublease assumptions in the fourth quarter which resulted in an additional $1.8 million charge, based on the further deterioration of the sublease market in Mountain View, California.

        In 2009, Caliper revised its assumptions around the restructuring charge taken in 2008 regarding the Mountain View, California facility. The effect of the change was to update the sublease timing and rates assumed as a result of the current real estate market. As a result of these revisions, we recorded a charge of $0.8 million in the fourth quarter of 2009. As more fully described in Note 17, management also identified errors related to the restructuring charges it recorded related to the Mountain View, California facility. The error identified related to 10,200 square feet for which Caliper did not meet the criteria for a "cease use" date as defined by ASC 420 in 2008. Caliper corrected this error in the fourth quarter of 2009 and recorded a credit (a reduction of restructuring charges) to its statement of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Restructuring Activities (Continued)

operations of $1.2 million. The net of these restructuring activities in the fourth quarter of 2009 is a $0.4 million credit (i.e., reduction of expense) to restructuring charges in our statement of operations.

        In July 2009, Caliper abandoned approximately 19,000 square feet at its Hopkinton, Massachusetts facilities. This facility consolidation was enabled as the result of the product line divestitures completed in the fourth quarter of 2008 and continued efforts to reduce operating costs. Caliper recorded a restructuring charge of approximately $1.0 million related to this action in the third quarter of 2009. Caliper has accounted for this restructuring activity in accordance with FASB ASC 420, pursuant to which Caliper has recorded a liability equal to the fair value of the remaining lease payments as of the cease-use date. Fair value was determined based upon the discounted present value of remaining lease payments (using a discount rate of 6.5%), considering future estimated sublease income, estimated broker fees and required tenant improvements. The lease term expires on December 31, 2015.

Xenogen Acquisition

        In connection with the acquisition of Xenogen, Caliper incurred costs associated with the involuntary termination of certain employees of Xenogen as well as the closing of duplicate facilities. These costs have been accounted for in accordance with EITF No. 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination, pursuant to which Caliper recorded a liability based on a defined exit plan equal to the fair value of the facility obligations and the costs related to the involuntarily terminated individuals.

•

Caliper identified severance and other expenses relating to the involuntary termination of former Xenogen personnel performing general and administrative and manufacturing functions and established an assumed liability of $3.5 million related to this activity. This action reduced the total Xenogen workforce by approximately 34 employees, or approximately 6%. Substantially all affected employees were terminated by December 31, 2006. Based on the actual payments, Caliper adjusted the accrual by $0.2 million in 2007 and recorded the adjustment in the purchase price allocation.

•

Caliper consolidated Xenogen's west coast operations in Alameda, California into a single facility, leaving one facility currently unoccupied. As of August 9, 2006, Caliper established a liability of $1.0 million related to this lease obligation. The fair value of the lease obligation was determined based upon the discounted present value of remaining lease rentals (8.75% discount rate used) for the space no longer occupied, considering the building's sublease income potential. The lease term expires April 30, 2011. During 2007, Caliper increased the accrual by $0.6 million based upon required tenant improvements, costs incurred or to be incurred, and changes to its estimated sublease income assumptions. Approximately 57% of the facility was subleased. The adjustment was recorded in the purchase price allocation. In March 2008, in connection with the 2008 consolidation actions discussed above under "Facility Closures," Caliper revised its intention to sublease the remaining 43% of the second facility, and accordingly, reversed approximately $0.2 million of the restructuring accrual with an offsetting adjustment to goodwill.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Restructuring Activities (Continued)

        Caliper also assumed a $1.0 million obligation related to Xenogen's St. Louis, Missouri facility. The facility closure was previously accounted for by Xenogen in accordance with EITF 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring). The fair value of the assumed obligation was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 8.75%) for the space no longer occupied, net of sublease income expected to be derived from the property. The lease term expires April 30, 2011. During 2007, Caliper increased the accrual by $0.1 million based upon the level of operating expenses required to maintain the facility. The adjustment was recorded in the purchase price allocation.

12. Stockholders' Equity

Preferred Share Purchase Rights Plan

        In December 2001, the Board of Directors and stockholders of Caliper adopted a Preferred Share Purchase Rights Plan (Rights Plan) under which Caliper issued as a dividend to all holders of its common stock certain rights to acquire additional shares of common stock at a discount price under certain circumstances (Rights). The dividend of the Rights was made to holders of Caliper's common stock on record as of January 8, 2002. Shares of common stock that are newly issued after this date will also carry Rights. The Rights Plan is designed to provide protection to stockholders from unsolicited and abusive takeover tactics, including attempts to acquire control of Caliper at an inadequate price or to treat all stockholders equally. Under the Rights Plan, each stockholder received one Right for each share of Caliper's outstanding common stock held by the stockholder. Each Right will entitle the holder to purchase one one-hundredth of a share of newly designated Series A Junior Participating Preferred Stock of Caliper at an initial exercise price of $100. Initially, the Rights are not detachable from Caliper's common stock and are not exercisable. Subject to certain exceptions, they become immediately exercisable after any person or group (Acquiring Person) acquires beneficial ownership of 15% or more of Caliper's common stock, or 10 business days (or such date as the Board of Directors may determine) after any person or entity announces a tender or exchange offer that would result in a 15% or greater beneficial ownership level. At no time will the Rights have any voting power. If the Rights become exercisable and a buyer becomes an Acquiring Person, all Rights holders, except the Acquiring Person, will be entitled to purchase, for each Right held, $200 worth of Caliper's common stock for $100. Caliper's Board of Directors may amend or terminate the Rights Plan at any time or redeem the Rights prior to the time a person acquires more than 15% of Caliper's common stock. Issuance of the Rights will not affect the financial position of Caliper or interfere with its business plans. Issuance of the Rights will not affect reported earnings per share and will not be taxable to Caliper or Caliper's stockholders except, under certain circumstances, if the Rights become exercisable.

Warrants

        In connection with Caliper's 2006 acquisition of Xenogen, Caliper granted Xenogen stockholders an aggregate of 4,701,733 warrants, and reserved an additional 411,814 warrants for potential issuance upon the exercise of Xenogen warrants which were assumed by Caliper. Each warrant granted permits the holder to acquire one Caliper common share at an exercise price of $6.79 per share through August 9, 2011. Upon the potential exercise of these warrants, the holders are entitled to receive that number of Caliper shares and warrants that such holder would have been entitled to receive as a Xenogen stockholder as of the acquisition date. The termination date of the Caliper warrants that are

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

to be issued upon the eventual exercise of the Xenogen warrants may not be extended beyond the 5 year expiration date.

        The following table summarizes information with respect to warrants assumed from Xenogen which remain outstanding and exercisable at December 31, 2009:

Expiration Date	Exercise Price		Number of Xenogen Warrants		Equivalent Caliper Warrants (.2249 exchange ratio)		Equivalent Caliper Shares (.5792 exchange ratio)
August 2, 2012	$	2.91		111,340		25,041		64,488
August 15, 2010	$	3.29		1,412,562		317,685		818,156
April 30, 2013	$	3.64		288,044		64,781		166,835
February 28, 2010	$	15.82		1,580		355		915
October 18, 2011	$	40.74		8,159		1,835		4,726
April 28, 2010	$	40.75		2,576		579		1,492
				1,824,261		410,276		1,056,612

Stock Plans

        The following is a summary of Caliper's stock plans that are in place as of December 31, 2009:

Plan		Plan Shares Authorized		Plan Shares Available		Awards Outstanding		Common Stock Reserved for Future Issuance
Option Plans:
	2009 Equity Plan		10,000,000		9,744,334		255,666		10,000,000
	1999 Equity Plan		17,034,894		—		8,568,946		8,568,946
	1999 Directors' Plan		808,917		—		384,694		384,694
	2001 Non-Statutory Stock Option Plan		500,000		249,516		247,535		497,051
Acquisition Plan			900,000		80,000		600,000		680,000
			29,243,811		10,073,850		10,056,841		20,130,691
1999 Purchase Plan			3,279,035		456,850		—		456,850

        On June 2, 2009, Caliper's stockholders approved a new 2009 Equity Incentive Plan (the "2009 Equity Incentive Plan"), and Caliper reserved an aggregate of 10 million shares of common stock for issuance pursuant to the 2009 Equity Incentive Plan. The 2009 Equity Incentive Plan replaced Caliper's 1999 Equity Incentive Plan (the "1999 Plan") and 1999 Non-Employee Directors' Equity Incentive Plan (the "1999 Directors' Plan" and, collectively with the 1999 Plan, the "Existing Plans"), which were due to terminate on September 30, 2009. Collectively, the 2009 Equity Incentive Plan and Existing Plans are referred to as the "Plans." The 2009 Equity Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, and other types of stock-based awards to officers, employees, non-employee directors and consultants. Of the 10 million shares reserved under the 2009 Equity Incentive Plan, Caliper has established a 2.5 million share limit on the number of shares that may be granted as "full value" awards. A full value award is an award which is a one-for-one common stock equivalent, such as a restricted stock grant that does not require the individual to pay a purchase or exercise price to receive the shares of common stock. The 2009 Equity

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

Incentive Plan has a ten-year term through June 2, 2019, and stock options granted under the 2009 Equity Incentive Plan have a maximum term of ten years.

        The 1999 Equity Plan expired automatically upon the adoption of the new 2009 Equity Incentive Plan on June 2, 2009. This Plan, which was in place since being adopted by Caliper's Board of Directors and stockholders in 1999, continues to be in effect for outstanding options. The 1999 Equity Plan provided for an automatic annual increase in the shares reserved for issuance for a period of ten years starting in 2000, by the greater of 5% of outstanding shares on a fully-diluted basis or the number of shares that have been made subject to awards granted under the 1999 Equity Plan during the prior 12-month period, and included certain limitations with respect to the number of awards designated as "incentive stock options" which could be granted. Future cancellations of outstanding stock awards issued under the 1999 Equity Plan are not available for future grant under the 2009 Equity Incentive Plan. Options granted under the Plan generally carried a 10-year term and were subject to vesting provisions as determined by Caliper's Board of Directors. The majority of employee equity awards carried a 4-year vesting term.

        The 1999 Directors' Plan expired automatically upon the adoption of the new 2009 Equity Incentive Plan on June 2, 2009. This Plan, which was in place since being adopted by Caliper's Board of Directors and stockholders in 1999, as amended and approved by stockholders in June 2007, provided for the automatic grant of options and restricted stock units to non-employee directors. Future cancellations of outstanding stock awards issued under the 1999 Directors Plan are not available for future grant under the 2009 Equity Incentive Plan.

        In December 2001, Caliper's Board of Directors adopted the 2001 Non-Statutory Stock Option Plan (the "2001 Non-Statutory Plan"). Options under the 2001 Non-Statutory Plan cannot be issued to Caliper's current officers and directors and was therefore not required to be voted on and approved by stockholders.

        In June 2003, Caliper's Board of Directors adopted the Acquisition Equity Plan (the "Acquisition Plan"), which provides for the grant of options and restricted shares as inducements to retain key employees in connection with a significant acquisition. In July 2003, Caliper granted 600,000 options and 275,000 shares of restricted common stock under this plan in connection with the Zymark acquisition.

        In October 1999, Caliper's Board of Directors and stockholders adopted the 1999 Employee Stock Purchase Plan (the "1999 Purchase Plan"). The initial number of shares reserved was 300,000 and under the 1999 Equity Plan, the number of shares reserved for issuance automatically increases annually by the greater of 0.5% of outstanding shares on a fully-diluted basis, or the number of shares issued under the 1999 Purchase Plan during the prior 12-month period. The automatic share reserve increase may not exceed 3 million shares in aggregate over the 10-year period.

        The 1999 Purchase Plan permits eligible employees to acquire shares of Caliper's common stock through payroll deductions of up to 10% of their gross earnings. No employee may participate in the 1999 Purchase Plan if, immediately after the grant, the employee has voting power over 5% or more of the outstanding capital stock. The Board may specify offerings of up to 27 months under the terms of the plan; however, Caliper's Board of Directors has currently limited offering periods to six months. Unless the Board determines otherwise, common stock may be purchased at the lower of 85% of the fair market value of Caliper's common stock on the first day of the offering or 85% of the fair market

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

value of Caliper's common stock on the purchase date. The initial offering period began on the effective date of the initial public offering. Caliper issued 512,083, 313,477 and 296,549 shares under the 1999 Purchase Plan in the years 2009, 2008 and 2007, respectively, at a weighted average price of $1.12, $2.05 and $3.91, respectively.

        A summary of activity under the stock plans, excluding the 1999 Purchase Plan, is as follows:

					Outstanding
		Available			Number of Shares			Exercise Price		Weighted Average Exercise Price
Balance at December 31, 2008			5,080,845			8,268,181		$	0.00 - 162.00	$	5.42
	Authorized		10,000,000			—			—		—
	Granted		(3,544,324	)		3,544,324			0.00 - 2.69		1.37
	Exercised		—			(30,353	)		0.97 - 2.59		1.10
	Vested Restricted Stock		—			(255,347	)		—		—
	Un-vested Repurchased		—			(60,494	)		—		—
	Forfeited		1,084,775			(1,084,775	)		0.97 - 130.00		5.51
	Canceled		324,695			(324,695	)		1.30 - 6.86		3.43
	Expired		(2,872,141	)		—			—		—
Balance at December 31, 2009			10,073,850			10,056,841			0.00 - 162.00		4.00
Exercisable at December 31, 2009						5,133,771			1.16 - 162.00		5.74
Exercisable at December 31, 2008						5,076,450		$	0.97 - 162.00	$	5.90

        Included in the summary of activity are 2.9 million shares that relate to previously cancelled or forfeited shares that are no longer available for future grant under the expired plans described above.

Stock Based Compensation

        On January 1, 2006, Caliper adopted FASB ASC 718, which requires all share-based payments to be recognized in the income statement as an operating expense, based on their fair values. Caliper's share-based payment arrangements within the scope of FASB ASC 718 include options, restricted stock and other forms of stock bonuses, including restricted stock units, awarded under its option plans, and its Employee Stock Purchase Plan (ESPP) which enables participating employees to purchase Caliper's stock at a discount from fair market value. Caliper applied the modified prospective method in adopting FASB ASC 718. For stock option awards and ESPP purchases, Caliper estimates the fair value of share-based payments using the Black-Scholes-Merton formula and, for all share-based payments made after the adoption of FASB ASC 718, recognizes the resulting compensation expense using a straight-line recognition method over the applicable service period of each award. The fair value of restricted stock awards (including restricted stock units) is determined based upon the fair market value of Caliper's stock on the date of grant. The majority of the incentive and non-statutory stock option grants and restricted stock awards carry a 4-year vesting term, which is generally the requisite service period. There are typically no acceleration provisions related to the stock option grants or restricted stock awards. The exercise price of stock option grants is equal to the fair market value of Caliper's stock on the date of grant. For certain restricted stock awards that cliff vest Caliper recognizes the resulting compensation expense using a straight-line recognition method over the applicable service

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

period of each award. Shares issued pursuant to option exercises or restricted stock unit conversion are generally made from previously authorized, but un-issued shares of common stock, or if available, outstanding treasury shares.

        Under the modified prospective method, compensation cost recognized includes (a) all share-based payments granted prior to, but not yet vested as of, January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of Statement of Financial Accounting Standard No. 123 (SFAS 123), Accounting for Stock-Based Compensation , and (b) all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of FASB ASC 718. Prior to the adoption of FASB ASC 718, forfeitures of unvested awards were accounted for in the period in which they occurred. Effective with the adoption of FASB ASC 718 estimated prospective forfeitures are included in the determination of compensation cost to be recognized. Caliper applied an expected forfeiture rate of 5% to unvested stock options for which expense was recognized during the years ended December 31, 2009, 2008 and 2007.

        Caliper accounts for options issued to non-employees in accordance with the provisions of FASB ASC 718 and EITF No. 96-18, Accounting for Equity Instruments that are issued to other than Employees for Acquiring, or in Conjunction with Selling Goods or Services. For the years ended December 31, 2009, 2008 and 2007, compensation expense related to stock-based compensation issued to non-employees was not material.

        Stock-based compensation expense is included within costs and expenses as follows (in thousands):

	Years Ended December 31,
	2009		2008		2007
Cost of product revenue	$	323	$	306	$	422
Cost of service revenue		125		75		121
Research and development		566		398		835
Selling, general and administrative		2,868		2,801		3,783
Total	$	3,882	$	3,580	$	5,161

        The fair value of each option award issued under Caliper's equity plans is estimated on the date of grant using a Black-Scholes-Merton based option pricing model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of Caliper's stock and warrants. The expected term of the options is based on Caliper's historical option exercise data taking into consideration the exercise patterns of the option holder during the option's life. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of the grant.

	2009	2008	2007
Expected volatility (%)	75 - 91	40 - 68	39 - 45
Risk-free interest rate (%)	1.60 - 2.02	1.59 - 3.53	3.90 - 5.00
Expected term (years)	3.38 - .51	3.39 - 4.24	3.20 - 4.20
Expected dividend yield (%)	—	—	—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

        A summary of stock option and restricted stock unit activity under the Plans as of December 31, 2009, and changes during the year then ended as follows:

Stock Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
								(in thousands)
Outstanding at December 31, 2008		7,666,461		$	5.45		6.35	$	567
Granted		1,695,754			1.37		—		—
Exercised		(30,353	)		1.10		—		7
Canceled		(1,409,470	)		5.03		—		—
Outstanding at December 31, 2009		7,922,392		$	4.67		6.43	$	1,854
Exercisable at December 31, 2009		5,133,771		$	5.74		5.20	$	1
Vested and expected to vest at December 31, 2009		7,789,661		$	4.70		6.39	$	2,348

Restricted Stock Units	Shares
Outstanding and non-vested at December 31, 2008		601,720
Granted		1,848,570
Vested		(255,347	)
Forfeited		(60,494	)
Outstanding and non-vested at December 31, 2009		2,134,449

        Restricted stock units do not carry an exercise price and typically vest over a four-year period, although the vesting period of certain awards may vary. As of December 31, 2009, the weighted average remaining vesting term is 1.89 years and the aggregate intrinsic value of outstanding and non-vested restricted stock is approximately $5.4 million.

        During the twelve months ended December 31, 2009, Caliper granted 1,695,754 options at a weighted average grant date fair value, using the Black-Scholes-Merton option pricing model, of $0.58 per share, and 1,848,570 restricted stock units at a weighted average grant date fair value of $0.84 per share. The total fair value of restricted stock that vested during the year ended December 31, 2009 was approximately $1.2 million.

        As of December 31, 2009, there was $4.1 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average remaining service period of approximately 2.04 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes

        The components of the provision (benefit) for income taxes are as follows (in thousands):

	Years Ended December 31,
	2009			2008			2007
Federal	$	(8	)	$	(76	)	$	—
State		97			50			125
Foreign		130			633			159
Total	$	219		$	607		$	284

        Total foreign pre-tax income was $0.6 million, $1.8 million and $1.0 million in 2009, 2008 and 2007, respectively. A foreign tax benefit was recognized in certain jurisdictions in which foreign losses were incurred during 2009 and able to be offset against previously paid taxes and a foreign provision was recorded for potential exposure on international filings. In 2009, Caliper recorded a provision for U.S. federal taxes of $43,000 for alternative minimum tax, net of a benefit of $51,000 related to the election under the Housing of Recovery Act of 2008. In 2008, Caliper recorded a benefit of $76,000 for U.S. federal taxes related to the election under the Housing & Recovery Act of 2008.

        A reconciliation of income taxes at the statutory federal income tax rate to net income taxes included in the accompanying statements of operations is as follows (in thousands):

		Years Ended December 31,
		2009			2008			2007
Income tax provision (benefit):
	At federal statutory rate	$	(2,722	)	$	(23,013	)	$	(8,091	)
	State		97			50			125
	Foreign		130			633			159
Permanent differences:
	Stock compensation		304			121			1,067
	Impairment of goodwill and intangibles		147			19,504			—
	XenBio divestiture		4,169			—			—
	Deferred tax true up		(1,885	)		—			—
	Other		(258	)		(713	)		101
Valuation allowance			237			4,025			6,923
	Total	$	219		$	607		$	284

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets for financial reporting purposes and the amounts used for income tax purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes (Continued)

        Significant components of Caliper's deferred tax assets for federal and state income taxes are as follows (in thousands):

		Years Ended December 31,
		2009			2008			2007
Net operating loss carryforwards		$	103,099		$	106,665		$	105,863
Research credit carryforwards			12,747			12,715			14,530
Capitalized research and development			245			361			482
Restructuring accrual			1,432			1,742			1,034
Intangible assets			(10,020	)		(12,374	)		(15,722	)
Non-amortized intangibles			(1,128	)		(1,128	)		(1,130	)
Other, net			11,004			9,161			8,058
Net deferred tax assets			117,379			117,142			113,115
Valuation allowance			(118,507	)		(118,270	)		(114,245	)
	Total	$	(1,128	)	$	(1,128	)	$	(1,130	)

        As of December 31, 2009, Caliper had federal and state net operating loss carryforwards of approximately $282.7 million and $123.1 million, respectively. Caliper also had federal and state research and development tax credit carryforwards of approximately $7.9 million and $5.1 million, respectively. The federal net operating loss and credit carryforwards will expire at various dates through 2029 beginning in the year 2010, if not utilized. The current remaining state net operating losses have varying expiration dates through 2029.

        Because of Caliper's lack of earnings history and the uncertainty of realizing these net operating losses, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $0.2 million, $4.0 million and $7.7 million during the years ended December 31, 2009, 2008 and 2007, respectively.

        Utilization of the federal and state net operating losses and credits may be subject to a substantial limitation due to the change in ownership provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. The acquisition of Xenogen resulted in Xenogen stockholders owning approximately one-third of Caliper and, therefore, in all likelihood resulted in a change of ownership that will cause pre-merger losses to be subject to limitation.

        Caliper adopted the provisions of FASB ASC 740, Accounting for Uncertainty in Income Taxes as of January 1, 2007. FASB ASC 740 clarifies the accounting for uncertainty in income taxes recognized in financial statements under FASB ASC 825 and prescribes a comprehensive model for the recognition, measurement, and financial statement disclosure of uncertain tax positions. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes pursuant to FASB ASC 740. As a result of adopting the provisions of FASB ASC 740, Caliper recognized no change in the amount of unrecognized tax benefits that are recorded in its financial statements. In connection with the adoption of FASB ASC 740, Caliper has classified uncertain tax positions as short-term liabilities within accrued expenses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes (Continued)

        The following table summarizes the activity related to Caliper's gross unrecognized tax benefits from January 1, 2007 to December 31, 2009 (in thousands):

Balance as of January 1, 2007	$	308
Increases related to prior year's tax provisions		43
Balance as of December 31, 2007		351
Increases related to current year's tax provisions		161
Decreases related to settlements with taxing authorities		(101	)
Decreases related to lapsing of statute of limitations		(51	)
Balance as of December 31, 2008		360
Increases related to current year's tax provisions		98
Decreases related to lapsing of statute of limitations		(16	)
Balance as of December 31, 2009	$	442

        If recognized the full amount of the unrecognized tax benefit of $0.4 million would impact the annual effective tax rate. In the ordinary course of Caliper's business, its income tax filings are regularly under audit by tax authorities. While Caliper believes it has appropriately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater or less than its accrued position. Accordingly, additional provisions on income tax matters, or reductions of previously accrued provisions, could be recorded in the future as Caliper revises its estimates due to changing facts and circumstances or the underlying matters are settled or otherwise resolved. Federal and certain state taxes for the years 2006 through 2008 are subject to examination, as well as foreign jurisdiction tax returns covering these same periods. Caliper does not anticipate that the total amount of unrecognized tax benefit related to any particular tax position will change significantly within the next twelve months.

        Caliper recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties accrued as of December 31, 2009 were not material.

14. 401(k) Plans

        Caliper has a 401(k) plan qualified under section 401(k) of the Internal Revenue code that is available to all eligible employees as defined in the plan. Caliper has not historically matched employee contributions, but Caliper may contemplate instituting a matching contribution in the future as the market dictates and financial resources allow.

15. Legal Proceedings

        Commencing on June 7, 2001, Caliper and three of its then officers and directors (David V. Milligan, Daniel L. Kisner and James L. Knighton) were named as defendants in three securities class action lawsuits filed in the United States District Court for the Southern District of New York. The cases have been consolidated under the caption, In re Caliper Technologies Corp. Initial Public Offering Securities Litigation, 01 Civ. 5072 (SAS) (GBD). Similar complaints were filed against approximately 300 other public companies that conducted initial public offerings of their common stock during the late 1990s (the "IPO Lawsuits"). On August 8, 2001, the IPO Lawsuits were consolidated for pretrial purposes before United States Judge Shira Scheindlin of the Southern District of New York. Together, those cases are denominated In re Initial Public Offering Securities Litigation,

F-39

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Legal Proceedings (Continued)

21 MC 92(SAS). On April 19, 2002, a Consolidated Amended Complaint was filed alleging claims against Caliper and the individual defendants under Sections 11 and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. The Consolidated Amended Complaint also names certain underwriters of Caliper's December 1999 initial public offering of common stock as defendants. The Complaint alleges that these underwriters charged excessive, undisclosed commissions to investors and entered into improper agreements with investors relating to aftermarket transactions. The Complaint seeks an unspecified amount of money damages. Caliper and the other issuers named as defendants in the IPO Lawsuits moved on July 15, 2002, to dismiss all claims on multiple grounds. By Stipulation and Order dated October 9, 2002, the claims against Messrs. Milligan, Kisner and Knighton were dismissed without prejudice. On February 19, 2003, the Court granted Caliper's motion to dismiss all claims against it. Plaintiffs were not given the right to replead the claims against Caliper. In March 2009, all of the plaintiffs, underwriters and issuers involved in this litigation entered into a new global settlement agreement. On October 5, 2009, Judge Scheindlin issued an Opinion and Order approving the settlement agreement, which requires no payment by Caliper or any of the other issuers. Several appeals were filed and remain pending with respect to the October 5, 2009 Opinion and Order. On November 30, 2009 an Order and Final Judgment with respect to the cases brought against Caliper was filed with the Court. No appeals relating to this Order and Final Judgment were filed during the following 30-day appeal period. As a result, the dismissal of the claims asserted against Caliper is now final.

        On January 23, 2009, Caliper filed a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. The complaint was promptly served upon Shimadzu's U.S. subsidiary, and subsequently served on Shimadzu Corporation in Japan. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system, which performs electrophoretic separations analysis of nucleic acids, infringes 11 different U.S. patents owned by Caliper. In its answer to this complaint, Shimadzu denied infringement of any valid claim of any of the 11 patents asserted against Shimadzu by Caliper, and alleged that each patent asserted by Caliper is invalid and/or unenforceable. Caliper filed its preliminary infringement contentions with the Court on February 10, 2009, and Shimadzu filed its preliminary invalidity contentions with the Court on July 23, 2009. In March 2010, Caliper entered into a settlement agreement with Shimadzu pursuant to which Caliper agreed to dismiss its complaint against Shimadzu and Shimadzu agreed to discontinue sales of the MCE-202 MultiNA system in the United States.

        On July 13, 2009, HandyLab, Inc., a private company based in Ann Arbor, Michigan, filed a complaint against Caliper in United States District for the Court Eastern District of Michigan, Southern Division, seeking declaratory judgment that either (i) HandyLab's Raider™ and Jaguar™ systems and related consumable products do not infringe 13 patents owned or licensed by Caliper and/or (ii) the claims of the 13 patents identified in HandyLab's complaint are invalid. The complaint filed by HandyLab did not contain any other claims against Caliper. On August 6, 2009, HandyLab and Caliper entered into a Standstill and Tolling Agreement pursuant to which the parties agreed to postpone the formal service of the complaint filed by HandyLab or the filing or commencement of new claims concerning HandyLab's products or either party's microfluidic technology while the parties discuss a potential licensing arrangement. In November, 2009, HandyLab was acquired by Becton Dickinson & Company ("BD"). In December, 2009, Caliper entered into a settlement agreement with

F-40

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Legal Proceedings (Continued)

BD pursuant to which Caliper granted a non-exclusive license to BD, BD agreed to pay to Caliper a license fee and royalties based on BD's future sales of licensed products, and BD agreed to a dismissal of its complaint against Caliper.

        On February 23, 2010, Caliper, its wholly owned subsidiary Xenogen Corporation, and Stanford University filed a complaint against Carestream Health, Inc. ("Carestream") for patent infringement in the U.S. District Court for the Eastern District of Texas. In the suit, Caliper, Xenogen and Stanford University seek a finding of willful infringement by Carestream, compensatory damages, a trebling due to willfulness, a permanent injunction and attorneys' fees against Carestream for the ongoing, unauthorized and willful use of a number of United States patents that Caliper, through Xenogen, exclusively licenses from Stanford University. This complaint was served on Carestream on February 26, 2010. Carestream's answer to this complaint is due to be filed by Carestream on March 19, 2010.

        From time to time Caliper is involved in litigation arising out of claims in the normal course of business, and when a probable loss contingency arises, records a loss provision based upon actual or possible claims and assessments. The amount of possible claim recorded is determined on the basis of the amount of the actual claim, when the amount is both probable and the amount of the claim can be reasonably estimated. If a loss is deemed probable, but the range of potential loss is wide, Caliper records a loss provision based upon the low end estimate of the probable range and may adjust that estimate in future periods as more information becomes available. Litigation loss provisions, when made, are reflected within general and administrative expenses in the Statement of Operations and are included within accrued legal expenses in the accompanying balance sheet. Based on the information presently available, management believes that there are no outstanding claims or actions pending or threatened against Caliper, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or results of operations, although the results of litigation are inherently uncertain, and adverse outcomes are possible.

16. Geographic Data

        FASB ASC 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to stockholders. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions of how to allocate resources and assess performance. Caliper's chief decision maker, as defined under FASB ASC 280, is the chief executive officer. Caliper views its operations and manages its business as one operating segment.

F-41

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Geographic Data (Continued)

        The table below presents Caliper's activities by geographical location (in thousands). Caliper attributes revenue to geographic locations based upon location of the end customer.

		2009			2008			2007
Revenue:
	United States	$	71,784		$	77,335		$	88,262
	Europe		35,769			37,689			34,117
	Asia		20,989			16,055			16,104
	Other		1,870			2,975			2,224
		$	130,412		$	134,054		$	140,707
Net income (loss):
	United States	$	(11,262	)	$	(71,415	)	$	(31,806	)
	Europe		362			1,007			1,330
	Asia		2,865			1,832			6,169
	Other		(190	)		284			227
		$	(8,225	)	$	(68,292	)	$	(24,080	)
Property and equipment, net:
	United States	$	8,586		$	10,576		$	11,249
	Europe		487			148			224
	Asia		34			11			4
		$	9,107		$	10,735		$	11,477
Net Assets:
	United States	$	65,536		$	70,621		$	138,968
	Europe		5,634			4,624			3,898
	Asia		1,079			824			(2,222	)
	Other		761			669			542
		$	73,010		$	76,738		$	141,186

        For all periods presented, no individual country within Europe, Asia or other exceeded 10% of the consolidated totals for revenue, net loss, property and equipment and net assets. Caliper's other long-lived assets include restricted cash, goodwill, intangible assets and other assets which are primarily located in the United States.

17. Quarterly Financial Data (Unaudited)

Unaudited Results

        The following table sets forth a summary of our unaudited quarterly operating results for each of the eight quarters up through the year ended December 31, 2009. This data has been derived from our unaudited consolidated interim financial statements which, in our opinion, have been prepared in substantially the same basis as the audited consolidated financial statements contained elsewhere in this Annual Report on Form 10-K and include all normal recurring adjustments necessary for a fair presentation of the financial information for the periods presented. These unaudited quarterly results should be read in conjunction with our consolidated financial statements and notes thereto included in

F-42

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. Quarterly Financial Data (Unaudited) (Continued)

this Annual Report on Form 10-K. The operating results in any quarter are not necessarily indicative of the results that may be expected for any future period.

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year ended December 31, 2009
Total revenue	$	28,472		$	32,111		$	32,173		$	37,656
Gross profit(1)		11,120			13,640			14,477			18,655
Operating income (loss)		(6,196	)		(3,844	)		(3,122	)		959
Net income (loss)		(6,645	)		(4,053	)		(3,377	)		5,851
Basic income (loss) per share		(0.14	)		(0.08	)		(0.07	)		0.12
Diluted income (loss) per share	$	(0.14	)	$	(0.08	)	$	(0.07	)	$	0.11
Year ended December 31, 2008
Total revenue	$	29,287		$	34,031		$	34,041		$	36,695
Gross profit(1)		11,800			14,070			14,880			14,910
Operating loss		(10,160	)		(6,191	)		(4,757	)		(48,423	)
Net loss		(9,936	)		(6,682	)		(5,396	)		(46,278	)
Basic and diluted loss per share	$	(0.21	)	$	(0.14	)	$	(0.11	)	$	(0.96	)

(1)

Gross profit refers to total product and service revenue, less costs associated with those revenues. Costs related to contract revenues are included within research and development expenses in the accompanying statements of operations.

Correction of an Error

        Included within fourth quarter 2009 net income is a $1.2 million reversal of certain prior period restructuring charges and a $0.4 million charge to operating rent expense that resulted from having not fully vacated certain office and lab space that was originally intended to be vacated in connection with Caliper's consolidation of its Mountain View, California facility in 2008 (further discussed in Note 11). During the fourth quarter of 2009, management became aware that certain space previously included in restructuring charges taken in the third and fourth quarter of 2008 had not met the "cease-use" date as required under ASC 420 to record a restructuring accrual. Accordingly, Caliper reversed the previously recorded charges in the fourth quarter of 2009 and recorded the appropriate rent expense, both on a cumulative basis. Caliper evaluated the materiality of this error in accordance with ASC 250, Accounting Changes and Error Corrections, and SEC Staff Accounting Bulletin Nos. 99, Materiality, and 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and concluded that the effects of the correction of the error were not material to its full year 2009 and 2008 financial results or to any interim quarterly period therein.

F-43

CALIPER LIFE SCIENCES, INC.

Schedule II—VALUATION AND QUALIFYING ACCOUNTS

	Balance at Beginning Period		Additions Charged to Costs and Expenses		Deductions		Balance at End of Period
	(In thousands)
Year ended December 31, 2009:
Allowance for doubtful accounts	$	740	$	240	$	175	$	805
Valuation allowance for deferred tax assets		118,270		237		—		118,507
	$	119,010	$	477	$	175	$	119,312
Year ended December 31, 2008:
Allowance for doubtful accounts	$	1,320	$	139	$	719	$	740
Valuation allowance for deferred tax assets		114,245		4,025		—		118,270
	$	115,565	$	4,164	$	719	$	119,010
Year ended December 31, 2007:
Allowance for doubtful accounts	$	582	$	793	$	55	$	1,320
Valuation allowance for deferred tax assets		106,525		7,720		—		114,245
	$	107,107	$	8,513	$	55	$	115,565

F-44

EXHIBIT INDEX

Exhibit Number			Description of Document
	2.1	(18)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Holdings, Inc. and Xenogen Corporation, dated as of February 10, 2006.
	2.2	(17)(31)	Asset Sale and Purchase Agreement, dated as of October 29, 2008, by and between Sotax Corporation and Caliper Life Sciences, Inc.
	2.3	(17)(32)	Asset Purchase Agreement, dated as of November 10, 2008, by and between Dionex Corporation and Caliper Life Sciences, Inc.
	2.4	(17)	Stock Purchase Agreement, dated December 11, 2009, by and between Taconic Farms, Inc., Xenogen Corporation and Caliper Life Sciences, Inc.
	3.1	(14)	Amended and Restated Certificate of Incorporation of Caliper.
	3.2	(7)	Certificate of Designation of Series A Junior Participating Preferred Stock.
	3.3	(21)	Amended and Restated Bylaws of Caliper.
	4.1		Reference is made to Exhibits 3.1, 3.2 and 3.3.
	4.2	(15)	Specimen Stock Certificate.
	4.3	(8)	Rights Agreement, dated as of December 18, 2001, between Caliper and Wells Fargo Bank Minnesota, N.A., as Rights Agent.
	4.11	(22)	Registration Rights Agreement by and between Caliper and The Berwind Company LLC, dated as of December 18, 2007.
	10.1	(1)	Lease Agreement, dated December 1, 1998, between Caliper and 605 East Fairchild Associates, L.P.
	10.2	(1)(2)	1996 Equity Incentive Plan.
	10.3	(1)(2)	1999 Equity Incentive Plan.
	10.4	(1)(2)	1999 Employee Stock Purchase Plan.
	10.5	(2)(19)	1999 Non-Employee Directors' Stock Option Plan.
	10.6	(2)(15)	Form of Grant Agreement for 1999 Equity Incentive Plan—Option Awards.
	10.7	(2)(15)	Form of Grant Agreement for 1999 Equity Incentive Plan—Restricted Stock Unit Awards.
	10.8	(2)(15)	Form of Grant Agreement for 1999 Non-Employee Directors' Stock Option Plan.
	10.9	(1)(2)	Form of Indemnification Agreement entered into between Caliper and its directors and executive officers.
	10.10	(1)(3)	Collaboration Agreement, dated May 2, 1998, between Caliper and Hewlett-Packard Company (now Agilent Technologies, Inc.).
	10.11	(2)(15)	Form of Stock Option Grant Agreement for Acquisition Equity Incentive Plan.
	10.12	(2)(15)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (pro rata vesting).
	10.13	(2)(15)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (5 year cliff vesting).
	10.14	(29)	Lease Agreement, dated as of April 25, 2005, between Caliper and BCIA New England Holdings LLC.

Exhibit Number			Description of Document
	10.17	(2)(15)	Non-Employee Directors' Cash Compensation Plan.
	10.18	(2)	Caliper Performance Bonus Plan.
	10.23	(1)(2)	The Corporate Plan for Retirement Select Plan Adoption Agreement and related Basic Plan Document.
	10.29	(2)(15)	Key Employee Change of Control and Severance Benefit Plan.
	10.30	(4)(7)	Cross-License Agreement, dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.32	(3)(6)	Settlement Agreement and Mutual General Release dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.39	(2)(8)	2001 Non-Statutory Stock Option Plan.
	10.46	(2)(15)	Form of Grant Agreement for 2001 Non-Statutory Stock Option Plan.
	10.52	(3)(12)	Sole Commercial Patent License Agreement, effective September 1, 1995, between UT-Battelle, LLC, the successor to Lockheed Martin Energy Research Corporation, and Caliper, as amended on November 1, 2002.
	10.55	(3)(9)	Collaboration Agreement, dated June 4, 2003, between Caliper and Bio-Rad Laboratories, Inc.
	10.56	(2)(10)	Key Employee Agreement, dated July 14, 2003, between Caliper and E. Kevin Hrusovsky.
	10.62	(2)(11)	Acquisition Equity Incentive Plan.
	10.64	(2)(13)	Consulting Agreement, dated January 1, 2004, between Caliper and Dr. David V. Milligan.
	10.67	(2)(30)	Offer Letter dated September 7, 2005 between Caliper Life Sciences, Inc. and David M. Manyak, Ph.D.
	10.71	(3)(16)	Agreement, dated as of May 5, 2000, between the Board of Trustees of the Leland Stanford Junior University and Xenogen Corporation.
	10.73	(23)	Amended and Restated Loan and Security Agreement, dated as of February 15, 2008, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation and NovaScreen Biosciences Corporation.
	10.74	(24)	Amendment to Lease Agreement dated as of March 18, 2008, by and between 605 Fairchild Associates, L.P., as landlord, and Caliper Life Sciences, Inc., as tenant.
	10.78	(25)	Amendment to Lease Agreement dated as of June 27, 2008, by and between Cedar Brook 5 Corporate Center, L.P., as landlord and Caliper Life Sciences, Inc., as tenant.
	10.79	(26)	2009 Equity Incentive Plan.
	10.80	(2)	Form of Stock Award Agreement for 2009 Equity Incentive Plan.
	10.81	(2)	Form of Grant Award for 2009 Equity Incentive Plan.
	10.82	(27)	Second Amended and Restated Loan and Security Agreement, dated as of March 6, 2009, by and among Silicon Valley Bank, Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation, Xenogen Biosciences Corporation and Caliper Life Sciences, Ltd.

Exhibit Number			Description of Document
	10.83		First Loan Modification Agreement, dated as of December 11, 2009, by and among Silicon Valley Bank, Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation, and Caliper Life Sciences,  Ltd.
	10.84	(28)	Non-Employee Director Compensation Policy
	21.1	(20)	Subsidiaries of the Registrant.
	23.1		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	24.1		Power of Attorney (reference is made to the signature page of this report).
	31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a)
	31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).
	32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-1, as amended, File No. 333-88827, filed on October 12, 1999 and incorporated by reference herein.

(2)

Management contract or compensatory plan or arrangement.

(3)

Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.

(4)

Previously filed as the like-numbered exhibit to Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated by reference herein.

(5)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-1, as amended, File No. 333-45942, filed on September 15, 2000, and incorporated by reference herein.

(6)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended March 31, 2001 and incorporated by reference herein.

(7)

Previously filed as Exhibit 99.1 to Current Report on Form 8-K filed December 19, 2001 and incorporated by reference herein.

(8)

Previously filed as Exhibit 99.1 to our Registration Statement on Form S-8, File No. 333-76636, filed January 11, 2002 and incorporated by reference herein.

(9)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended June 30, 2003 and incorporated by reference herein.

(10)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended September 30, 2003 and incorporated by reference herein.

(11)

Previously filed as Exhibit 99.1 to our Registration Statement on Form S-8, File No. 333-106946, filed June 10, 2003 and incorporated by reference herein.

(12)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2002 and incorporated by reference herein.

(13)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2003 and incorporated by reference herein.

(14)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended March 31, 2004 and incorporated by reference herein.

(15)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2004 and incorporated by reference herein.

(16)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(17)

Confidential treatment has been requested for certain portions of this exhibit which portions have been omitted and filed separately with the Securities and Exchange Commission.

(18)

Previously filed as Exhibit 2.5 to Form 10-K for the year ended December 31, 2005 and incorporated by reference herein.

(19)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended June 30, 2007 and incorporated by reference herein.

(20)

Previously filed as the like numbered Exhibit to Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.

(21)

Previously filed as Exhibit 3.1 to Current Report on Form 8-K filed on March 2, 2007 and incorporated by reference herein.

(22)

Previously filed as the like-numbered Exhibit to our Registration Statement on Form S-3, as amended, File No. 333-147571, filed on November 21, 2007 and incorporated by reference herein.

(23)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended June 30, 2008 and incorporated by reference herein.

(24)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(25)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2008 and incorporated by reference herein.

(26)

Previously filed ad Exhibit 10.1 to Current Report on Form 8-K filed on July 7, 2009 and incorporated by reference herein.

(27)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended March 31, 2009 and incorporated by reference herein.

(28)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended March 31, 2009 and incorporated by reference herein.

(29)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

(30)

Previously filed as the like-numbered Exhibit to Form 10-K for the year ended December 31, 2005 and incorporated by reference herein.

(31)

Previously filed as Exhibit 2.6 to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

(32)

Previously filed as Exhibit 2.7 to Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.

EX-2.4

Exhibit 2.4

TACONIC FARMS, INC.,

XENOGEN CORPORATION

and

CALIPER LIFE SCIENCES, INC.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

TABLE OF CONTENTS

Article 1		1
PURCHASE AND SALE		1
1.1	Purchase and Sale	1
1.2	Closing	1
1.3	Purchase Price	2
1.4	Closing Calculations	2
1.5	Closing Balance Sheet Calculations	2
1.6	Post-Closing Adjustment Payment	4
1.7	Tax Withholding	4
Article 2 REPRESENTATIONS AND WARRANTIES OF CALIPER		4
2.1	Organization of the Company	4
2.2	Company Capital Structure	5
2.3	Subsidiaries	5
2.4	Authority	6
2.5	No Conflict	6
2.6	Governmental Consents	6
2.7	Company Financial Statements	6
2.8	No Undisclosed Liabilities	7
2.9	No Changes	7
2.10	Tax Matters,	9
2.11	Restrictions on Business Activities	13
2.12	Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment	13
2.13	Intellectual Property	14
2.14	Sufficiency of Assets	17
2.15	Contracts	18
2.16	No Defaults	19
2.17	Interested Person Transactions	19
2.18	Governmental Authorization	20
2.19	Litigation	20
2.20	Accounts Receivable	20
2.21	Minute Books	20
2.22	Environmental Matters	20
2.23	Fees and Expenses	24
2.24	Employee Benefit Plans and Compensation	24
2.25	Insurance and Bonds	27

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

2.26	Compliance with Laws	28
2.27	Animal Welfare	28
2.28Council on Accreditation of the Association for Assessment and Accreditation of Laboratory Animal Care Certification		28
2.29	Foreign Corrupt Practices Act	28
2.30	Health Profiles	29
2.31	Warranties	29
2.32	Complete Copies of Materials	29
2.33	Insider Loans	29
2.34	Suppliers and Customers	29
2.35	Privacy	30
2.36	Compliance with the Immigration Reform and Control Act	30
2.37	Data Room	30
2.38	Representations Complete	31
Article 3 REPRESENTATIONS AND WARRANTIES OF TACONIC		31
3.1	Organization and Standing	31
3.2	No Conflict	31
3.3	Consents	31
Article 4 AGREEMENTS		32
4.1	Confidentiality	32
4.2	Expenses	32
4.3	Public Disclosure	32
4.4	Reasonable Best Efforts	32
4.5	Additional Documents and Further Assurances	33
4.6	Employment Arrangements	33
4.7	Non-Continuing Employees	33
4.8	Employment of Continuing Employees	33
4.9	Internet Inquiries	34
4.10	Xenogen Trademark	34
4.11	Destruction of Confidential Information	34
4.12	Tax Matters	34
4.13	Tax Sharing Agreements	36
4.14	Non-Solicitation	36
4.15	Caliper Confidential Information Remaining with the Company	36
4.16	Promega Corporation (PGL3) Sublicense	36
Article 5 CONDITIONS TO THE CLOSING		36
5.1	Conditions to the Obligations of Each Party to Effect the Transaction	36
5.2	Additional Conditions to the Obligations of Taconic	37
5.3	Additional Conditions to the Obligations of Caliper	38

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Article 6 INDEMNIFICATION AND ESCROW		39
6.1	Survival	39
6.2	Indemnification by Caliper	39
6.3	Claims for Indemnification	41
6.4	Escrow Fund	42
Article 7 GENERAL PROVISIONS		43
7.1	Notices	43
7.2	Interpretation	44
7.3	Counterparts	44
7.4	Entire Agreement; Assignment	45
7.5	Severability	45
7.6	Other Remedies	45
7.7	Governing Law	45
7.8	Rules of Construction	45
7.9	Specific Performance	45
7.10	Attorneys’ Fees	45
7.11	WAIVER OF JURY TRIAL	46
Article 8 DEFINITIONS		46

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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INDEX OF EXHIBITS

Exhibit	Description
Exhibit A	Closing Agenda
Exhibit B	Form of Section 382 Allocation Agreement
Exhibit C	Distribution and Supply Agreement
Exhibit D	Form of Escrow Agreement
Exhibit E	License Agreement (for Imaging Services)

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of December 11, 2009 by and among Taconic Farms, Inc., a New York corporation (“Taconic”), Caliper Life Sciences, Inc., a Delaware corporation (“CLS”), and Xenogen Corporation, a Delaware corporation and a wholly owned subsidiary of CLS (“Xenogen” and collectively with CLS, “Caliper”). Certain capitalized terms used but not otherwise defined herein are defined in Article 8 hereof.  All representations, covenants and agreements of CLS and Xenogen herein shall be deemed to be joint and several, whether so expressed or not, unless otherwise not permitted by the context.

RECITALS

A.            Taconic wishes to purchase from Caliper, and Caliper wishes to sell to Taconic, all of the issued and outstanding capital stock and other equity interests in Xenogen Biosciences Corporation, an Ohio corporation (the “Company”) and wholly owned subsidiary of Caliper.

B.            A portion of the consideration payable by Taconic in connection with this Agreement and the transactions contemplated hereby (the “Transaction”) shall be placed in escrow by Taconic as security for the indemnification obligations set forth in this Agreement.

C.            Caliper is making certain representations warranties regarding the Company and is also making certain covenants and other agreements in connection with the Transaction.

NOW, THEREFORE, in consideration of the mutual agreements, covenants and other promises set forth herein, the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE

1.1           Purchase and Sale.  Upon the terms and subject to the conditions of this Agreement, Caliper will sell to Taconic, and Taconic will purchase from Caliper, at the Closing (as defined below), all of the issued and outstanding capital stock (the “Shares”) in the Company.

1.2           Closing.

(a)   The closing of the Transaction (the “Closing”) is effective as of 9a.m. on the day this Agreement and the Ancillary Agreements, in addition to other closing documents, are executed and delivered.  For this purpose, such date is called the “Closing Date.”  All documents and signatures are being exchanged by electronic delivery.

(b)   At the Closing:

(i)Taconic is delivering (A) the Estimated Purchase Price to Caliper, less an amount equal to the Escrow Amount, by wire transfer of immediately available funds, and (B) the Escrow Amount to the Escrow Agent by wire transfer of immediately available funds.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

(ii)Caliper is delivering to Taconic certificates for the Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto.

(iii)The appropriate persons are executing and delivering the license, distribution, escrow, transition services and other ancillary agreements and documents (the “Ancillary Agreements”).

(iv)The appropriate persons are executing and delivering, or delivering, the other items set forth on the Closing Agenda attached hereto as Exhibit A.

1.3           Purchase Price.

(a)   The “Final Purchase Price” shall be an amount equal to:

(i)Eleven Million Dollars ($11,000,000),

(ii)plus Company Cash,

(iii)minus any Indebtedness that has not been discharged pursuant to Section 5.2(f),

(iv)minus the Deferred Revenue Amount, and

(v)plus (or minus) the Net Working Capital Adjustment.

1.4           Closing Calculations.

(a)   Caliper has caused the Company to deliver to Taconic its good faith calculation, in reasonable detail, of its estimate of the following amounts as of the close of business on the Closing Date:

(i)the amount of Company Cash (the “Estimated Company Cash”),

(ii)the amount of Indebtedness (the “Estimated Indebtedness”),

(iii)the Deferred Revenue Amount (the “Estimated Deferred Revenue Amount”) and

(iv)Net Working Capital (the “Estimated Net Working Capital”).

(b)   Using these estimates, the parties have agreed that, for purposes of the Closing, the Final Purchase Price is estimated at [***] Dollars ($[***]) (the “Estimated Purchase Price”).

1.5           Closing Balance Sheet Calculations.  As promptly as practicable, but in any event within 60 days after the Closing Date, Taconic will deliver to Caliper a consolidated balance sheet of the Company dated as of the close of business on the Closing Date (the “Closing

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Balance Sheet”) and a statement showing the calculation, as of such date and time, of Company Cash, Indebtedness, the Deferred Revenue Amount, Net Working Capital and the Net Working Capital Adjustment, all derived from the Closing Balance Sheet (together with the Closing Balance Sheet, the “Preliminary Statement”). The Closing Balance Sheet shall be prepared and Company Cash, Indebtedness, the Deferred Revenue Amount, Net Working Capital, and the Net Working Capital Adjustment shall be determined in accordance with GAAP using the same accounting methods, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in preparation of the Financial Statements.  After delivery of the Preliminary Statement, Caliper and its accountants and other representatives shall be permitted reasonable access to review the Company’s books and records and work papers related to the preparation of the Preliminary Statement. Caliper and its accountants and other representatives may make inquires of Taconic and its accountants regarding questions concerning or disagreements with the Preliminary Statement arising in the course of their review thereof, and Taconic shall use its, and shall cause the Company to use its, commercially reasonable best efforts to cause any such accountants to cooperate with and respond to such inquiries. If Caliper has any objections to the Preliminary Statement, Caliper shall deliver to Taconic a statement setting forth its objections thereto (an “Objections Statement”). If an Objections Statement is not delivered to Taconic within 30 days after delivery of the Preliminary Statement, the Preliminary Statement shall be final, binding and non-appealable by the parties hereto. Caliper and Taconic shall negotiate in good faith to resolve any such objections, but if they do not reach a final resolution within fifteen (15) days after the delivery of the Objections Statement, Caliper and Taconic shall submit such dispute to BDO Seidman, LLP (the “Dispute Resolution Auditor”). Any further submissions to the Dispute Resolution Auditor must be written and delivered to each party to the dispute. The Dispute Resolution Auditor shall consider only those items and amounts which are identified in the Objections Statement as being items which Caliper and Taconic are unable to resolve. The Dispute Resolution Auditor’s determination will be based solely on the definitions of Company Cash, Indebtedness, the Deferred Revenue Amount, Net Working Capital, and the Net Working Capital Adjustment contained herein and the provisions of this Section 1.5. Caliper and Taconic shall use their commercially reasonable best efforts to cause the Dispute Resolution Auditor to resolve all such disagreements as soon as practicable. Further, the Dispute Resolution Auditor’s determination shall be based solely on the presentations by Taconic and Caliper which are in accordance with the terms and procedures set forth in this Agreement (i.e., not on the basis of an independent audit or review). The resolution of the dispute by the Dispute Resolution Auditor shall be final, binding and non-appealable on the parties hereto. The costs and expenses of the Dispute Resolution Auditor shall be allocated between Taconic, on the one hand, and Caliper on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party. For example, if Caliper claims the appropriate adjustments are $1,000 greater than the amount determined by Taconic’s accountants, and Taconic contests only $500 of the amount claimed by Caliper, and if the Dispute Resolution Auditor ultimately resolves the dispute by awarding to Caliper $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 ÷ 500) to Taconic and 40% (i.e., 200 ÷ 500) to Caliper.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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1.6           Post-Closing Adjustment Payment.

(a)   If, after taking into account any required adjustments, the Final Purchase Price is greater than the Estimated Purchase Price (the amount of such difference, a “Payment Shortfall”), then Taconic shall, within five (5) business days of the final determination of the Final Purchase Price, pay the Payment Shortfall to Caliper.

(b)   If, after taking into account any required adjustments, the Final Purchase Price is less than the Estimated Purchase Price (the amount of such difference, an “Excess Payment”), then Caliper shall, within five (5) business days of the final determination of the Final Purchase Price, pay the Excess Payment to Taconic.

1.7           Tax Withholding. Taconic will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any person or entity such amounts as Taconic determines it is required to deduct and withhold with respect to the making of such payment under the Code or any other provision of state, local or foreign Tax Law.  To the extent that amounts are so withheld, such withheld amounts will be treated for all purposes hereof as having been paid to such person or entity in respect of which such deduction and withholding was made.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF CALIPER

Caliper represents and warrants to Taconic that, except as set forth in the Disclosure Schedule delivered by Caliper to Taconic (the “Disclosure Schedule”), the statements contained in this Article 2 are true and correct as of the date of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date).  Caliper further represents and warrants that the statements contained in the Disclosure Schedule are true and correct as of the date of the Closing.  The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article 2. The disclosures in any section or subsection of the Disclosure Schedule will qualify other sections or subsections in this Article 2 only if it is reasonably clear from a reading of the disclosure that such disclosure is applicable to such other sections and subsections and the relationship between the disclosure and the related section and subsections is reasonably clear.

2.1           Organization of the Company.  The Company is a corporation duly organized, validly existing and in good standing under the Laws of Ohio. The Company has the corporate power to own its properties and to carry on its business as currently conducted. The Company is duly qualified or licensed to do business and in good standing as a foreign corporation (if applicable) in each jurisdiction in which it conducts business, except where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. Caliper has delivered to Taconic (i) a true and correct copy of the Company’s certificate of incorporation and bylaws (collectively, the “Company Charter Documents”) and (ii) a true and correct copy of the minutes of meetings and other actions of the board of directors, including any committees of the board of directors, and the stockholder of the Company (acting in its capacity as such) since the

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Acquisition Date, which reflect all actions of such stockholder (acting in its capacity as such), the board of directors and any committees of the board of directors of the Company up to the date hereof and are in full force and effect on the date hereof. Section 2.1 of the Disclosure Schedule lists the directors and officers of the Company. The operations now being conducted by the Company are not now and, since January 1, 2001, have not been conducted by the Company under any other name. The Company is not in violation of any of the provisions of the Company Charter Documents.

2.2           Company Capital Structure.

(a)   The authorized capital stock of the Company consists of 750,000 shares of common stock, no par value (“Common Stock”).  The Company has 1,000 shares of Common Stock outstanding, and all outstanding shares of capital stock of the Company are owned, of record and beneficially, by Xenogen, which is a direct wholly owned subsidiary of CLS. The Shares are duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the Company Charter Documents, or any agreement to which the Company or Caliper is a party or by which either the Company or Caliper is bound. Since at least January 1, 2001, the Company has not repurchased any shares of its capital stock. There are no declared or accrued but unpaid dividends with respect to any shares of Common Stock.

(b)   The Company has not, since the Acquisition Date, authorized or issued any Common Stock, and there are not, and have not been since the Acquisition Date, any options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which Caliper or any of its Subsidiaries, including the Company (each a “Caliper Company”), is a party or by which it is bound, obligating any such entity to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company to grant any such option, warrant, call, right, commitment or agreement. There are not, and since the Acquisition Date have not been, any outstanding or authorized stock appreciation, stock unit, phantom stock, profit participation or other similar rights with respect to the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Company. Upon the consummation of the Closing, Taconic will be the sole record and beneficial holder of the Shares and all rights to acquire or receive any Shares.

2.3           Subsidiaries.  The Company does not have, and since the Acquisition Date never had, any Subsidiaries and does not otherwise own any shares of capital stock or any interest in, or control, directly or indirectly, any other corporation, partnership, association, joint venture or other business entity or have any ongoing obligation to purchase any shares of capital stock with respect thereto. Any other documents required by applicable Law to be filed with the competent commercial register or other comparable authorities have been completed and duly and timely filed, except where the failure to file any such documents, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company does not have any permanent establishments, branches, agencies or similar affiliates.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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2.4           Authority.

(a)   Caliper has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Caliper, and no further action is required on the part of Caliper or the Company to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by Caliper and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes the valid and binding obligation of Caliper, enforceable against Caliper in accordance with its terms, except as such enforceability may be subject to the Laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of Law governing specific performance, injunctive relief or other equitable remedies.

(b)   The Board of Directors of each of CLS and Xenogen has unanimously approved this Agreement and the transactions contemplated by this Agreement.

2.5           No Conflict.  The execution and delivery by Caliper of this Agreement, and the consummation of the transactions contemplated hereby, will not conflict with or result in any violation of or default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, modification or acceleration of any obligation, payment of any benefit, or loss of any benefit (any such event, a “Conflict”) under (i) any provision of the Company Charter Documents; (ii) except as set forth in Section 2.5 of the Disclosure Schedule, any mortgage, indenture, lease, contract (whether written or oral), covenant or other agreement, instrument or commitment, permit, concession, franchise or license (each a “Contract” and collectively the “Contracts”) to which any Caliper Company, or any of its respective properties or assets (whether tangible or intangible) is a party or, as the case may be, subject; or (iii) any Law applicable to any Caliper Company, or any of its respective properties (whether tangible or intangible) or assets.. As a result of the consummation of the transactions contemplated by this Agreement, the Company will not be prohibited from exercising any of its rights under any of the Contracts to which it is a party or a sublicensee, and Taconic will not be required to pay any additional amounts or consideration other than ongoing fees, royalties or payments, which the Company would otherwise be required to pay pursuant to the terms of such Contracts had the transactions contemplated by this Agreement not occurred, except as may be required in connection with obtaining rights to use the Specified Third Party Intellectual Property..

2.6           Governmental Consents.  Except as set forth in Section 2.6 of the Disclosure Schedule, no consent, waiver, approval, order or authorization of, or registration, declaration or filing with any court, administrative agency or commission or other federal, state, county, local or foreign governmental authority, instrumentality, agency or commission (each, a “Governmental Entity”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

2.7           Company Financial Statements.

(a)   Section 2.7(a) of the Disclosure Schedule sets forth (i) the Company’s unaudited  balance sheets as of December 31, 2007 and December 31, 2008, and the related unaudited  statements of income for each fiscal year then ended and (ii) the Company’s unaudited  balance sheets as of the end of each calendar month since December 31, 2008, and

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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the related unaudited statement of income for each of the calendar months then ended, together with the equivalent financial statements in the prior fiscal year (all of the foregoing financial statements of the Company and any notes thereto are hereinafter collectively referred to as the “Financial Statements”). The Financial Statements are true and correct in all material respects and have been prepared in all material respects in accordance with GAAP consistently applied on a basis consistent throughout the periods indicated and consistent with each other. The Financial Statements present fairly, in all material respects, the financial condition and operating results of the Company as of the dates and during the periods indicated therein, subject to normal year-end adjustments in the case of interim Financial Statements, which are not material in amount. Caliper maintains with respect to the Company a standard system of accounting established and administered in accordance with GAAP. The Company’s unaudited consolidated balance sheet as of November 30, 2009, is referred to hereinafter as the “Current Balance Sheet.”

(b)   The Company maintains a system of internal accounting controls and procedures, which internal accounting controls and procedures are sufficient to provide reasonable assurance that (i) transactions by the Company are executed with management’s authorization, (ii) transactions by the Company are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access to assets of the Company is permitted only in accordance with management’s authorization, and (iv) the recorded accountability for assets of the Company is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Caliper has not identified or been made aware of (A) any significant deficiency or material weakness in the system of internal accounting controls utilized by it that may affect the Financial Statements, (B) any fraud, whether or not material, that involves the employees of the Company or (C) any claim or allegation regarding any of the foregoing.

2.8           No Undisclosed Liabilities.  Except as set forth in Section 2.8 of the Disclosure Schedule, the Company does not have any obligation, expense, claim, deficiency, guaranty or endorsement of any type, including any inter-company items, whether accrued, absolute, contingent, matured, unmatured or other (whether or not required to be reflected in financial statements in accordance with GAAP), except liabilities which individually or in the aggregate (i) have been reflected in the Current Balance Sheet or disclosed in the notes thereto (to the extent of such reflection or disclosure), (ii) have arisen in the Ordinary Course of Business since the date of the Current Balance Sheet, or (iii) are executory non-material obligations arising in the Ordinary Course of Business (and not as a result of the breach of any Contract identified in Sections 2.13 or 2.15 hereof).

2.9           No Changes.  Except as set forth in Section 2.9 of the Disclosure Schedule, since the date of the Current Balance Sheet, there has or have not been, occurred or arisen any:

(a)   transaction by the Company that is material to the Company, except in the Ordinary Course of Business;

(b)   amendment or change to the Company Charter Documents;

(c)   capital expenditure or commitment by the Company exceeding $25,000 individually or $50,000 in the aggregate;

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(d)   payment, discharge or satisfaction, in any amount in excess of $10,000 in any one case, or $25,000 in the aggregate, of any claim or Liability, other than payment, discharge or satisfaction of claims, liabilities and obligations in the Ordinary Course of Business or of liabilities reflected or reserved against in the Current Balance Sheet;

(e)   destruction of, damage to, or loss of any assets (whether tangible or intangible) of the Company with a book value in excess of $10,000 in any one case or $25,000 in the aggregate, whether or not covered by insurance;

(f)    labor dispute or claim of wrongful discharge or other unlawful labor practice or action with respect to the Company;

(g)   change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company other than as required by GAAP;

(h)   change in any material election in respect of Taxes, adoption or change in any material accounting method in respect of Taxes, material agreement or settlement of any claim or assessment in respect of Taxes, or extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

(i)    revaluation by the Company of any of its assets (whether tangible or intangible);

(j)    declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any capital stock of the Company, or any split, combination or reclassification in respect of any shares of capital stock of the Company, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company, or any direct or indirect repurchase, redemption or other acquisition by the Company of any shares of capital stock of the Company (or options, warrants or other rights convertible into, exercisable or exchangeable therefor);

(k)   increase in the base salary or other compensation payable or to become payable by the Company to any Company Personnel, or the declaration, payment, commitment or obligation of any kind for the payment by the Company of a severance payment, termination payment, bonus or other additional salary or compensation to any such person;

(l)    entering into of any material Contract to which the Company is a party or by which the Company, any of its assets (whether tangible or intangible) are bound or any termination, extension, material amendment or modification of the terms of any material Contract to which the Company is a party or by which it or any of its assets are bound;

(m)  sale, lease, license or other disposition of any of the material assets (whether tangible or intangible) or material properties of the Company taken as a whole, including the sale of any accounts receivable of the Company, or any creation of any security interest in any such material assets or material properties;

(n)   outstanding loan by the Company to any person or entity, incurring by the Company of any Indebtedness, guaranteeing by the Company of any Indebtedness, issuance or sale of any debt securities of the Company or guaranteeing of any debt securities of others,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

8

except for advances to Company Personnel for travel and business expenses in the Ordinary Course of Business;

(o)   granting of any waiver or release by the Company of any right or claim material to the Company, including any write-off or other compromise of any account receivable of the Company exceeding $5,000 individually or $25,000 in the aggregate;

(p)   commencement, settlement, notice or, to the Knowledge of Caliper, threat, of any lawsuit or proceeding or other investigation against the Company;

(q)   notice of any claim or potential claim of ownership by any person other than the Company of the intellectual property owned, developed or created by the Company or of any claim or potential claim of infringement by the Company of any other person’s intellectual property;

(r)    issuance or sale, or contract to issue or sell, by the Company of any Shares or any securities convertible into, or exercisable or exchangeable for, Shares, or any securities, warrants, options or rights to purchase any of the foregoing, except for issuances of Shares upon the exercise thereof;

(s)   (i) sale or license by the Company of any Company Intellectual Property or execution of any agreement with respect to any Company Intellectual Property, (ii) purchase or license by the Company of any Intellectual Property or execution of any agreement with respect to the Intellectual Property of any person or entity, (iii) agreement by the Company with respect to the development of any Intellectual Property with a third party, or (iv) material change in pricing or royalties set or charged by the Company to their customers or licensees or in pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company, except in the case of clause (i) or (ii), with respect to non-exclusive end user licenses of object code in the Ordinary Course of Business and on the Company’s standard terms and conditions;

(t)    agreement or material modification to any agreement pursuant to which any other party was granted marketing, distribution, development or similar rights of any type or scope with respect to any products or technology of the Company;

(u)   event or condition of any character that has had or is reasonably likely to have a Company Material Adverse Effect; or

(v)   agreement by the Company, or any officer or employee on behalf of the Company, to do any of the things described in the preceding clauses (a) through (u) of this Section 2.9.

2.10         Tax Matters,

(a)   The Company has filed all material Tax Returns that it was required to file under applicable Tax Laws and such Tax Returns were true, correct and complete in all material respects and were prepared in compliance in all material respects with all applicable Tax Laws.  All Taxes required to be paid by the Company have been timely paid, whether or not shown on any Tax Return, except for any Taxes for which there have been proper accruals under GAAP and are reserved on the Current Balance Sheet.  The Company is not currently the beneficiary of any extension of time within which to file any Tax Return.  Since January 1, 2005, no claim

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

9

has been made by a Governmental Entity in a jurisdiction in which the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction and to Caliper’s Knowledge, no such jurisdiction has any reasonable basis for such a claim.  There are no Liens for Taxes upon any of the property or assets of the Company other than for Taxes that are not yet due and payable or for non-material Taxes that are being contested in good faith and for which there have been proper accruals under GAAP and are reserved for on the Current Balance Sheet.  The Company has not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(b)   Each Affiliated Group has filed all material Tax Returns that it was required to file under applicable Tax Laws for each taxable period during which the Company was a member of such Affiliated Group.  All such Tax Returns were true, correct and complete in all material respects and were prepared in compliance with all applicable Tax Laws.  All Taxes required to be paid by any Affiliated Group have been timely paid for each taxable period during which the Company was a member of such Affiliated Group, whether or not shown on any Tax Return, except for any Taxes for which there have been proper accruals under GAAP and are reserved on the Current Balance Sheet.  To the Knowledge of Caliper, no Governmental Entity is expected to assess any additional Taxes against any Affiliated Group for any taxable period during which the Company was a member of such Affiliated Group.  There is no dispute or claim concerning any Tax Liability of any Affiliated Group for any taxable period during which the Company was a member of such Affiliated Group either (i) claimed or raised by any Governmental Entity in writing or (ii) as to which Caliper has Knowledge based upon personal contact with any agent of such Governmental Entity.  No Affiliated Group has waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency, in each case for any taxable period during which the Company was a member of such Affiliated Group.

(c)   The Company has complied in all material respects with all applicable Laws, rules and regulations relating to the payment and withholding of Taxes (including without limitation amounts paid or owing to any employee, independent contractor, creditor, stockholder, foreign person or entity, or other third party). The Company has, within the time and the manner prescribed by Law, withheld and paid over to the proper Governmental Entities all amounts required to be so withheld and paid over under applicable Laws, and all Tax Returns or other forms required to be filed with respect thereto have been properly completed and timely filed.

(d)   Section 2.10(d) of the Disclosure Schedule (i) lists all federal, state, local, and foreign jurisdictions to which any Tax is properly payable by or with respect to either the Company (ii) lists the type of Tax or Taxes payable in such jurisdiction, (iii) lists all Tax Returns filed by, on behalf of or with respect to the Company in each such jurisdiction for each taxable period ended on or after January 1, 2005, (iv) indicates those Tax Returns that have been audited or are currently the subject of audit, and (v) lists any written document received by the Company from any Governmental Entity indicating an intent to open an audit or other review, requesting information related to Tax matters, or providing notice of deficiency or of proposed adjustment for any amount of Tax.  The Company has delivered or caused to be delivered to Taconic true, correct and complete copies of all Tax Returns filed with respect to

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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the Company and all federal, state, local, and foreign examination reports or statements of deficiencies assessed against or agreed to by the Company received since January 1, 2005.

(e)   The Company is not a party to any agreement, contract, arrangement, or plan that has resulted or could result, separately or in the aggregate, in the payment of (i) any “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state, local, or foreign Tax Law) or (ii) any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code (or any corresponding provision of state, local, or foreign Tax Law).

(f)    The Company has never been a United States real property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of the Code.

(g)   The Company is not a party to or member of any joint venture, partnership, limited liability company or other arrangement or contract with any third party which could be treated as a partnership for federal income tax purposes.  The Company is not a party to or bound by any Tax allocation or sharing agreement.  Since January 1, 2001, the Company has never been a member of a group filing a consolidated federal income Tax Return or a combined, consolidated, unitary or other affiliated group Tax Return for state, local or foreign Tax purposes (other than a group the only member of which is the Company or a group the common parent of which was either CLS or Xenogen), and the Company does not have any Liability for the Taxes of any person or entity as a consequence of being a member of a group filing a consolidated federal income Tax Return or a combined, consolidated, unitary or other affiliated group Tax Return for state, local or foreign Tax purposes prior to January 1, 2001.  The Company does not have any Liability for the Taxes of any person or entity (other than the Caliper Companies) under Treasury Regulation Section 1.1502-6 (or any corresponding provision of state, local or foreign Tax Law), or as a transferee or successor, or by contract, or otherwise.

(h)   Section 2.10(h) of the Disclosure Schedule sets forth the following information with respect to the Company as of the most recent practicable date: (i) the Tax basis of each asset held by the Company; (ii) the amount of any net operating loss carryover, net capital loss carryover, unused investment or other credit, unused foreign tax credit, or excess charitable contribution allocable to the Company, as allowable under the Code, and after application, as applicable, of Treasury Regulations under Section 1502 of the Code, including without limitation Treasury Regulation Section 1.1502-21 (or any similar provisions of applicable state, local, or foreign Law); and (iii) the amount of any deferred gain or loss allocable to the Company arising out of any intercompany transaction.

(i)    The unpaid Taxes of the Company (whether currently accrued or accruing prior to the Closing Date, as applicable) (i) did not, as of November 30, 2009, exceed the reserve for Tax Liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Current Balance Sheet (rather than in any notes thereto) and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company in filing its Tax Returns.  Since November 30, 2009, the Company has not incurred any Liability for Taxes accruing after such date other than unpaid Taxes arising in the Ordinary Course of Business.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(j)       The Company has not made any change in accounting methods or related-party transaction pricing, or received a ruling from any Governmental Entity or signed an agreement with respect thereto, with respect to any Tax year.  The Company is not required to include in income any adjustment pursuant to Section 481(a) of the Code by reason of any change in accounting method, pursuant to Section 482 of the Code by reason of any adjustment to pricing among related parties, or pursuant to any similar provisions of applicable state, local, or foreign Law by reason of changes in accounting method or adjustments to pricing among related parties; nor has any Governmental Entity proposed any such change of accounting method or adjustment to related-party pricing.  The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) as a result of any: (i) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Law) executed on or prior to the Closing Date; (ii) intercompany transaction or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or foreign Law); (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date.  No indebtedness of the Company constitutes “corporate acquisition indebtedness” within the meaning of Section 279(b) of the Code (ignoring for this purpose Section 279(b)(4) of the Code).  The Company has not distributed stock of another person or entity, or has had its stock distributed by another person or entity, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.

(k)      The Company does not own, directly or indirectly, any interests in an entity that has been or would be treated as a “passive foreign investment company” within the meaning of Section 1297 of the Code or as a “controlled foreign corporation” within the meaning of Section 957 of the Code.  The Company has not filed a consent under Section 341(f) of the Code (as in effect prior to Public Law 108-27) concerning collapsible corporations, and Section 341(f)(2) of the Code (as in effect prior to Public Law 108-27) does not apply to any assets of the Company.  No power of attorney with respect to the Company with respect to any matter relating to Taxes is currently in effect.  Except as set forth in Section 2.10(k) of the Disclosure Schedule, no election under Section 108, 441 or 1017 of the Code has been made by or with respect to the Company.

(l)       The Company is in full compliance with all terms and conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or order of a Governmental Entity, and the consummation of the transactions contemplated by this Agreement will not have any adverse effect on the continued validity and effectiveness of any such Tax exemption, Tax holiday or other Tax reduction agreement or order.  The Company has no cash or other assets that has been or may be delivered to a Governmental Entity (or public official thereof) pursuant to any applicable abandoned property, escheat or similar Law.

(m)     Since at least January 1, 2005, the Company has not taken any deduction or received any Tax benefit arising with respect to any “reportable transaction” as defined in Section 6707A(c) of the Code (or any corresponding provision of state, local or foreign Tax Law).  Each position on any federal or state income Tax Return that relates to the Company and

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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that could give rise to a substantial understatement penalty under Section 6662 of the Code has been adequately disclosed on such Tax Return.

(n)      For purposes of this Section 2.10, any reference to the Company shall be deemed to include the Company and any entity that merged or was liquidated into the Company.

2.11         Restrictions on Business Activities.  There is no agreement (non-competition or otherwise), commitment, judgment, injunction, order or decree to which the Company is a party or that is otherwise binding upon the Company that has or may reasonably be expected to have the effect of prohibiting or impairing any present business practice of the Company, any acquisition of property (tangible or intangible) by the Company, the conduct of business by the Company, or otherwise limiting the freedom of the Company to engage in any line of business or to compete with any person, except for license agreements entered into by the Company in the Ordinary Course of Business that limit the Company’s use of licensed technology to a defined field of use. Without limiting the generality of the foregoing, and except for such license agreements, the Company has not entered into any agreement under which the Company is restricted from selling, licensing or otherwise distributing any of its technology or products or from providing services to customers or potential customers in any geographic area, during any period of time or in any segment of the market.

2.12         Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment.

(a)      The Company does not own any real property, nor has the Company ever owned any real property.  Section 2.12(a) of the Disclosure Schedule sets forth a list of all real property currently leased by the Company or otherwise used or occupied by the Company for the operation of the Company’s businesses (the “Leased Real Property”), together with the name of the lessor, the date of the lease and each amendment thereto and, with respect to any current lease, the aggregate annual rental payable under any such lease. All such current leases are in full force and effect, are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing default or event of default (or event which with notice or lapse of time, or both, would constitute a default) by the Company or, to the Knowledge of Caliper, by any other party thereto.

(b)      Caliper has delivered to Taconic true, correct and complete copies of all leases, lease guaranties, subleases, agreements for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property, including all amendments, terminations and modifications thereof (the “Lease Agreements”); and there are no other Lease Agreements affecting the Leased Real Property or to which the Company is bound.  The Company has not received any notice of a default, alleged failure to perform, or any offset or counterclaim with respect to any such Lease Agreement, which has not been fully remedied and withdrawn.  The consummation of the transactions contemplated by this Agreement will not affect the enforceability against any person of any such Lease Agreement or the rights of the Company to the continued use and possession of the Leased Real Property for the conduct of business as presently conducted.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(c)      The Leased Real Property and any improvements thereon (i) are in good operating condition and repair, (ii) to the Knowledge of the Caliper, are free from structural, physical and mechanical defects, (iii) are maintained in a manner consistent with standards generally followed with respect to similar properties, and (iv) to the Knowledge of Caliper, are structurally sufficient and otherwise suitable for the conduct of the business of the Company as presently conducted.

(d)      The Company has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of its tangible properties and assets, real, personal and mixed, used or held for use in its business, free and clear of any judgments or Liens, except (i) as reflected in the Current Balance Sheet or the notes thereto, (ii) Liens for Taxes, assessments and similar charges which are not yet due and payable, or non-material items that are being contested in good faith, (iii) Liens securing Indebtedness of the Company and its Affiliates owing to Silicon Valley Bank, which Liens will be released as of the Closing, and (iv) such imperfections of title and encumbrances, if any, that do not materially detract from the value or materially interfere with the present use of the property subject thereto or affected thereby.

(e)      Section 2.12(e) of the Disclosure Schedule lists all items of equipment (the “Equipment”) with a book value in excess of $5,000 and owned or leased by the Company, and such Equipment is (i) adequate for the conduct of the business of the Company as currently conducted, and (ii) in good operating condition, regularly and properly maintained, subject to normal wear and tear.

(f)       The Company has the valid right to use, unrestricted by contract or statute, all customer lists, customer contact information, customer correspondence and customer licensing and purchasing histories relating to the Company’s current and former customers.

(g)      All improvements on the Leased Real Property (i) substantially conform to all applicable Laws, including zoning and building ordinances and health and safety ordinances, and such Leased Real Property is zoned for the various purposes for which the leased Real Property and improvements thereon are presently being used, and (ii) are adequate and sufficient for the operation of the business of the Company as presently conducted.  The Company has not received notice from any Governmental Entity or lessor requiring material work to be done or material improvements to be made upon any of the Leased Real Property and, to the Knowledge of Caliper, no such work or improvements has been or will be requested by any other person.

2.13         Intellectual Property.

(a)      Section 2.13(a) of the Disclosure Schedule sets forth a complete and accurate list of each and every agreement relating to Licensed—In Intellectual Property (excluding software and databases licensed to the Company under standard non-exclusive software licenses granted to end-user customers by third parties in the ordinary course of such third parties’ business) and Licensed-Out Intellectual Property (collectively, “Licensed Company Intellectual Property”), in each case specifying the parties to the agreement.  [***] there are [***] regarding the scope of [***], or with respect to [***].  All agreements relating to the Licensed Company Intellectual Property are in full force and effect and will be in full

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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force and effect immediately after the Closing, and the Company will be entitled to the full benefit thereof.

(b)      Section 2.13(b) of the Disclosure Schedule sets forth the following Owned Company Intellectual Property Right: (i) all registered Trademarks and material unregistered Trademarks; (ii) all Patents and (iii) all registered Copyrights, and all applications for any of the foregoing, in each case listing, as applicable, (A) the name of the applicant/registrant and current owner, (B) the jurisdiction where the application/registration is located and (C) the application or registration number. All of the Owned Company Intellectual Property is valid and subsisting. All logbooks, documents and records supporting the creation and ownership of Intellectual Property have been confidentially retained by the Company.  All necessary documents and certificates in connection with such Owned Company Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United States or elsewhere in the world, as the case may be, for the purposes of perfecting, prosecuting and maintaining such Owned Company Intellectual Property.  There are no actions that must be taken by the Company within 150 days of the date of this Agreement, including the payment of any registration, maintenance or renewal fees or the filing of any responses to Governmental Entity office actions, documents, applications or certificates for the purposes of obtaining, maintaining, perfecting or preserving or renewing any Owned Company Intellectual Property.

(c)      Section 2.13(c) of the Disclosure Schedule contain, respectively, a complete and accurate list of all products and services marketed by the Company in the year preceding the date hereof (the “Company Products and Services”).

(d)      There are no Domain Name registrations owned by the Company.

(e)      In each case in which the Company has acquired ownership of any Trademark, Copyright, or Patent currently included in the Owned Company Intellectual Property from another person (each of which are identified in Section 2.13(b) of the Disclosure Schedule), the Company has obtained a valid and enforceable assignment sufficient to irrevocably transfer all rights in and to all such Intellectual Property to the Company has, in the case of a Patent, Trademark or registered Copyright, recorded or had recorded each such assignment with the U.S. Patent and Trademark Office, the U.S. Copyright Office, or their respective equivalents in the applicable jurisdiction, in each case in accordance with applicable Laws.

(f)       The Company Intellectual Property is sufficient for the conduct of the business of the Company as it is currently conducted, except that Taconic acknowledges that (i) Taconic will need the third party intellectual property specified in Section 2.13(f) of the Disclosure Schedule in order to conduct portions of the light producing transgenic animal or in vivo imaging business (the “Specified Third Party Intellectual Property”) and (ii) the nature of the Company’s business is such that additional license rights to cell lines, reagents or other technologies may be required from time to time in the future, depending on the types of services performed by the Company after the date hereof (it being understood and represented that no such license rights are currently required in the conduct of the business of the Company as presently conducted, except for the Specified Third Party Intellectual Property). The Company Intellectual Property, together with the Intellectual Property to be licensed to the Company by Caliper effective as of the Closing (which licenses to Intellectual Property are described in

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Sections 5.1(c), 5.2(d) and 5.2(e)) constitutes all Intellectual Property and Intellectual Property Rights used by the Company in its business, except for the Specified Third Party Intellectual Property).

(g)      The Company owns all right, title and interest in the Owned Company Intellectual Property, free and clear of all Liens other than encumbrances, restrictions or other obligations expressly set forth in any of the Licensed Company Intellectual Property, except as set forth in Section 2.13(g) of the Disclosure Schedule. All Owned Company Intellectual Property was created solely by either (i) employees of the Company acting within the scope of their employment or (ii) by third parties who have validly and irrevocably assigned all of their rights therein to the Company, and no third party owns or has any rights to any of the Owned Company Intellectual Property. No Company Personnel owns or has a license to any Company Intellectual Property.

(h)      The Company has taken reasonable and appropriate steps to protect and preserve the confidentiality of any trade secrets that comprise any part of the Company Intellectual Property, and, to the Knowledge of Caliper, there have not occurred any unauthorized uses, disclosures or infringements of any such trade secrets by any person. All use and disclosure by the Company of Trade Secrets owned by another person have been pursuant to the terms of a written agreement with such person or was otherwise lawful. Without limiting the foregoing, the Company has a valid confidentiality and assignment agreement, substantially in the Company’s standard form previously delivered to Taconic, in place with each employee and contractor who has ever created Intellectual Property, except for any failure to have such an agreement in place that has not had and would not reasonably be expected to have a Company Material Adverse Effect. To the extent necessary, since January 1, 2001, the Company has enforced such agreements.

(i)       Except as set forth in Section 2.13(i) of the Disclosure Schedule, none of the Company’s Products and Services, nor any other operation of the Company’s business, has infringed upon or otherwise violated, or is infringing upon or otherwise violating, in any respect the Intellectual Property Rights of any third party.  To the Knowledge of Caliper as of the date hereof, no person or any of such person’s products or services or other operation of such person’s business is infringing upon or otherwise violating any Company Intellectual Property.

(j)       There is no suit, claim, action, investigation or proceeding made, conducted or brought by a third party that has been served upon or, to the Knowledge of Caliper, filed or threatened with respect to, and the Company has not been notified in writing of, any alleged infringement or other violation by the Company or any of the Company’s Products and Services or other operation of the Company’s business of the Intellectual Property Rights of such third party, except as set forth in Section 2.13(j) of the Disclosure Schedule.  To the Knowledge of Caliper, there is no pending or threatened claim challenging the validity or enforceability of, or contesting the Company’s rights with respect to, any of the Company Intellectual Property.  The Company has not received any opinion of counsel regarding (i) any potential allegation of infringement, (ii) the application of any Patent to the Company Products and Services, or (iii) the operation of the Company’s business. The Company is not subject to any order of any Governmental Entity that restricts or impairs the use, transfer or licensing of any Company Intellectual Property.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(k)      The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including the Transaction) will not result in (i) the Company granting to any third party or to a Caliper Company any rights or licenses to any Intellectual Property or Intellectual Property Rights, (ii) any right of termination or cancellation under any Licensed Company Intellectual Property, (iii) the imposition of any Lien on any Owned Company Intellectual Property, or (iv) after the Transaction, Taconic, the Company or any of Taconic’s other Subsidiaries being required, under the terms of any agreement to which the Company is a party, to grant any third party or a Caliper Company any rights or licenses to any of Taconic’s or any of its Subsidiaries’ Intellectual Property or Intellectual Property Rights or to pay any royalties or other amounts in excess of those that would have, in any event, been payable by the Company had the transactions contemplated by this Agreement not occurred. Section 2.13(k) of the Disclosure Schedule contains a complete and accurate list as of the date hereof of all “open source” software that is used by the Company in connection with the Company’s business or incorporated in or used in connection with any of the Company’s Products and Services. To the Knowledge of Caliper, the Company has not violated any license related to any open source software used by the Company.

(l)       None of the proprietary or confidential information related to Company Products and Services or trade secrets included within Company Intellectual Property have been published or disclosed by the Company, except to its employees or advisers or pursuant to non-disclosure agreements, or, to the Knowledge of Caliper, by any other person except as authorized by the Company under a non-disclosure agreement enforceable by the Company.

(m)     The Company’s collection and dissemination of personal customer information in connection with their business has been conducted in material compliance with applicable privacy policies published or otherwise adopted by the Company and any applicable Law.

(n)      To the Knowledge of Caliper, no government funding, facilities of a university, college, other educational institution or research center or funding from third parties was used in the development of any Owned Company Intellectual Property.  To the Knowledge of Caliper, no Company Personnel who was involved in, or who contributed to, the creation or development of any such Owned Company Intellectual Property, has performed services for the government, university, college, or other educational institution or research center during a period of time during which such Company Personnel was also performing services for the Company.

(o)      If the Company has exported the Company Products and Services, or any technical information or other technology within its control, it has done so in material compliance with the requirements of U.S. export Laws, as promulgated and enforced by the Bureau of Export Administration.

2.14         Sufficiency of Assets.  Except as set forth in Section 2.14 of the Disclosure Schedule, the assets currently owned by the Company, or which the Company otherwise has the right to use without requirement of payment to any Caliper Company or any third party, are sufficient for the conduct of the Company’s business as presently conducted, except that Taconic acknowledges that (i) Taconic will need the Specified Third Party Intellectual Property and (ii) the nature of the Company’s business is such that additional license rights to cell lines, reagents

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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or other technologies may be required from to time in the future, depending on the types of services performed by the Company after the date hereof (it being understood and represented that no such license rights are currently required by Caliper or the Company except for the Specified Third Party Intellectual Property).  Such assets constitute all assets used by the Company in its business, except for the Specified Third Party Intellectual Property.

2.15         Contracts.  Except as set forth in Section 2.15 of the Disclosure Schedule, as of the date hereof, the Company is not a party to, or is not bound by:

(a)      any employment or consulting Contract with an employee or individual consultant or salesperson, or consulting or sales Contract with a firm or other organization to provide services to the Company;

(b)      any agreement or plan, including any stock option plan, stock appreciation rights plan, phantom stock plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

(c)      any fidelity or surety bond or completion bond;

(d)      any lease of personal property having a value in excess of $10,000 individually or $25,000 in the aggregate;

(e)      any Contract relating to capital expenditures and involving future payments in excess of $25,000 individually or $50,000 in the aggregate;

(f)       any Contract relating to the disposition or acquisition of assets or any interest in any business enterprise outside the Company’s Ordinary Course of Business;

(g)      any mortgage, indenture, guarantee, loan or credit agreement, security agreement or other agreement or instrument relating to the borrowing of money or extension of credit;

(h)      any purchase order or Contract for the purchase of materials involving in excess of $10,000 individually or $25,000 in the aggregate;

(i)       any dealer, distribution, joint marketing or development Contract;

(j)       any sales representative, original equipment manufacturer, value added, remarketer, reseller, or independent software vendor, or other Contract for use or distribution of the Company’s products, technology or services; or

(k)      any other Contract that involves (i) annually $10,000 individually or $25,000 in the aggregate or more and is not cancelable without penalty within thirty (30) days, (ii) minimum purchase commitments by the Company, (iii) ongoing service or support obligations in excess of $10,000 individually or $25,000 in the aggregate that are not cancelable without penalty or refund within thirty (30) days, or (iv) the development or delivery of any customer-specified product enhancements or upgrades.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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The Company does not have any cash or other obligations to any person under or with respect to a Contract in connection with returns, rebates, co-marketing arrangements, service level agreements, most-favored nations undertakings, price protection mechanisms, or warranties.

2.16         No Defaults.  The Company is in material compliance with and has not materially breached, violated or defaulted under, or received notice that it has materially breached, violated or defaulted under, any of the terms or conditions of any Contract required to be disclosed under Sections 2.13 or 2.15 hereof, nor is the Company aware of any event that would constitute such a breach, violation or default with the lapse of time, giving of notice or both.  Each Contract required to be disclosed under Sections 2.13 or 2.15 hereof is in full force and effect, and the Company is not in material default thereunder, nor to the Knowledge of Caliper is any other party to any such Contract in material default thereunder.  The consummation of the transactions contemplated by this Agreement will neither violate nor result in the breach, modification, cancellation, termination or suspension (with the lapse of time, giving of notice or both) of any Contract required to be disclosed under Sections 2.13 or 2.15 hereof.  Except as set forth in Section 2.16 of the Disclosure Schedule, the transfer, assignment and delegation of all rights and obligations under the Contracts required to be disclosed under Sections 2.13 or 2.15 hereof in connection with the consummation of the transactions contemplated by this Agreement will not require the consent of any party to such Contracts.  Following the Closing Date, the Company will be permitted to exercise all of the Company’s rights under the Contracts required to be disclosed under Sections 2.13 or 2.15 hereof to the same extent the Company would have been able to had the transactions contemplated by this Agreement not occurred and without being required to pay any additional amounts or consideration other than fees, royalties or payments which the Company would otherwise be required to pay had such transactions contemplated hereby not occurred.

2.17         Interested Person Transactions.

(a)      Except for intercompany transactions and services among the Caliper Companies in the Ordinary Course of Business as described in Section 2.17 of the Disclosure Schedule (the “Intercompany Transactions”), none of Caliper Companies and none of the officers and directors of any of the Caliper Companies, nor any ancestor, sibling, descendant or spouse of any of such persons, or any trust, partnership, corporation or other entity in which any of such persons has or has had an interest, (an “Interested Person”), has or has had, directly or indirectly, (i) an economic interest in any entity which furnished or sold, or furnishes or sells, services, products or technology that the Company furnishes or sells, or proposes to furnish or sell, or (ii) any economic interest in any entity that purchases from or sells or furnishes to the Company, any services, products or technology, or (iii) a beneficial interest in any Contract to which the Company is a party, except in the case of clause (iii) in any such person’s capacity as an officer, director or stockholder of the Company; provided, however, that ownership of no more than five percent (5%) of the outstanding voting stock of a private corporation, or one percent (1%) of the outstanding voting stock of a publicly traded corporation, shall not be deemed to be an “interest in any entity” for purposes of this Section 2.17.

(b)      Except for the Intercompany Transactions, all transactions pursuant to which a Caliper Company or any of its respective officers or directors or any Interested Person has purchased any services, products or technology from, or sold or furnished any services,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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products or technology to, the Company have been on an arms’ length basis on terms no less favorable to the Company than would be available from an unaffiliated party.

2.18         Governmental Authorization.  Each consent, license, permit, grant or other authorization from any Governmental Entity that is material for the operation of the Company’s business as currently conducted has been issued or granted to the Company and is in full force and effect and is not affected by the transactions contemplated hereby.

2.19         Litigation.  There is no action, suit, claim or proceeding of any nature pending or, to the Knowledge of Caliper, threatened against the Company, any of its properties (tangible or intangible) or any of its officers or directors in their respective capacities as such.  There is no investigation, inquiry or other proceeding pending or, to the Knowledge of Caliper, threatened against the Company, any of its properties (tangible or intangible) or any of its officers or directors in their respective capacities as such by or before any Governmental Entity.  No Governmental Entity has provided the Company with written notice challenging or questioning the legal right of the Company to conduct its operations as conducted at that time or as presently conducted.

2.20         Accounts Receivable.

(a)      Caliper has delivered to Taconic a list of all accounts receivable of the Company as of the Current Balance Sheet Date, together with the respective range of days elapsed since each invoice.

(b)      All of the Company’s accounts receivable are bona fide, arose in the ordinary course of business and are carried at values determined in accordance with GAAP, consistently applied, less any reserves for doubtful accounts set forth on the Current Balance Sheet and are collectible in full, net of related reserves. As of the Closing, no person will have any Lien on any of the Company’s accounts receivable.  No request or agreement for deduction or discount has been made with respect to any of the Company’s accounts receivable.

2.21         Minute Books.  The minutes of the proceedings of meetings and written actions of the Board of Directors of the Company since the Acquisition Date provided to Taconic are the only such minutes of the Company as of the date of this Agreement and contain accurate summaries of all meetings and actions by written consent of the Board of Directors (or committees thereof) of the Company since the Acquisition Date.

2.22         Environmental Matters.  Without limiting the generality of any other representations and warranties contained in this Article 2:

(a)      Environmental Compliance.  The Company is currently in material compliance with and has for the five (5) years prior to the date hereof complied in all material respects with, and has not received any written or oral notice or other communication asserting or alleging a violation of, Environmental Laws or Environmental Orders. Neither the Company nor any of its predecessors has generated, transported, stored, used, managed, manufactured, sold, reclaimed, recycled or disposed of any Hazardous Materials, or any product containing a Hazardous Material, except in material compliance with Environmental Laws.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(b)      Environmental Liabilities and Costs.

(i)None of the Company or the Company’s real properties, assets, equipment or facilities is subject to any existing, pending or, to the Knowledge of Caliper, threatened, and none of the Company nor any of its predecessors has caused or taken any action that could result in, Liability under or relating to Environmental Laws or Environmental Orders (including without limitation Liabilities arising out of the manufacture, processing, distribution, use or sale of any Company Products and Services).

(ii)Without limiting the generality of the foregoing:

(A)          None of the Company’s or any of its predecessors’ current or past operations, and none of the currently or formerly owned real properties, assets, equipment or facilities of the Company or any of its predecessors, is related to or subject to any investigation or evaluation by any Governmental Entity, as to whether any Remedial Action is needed to respond to a Release or threatened Release of any Hazardous Materials.

(B)           Caliper has no Knowledge of any fact or circumstance that could (i) involve the Company in any litigation or impose upon the Company any Liability under or relating to Environmental Laws or Environmental Orders (including without limitation Liabilities arising out of the manufacture, processing, distribution, use or sale of any Company Products and Services), or (ii) prevent or interfere with compliance by the Company with Environmental Laws in the future.

(C)           The Company has filed all notices required under any Environmental Law indicating a past or present use, management, handling, transport, recycling, reclamation, treatment, generation, storage or Release of Hazardous Materials.

(D)          To Caliper’s Knowledge, there is not now, and there was not previously, at, on, in or under any of the real properties, assets, equipment or facilities currently owned, leased, operated or otherwise used by the Company: (i) any treatment, recycling, reclamation, storage or disposal of any Hazardous Materials, (ii) any underground or above ground storage tank, surface impoundment, lagoon or other containment facility (past or present) for the temporary or permanent storage, treatment or disposal of Hazardous Materials (iii) any landfill or solid waste disposal area, (iv) any asbestos-containing material except in compliance with Environmental Law, (v) any polychlorinated

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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biphenyls, or (vi) any Release of Hazardous Materials which has not been fully remediated in accordance with Environmental Law.

(E)           To Caliper’s Knowledge, in relation to real properties, assets, equipment or facilities previously but no longer owned, leased, operated or otherwise used by the Company or any of its predecessors, there was not during or prior to the time of such ownership, lease, operation or use, at, on, in or under any such real properties, assets, equipment or facilities: (i) any treatment, recycling, reclamation, storage or disposal of any Hazardous Materials, (ii) any underground or above ground storage tank, surface impoundment, lagoon or other containment facility (past or present) for the temporary or permanent storage, treatment or disposal of Hazardous Materials (iii) any landfill or solid waste disposal area, (iv) any asbestos-containing material except in compliance with Environmental Law, (v) any polychlorinated biphenyls, or (vi) any Release of Hazardous Materials which has not been fully remediated in accordance with Environmental Law.

(F)           With the exception of validly issued Environmental Permits and obligations assumed in the Company’s Ordinary Course of Business, the Company is not subject to any Environmental Order from, or contractual or other obligation with, any Governmental Entity or other person in respect of which the Company is required to incur any Loss under or relating to Environmental Laws or Environmental Orders, and neither the Company nor any of its predecessors has entered into any contractual or other obligation with any Governmental Entity or other person pursuant to which the Company or any of its predecessors has assumed responsibility for, either directly or indirectly, the remediation of any condition arising from or relating to the Release or threatened Release of Hazardous Materials.

(G)           None of the real properties, assets, equipment or facilities currently occupied by the Company, and to Caliper’s Knowledge, no real properties, assets, equipment or facilities previously owned or leased by the Company or any of its predecessors are, and the Company and its predecessors have not transported or arranged for transportation (directly or indirectly) of any Hazardous Materials to any location that, is listed or proposed for listing under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601, et seq., or on any similar state list, or the subject of federal, state or local enforcement actions or investigations or Remedial Action.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(H)          To Caliper’s Knowledge, no action or failure to act by the Company or any of its predecessors has occurred, and no event has occurred with respect to the Company or any of its predecessors or their operations that has resulted in exposure of the Company’s or any of its predecessors’ employees or any third parties to any amount of any Hazardous Material that may now or in the future constitute a threat to human health or the environment or subject the Company to Liability.

(c)   Environmental Permits.

(i)The Company currently holds, and has for the five (5) years prior to the date hereof held, all Environmental Permits that are material for the conduct of its activities and businesses (including, for the avoidance of doubt, those which relate to the generation, transportation, manufacture, disposal of, or sale of any product containing, a Hazardous Material) as such activities and businesses are currently being conducted, were conducted in the past, and are currently contemplated to be conducted.

(ii)The Company is currently in compliance in all material respects with and has for the five (5) years prior to the date hereof complied in all material respects with, and has not received any written or oral notice or other communication asserting or alleging a violation with respect to, all Environmental Permits, and there are no facts or circumstances reasonably likely to result in the revocation, suspension or revision of any Environmental Permits.

(iii)There are no Environmental Permits that are required to be transferred or reissued, or that are otherwise prohibited from being transferred or reissued, as a result of the transactions contemplated by this Agreement.

(d)   Reports and Records.

(i)Caliper has disclosed and delivered to Taconic all material information, including without limitation all studies, analyses, audits, assessments, reports, data and test results, in its possession, custody or control relating to (i) the environmental conditions of the Company at, on, in, under or about the real properties, assets, equipment or facilities currently owned, leased, occupied, operated, controlled, or used by the Company or any of its predecessors, and (ii) Hazardous Materials used, managed, handled, transported, treated, generated, stored or Released by the Company or any of its predecessors at any time in connection with the business of the Company or any of the real properties, assets,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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equipment or facilities currently or formerly owned, leased, occupied, operated, controlled, or used by the Company or any of its predecessors.

(ii)Except as set forth in Section 2.22(d) of the Disclosure Schedule, there are no Environmental Laws or Environmental Orders applicable to the Company or to the real properties, assets, equipment or facilities or businesses of the Company that would require the Company, Taconic or any other person to provide notice to, to take actions to satisfy, or to obtain the approval of, any Governmental Entity as a condition to the consummation of the transactions contemplated by this Agreement.  The Company has complied in all material respects with all disclosure obligations imposed by Environmental Laws with respect to the transactions contemplated by this Agreement.

2.23         Fees and Expenses.  The Company has not incurred, nor will the Company incur, directly or indirectly, any Liability for investment banking fees or for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

2.24         Employee Benefit Plans and Compensation.

(a)   Section 2.24(a)(i) of the Disclosure Schedule contains an accurate and complete list of each Company Employee Plan, of the Company (or of Caliper if and to the extent it covers any Company Personnel) , and each agreement or employment arrangement that relates to the employment of any employee of the Company who is not at-will employee (an “Employee Agreement”).  Since January 1, 2009, neither the Company nor any of its ERISA Affiliates has made any plan or commitment to establish, adopt or enter into any new Company Employee Plan or Employee Agreement or to modify any Company Employee Plan or Employee Agreement, except (i) to the extent required by Law and (ii) in connection with renewal of Company Employee Plans for 2010 in Caliper’s Ordinary Course of Business.  Section 2.24(a)(ii) of the Disclosure Schedule sets forth a table listing the name and salary of each employee and/or consultant of the Company.

(b)   Documents. Caliper has delivered to Taconic, or will make available immediately upon request, (i) correct and complete copies of all documents embodying each Company Employee Plan and each Employee Agreement, including all amendments, summary plan descriptions, and trust documents, (ii) the three (3) most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA for any Company Employee Plan, (iii) if any Company Employee Plan is funded, the most recent annual and periodic accounting of such Company Employee Plan’s assets, (iv) all material written agreements and contracts relating to each Company Employee Plan, including administrative service agreements and group insurance contracts, (v) all material communications relating to any established or proposed Company Employee Plan that relates to any material amendments, terminations, increases or decreases in benefits, acceleration of payments or vesting schedules or other events that would result in any Liability to the Company

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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or ERISA Affiliates, (vi) all material correspondence to or from any Governmental Entity relating to any Company Employee Plan, (vii) all policies pertaining to fiduciary liability insurance covering the fiduciaries for each Company Employee Plan, (viii) discrimination test results for each Company Employee Plan for the three (3) most recent plan years, (ix) the most recent IRS determination letter issued with respect to each Company Employee Plan, and (x) visa and work permit information with respect to current Company Personnel. There is no Company Employee Plan that is maintained in any non-U.S. jurisdiction.

(c)   Employee Plan Compliance. Each Company Employee Plan has been established and maintained in accordance with its terms and in substantial compliance with all applicable Laws.  The Company and each of its ERISA Affiliates has performed all material obligations required to be performed by them under each Company Employee Plan.  Each Company Employee Plan intended to be qualified under Section 401(a) of the Code has timely obtained a favorable determination letter from the IRS (or is entitled to rely on an opinion letter issued by the Internal Revenue Service to the prototype sponsor of the Plan), and nothing has occurred since the date of that determination letter that could reasonably be expected to cause any such Company Employee Plan to fail to qualify under Section 401(a) of the Code.  No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA or Section 4975 of the Code, has occurred with respect to any Company Employee Plan.  There are no material actions, suits or claims pending or, to the Knowledge of Caliper, threatened or reasonably anticipated (other than routine claims for benefits) against any Company Employee Plan or against the assets of any Company Employee Plan.  Each Company Employee Plan can be amended, terminated or otherwise discontinued in accordance with its terms, without Liability to Taconic, the Company or any ERISA Affiliate (other than ordinary administration expenses).  There are no audits, inquiries or proceedings pending or to the Knowledge of Caliper or any of its Subsidiaries or ERISA Affiliates, threatened by the IRS, U.S. Department of Labor or any other Governmental Entity with respect to any Company Employee Plan.  The Company and its ERISA Affiliates are not subject to any penalty or tax with respect to any Company Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code, nor is any employee or former employee of the Company subject to tax under Section 409A of the Code.  The Company and each of its ERISA Affiliates has timely made all contributions and other payments required by and due under the terms of each Company Employee Plan.

(d)   No Pension Plans or Welfare Plans. The Company and its ERISA Affiliates have not ever maintained, established, sponsored, participated in, or contributed to, any (i) employee benefit plan subject to Section 412 of the Code or Title IV of ERISA, (ii) “multiemployer plan” within the meaning of Section (3)(37) of ERISA, (iii) “multiple employer plan” for purposes of ERISA, or (iv) “funded welfare plan” within the meaning of Section 419 of the Code.  No Company Employee Plan provides health or disability benefits that are not fully insured through an insurance contract, except as set forth in Section 2.24(d) of the Disclosure Schedule.

(e)   No Post-Employment Obligations. No Company Employee Plan provides, or reflects or represents any Liability to provide, post-termination or retiree life insurance, health or other retiree employee welfare benefits to any person for any reason, except as may be

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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required by COBRA or other applicable statute, and neither the Company nor any of its ERISA Affiliates has ever represented, promised or contracted (whether in oral or written form) to any Company Personnel (either individually or to Company Personnel as a group) or any other person that such Company Personnel or other person would be provided with post-termination or retiree life insurance, health or other employee welfare benefit, except to the extent required by statute.

(f)    COBRA; FMLA; HIPAA. The Company and each of its ERISA Affiliates has, prior to the date hereof, substantially complied with the health care continuation requirements of COBRA, Family Medical Leave Act of 1993, HIPAA, the Women’s Health and Cancer Rights Act of 1998, the Newborns’ and Mothers’ Health Protection Act of 1996 and any similar provisions of state or foreign Law applicable to Company Personnel.  Neither the Company nor any of its ERISA Affiliates has any material unsatisfied obligations to any Company Personnel or qualified beneficiaries pursuant to COBRA, HIPAA or any state or foreign Law governing health care coverage or extension.

(g)   Effect of Transaction. Except as set forth in Section 2.24(g) of the Disclosure Schedule, the execution of this Agreement and the consummation of the transactions contemplated hereby will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Company Employee Plan, Employee Agreement, trust or loan that will or may result in (i) any payment (whether of severance pay or otherwise), acceleration, forgiveness of Indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits, (ii) the payment of any amount that may be deemed a “parachute payment” under Section 280G of the Code with respect to any Company Personnel (a “Section 280G Payment”) or (iii) a tax under Section 409A of the Code with respect to any Company Personnel.  There is no contract, agreement, plan or arrangement to which the Company or any of its ERISA Affiliates is a party or by which any of them is bound to compensate any Company Personnel for excise taxes paid pursuant to Section 4999 of the Code.

(h)   Employment Matters. The Company and each of its ERISA Affiliates: (i) has complied in all material respects with all applicable foreign, federal, state and local Laws, collective agreements, works agreements, rules and practices respecting employment, employment practices, terms and conditions of employment and wages and hours including, without limitation, orders and awards relevant to terms and conditions of service, health and safety, labor leasing, use of fixed-term contracts, supply of temporary staff, social security filings and payments, secondment and expiration rules, applicable requirements in respect of staff representation and paid vacations, in each case, with respect to Company Personnel, (ii)   is not liable for any arrears of wages, taxes or penalties for failure to comply with any of the foregoing, and (iii) is not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity, with respect to unemployment compensation benefits, social security or other benefits or obligations for Company Personnel (other than routine payments to be made in the normal course of business and consistent with past practice), except for any such Liability that would not, individually or in the aggregate, be material to the Company.  Except as set forth in Section 2.24(h) of the Disclosure Schedule, there are no pending or, to the Knowledge of Caliper, threatened or reasonably anticipated

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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claims or actions against the Company or any of its ERISA Affiliates under any worker’s compensation policy or long-term disability policy.  Neither the Company nor any of its ERISA Affiliates has or reasonably anticipates any direct or indirect material Liability of the Company with respect to any misclassification of any person as an independent contractor rather than as an employee, or with respect to any employee leased from another employer.

(i)    Labor. No work stoppage or labor strike against the Company is pending or, to the Knowledge of Caliper, threatened or reasonably anticipated.  Caliper does not know of any activities or proceedings of any labor union to organize any Company Personnel.  There are no actions, suits, claims, labor disputes or grievances pending or, to the Knowledge of Caliper, threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Company Personnel, including charges of unfair labor practices or discrimination complaints.  The Company has not engaged in any unfair labor practices within the meaning of the National Labor Relations Act or other applicable similar Laws.  The Company presently is not, nor has it been in the past, a party to, or bound by, any collective bargaining agreement or union contract with respect to Company Personnel, and no collective bargaining agreement is being negotiated by the Company.  The Company is not, and has not been, a party to any redundancy agreements (including social plans or job protection plans).  The employment of all Employees is “at will” employment.

(j)    No Interference or Conflict. To the Knowledge of Caliper, no Company Personnel is obligated under any contract or agreement or subject to any judgment, decree or order of any court or administrative agency that would interfere with such person’s efforts to promote the interests of the Company, or that would, in the case of any Employee or officer, interfere with the Company’s businesses as presently conducted, or that would, in the case of any director, interfere in the discharge of such director’s fiduciary duties.  Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s businesses as presently conducted, nor any activity of such Company Personnel in connection with the carrying on of the Company’s businesses as presently conducted, will, to the Knowledge of Caliper, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract or agreement under which any of such Company Personnel is now bound.

(k)   Certain Compensation Arrangements. Except as set forth in Section 2.24(k) of the Disclosure Schedule, (i) there are no variable compensation plans or practices (including bonus plans or practices) with respect to Company Personnel, and (ii) the Company has not made any promises or other undertakings, oral or in writing, to any Company Personnel or any third party with respect to any such variable compensation plans or practices. The Company has paid in full all wages, salary, severance payments, termination payments, bonuses or other compensation payable to any Company Personnel, except to the extent accrued in full on the Current Balance Sheet with respect to current Employees of the Company in compliance with Law.

2.25         Insurance and Bonds.  Section 2.25 of the Disclosure Schedule lists all insurance policies and bonds (whether denominated as bid, litigation, performance, fidelity, AD&D, or otherwise) covering the assets, business, equipment, properties, operations, employees, officers and directors (in their respective capacities as such) of the Company.  Caliper believes that such insurance policies and bonds are upon terms that are reasonable and adequate for and are of the

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

27

type and in amounts customarily carried by persons with businesses, operations, properties and locales similar to those of Company.  There is no claim by the Company pending under any of such policies or bonds.  All potentially insurable claims have been properly tendered to the appropriate insurance carrier in compliance with any applicable insurance policy notice provisions.  All premiums due and payable under all such policies and bonds have been paid, and the Company and its Affiliates are otherwise in material compliance with the terms of such policies and bonds (or other policies and bonds providing substantially similar insurance coverage).  All such insurance policies are valid and binding in accordance with their terms, except to the extent such enforceability may be limited by the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar Law affecting creditors’ rights generally and general principles of equity or public policy (regardless of whether such enforceability is considered in a proceeding in equity or at law), and are in full force and effect.  To the Knowledge of Caliper, there is no threat of termination of, or premium increase with respect to, any of such policies.  The bonds listed in such Schedule 2.25 of the Disclosure Schedule satisfy all material requirements for such bonds set forth in (i) any Law applicable to the Company or its businesses and (ii) any Contract of the Company.

2.26         Compliance with Laws.  The Company has complied in all material respects with, is not in material violation of, and has not received any notices of violation with respect to, foreign, federal, state or local Laws.  Each of the Company Products and Services does and has complied in all material respects with all applicable Laws of each jurisdiction in which such Company Product is or has been sold directly or indirectly by or on behalf of the Company, including, without limitation, such Laws which pertain to: electrical safety; energy consumption of energy using products or components; the presence (or absence) of specified substances in electrical or electronic products, batteries or products generally; registration or notification of chemical substances in products; labeling of product or product packaging as respects product content or as respects health, safety or environmental effects or attributes or as respects required end-of-life handling or disposition of products or product packaging; and coverage under approved scheme for end-of-life collection and return of products or of product packaging.

2.27         Animal Welfare.  The Company is in material compliance with and has not materially violated the terms and provisions of applicable Laws relating to animal care, control and testing, including, but not limited to, animal cruelty laws and the Guide for the Care and Use of Laboratory Animals of the U.S. Public Health Service, and all regulations promulgated under any of the foregoing.  The Company has not been the subject of any investigation relating to its compliance with or  violation of any of the foregoing laws or regulations.

2.28         Council on Accreditation of the Association for Assessment and Accreditation of Laboratory Animal Care Certification.  Except as set forth Schedule 2.28 of the Disclosure Schedule, the Company has been granted full accreditation by all applicable Federal, state and local accreditation bodies, and the Company has not been the subject of any inspection, investigation or decision affecting its accreditation status within the last two (2) years.

2.29         Foreign Corrupt Practices Act.  The Company (including any of its officers or directors) has not taken or failed to take any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder.  Neither the Company nor, to the Knowledge of Caliper, any third party acting on behalf of the

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Company, has offered, paid, promised to pay, or authorized, or will offer, pay, promise to pay, or authorize, directly or indirectly, the giving of money or anything of value to any Official, or to any other person while knowing or being aware of a high probability that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any Official, for the purpose of: (i) influencing any act or decision of such Official in his, her or its official capacity, including a decision to fail to perform his, her or its official duties or functions or (ii) inducing such Official to use his, her or its influence with any Governmental Entity to affect or influence any act or decision of such Governmental Entity, or to obtain an improper advantage in order to assist the Company or any third party in obtaining or retaining business for or with, or directing business to, the Company.  For purposes of this Agreement, an “Official” shall include any appointed or elected official, any government employee, any political party, party official, or candidate for political office, or any officer, director or employee of any Governmental Entity.

2.30         Health Profiles.  Caliper has provided to Taconic a complete set of all current and historical data related to the health of the animals that have been sold by the Company or are currently in the Company’s facilities and a complete set of all historical data related to any and all tests performed or authorized by the Company to detect disease-causing organisms at the Company’s facilities (together, the “Health Data”).  No event or circumstance has occurred since the date of Taconic’s inspection of the Company’s facilities and evaluation of the Company’s Health Data that materially affects such Health Data, would cause the health standard for animals sold commercially to deviate from the “Taconic Restricted Flora” standard or would cause an organism to be detected by the International Health Monitoring System test specified by Taconic, namely the IHMS-52 test.  Restricted Flora excluded organisms that are accepted as being present in the Company’s mice include Staphyloccus aureus, Klebsiella oxytoca and Pneumocystis carinii.

2.31         Warranties.  The Company has provided to Taconic a true and correct copy of all warranties given by the Company with respect to the Products and Services.  There are no pending warranty claims against the Company that are material in amount or out of the Ordinary Course of Business.

2.32         Complete Copies of Materials.  Caliper has delivered or made available to Taconic true and complete copies of each document that has been requested in writing by Taconic or its counsel or advisors (unless inapplicable) or that is referenced in the Disclosure Schedule or any schedule to this Agreement.

2.33         Insider Loans.  There are no outstanding loans of any money from the Company to any of the Company Personnel or to another Caliper Company, and none of such persons is indebted to the Company for any amount.

2.34         Suppliers and Customers.  No licensor, vendor, supplier, licensee or customer of the Company within the last year has cancelled or otherwise modified in any material adverse respect its relationship with the Company, and no such Person has communicated (orally or in writing) to the officers, directors or other senior managers of the Company any intention to terminate or materially amend its Contract with the Company, and (ii) to the Knowledge of Caliper, the consummation of the transactions contemplated hereby will not adversely affect any of such relationships.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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2.35         Privacy.  Caliper has delivered to Taconic correct and complete copies of all written policies maintained by the Company since the Acquisition Date with respect to privacy and personal data protection relating to its respective employees, customers, suppliers, service providers or any other third parties from or about whom the Company has obtained personal data (“Company Privacy Policies”).  The Company has complied in all material respects with, is not in material violation of, and has not received any notices of violation with respect to, any applicable Laws, contracts, Company Privacy Policies or any other commitments, obligations or representations, concerning privacy and personal data protection relating to their employees, customers, suppliers, service providers or any other third parties from or about whom the Company has obtained personal data (“Company Privacy Obligations”).  The Company has full right and authority to transfer to Taconic all personal data in the possession of the Company.  The consummation of the transactions contemplated by this Agreement will not violate any Company Privacy Obligation, nor require the Company to provide any notice to, or seek any consent from, any employee, customer, supplier, service provider or other third party under any Company Privacy Policy.  To the Knowledge of Caliper, no Company Privacy Obligations will impose any restrictions upon Taconic’s ability to use, possess, disclose or transfer such personal data in the manner the Company has used, possessed, disclosed or transferred such or similar personal data prior to the Closing.  The Company does not have any notice of any claims or alleged claims that the Company has violated Company Privacy Obligations and no governmental agency is investigating to determine whether the Company has violated any Company Privacy Obligations.  The consummation of the transactions contemplated by this Agreement will not violate any Company Privacy Obligation, nor require the Company to provide any notice to, or seek any consent from, any employee, customer, supplier, service provider or other third party under any Company Privacy Policy.

2.36         Compliance with the Immigration Reform and Control Act.  The Company is in material compliance with and have not violated in any material respect the terms and provisions of applicable Laws relating to immigration, including the Immigration Reform and Control Act of 1986, and all related regulations promulgated thereunder (collectively, the “Immigration Laws”).  Except as set forth as in Section 2.36 of the Disclosure Schedule, the Company has not been the subject of any inspection or investigation relating to its compliance with or violation of the Immigration Laws.  With respect to any employee of the Company for whom compliance with the Immigration Laws is required, the Company will deliver to Taconic, promptly after the date of this Agreement upon written request copies of such employee’s Form I-9 (Employment Eligibility Verification Form) and copies of all other records, documents or other papers which are retained with the Form I-9 by the Company pursuant to the Immigration Laws.

2.37         Data Room.  The Company has made available to Taconic in the online data room established with BroadOak Partners, LLC for “Project Swiss” in connection with the Transaction (the “Data Room”) copies of all documents disclosed in connection with the Transactions, and such copies are true and complete copies of the respective documents.  Without limiting or expanding the foregoing, “true and complete copies of the respective documents” includes all written and oral communications or other acts that modify or supplement the obligations set forth in the documents contained in the Data Room. Caliper has delivered to Taconic an electronic copy of the Data Room, which Caliper represents and warrants was not changed in the 48 hours prior to the execution of this Agreement.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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2.38         Representations Complete.  None of the representations or warranties made by Caliper or the Company (as modified by the Disclosure Schedule) in this Agreement, and none of the statements made in any exhibit, schedule or certificate furnished by the Company or anyone acting on behalf thereof pursuant to this Agreement contains, or will contain at the date hereof, any untrue statement of a material fact, or omits or will omit at the date hereof to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF TACONIC

As of the date hereof Taconic hereby represents and warrants to Caliper:

3.1           Organization and Standing.

(a)           Taconic is a corporation duly organized, validly existing and in good standing under the laws of the State of New York.  Taconic has the corporate power to own its properties and to carry on its business as currently being conducted.

(b)           Taconic has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Taconic, and no further action is required on the part of Taconic to authorize this Agreement and the transactions contemplated hereby.  This Agreement has been duly executed and delivered by Taconic and constitutes the valid and binding obligations of Taconic, enforceable against Taconic in accordance with its terms, except as such enforceability may be subject to the Laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of Law governing specific performance, injunctive relief or other equitable remedies.

(c)           The Board of Directors of Taconic has duly approved this Agreement and the transactions contemplated by this Agreement.

3.2           No Conflict.  The execution and delivery of this Agreement by Taconic does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a Conflict under (i) any provision of the certificate of incorporation and bylaws of Taconic; (ii) any Contract to which Taconic or any of its Affiliates, or any of their respective properties or assets (whether tangible or intangible) is a party or, as the case may be, subject; or (iii) any Law applicable to Taconic or its properties or assets (whether tangible or intangible), except in each case where such Conflict will not have a Taconic Material Adverse Effect or will not have an affect on the legality, validity or enforceability of this Agreement.

3.3           Consents.  No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Taconic in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby that has not been obtained.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ARTICLE 4

AGREEMENTS

4.1           Confidentiality.

(a)   Each of the parties hereto hereby agrees that this Agreement, the exhibits and schedules hereto, and any information obtained in any due diligence investigation, or pursuant to the negotiation and execution of this Agreement or the effectuation of the transactions contemplated hereby, shall be governed by the terms of the Confidentiality Agreement dated July 22, 2009 (the “Confidential Disclosure Agreement”) between Caliper and Taconic (or representatives on their behalf).  The Confidential Disclosure Agreement shall be deemed to  apply to the Information (as defined in the Confidential Disclosure Agreement) of each of Taconic, Caliper and the Company; that is, Caliper agrees to keep confidential, except as otherwise legally required, all Information of the Company and Taconic (as if it were the Company and Taconic were the disclosing parties and Caliper were the receiving party), and Taconic agrees to keep confidential all Information of Caliper (not including the Company), except as otherwise legally required.  Caliper further agrees that it will furnish to Taconic all financial, technical and operating data and other information relating specifically to the Company or its business not already in Taconic’s possession as Taconic shall request.

(b)   The parties hereto hereby acknowledge that offers of employment made by Taconic to certain Company Personnel pursuant to Section 4.6 shall not violate the terms of the Confidential Disclosure Agreement.

(c)   Notwithstanding the foregoing, Taconic acknowledges that Caliper intends to file a redacted version of this Agreement with the Securities and Exchange Commission pursuant to a confidential treatment request.  Caliper will give Taconic a reasonable opportunity to review and comment on any confidential treatment request proposed to be submitted by Caliper to the Securities and Exchange Commission, and Caliper will incorporate any reasonable requests by Taconic with respect thereto.

4.2           Expenses.  All fees and expenses, including all legal, accounting, investment banking, financial advisory, consulting and all other fees and expenses of third parties (“Third-Party Expenses”), incurred by a party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the transactions contemplated hereby, shall be the obligation of the respective party incurring such fees and expenses; provided, however, that any Third-Party Expenses incurred by the Company are hereby assumed by Caliper and shall be the sole responsibility of Caliper.

4.3           Public Disclosure.  Caliper and Taconic shall each issue a press release with language previously agreed to announcing the transactions contemplated herein.

4.4           Reasonable Best Efforts.  Subject to the terms and conditions provided in this Agreement and to the extent not previously taken, each of the parties hereto shall use commercially reasonable best efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable Laws to

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement.

4.5           Additional Documents and Further Assurances.  Each party hereto, at the request of another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of the Transaction and the transactions contemplated hereby.  In addition, after the Closing, Caliper agrees to furnish or give access to, as appropriate, Taconic such records and information of Caliper and its Subsidiaries that relate to the Company as Taconic shall reasonably request for the purpose of complying with Law or as necessary to administer the business of the Company, including without limitation, human resources, sales and customer relations and the like.

4.6           Employment Arrangements.Each employee of the Company who has executed and delivered prior to the Closing, or who executes and delivers within any deadline following the Closing specified by Taconic, his or her acceptance of either an offer of employment or a notice of continued employment and becomes an employee of Taconic or a Subsidiary of Taconic or who remains an employee of the Company shall be referred to herein as a “Continuing Employee.” Taconic shall make such offers of employment or provide notices of continuing employment to each current employee of the Company, which employees are listed on Section 2.24(a)(ii) of the Disclosure Schedule.  Continuing Employees shall receive credit for their continuing service with the Company in determining the rate at which they accrue service under the Taconic benefit plans in which they participate, except with respect to the Taconic 401(k) & Profit Sharing Plan for which credited service will begin on the Continuing Employee’s hire date as a Taconic employee.  Set forth on Schedule 4.6 of the Disclosure Schedule is a list of accruals made by Caliper with respect to Continuing Employees who are participants in Caliper’s bonus plan; the full dollar amount of such accruals, without regard to vesting or other restrictions, is also included in the calculation of Net Working Capital. Taconic agrees to pay such accrued bonuses to the Continuing Employees prior to March 31, 2010 provided that such employees remain employed by Taconic or one of its Subsidiaries on the payout date and otherwise fulfill the requirements under such plan. Caliper agrees to supply Taconic with any information reasonably requested by Taconic with respect to required compensation and benefit reporting to Governmental Authorities for the period prior to the Closing Date, and both Taconic and Caliper shall provide the other with any information necessary for the parties to comply with this Section 4.6.

4.7           Non-Continuing Employees.  Caliper shall be solely responsible for all employment and benefit obligations, including COBRA notices, for all Company Personnel who are not or do not become Continuing Employees.

4.8           Employment of Continuing Employees.  Notwithstanding anything else herein to the contrary, Caliper  hereby acknowledges and agrees that following Closing, Taconic shall have complete and absolute authority to cause the Company to terminate the employment of any Continuing Employee for any reason.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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4.9           Internet Inquiries.  Caliper shall take all necessary action to ensure that all internet inquiries regarding the Company and/or Company Products and Services are appropriately re-directed as specified by Taconic from time to time.

4.10         Xenogen Trademark.  Subject to Taconic’s continuing rights to use the “Xenogen” trademark as set forth in Section 7.2 of the Imaging Services License Agreement referred to in Section 5.2(e), Caliper hereby agrees that Taconic and its Subsidiaries may, until one hundred eighty (180) days after the Closing, use, without payment or restriction: (i) the “Xenogen” name and related trademarks, except that such use shall be limited to use as part of the trade name, “Xenogen Biosciences” and (ii) all marketing and sales material related to the business of the Company, including all pictures, graphics and other information on Caliper’s website relating solely to the Company Products and Services,, and all derivative works of any of the foregoing.   Promptly following the Closing, Taconic will remove the word, “Xenogen,” from the Company’s corporate name.

4.11         Destruction of Confidential Information.  No later than five (5) Business Days after the Closing, Caliper shall distribute a written notice, in form and substance acceptable to Taconic, to all third parties who received confidential information relating to the Company in connection with discussions about any potential acquisition activity to: (i) promptly return to the Company, or destroy all copies of, written confidential information relating to the Company (including any confidential information stored on a computer, word processor or similar device) furnished to such third parties by Caliper or on behalf of the Company in their possession or custody or in the possession or custody of their respective representatives, officers, directors, and employees; and (ii) confirm in writing (copies of which shall be delivered to Taconic) that all such confidential information has been either returned or destroyed.

4.12         Tax Matters.

(a)           Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration and other such Taxes and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement, including without limitation any applicable New Jersey Controlling Interest Transfer Tax, shall be paid by Caliper.  Caliper shall accurately and timely file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, and if required by applicable Law, Taconic will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.

(b)           Tax Returns.  Except as provided in Section 4.12(a), Caliper shall accurately prepare and timely file (or cause to be so prepared and filed) all Tax Returns and other documentation of or with respect to the Company for Pre-Closing Tax Periods, and Taconic shall accurately prepare and timely file (or cause to be so prepared and filed) all other Tax Returns and other documentation of or with respect to the Company (each such Tax Return that relates to Pre-Closing Taxes, a “Pre-Closing Tax Return”).  All Pre-Closing Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Law.  Upon Caliper’s request, Taconic shall provide each Pre-Closing Tax Return that it prepares to Caliper at least fifteen (15) days prior to filing such Pre-Closing Tax Return for its review and comment.  All Pre-Closing Taxes relating to each Pre-Closing Tax Return (whether or not shown on such Pre-Closing Tax Return) shall be the responsibility of, and a liability, subject to indemnification

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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pursuant to Article 6, of Caliper, except that Taconic shall be responsible for and pay such Taxes to the extent that liability for such Taxes entered into the computation of the Post-Closing Adjustment Payment pursuant to Section 1.6.  Taconic shall be responsible for and pay all Taxes of the Company other than Pre-Closing Taxes, provided, however, (i) that Taconic may apply without reimbursement any and all Tax attributes to offset or reduce the amount of any such Taxes including without limitation, estimated taxes, net operating losses, prepaid amounts, and Tax credits, whether accruing before or after the Closing Date and (ii) Taconic shall not be responsible for any Taxes for which it has a claim for indemnification from Caliper under Article 6 of this Agreement.

(c)           Cooperation.  From and after the Closing Date, Taconic and Caliper shall reasonably cooperate, and will cause their Affiliates to reasonably cooperate, with one another in preparing and filing all Tax Returns to the extent such filings require providing necessary information, records and documents relating to the Company, and, if required by applicable law, executing any Pre-Closing Tax Returns.  Taconic and Caliper shall cooperate with one another to the same extent in defending or resolving any audit, examination or litigation relating to such Taxes.

(d)           Audits.  Caliper shall not settle any such Tax audit in a manner that would adversely affect the Company after the Closing Date without the prior written consent of Taconic, which consent shall not be unreasonably withheld.

(e)           Carrybacks.  Taconic shall timely make all available Tax elections and timely take any other available actions necessary to forgo the carryback of Tax attributes of the Company from Tax periods ending after the Closing Date to Tax Returns of a consolidated, combined, affiliated, or unitary group for any Pre-Closing Tax Period.

(f)            Consolidated Return Matters.  Caliper shall not elect to retain any net operating loss carryovers or capital loss carryovers of the Company.  If any Share would be a “loss share” within the meaning of Treasury Regulation Section 1.1502-36(f)(7), determined without regard to any election under Treasury Regulation Section 1.1502-36(d)(6), then Caliper shall make a timely election under Treasury Regulation Section 1.1502-36(d)(6)(i)(A) to reduce the basis in each such Share in an amount sufficient to avoid attribute reduction with respect to each such Share and the Company.  Caliper shall not make any election pursuant to Treasury Regulation Section 1.1502-36(d)(6)(i)(B) or -36(d)(6)(i)(C) (relating to reattribution of tax attributes) or Treasury Regulation Section 1.1502-96(d)(5) (relating to reattribution of limitations under Section 382 of the Code).

(g)           Prior Ownership Change.  As soon as reasonably practicable after the completion of the Code Section 382 analysis described in Section 4.12(h) of this Agreement, Caliper, the Company, and Taconic shall execute an agreement in substantially the form attached hereto as Exhibit B (the “Section 382 Allocation Agreement”), which agreement shall provide for an apportionment under Treasury Regulation Section 1.1502-95 by Caliper to the Company of certain consolidated Code Section 382 limitations and net unrealized built-in gains (or the Code Section 382 limitations and built-in gains of such subgroup as may be applicable).  Caliper shall elect to apportion to the Company a pro rata amount of the Code Section 382 limitations and net unrealized built-in gains based on the relative value of the Company to the loss group at the time of each prior ownership change.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(h)           Section 382 Analysis.  Caliper shall engage an outside auditing firm that is mutually acceptable to Caliper and Taconic to perform an analysis of the Company’s stock ownership history through the Closing Date in order to determine whether one or more “ownership changes” as defined in Section 382 of the Code have occurred with respect to the Company’s losses, built-in losses, or other Tax attributes.  In the event one or more “ownership changes” have occurred, the analysis will also include an assessment of the Code Section 382 or other limitations applicable to the Company’s net operating losses, built-in losses, and other Tax attributes.  Caliper and Taconic shall split equally the cost of such analysis, which will be bid out to at least two accounting firms, and Caliper shall use reasonable best efforts to have such analysis completed by March 31, 2010, but in no event later than June 30, 2010.

4.13         Tax Sharing Agreements.  All Tax sharing agreements or similar agreements (including without limitation any obligation to make tax distributions) with respect to or involving the Company shall be terminated as of the Closing Date and, after the Closing Date, no such person shall be bound thereby or have any liability thereunder.

4.14         Non-Solicitation.  For a period of one year after the Closing, (i) Caliper will not, and will cause its officers and other employees not to, solicit, encourage, or request any Continuing Employee to terminate such person’s employment by or consultancy to the Company or Taconic, and (ii) Taconic will not, and will cause its officers and other employees not to, solicit, encourage, or request any employee of Caliper to terminate such person’s employment by or consultancy to Caliper.

4.15         Caliper Confidential Information Remaining with the Company.  Taconic acknowledges that, because the Company has been operated as a subsidiary of Caliper for a substantial period of time, there is confidential information regarding Caliper’s businesses other than the business of the Company located at the Company’s site in Cranbury, New Jersey, including without limitation, on the e-mail server and other computers located at such site.  Taconic agrees with respect to such confidential information that (i) such information shall be and remain subject to the terms of the Confidential Disclosure Agreement, (ii) Taconic shall not actively search such information for any information that is not related to the business of the Company and (iii) Taconic shall take reasonable measures to destroy such information as and when it is discovered.

4.16         Promega Corporation (PGL3) Sublicense.  Within one hundred eighty (180) days of the Closing, upon the request of Taconic, Caliper shall execute a sublicense agreement providing Taconic with the use of the technology claimed in U.S. Patent No. 5,670,356 owned by Promega Corporation (PGL3).

ARTICLE 5

CONDITIONS TO THE CLOSING

5.1           Conditions to the Obligations of Each Party to Effect the Transaction.  The respective obligations of Caliper and Taconic to consummate the Closing shall be subject to the satisfaction, at or prior to the Closing, of the following conditions:

(a)   No Order.  No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Transaction illegal or otherwise prohibiting the consummation of the Transaction.

(b)   No Injunctions or Restraints; Illegality.  No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition (i) preventing the consummation of the Transaction, (ii) prohibiting Taconic’s ownership or operation of any portion of the business of the Company, or (iii) compelling Taconic or the Company to dispose of or hold separate all or any material portion of the business or assets of Taconic, the Company or any of their respective Subsidiaries or Affiliates as a result of the Transaction, shall be in effect, nor shall any proceeding brought by an administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any of the foregoing be threatened or pending.

(c)   LPTA Distribution and Supply Agreement.  Caliper and Taconic shall have executed and delivered the Distribution and Supply Agreement in the form attached hereto as Exhibit C.

(d)   Escrow Agreement. Caliper, Taconic and the Escrow Agent shall each have executed and delivered to each of the other parties the Escrow Agreement in the form attached hereto as Exhibit D, and such Escrow Agreement shall be in full force and effect.

5.2           Additional Conditions to the Obligations of Taconic.  The obligation of Taconic to effect the Transaction also shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Taconic:

(a)   Governmental Approval. Caliper shall have obtained all Governmental Entity approvals required to legally consummate the Transaction and those required so that the consummation of those transactions contemplated by this Agreement will not trigger any Conflict with any of the items set forth in Section 2.5 hereof.

(b)   Litigation. There shall be no action, suit, claim or proceeding of any nature pending, or overtly threatened, against Taconic or the Company, or Caliper in respect of the Company, their respective Subsidiaries or properties or any of their respective officers or directors, arising out of, or in any way connected with, the Transaction or the other transactions contemplated by the terms of this Agreement.

(c)   Mandatory Third-Party Consents. Caliper shall have obtained all necessary consents to assignment, waivers and approvals, and timely provided all notifications, with respect to the transactions contemplated by this Agreement under those Contracts listed on Schedule 5.2(c) of the Disclosure Schedule.

(d)   Mandatory Sublicense from Caliper to Taconic.  Caliper shall deliver to Taconic sublicenses executed by Caliper for all licenses listed on Schedule 5.2(d) of the Disclosure Schedule.

(e)   Completion of License for Imaging Services.  Caliper and Taconic will have executed the License Agreement in the form attached hereto as Exhibit E.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(f)    Cancellation of Inter-Company Indebtedness. Immediately prior to the Closing, all inter-company Indebtedness between the Company, on the one hand, and Caliper and its other Subsidiaries on the other hand, shall have been satisfied either as a distribution from additional paid in capital or as a contribution to the capital of the Company, as applicable, and shall have been fully satisfied thereby, all in a manner that does not result in gross income to the Company.

(g)   Resignation of Officers and Directors. Taconic shall have received a written resignation from each of the officers and directors of the Company effective as of the date hereof.

(h)   Certificate of Secretary of Caliper and the Company. Taconic shall have received a certificate, validly executed by the Secretary of the Company, certifying as to (i) the terms and effectiveness of the Company Charter Documents, (ii) the valid adoption of resolutions of the Board of Directors of Caliper (whereby the Transaction and the transactions contemplated by this Agreement were duly approved by the Board of Directors of Caliper), and (iii) the incumbency of the executive officers of Caliper.

(i)    Certificates of Good Standing. Taconic shall have received (i) a long-form certificate of good standing for the Company from the Secretary of State of the State of Ohio, dated within five (5) days prior to the Closing Date and (ii) a certificate of good standing as a foreign corporation or similar certificate of the Company issued by the Secretary of the State of New Jersey dated within five (5) days prior to the Closing certifying as to the good standing of the Company as a “foreign corporation.”

(j)    FIRPTA Certificate. Taconic shall have received a certificate in a form reasonably satisfactory to Taconic that Caliper is not a foreign person in accordance with Treasury Regulations under Section 1445 of the Code, validly executed by a duly authorized officer of Caliper.

(k)   Employment Continuation. The Continuing Employees listed on Section 5.2(l) of the Disclosure Schedule shall have accepted Taconic’s offer of employment and executed all employment-related documents requested by Taconic.

(l)    Data Room. Caliper shall have provided to Taconic an electronic copy of the Data Room as of the date of this Agreement and a second electronic copy as of the Closing, together with all records of access and use thereof.

5.3           Additional Conditions to the Obligations of Caliper.  The obligation of Caliper to effect the Transaction also shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by the Caliper:

(a)   Governmental Approval. Caliper shall have obtained all Governmental Entity approvals required to legally consummate the Transaction and those required so that the consummation of those transactions contemplated by this Agreement will not trigger any Conflict with any of the items set forth in Section 2.5 hereof.

(b)   Litigation. There shall be no action, suit, claim or proceeding of any nature pending, or overtly threatened, against Caliper in respect of the Company or any of its officers

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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or directors, arising out of, or in any way connected with, the Transaction or the other transactions contemplated by the terms of this Agreement.

(c)   Certificate of Secretary of Taconic. Caliper shall have received a certificate, validly executed by the Secretary of Taconic, certifying as to (i) the valid adoption of resolutions of the Board of Directors of Taconic (whereby the Transaction and the transactions contemplated by this Agreement were duly approved by the Board of Directors of Taconic), and (ii) the incumbency of the executive officers of Taconic.

(d)   Certificates of Good Standing. Caliper shall have received a long-form certificate of good standing for Taconic from the Secretary of State of the State of New York, dated within five (5) days prior to the Closing Date.

ARTICLE 6

INDEMNIFICATION AND ESCROW

6.1           Survival.

(a)   Caliper.  The representations and warranties of Caliper contained in this Agreement, or in any certificate or instrument delivered to Taconic pursuant to this Agreement, shall survive until [***] (the expiration of such period, the “Survival Date”); provided, however, that (i) the representations and warranties of Caliper in Section 2.2 (Company Capital Structure), and Section 2.4 (Authority) shall survive indefinitely, (ii) the representations and warranties of Caliper in Section 2.22 (Environmental) shall survive until the second anniversary of the Closing Date, and (iii) the representations and warranties of Caliper contained in Section 2.10 (Tax Matters) shall survive until ninety (90) days after the expiration of the applicable statute of limitations (each of such representations and warranties described in clause (i), (ii) or (iii) a “Special Representation”). If an indemnification claim is properly asserted in writing pursuant to Section 6.3 prior to the expiration (as provided in this Section 6.1(a)) of the representation or warranty that is the basis for such claim, then such representation or warranty shall survive beyond the Survival Date until, but only for the purpose of, the resolution of such claim.

(b)   Covenants.  All of the covenants and other agreements contained in this Agreement that contemplate performance thereof following the Closing Date shall survive the Closing Date indefinitely or until otherwise terminated in accordance with their terms.

6.2           Indemnification by Caliper.

(a)   Incurred Losses. Subject to the terms and conditions of this Article 6, from and after the Closing, Caliper shall indemnify Taconic and its officers, directors and Affiliates, including the Company, from and after the Closing (any, an “Indemnified Party” and collectively, the “Indemnified Parties”), for any claims, losses, liabilities, damages, deficiencies, diminution in value, costs, interests, awards, judgments, penalties and expenses, including reasonable attorneys’ fees and expenses of investigation and defense (hereinafter

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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individually a “Loss” and collectively “Losses”) paid, incurred, accrued or sustained by such Indemnified Parties or any of them, directly or indirectly, as a result of:

(i)any breach or inaccuracy of a representation or warranty of Caliper or the Company contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement;

(ii)any failure by Caliper, or failure by Caliper to cause the Company, to perform or comply with any covenant or other agreement applicable to it contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement;

(iii)the matter described on Section 2.9(f) of the Disclosure Schedule; and

(iv)[***]: (A) related to, or arising from, [***] as of the Closing, including without limitation, [***] that asserts, directly or indirectly, [***] or (B) any [***] that asserts, directly or indirectly that the [***] because of the transactions contemplated by this Agreement.

(b)   Indemnification Threshold and Cap. No Indemnified Party may recover any Losses (i) unless and until written notice pursuant to Section 6.3(a) identifying a Loss or Losses in excess of [***] Dollars ($[***]) in the aggregate (the “Threshold Amount”) has or have been delivered to the Escrow Agent by one or more Indemnified Parties, in which case such Indemnified Party shall be entitled to recover all Losses so identified, or (ii) in excess of (A) [***] Dollars ($[***]) (the “General Indemnification Cap”) for Losses incurred under Section 6.2(a)(i) or (B) [***] Dollars ($[***]) (the “IP Indemnification Cap” together with the General Indemnification Cap, the “Indemnification Cap”) for Losses incurred under Section 6.2(a)(iv) (“IP Losses”); provided that, in the event and to the extent that any Indemnified Party incurs IP Losses that exceed the IP Indemnification Cap, such IP Losses may be applied to the General Indemnification Cap if the General Indemnification Cap has not already been exhausted.  By way of example only, assume hypothetically that there are Losses excluding IP Losses of $[***] and IP Losses of $[***].  In such case, the IP Losses would first be used against the IP Indemnification Cap, after which there would be $[***] in unreimbursed IP Losses.  The balance of $[***] in the General Indemnification Cap after reimbursement of $[***] of non-IP losses would be available to provide reimbursement for the $[***] in unreimbursed IP Losses. Notwithstanding the foregoing, Taconic shall be entitled to recover for, and the Threshold Amount and the Indemnification Cap shall not apply as a threshold or cap to, any and all claims or payments made with respect to (A) all Losses incurred pursuant to clauses (ii) or (iii) of Section 6.2(a), (B) fraud or knowing or willful breach or inaccuracy of a representation or warranty contained herein or (C) any breach or inaccuracy of a Special Representation. With regard to the matter described in Section 6.2(a)(iii), Caliper shall continue the defense of the action described therein at its own expense and shall be solely responsible for any expenses and Losses incurred in connection therewith.

(c)   Materiality; Knowledge; No Right of Contribution. For the purpose of quantifying an Indemnified Party’s Losses under this Article 6 only, any representation or warranty given or made by the Company that is qualified in scope as to materiality (including the Company Material Adverse Effect) or as to Knowledge shall be deemed to be made or

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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given without such qualification. There shall be no right of contribution from the Company or any of its respective officers and directors, with respect to any Loss claimed by an Indemnified Party.

(d)   Knowledge of Taconic. Any due diligence review, audit or other investigation or inquiry undertaken or performed by or on behalf of Taconic shall not limit, qualify, modify or amend the representations, warranties or covenants of, or indemnities by Caliper made or undertaken pursuant to this Agreement, irrespective of the knowledge and information received (or which should have been received) therefrom by Taconic other than as expressly reflected on the Disclosure Schedule or the other Exhibits or Schedules to this Agreement.

(e)   Treatment of Indemnification Payments. All indemnification payments under this Agreement shall be treated as an adjustment to the Final Purchase Price for all Tax purposes unless otherwise required by Law.

6.3           Claims for Indemnification.

(a)   Procedure for Claims. An Indemnified Party wishing to assert a claim for indemnification under this Article 6 (other than a third-party claim covered by Section 6.3(b) below) shall deliver to Caliper a certificate (an “Officer’s Certificate”) signed by any officer of Taconic (or another Indemnified Party) (A) stating that Taconic (or such other Indemnified Party) has paid, sustained, incurred or accrued, or reasonably anticipates that it will have to pay, sustain, incur, or accrue Losses (the aggregate amount of such Losses being referred to as the “Claimed Amount”), (B) specifying in reasonable detail the facts pertinent to such claim(s), the individual items of Losses included in the amount so stated and the nature of basis for indemnification to which such item is related, and (C) demanding payment of the Claimed Amount. Within forty five (45) days after delivery of such Officer’s Certificate, Caliper shall deliver to the Indemnified Party a written response in which Caliper shall: (I) agree that the Indemnified Party is entitled to receive all of the Claimed Amount with appropriate joint instructions to the Escrow Agent if the Escrow Fund is then available for payment to pay such amount, (II) agree that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) (with appropriate joint instructions to the Escrow Agent if the Escrow Fund is then available for payment to pay the Agreed Amount, or (III) contest that the Indemnified Party is entitled to receive any of the Claimed Amount. If Caliper in such response contests the payment of all or part of the Claimed Amount, then Caliper and the Indemnified Party shall use good faith efforts to resolve such dispute in accordance with Section 6.3(c) below. Failure of Caliper to timely respond in writing shall be treated as agreement that the Indemnified Party is entitled to the Claimed Amount from the Escrow Fund or otherwise directly from Caliper if payment from the Escrow Fund is not available.

(b)   Procedure for Third-Party Claims. All claims for indemnification made under this Agreement resulting from, related to or arising out of a third-party claim against an Indemnified Party shall be made in accordance with the following procedures. In the event an Indemnified Party becomes aware of a third party claim which such Indemnified Party reasonably believes may result in a Loss, such Indemnified Party shall promptly notify Caliper of such claim by delivery of an Officer’s Certificate to Caliper. Delay or failure in so notifying Caliper shall relieve Caliper of its obligations under this Article 6 only to the extent, if at all,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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that Caliper is prejudiced by reason of such delay or failure.  If there is a third party claim that, if adversely determined would give rise to a right of recovery for Losses hereunder, then any amounts incurred or accrued in defense of such third party claim, regardless of the outcome of such claim, shall be deemed Losses hereunder.  Within forty five (45) days after delivery of such Officer’s Certificate, Caliper may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim other than Tax Claims if (1) Caliper provides written notice to such Indemnified Party that Caliper intends to undertake such defense and that Caliper will indemnify the Indemnified Parties against all Losses resulting from or relating to such third-party claim; (2) the third-party claim does not seek an injunction or other equitable relief; (3) settlement of or an adverse judgment with respect to the third-party claim is not, in the good faith judgment of Taconic, likely to establish a precedent adverse relating to the Intellectual Property or Intellectual Property Rights of Taconic and its Subsidiaries, and (4) the defense of the third-party claim is conducted actively and diligently by legal counsel reasonably acceptable to such Indemnified Party. If Caliper does not assume control of such defense, the Indemnified Party shall control such defense. The party not controlling such defense may participate therein at its own expense; provided, however, that if Caliper assumes control of such defense and the Indemnified Party reasonably concludes, based on advice of counsel, that Caliper and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith shall be considered “Losses” for purposes of this Agreement; provided, however, that in no event shall Caliper be responsible for the fees and expenses of more than one counsel per jurisdiction for all Indemnified Parties. The party controlling such defense shall keep the other party reasonably advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider recommendations made by the other party with respect thereto. The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of Caliper, not to be unreasonably withheld, delayed or conditioned. Caliper shall not agree to any settlement of such action, suit, proceeding or claim that does not include a complete release of all potential Indemnified Parties from all Liability with respect thereto or that imposes any Liability on any potential Indemnified Party without the prior written consent of such Indemnified Party.

(c)Resolution of Conflicts. In case Caliper shall object in writing to any claim or claims made in any Officer’s Certificate, Caliper and Indemnified Party shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims within forty-five (45) days following the delivery by Caliper of its response to such Officer’s Certificate. If Caliper and Indemnified Party should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and, in the case of a claim against the Escrow Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum and make distributions from the Escrow Fund in accordance with the terms thereof.

6.4Escrow Fund.  As of the Closing, Taconic, Computershare Trust Company, N.A. (the “Escrow Agent”) and Caliper shall execute and deliver the Escrow Agreement in substantially the form attached hereto as Exhibit D (the “Escrow Agreement”), and, concurrently with the Closing, Taconic shall deposit the Escrow Amount with the Escrow Agent to be held as

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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a trust fund (the “Escrow Fund”) for the purpose of securing the indemnification obligations set forth in Article 6 of this Agreement and the post-closing adjustment payment obligations set forth in Section 1.6. The Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms thereof. The Escrow Fund shall be held as a trust fund as the first source but not the only source of indemnification for Taconic and payment of post-closing adjustment payments to Taconic hereunder, shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement.

6.5Indemnification by Taconic.  The representations and warranties of Taconic contained in this Agreement, or in any certificate or instrument delivered pursuant to this Agreement, shall survive until the first anniversary of the Closing Date, except that the representations and warranties of Taconic in Section 3.1(b) shall survive indefinitely.  If an indemnification claim is properly asserted in writing by Caliper prior to such expiration date then such representation or warranty shall survive beyond such date until, but only for the purpose of, the resolution of such claim.  All of the covenants and other agreements contained in this Agreement that contemplate performance thereof following the Closing Date shall survive the Closing Date indefinitely or until otherwise terminated in accordance with their terms.  Subject to the limits set forth in this Section 6.5, Taconic shall indemnify Caliper and its officers, directors, and Affiliates (the “Caliper Indemnified Parties”) for any Losses paid, incurred, accrued or sustained by such Caliper Indemnified Parties or any of them, directly or indirectly, as a result of (i) any breach or inaccuracy of a representation or warranty of Taconic contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement or (ii) any failure by Taconic to perform or comply with any covenant or other agreement applicable to it contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement.  Notwithstanding the foregoing, (x) no Caliper Indemnified Party may recover any Losses unless and until the Caliper Indemnified Parties have provided Taconic with written notice identifying a Loss or Losses in excess of the Threshold Amount, in which case the Caliper Indemnified Parties shall be entitled to recover all Losses so identified, and (y) Caliper Indemnified Parties shall in no event be entitled to recover Losses in the aggregate in excess of the Indemnification Cap, provided, however, that the foregoing limitations shall not apply to any claim by any Caliper Indemnified Party based on a breach the representations and warranties of Taconic in Section 3.1(b) or to a breach of a covenant of Taconic contained herein.

ARTICLE 7

GENERAL PROVISIONS

7.1Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) seven (7) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service, or (iii) on the first Business Day following the date of confirmation of receipt of transmission by facsimile, in each case to the intended recipient as set forth below:

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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(a)if to Taconic, to:

Taconic Farms, Inc.

One Hudson City Centre

Hudson, NY 12534

Attention:  Chief Executive Officer and

  Chief Financial Officer

Facsimile No.: (518) 597-3905

with a copy (which shall not constitute notice) to:

Sullivan & Worcester LLP

One Post Office Square

Boston, MA 02109

Attention:  Edwin L. Miller Jr.

Facsimile No.: (617) 338-2880

(b)if to Caliper, to:

Caliper Life Sciences, Inc.

68 Elm Street

Hopkinton, MA 01748

Attention:  Chief Financial Officer

Facsimile No.: (508) 497-2726

with a copy (which shall not constitute notice) to:

Caliper Life Sciences, Inc.

850 Marina Village Parkway

Alameda, CA 94501

Attention:  General Counsel

Facsimile No.: (510) 291-6136

Any party to this Agreement may change the address to which notices and other communications hereunder are to be delivered by giving the other parties to this Agreement notice in the manner herein set forth.

7.2Interpretation.  The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

7.3Counterparts.  This Agreement may be executed by facsimile and in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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7.4Entire Agreement; Assignment.  This Agreement, the Disclosure Schedule, the Confidential Disclosure Agreement, and the documents and instruments and other agreements among the parties hereto referenced herein: (i) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings both written and oral, among the parties with respect to the subject matter hereof; (ii) are not intended to confer upon any other person any rights or remedies hereunder; and (iii) shall not be assigned by operation of Law or otherwise, except that Taconic may assign its rights and delegate its obligations hereunder to its Affiliates so long as Taconic remains obligated to perform those obligations required to be performed by Taconic hereunder.

7.5Severability.  In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

7.6Other Remedies.  Any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

7.7Governing Law.  EXCEPT AS OTHERWISE PROVIDED HEREIN, ALL QUESTIONS AND/OR DISPUTES CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW YORK.

7.8Rules of Construction.  The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefor, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

7.9Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

7.10Attorneys’ Fees.  If any action or other proceeding relating to the enforcement of any provision of this Agreement is brought by any party hereto, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs, and disbursements (in addition to any other relief to which the prevailing party may be entitled).

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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7.11WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

ARTICLE 8

DEFINITIONS

For all purposes of this Agreement, the following terms shall have the following respective meanings:

“Acquisition Date” shall mean August 9, 2006.

“Affiliate” shall mean, with respect to any person, any other person directly or indirectly through one or more intermediaries controlling, controlled by or under common control with such other person.

“Affiliated Group” shall mean any affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of federal, state, local, or foreign income or other Tax Law, including any provision of federal, state, local, or foreign income or other Tax Law that imposes joint or several liability for Taxes on the members of such group.

“Agreed Amount” shall have the meaning set forth in Section 6.3(a) hereof.

“Agreement” shall have the meaning set forth in the preamble hereof.

“Business Day” shall mean any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in Boston, Massachusetts are permitted or required by Law to remain closed.

“Caliper Company” shall have the meaning set forth in Section 2.2(b) hereof.

“Claimed Amount” shall have the meaning set forth in Section 6.3(a) hereof.

“Closing” shall have the meaning set forth in Section 1.1 hereof.

“Closing Balance Sheet” shall have the meaning set forth in Section 1.5 hereof.

“Closing Date” shall have the meaning set forth in Section 1.1 hereof.

“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and as codified in Section 4980B of the Code and Section 601 et. seq. of ERISA.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Common Stock” shall have the meaning set forth in Section 2.2(a) hereof.

“Company” shall have the meaning set forth in the preamble hereof.

“Company Capital Stock” shall mean all authorized capital stock of the Company.

“Company Cash” shall mean, with respect to the Company, as of the close of business on the Closing Date, all cash, cash equivalents and marketable securities held on deposit in the bank accounts of the Company at such time. For avoidance of doubt, Company Cash shall (1) be calculated net of issued but uncleared checks and drafts, and (2) include checks and drafts deposited for the account of the Company or received in the Company’s lockbox prior to the preparation of the Closing Balance Sheet.

“Company Charter Documents” shall have the meaning set forth in Section 2.1 hereof.

“Company Employee Plan” shall mean an employee benefit plan as defined in Section 3(3) of ERISA and any material benefit arrangement that is not a Plan, including (i) any employment or consulting agreement, (ii) any arrangement providing for insurance coverage or workers’ compensation benefits, (iii) any incentive bonus or deferred bonus arrangement, (iv) any arrangement providing termination allowance, severance pay, salary continuation for disability, or other leave of absence, supplemental unemployment benefits, lay-off, reduction in force or similar benefits, (v) any stock option or equity compensation plan, (vi) any deferred compensation plan, (vii) any compensation policy or practice (including without limitation sick and vacation pay policies or practices), (viii) any educational assistance arrangements or policies, (ix) any plan governed by Section 125 of the Code, any fringe benefit (including without limitation company cars) and (xi) any change of control arrangements or policies, in each case under which any Company Personnel receives any compensation or benefits.

“Company Intellectual Property” shall mean any and all Licensed Company Intellectual Property and Owned Company Intellectual Property.

“Company Material Adverse Effect” shall mean any change, event or effect that is materially adverse to (i) the business, assets (whether tangible or intangible), condition (financial or otherwise), prospects, results of operations or capitalization of the Company or (ii) the Company’s ability to consummate the transactions contemplated by this Agreement, excluding any changes, events or effects that result from: (i) any change arising out of conditions affecting the economy or industry of the Company in general which does not affect the Company in a materially adverse manner relative to other participants in the economy or such industry, respectively, (ii) any change that is due to actions required to be taken by the Company pursuant to the terms of this Agreement, or (iii) the announcement of this Agreement and the transactions contemplated hereby.

“Company Personnel” shall mean any current Employee, consultant or director of the Company.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“Company Privacy Obligations” shall have the meaning set forth in Section 2.35 hereof.

“Company Privacy Policies” shall have the meaning set forth in Section 2.35 hereof.

“Company Products and Services” shall have the meaning set forth in Section 2.13(a) hereof.

“Confidential Disclosure Agreement” shall have the meaning set forth in Section 4.1 hereof.

“Conflict” shall have the meaning set forth in Section 2.5 hereof.

“Continuing Employee” shall have the meaning set forth in Section 4.6 hereof.

“Contract” shall have the meaning set forth in Section 2.5 hereof.

“Current Balance Sheet” shall have the meaning set forth in Section 2.7(a) hereof.

“Customer Information” shall have the meaning set forth in Section 2.12(f) hereof.

“Data Room” shall have the meaning set forth in Section 2.37 hereof.

“Deferred Revenue Amount” shall mean (a) [***] percent ([***]%) of the stated value of any deferred revenue and customer deposits on the Closing Balance Sheet up to the balance sheet stated value of  $[***] and (b) [***] percent (***]%) of the stated value of any deferred revenue and customer deposits on the Closing Balance Sheet above the balance sheet stated value of  $[***].

“Disclosure Schedule” shall have the meaning set forth in preamble to Article 2 hereof.

“Environmental Laws” shall mean all federal, state, local and foreign Laws issued, promulgated, approved or entered relating to environmental matters, the protection of the environment, the protection of human health and safety, or exposure to Hazardous Materials, including without limitation workplace health and safety Laws, packaging and labeling Laws and Laws relating to the Release or threatened Release of Hazardous Materials to the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the presence, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.

“Environmental Order” shall mean any order, judgment, injunction, award, decree or writ relating to the environment or imposed pursuant to Environmental Laws.

“Environmental Permits” shall mean all Permits required by or issued pursuant to applicable Environmental Laws.

“Equipment” shall have the meaning set forth in Section 2.12(e) hereof.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“ERISA Affiliate” shall mean any other person or entity under common control with the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) or 4001(b)(1) of ERISA, and the regulations issued thereunder.

“Escrow Agent” shall have the meaning set forth in Section 6.4 hereof.

“Escrow Amount” shall mean ten percent of the Estimated Purchase Price.

“Escrow Agreement” shall have the meaning set forth in Section 6.4 hereof.

“Escrow Fund” shall have the meaning set forth in Section 6.4 hereof.

“Estimated Company Cash” shall have the meaning set forth in Section 1.4(a)(i) hereof.

“Estimated Indebtedness” shall have the meaning set forth in Section 1.4(a)(ii) hereof.

“Estimated Net Working Capital” shall have the meaning set forth in Section 1.4(a)(iv) hereof.

“Estimated Purchase Price” shall have the meaning set forth in Section 1.4(b) hereof.

“Final Purchase Price” shall have the meaning set forth in Section 1.6 hereof.

“Financial Statements” shall have the meaning set forth in Section 2.7(a) hereof.

“GAAP” shall mean United States generally accepted accounting principles, consistently applied.

“General Indemnification Cap” shall have the meaning set forth in Section 2.6 hereof.

“Governmental Entity” shall have the meaning set forth in Section 2.6 hereof.

“Hazardous Materials” shall mean all hazardous substances, wastes, extremely hazardous substances, hazardous materials, hazardous wastes, hazardous constituents, solid wastes, special wastes, toxic substances, pollutants, contaminants, petroleum or petroleum derived substances or wastes, and related materials, including without limitation any such materials defined, listed, regulated or identified under or described in any Environmental Laws (including, by way of example and without limitation, spent solvents, PCBs, urea-formaldehyde, radon, lead or lead based paints or materials, asbestos and asbestos containing materials).

“Health Data” shall have the meaning set forth in Section 2.30 hereof.

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended.

“Immigration Laws” shall have the meaning set forth in Section 2.36 hereof.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“Indebtedness” shall mean, with respect to any person (a) all obligations of such person for borrowed money, whether current or funded, secured or unsecured, (b) all obligations of such person for the deferred purchase price of any property or services (other than deferred revenue, customer deposits and trade accounts payable arising in the ordinary course of business of such person), (c) all obligations of such person secured by a purchase money mortgage or other lien to secure all or part of the purchase price of property subject to such mortgage or lien, (d) all obligations under leases which shall have been or should be, in accordance with GAAP or other generally accepted accounting principles as applicable to such person, recorded as capital leases in respect of which such person is liable as lessee, (e) any obligation of such person in respect of bankers’ acceptances, (f) any obligations secured by Liens on property acquired by such person, whether or not such obligations were assumed by such person at the time of acquisition of such property, (g) any amounts owed to a Caliper Company, (h) all obligations of a type referred to in clauses (a), (b), (c), (d), (e), (f) or (g) above which is directly or indirectly guaranteed by such person or which it has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a credit against loss, (i) any refinancings of any of the foregoing obligations, (j) any penalties or fees accrued under any of the foregoing, including those resulting from the prepayment or repayment of any of the foregoing obligations and (k) all accrued interest payable on any of the foregoing obligations.

“Indemnification Cap” shall have the meaning set forth in Section 2.6 hereof.

“Indemnified Party” shall have the meaning set forth in Section 6.2(a) hereof.

“Intellectual Property” shall mean any or all of the following: (i) proprietary inventions (whether patentable or not), invention disclosures, industrial designs, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (ii) business, technical and know-how information, non-public information, and confidential information including databases and data collections and all rights therein; (iii) works of authorship (including computer programs and source and object code), architecture, artwork, logo images, documentation, files, records, schematics, test data and development tools; (iv) processes, devices and prototypes; (v) logos, trade names, trade dress, trademarks, service marks, World Wide Web addresses, uniform resource locators and domain names, tools, methods and processes; and (vii) any similar or equivalent property of any of the foregoing (as applicable).

“Intellectual Property Rights” shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof throughout the world (“Patents”); (ii) copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world including moral and economic rights of authors and inventors, however denominated (“Copyrights”); (iii) industrial designs and any registrations and applications therefor throughout the world; (iv) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world (“Trademarks”); (v) trade secrets (including, those trade secrets defined in

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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the Uniform Trade Secrets Act and under corresponding foreign statutory and common law), business, technical and know-how information, non-public information, and confidential information and rights to limit the use or disclosure thereof by any person; including databases and data collections and all rights therein (“Trade Secrets”); and (vi) any similar or equivalent rights to any of the foregoing (as applicable).

“Intercompany Transactions” shall have the meaning set forth in Section 2.17(a) hereof.

“Interested Person” shall have the meaning set forth in Section 2.17(a) hereof.

“IP Indemnification Cap” shall have the meaning set forth in Section 2.6 hereof.

“IRS” shall mean the United States Internal Revenue Service.

“Knowledge” shall mean with respect to Caliper, the  knowledge of the officers and directors of Caliper and the Company.

“Law” shall mean any law, statute, ordinance, rule, regulation, code, order, judgment, injunction, decree or other provision having the force or effect of law enacted, issued, promulgated, enforced or ordered by a Governmental Entity.

“Lease Agreements” shall have the meaning set forth in Section 2.12(b) hereof.

“Leased Real Property” shall have the meaning set forth in Section 2.12(a) hereof.

“Liability” shall mean, with respect to any person, any liability or obligation of such person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such person.

“Licensed-In Intellectual Property” shall mean all Intellectual Property and Intellectual Property Rights licensed to the Company.

“Licensed-Out Intellectual Property” shall mean all Intellectual Property and Intellectual Property Rights licensed by the Company to any person, including Caliper and its Subsidiaries other than the Company.

“Licensed Company Intellectual Property” shall have the meaning set forth in Section 2.13(a).

“Liens” means all security interests, liens, pledges, charges, claims, encroachments, defects of title, options, rights of first refusal or first offer, easements, licenses, covenants or any other encumbrances or restrictions on the use or exercise of any attribute of ownership, pledges, charges or encumbrances of any kind.

“Loss” shall have the meaning set forth in Section 6.2(a) hereof.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“Made Available” shall mean, with respect to a document, that such document has been posted by the Company to the Data Room and that Taconic has been granted unrestricted access to view such document.

“Net Working Capital” shall mean (as finally determined under Section 1.15 (i)) all current assets of the Company (excluding Company Cash and deferred tax assets) as of the close of business on the Closing Date minus (ii) all current liabilities of the Company (excluding Indebtedness, deferred revenue and deferred tax liabilities) as of the close of business on the Closing Date. Notwithstanding the foregoing, Net Working Capital shall be calculated as of the Closing with respect to all amounts required to be forgiven or discharged immediately prior to the Closing.

“Net Working Capital Adjustment” shall mean the amount by which Net Working Capital is more than $[***] above the Target Net Working Capital Amount or is more than $[***] below the Target Net Working Capital Amount, as applicable.

“Officer’s Certificate” shall have the meaning set forth in Section 6.3(a) hereof.

“Official” shall have the meaning set forth in Section 2.27 hereof.

“Open Source Materials” shall have the meaning set forth in Section 2.13(k) hereof.

“Ordinary Course of Business” shall mean, with respect to a person or entity, the ordinary course of the normal day-to-day operations of such person or entity consistent with customs and past practice.

“Owned Company Intellectual Property” shall mean all Intellectual Property and Intellectual Property Rights that are owned by the Company.

“Permits” shall mean any permits, consents, licenses, certificates, registrations, certificates of occupancy or use, variances, orders, governmental authorizations or approvals, or any other permits.

“Pre-Closing Tax Period” shall mean any taxable period that begins before the Closing Date and ends on or before the Closing Date.

“Pre-Closing Tax Return” shall have the meaning set forth in Section 4.11(b) hereof.

“Pre-Closing Taxes” shall mean (i) all Taxes attributable to or payable with respect to a Pre-Closing Tax Period and (ii) in the case of any taxable period that includes (but does not end on) the Closing Date, (x) the amount of any income or other Taxes measured on the basis of actual economic activity (such as sales Taxes) that are attributable or payable with respect to such period determined on a closing of the books as of the close of business on the Closing Date, and for such purpose, the taxable period of any partnership or other pass-through entity in which the Company holds a beneficial interest shall be deemed to terminate at such time, and (y) the amount of any other Taxes (if not described in the preceding clause (x), such as ad valorem

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Taxes) that are attributable or payable with respect to the period determined on a pro rata basis with reference to the number of days in such period prior to and including the Closing Date relative to the number of days remaining in such period after the Closing Date.

“Preliminary Statement” shall have the meaning set forth in Section 1.14 hereof.

“Release” shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the environment or out of any property, including the movement of any materials through or in the air, soil, surface water, ground water or property.

“Remedial Action” shall mean all actions to (a) abate, contain, ameliorate, clean up, remove, treat, remediate or in any other way address any Hazardous Materials; (b) prevent the Release of Hazardous Materials so that they do not migrate or endanger or threaten to endanger human health or welfare or the indoor or outdoor environment; or (c) perform studies, investigations, and pre- or post-remedial monitoring and care; and (d) otherwise correct a condition of noncompliance with Environmental Laws.

“Section 280G Payment” shall have the meaning set forth in Section 2.24(g) hereof.

“Section 382 Allocation Agreement” shall have the meaning set forth in Section 4.12(g) hereof.

“Share” shall have the meaning set forth in Section 1.1 hereof.

“Special Representation” shall have the meaning set forth in Section 6.1(a) hereof.

“Specified Third Party Intellectual Property” shall have the meaning set forth in Section 2.13(f) hereof.

“Subsidiary” shall mean, with respect to any party, any corporation or other organization, whether incorporated or unincorporated, of which (i) such party or any other subsidiary of such party is a general partner (excluding such partnerships where such party or any subsidiary of such party does not have a majority of the voting interest in such partnership) or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its subsidiaries.

“Survival Date” shall have the meaning set forth in Section 6.1 hereof.

“Taconic” shall have the meaning set forth in the preamble hereof.

“Taconic Material Adverse Effect” shall mean any change, event or effect that is materially adverse to (i) the business, assets (whether tangible or intangible), condition (financial or otherwise), prospects, results of operations or capitalization of Taconic or (ii) Taconic’s ability to consummate the transactions contemplated by this Agreement.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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“Target Net Working Capital Amount” shall mean $[***].

“Tax” or “Taxes” shall mean (i) any and all taxes, charges, fees, levies or other assessments, including income, gross receipts, profits, margins, excise, real or personal property, lease, sales, withholding, social security, occupation, use, service, service use, value added, license, net worth, payroll, franchise, transfer and recording taxes, ad valorem, stamp, capital, environmental, employment, worker’s compensation, disability, social security, utility, production, unemployment compensation, windfall profits, duties, registration, business organization, alternative or add-on minimum, fees and charges, imposed by any Governmental Entity (whether domestic or foreign including any state, local or foreign government or any subdivision or taxing agency thereof (including a United States possession)), whether computed on a separate, consolidated, unitary, combined or any other basis, and such term shall include any interest, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments, (ii) Liability for the payment of any amounts of the type described in clause (i) as a predecessor entity or as a transferee or a result of being or having been a member of an affiliated, consolidated, combined or unitary group, and (iii) Liability for the payment of any amounts as a result of being party to any Tax sharing agreement or arrangement or as a result of any obligation to indemnify any other person with respect to the payment of any amounts of the type described in clause (i) or (ii).

“Tax Claim” shall mean any third party claim (i) relating to Taxes for which Caliper is liable pursuant to Section 4.11 or (ii) relating to any breach of the representations and warranties contained in Section 2.10.

“Tax Return” shall mean any return, declaration, report, claim for refund, information return, or statement, and any schedule, attachment, or amendment thereto, including without limitation any consolidated, combined or unitary return or other document and any schedule, attachment or amendment thereto filed or required by any Governmental Entity to be filed in connection with the determination, assessment, collection, imposition, payment, refund or credit of any federal, state, local or foreign Tax or the administration of the Laws relating to any Tax.

“Third-Party Expenses” shall have the meaning set forth in Section 4.2 hereof.

“Threshold Amount” shall have the meaning set forth in Section 6.2(a)(iii) hereof.

“Transaction” shall have the meaning set forth in preamble hereof.

“Treasury Regulations” shall mean the final, temporary and proposed federal income tax regulations promulgated under the Code, as such Treasury Regulations may be amended from time to time.  All references herein to specific sections of the Treasury Regulations shall be deemed also to refer to any corresponding provisions of predecessor or succeeding Treasury Regulations.

[Remainder of page intentionally left blank.]

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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IN WITNESS WHEREOF, Taconic, CLS and Xenogen have caused this Agreement to be signed, all as of the date first written above.

TACONIC FARMS, INC.
By:	/s/ Todd F. Little
	Name: Todd F. Little
	Title: President and Chief Executive Officer
CALIPER LIFE SCIENCES, INC.
By:	/s/ E. Kevin Hrusovsky
	Name: E. Kevin Hrusovsky
	Title: President and Chief Executive Officer
XENOGEN CORPORATION
By:	/s/ E. Kevin Hrusovsky
	Name: E. Kevin Hrusovsky
	Title: President and Chief Executive Officer

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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EX-10.18

Exhibit 10.18

Caliper Performance Bonus Plan

This Performance Bonus Plan (the “Bonus Plan”) for eligible employees of Caliper Life Sciences, Inc. (“Caliper” or the “Company”) covers the period from January 1 to December 31 of each calendar year.  This Bonus Plan contains the entire agreement on this subject between the Company and those employees who have been notified in writing by the Company of their eligibility to participate in this Bonus Plan, and supersedes all prior performance bonus compensation programs of the Company and all other previous oral or written statements to any employee of the Company regarding any previous performance bonus plan.  The Company reserves the right to modify any of the provisions of this Bonus Plan at any time with or without written notice.  This Bonus Plan may be modified only in a writing signed by either the Chief Executive Officer of the Company or the Company’s Senior Vice President of Human Resources.

Eligibility for participation in this Bonus Plan is based upon certain criteria including but not limited to job function, level and/or title as defined from time to time by the Company in its sole discretion.  Target bonus amounts under this Bonus Plan will vary based on the Company’s criteria and an eligible employee’s job function, level and/or title.  Only those employees of the Company who are notified in writing by the Company of their eligibility to participate in this Bonus Plan will be eligible to receive performance bonuses under this Bonus Plan, which will be determined in accordance with an employee’s designated target bonus amount and the other terms and conditions of this Bonus Plan.  The Chief Executive Officer and employees on commission or sales incentive plans are not eligible to participate in this Bonus Plan.  No bonus amounts are guaranteed and all bonuses must be earned in accordance with the terms of this Bonus Plan.  Whether and how much of a performance bonus has been earned, at any bonus level, and determination of whether an employee is in good standing, is in the sole discretion of the Company.

No bonus is considered earned under this Bonus Plan until the time that such bonus is paid under the terms of this Bonus Plan. Thus, in the event that a Bonus Plan participant’s employment has been terminated (either by the Company or by the employee), the participant will not be entitled to any bonus that has not been paid prior to the termination date.

Performance bonuses under this Bonus Plan will be paid in the following calendar year after individual performance reviews for the previous year have been completed, and after the Board of Directors has determined the degree to which Caliper has attained its corporate goals for the previous year.  Historically, performance bonuses have been paid prior to the end of April, but the date may vary each year and is subject to the Company’s discretion.  Employees who are hired during the year are entitled to receive a prorated performance bonus based on their actual time of service during the year.

An employee’s performance bonus will be based on (i) the employee’s individual performance assessment (as determined in connection with the employee’s annual performance review by his or her manager) and (ii) the Board of Director’s assessment of the degree to which Caliper has attained its corporate goals for the year.

An individual employee’s performance objectives will be set by the employee’s supervisor at the beginning of the bonus period.  It is the responsibility of both the employee and his or her supervisor to ensure such written objectives are set.  No performance bonus will be paid unless the employee attains 70% or more of his or her overall performance objectives. Where numerous performance objectives are listed but no weighting of relative importance of performance objectives is provided, the Company will determine in its sole discretion how much weighting each performance objective should be provided.  The Company, in its sole discretion, will determine whether an employee attained a percentage of any one

performance objective and will consider any such pro rata attainment when assessing the employee’s attainment of overall performance objectives.

Caliper’s Board of Directors will determine the objectives to be met by the Company in each calendar year, as well as the degree to which the corporate goals for such year have been attained.

The performance bonus calculation is as follows:

Base Earnings  X  Target Bonus Percentage = Bonus Opportunity

Bonus Opportunity  X  Individual Rating  X  Corporate Rating= Bonus Earned

Nothing in this Bonus Plan is intended to alter the at-will nature of each employee’s employment, that is, an employee’s right or the Company’s right to terminate an employee’s employment at will, at any time, with or without cause.

Revised by the Company’s Board of Directors as of February 12, 2010.

EX-10.80

EXHIBIT 10.80

CALIPER LIFE SCIENCES, INC.

2009 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Restricted Stock Unit Grant Notice (“Grant Notice”) and this Restricted Stock Unit Award Agreement (“Agreement”) (collectively, the “Award”), Caliper Life Sciences, Inc. (the “Company”) has awarded you a right to receive a delayed issuance stock bonus (a “Restricted Stock Unit”) pursuant to Paragraph 8 of the Company’s 2009 Equity Incentive Plan (the “Plan”) for the number of Restricted Stock Units as indicated in the Grant Notice.  Defined terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.  Subject to adjustment and the terms and conditions as provided herein and in the Plan, each Restricted Stock Unit shall represent the right to receive a stock bonus of one (1) share of Common Stock.

The details of your Award, in addition to those set forth in the Grant Notice, are as follows:

1.           NUMBER OF RESTRICTED STOCK UNITS AND SHARES OF COMMON STOCK.  The number of Restricted Stock Units in your Award is set forth in the Grant Notice.

(a)           The number of Restricted Stock Units subject to your Award and/or the number of shares of Common Stock deliverable with respect to such Restricted Stock Units may be adjusted from time to time for capitalization adjustments as described in Paragraph 24 of the Plan.  You will receive no benefit or adjustment to your Award with respect to any cash dividend or other distribution that does not result in a capitalization adjustment pursuant to Section 24(d) of the Plan; provided, however, that this sentence shall not apply with respect to any shares of Company Common Stock that are delivered to you in connection with your Award after such shares have been delivered to you.

(b)           Any additional Restricted Stock Units, shares of Common Stock, cash or other property that becomes subject to the Award pursuant to this Section 1 shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability and time and manner of delivery as apply to the other Restricted Stock Units and Common Stock covered by your Award.

(c)           Notwithstanding the provisions of this Section 1, no fractional Restricted Stock Units or rights for fractional shares of Common Stock shall be created pursuant to this Section 1.  The Board shall, in its discretion, determine an equivalent benefit for any fractional Restricted Stock Units or fractional shares that might be created by the adjustments referred to in this Section 1.

2.           VESTING.   The Restricted Stock Units shall vest, if at all, as provided in the Grant Notice and the Plan.

3.           DELIVERY OF SHARES OF COMMON STOCK.  Subject to the provisions of this Agreement and the Plan, in the event one or more Restricted Stock Units vests, the Company shall deliver to you one (1) share of Common Stock for each Restricted Stock Unit that vests.  The delivery to you of the appropriate number of shares of Common Stock shall be made within sixty (60) days after the applicable vesting date.  The form of such delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.

4.           PAYMENT BY YOU.  This Award was granted in consideration of your past services to the Company.  Subject to Section 10 below, except as otherwise provided in the Grant Notice, you will not be required to make any payment to the Company (other than your past and future services with the Company) with respect to your receipt of the Award, vesting of the Restricted Stock Units or the delivery of the shares of Common Stock underlying the Restricted Stock Units.

5.           SECURITIES LAW COMPLIANCE.  You may not be issued any Common Stock under your Award unless the shares of Common Stock are either (i) then registered under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act.  Your Award must also comply with other applicable laws and regulations governing the Award, and you shall not receive such Common Stock if the Company determines that such receipt would not be in material compliance with such laws and regulations.

6.           RESTRICTIVE LEGENDS.  The Common Stock issued under your Award shall be endorsed with appropriate legends, if any, determined by the Company.

7.           TRANSFER RESTRICTIONS.  Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of the shares in respect of your Award.  For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares.  This restriction on transfer will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units.  Your Award is not transferable, except by will or by the laws of descent and distribution.  Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to receive any distribution of Common Stock pursuant to this Agreement.

8.           AWARD NOT A SERVICE CONTRACT.  Your Award is not an employment or service contract, and nothing in your Award shall be deemed to create any obligation on your part to continue in the service of the Company or an Affiliate thereof, or on the part of the Company or an Affiliate thereof to continue such service.  In addition, nothing in your Award shall obligate the Company or an Affiliate thereof, their respective stockholders, boards of directors or employees to continue any relationship that you might have as an Employee or Consultant of the Company or an Affiliate thereof.

9.           UNSECURED OBLIGATION.  Your Award is unfunded, and even as to any Restricted Stock Units which vest, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Common Stock pursuant to

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this Agreement.  You shall not have voting or any other rights as a stockholder of the Company with respect to the Common Stock acquired pursuant to this Agreement until such Common Stock is issued to you pursuant to Section 2 of this Agreement.   Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company with respect to the Common Stock so issued.  Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

10.         WITHHOLDING OBLIGATIONS.

(a)           On or before the time you receive a distribution of Common Stock pursuant to your Award, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from, at the Company’s election, the Common Stock issuable to you, payroll and any other amounts payable to you and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate thereof which arise in connection with your Award. Any fully vested shares that are withheld shall be based upon a whole number of shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.

(b)           Unless the tax withholding obligations of the Company and/or any Affiliate thereof are satisfied, the Company shall have no obligation to deliver to you any Common Stock.

(c)           In the event the Company’s obligation to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

11.         NOTICES.  Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

12.         HEADINGS.  The headings of the Sections in this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement.

13.         AMENDMENT.  This Agreement may be amended only by a writing executed by the Company and you which specifically states that it is amending this Agreement. Notwithstanding the foregoing, this Agreement may be amended solely by the Company by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Company reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of

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any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

14.         MISCELLANEOUS.

(a)           The rights and obligations of the Company with respect to your Award shall be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b)           You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c)           You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.

(d)           This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e)           All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

15.         GOVERNING PLAN DOCUMENT.  Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control; provided, however, that Section 3 of this Agreement shall govern the timing of any distribution of Common Stock under your Award.  The Board shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Board shall be final and binding upon you, the Company, and all other interested persons. No member of the Board shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Agreement.

16.         EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any employee benefit plan (other than the Plan) sponsored by the Company or any Subsidiary except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the Company or any Subsidiary.

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17.         CHOICE OF LAW.  The interpretation, performance and enforcement of this Agreement shall be governed by the law of the state of California without regard to such state’s conflicts of laws rules.

18.         SEVERABILITY.  If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

*  *  *  *  *

This Restricted Stock Unit Award Agreement shall be deemed to be signed by the Company and the Participant upon the electronic acceptance by the Participant of the Restricted Stock Unit Grant Notice to which it is attached.

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EX-10.81

Exhibit 10.81

CALIPER LIFE SCIENCES, INC.

2009 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT - INCORPORATED TERMS AND CONDITIONS

AGREEMENT made as of the date of grant set forth in the Stock Option Grant Notice between Caliper Life Sciences, Inc. (the “Company”), a Delaware corporation, and the individual whose name appears on the Stock Option Grant Notice (the “Participant”).

WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its common stock, $0.001 par value per share (the “Shares”), under and for the purposes set forth in the Company’s 2009 Equity Incentive Plan (the “Plan”);

WHEREAS, the Company and the Participant understand and agree that any terms used and not defined herein have the same meanings as in the Plan; and

WHEREAS, the Company and the Participant each intend that the Option granted herein shall be of the type set forth in the Stock Option Grant Notice.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1.GRANT OF OPTION.

The Company hereby grants to the Participant the right and option to purchase all or any part of an aggregate of the number of Shares set forth in the Stock Option Grant Notice, on the terms and conditions and subject to all the limitations set forth herein, under United States securities and tax laws, and in the Plan, which is incorporated herein by reference.  The Participant acknowledges receipt of a copy of the Plan.

2.EXERCISE PRICE.

The exercise price of the Shares covered by the Option shall be the amount per Share set forth in the Stock Option Grant Notice, subject to adjustment, as provided in the Plan, in the event of a stock split, reverse stock split or other events affecting the holders of Shares after the date hereof (the “Exercise Price”).  Payment shall be made in accordance with Paragraph 9 of the Plan.

3.EXERCISABILITY OF OPTION.

Subject to the terms and conditions set forth in this Agreement and the Plan, the Option granted hereby shall become exercisable as set forth in the Stock Option Grant Notice and are subject to the other terms and conditions of this Agreement and the Plan.

4.TERM OF OPTION.

This Option shall terminate ten years from the date of this Agreement or, if this Option is designated in the Stock Option Grant Notice as an ISO and the Participant owns as of the date hereof more than 10% of the total combined voting power of all classes of capital stock of the Company or an Affiliate, five years from the date of this Agreement, but shall be subject to earlier termination as provided herein or in the Plan.

If the Participant ceases to be an employee, director or Consultant of the Company or of an Affiliate for any reason other than the death or Disability of the Participant, or termination of the Participant for Cause, the Option may be exercised, if it has not previously terminated, within three months after the date the Participant ceases to provide service to the Company or an Affiliate, or within the originally prescribed term of the Option, whichever is earlier, but may not be exercised thereafter except as set forth below.  In such event, the Option shall be exercisable only to the extent that the Option has become exercisable and is in effect at the date of such cessation of service.

If this Option is designated in the Stock Option Grant Notice as an ISO and the Participant ceases to be an employee of the Company or of an Affiliate but continues after termination of employment to provide service to the Company or an Affiliate as a director or Consultant, this Option shall continue to vest in accordance with Section 3 above as if this Option had not terminated until the Participant is no longer providing services to the Company.  In such case, this Option shall automatically convert and be deemed a Non-Qualified Option as of the date that is three months from termination of the Participant’s employment and this Option shall continue on the same terms and conditions set forth herein until such Participant is no longer providing service to the Company or an Affiliate.

Notwithstanding the foregoing, in the event of the Participant’s Disability or death within three months after the termination of service, the Option may be exercised (i) by the Participant within one year of the Participant’s termination of service due to Disability; and (ii) by Participant’s Survivors within eighteen (18) months after the date of the Participant’s termination of service due to death, but in neither case may the Option be exercised after the date of expiration of the term of the Option.

In the event the Participant’s service is terminated by the Company or an Affiliate for Cause, the Participant’s right to exercise any unexercised portion of this Option shall cease immediately as of the time the Participant is notified his or her service

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is terminated for Cause, and this Option shall thereupon terminate.  Notwithstanding anything herein to the contrary, if subsequent to the Participant’s termination, but prior to the exercise of the Option, the Board of Directors of the Company determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then the Participant shall immediately cease to have any right to exercise the Option and this Option shall thereupon terminate.

In the event of the Disability of the Participant, as determined in accordance with the Plan, the Option shall be exercisable within one year after the Participant’s termination of service or, if earlier, within the term originally prescribed by the Option.  In such event, the Option shall be exercisable to the extent that the Option has become exercisable but has not been exercised as of the date of Disability.

In the event of the death of the Participant while an employee, director or Consultant of the Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors within eighteen (18) months after the date of death of the Participant or, if earlier, within the originally prescribed term of the Option.  In such event, the Option shall be exercisable to the extent that the Option has become exercisable but has not been exercised as of the date of death.

5.METHOD OF EXERCISING OPTION.

Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Company or its designee, in substantially the form of Exhibit A attached hereto.  Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by the person exercising the Option.  Payment of the Exercise Price for such Shares shall be made in accordance with Paragraph 9 of the Plan.  The Company shall deliver such Shares as soon as practicable after the notice shall be received, provided, however, that the Company may delay issuance of such Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including, without limitation, state securities or “blue sky” laws).  The Shares as to which the Option shall have been so exercised shall be registered in the Company’s share register in the name of the person so exercising the Option (or, if the Option shall be exercised by the Participant and if the Participant shall so request in the notice exercising the Option, shall be registered in the Company’s share register in the name of the Participant and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person exercising the Option.  In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person other than the Participant, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable.

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6.PARTIAL EXERCISE.

Exercise of this Option to the extent above stated may be made in part at any time and from time to time within the above limits, except that no fractional share shall be issued pursuant to this Option.

7.NON-ASSIGNABILITY.

The Option shall not be transferable by the Participant otherwise than by will or by the laws of descent and distribution.  If this Option is a Non-Qualified Option then it may also be transferred pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. Except as provided above in this paragraph, the Option shall be exercisable, during the Participant’s lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant’s guardian or representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon the Option shall be null and void.

8.NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

The Participant shall have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company’s share register in the name of the Participant.  Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date of such registration.

9.ADJUSTMENTS.

The Plan contains provisions covering the treatment of Options in a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with respect to stock subject to Options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference.

10.TAXES.

The Participant acknowledges that any income or other taxes due from him or her with respect to this Option or the Shares issuable pursuant to this Option shall be the Participant’s responsibility.  The Participant acknowledges and agrees that (i) the Participant was free to use professional advisors of his or her choice in connection with this Agreement, has received advice from his or her professional advisors in connection with this Agreement, understands its meaning and import, and is entering into this

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Agreement freely and without coercion or duress; (ii) the Participant has not received and is not relying upon any advice, representations or assurances made by or on behalf of the Company or any Affiliate or any employee of or counsel to the Company or any Affiliate regarding any tax or other effects or implications of the Option, the Shares or other matters contemplated by this Agreement and (iii) neither the Company its Affiliates, nor any of its officers or directors, shall be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the Internal Revenue Service were to determine that the Option constitutes deferred compensation under Section 409A of the Code.

If this Option is designated in the Stock Option Grant Notice as an ISO and there is a Disqualifying Disposition (as defined in Section 15 below) or if the Option is converted into a Non-Qualified Option and such Non-Qualified Option is exercised, the Participant agrees that the Company may withhold from the Participant’s remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes attributable to such amount that is considered compensation includable in such person’s gross income.  At the Company’s discretion, the amount required to be withheld may be withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the Participant on exercise of the Option.  The Participant further agrees that, if the Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the Company’s income tax withholding obligation, the Participant will reimburse the Company on demand, in cash, for the amount under-withheld.

11.PURCHASE FOR INVESTMENT.

Unless the offering and sale of the Shares to be issued upon the particular exercise of the Option shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:

(a)The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon any certificate(s) evidencing the Shares issued pursuant to such exercise:

“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have

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received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws;” and

(b)If the Company so requires, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder.  Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws).

12.RESTRICTIONS ON TRANSFER OF SHARES.

12.1The Participant agrees that in the event the Company proposes to offer for sale to the public any of its equity securities and such Participant is requested by the Company and any underwriter engaged by the Company in connection with such offering to sign an agreement restricting the sale or other transfer of Shares, then it will promptly sign such agreement and will not transfer, whether in privately negotiated transactions or to the public in open market transactions or otherwise, any Shares or other securities of the Company held by him or her during such period as is determined by the Company and the underwriters, not to exceed 180 days following the closing of the offering, plus such additional period of time as may be required to comply with Marketplace Rule 2711 of the National Association of Securities Dealers, Inc. or similar rules thereto (such period, the “Lock-Up Period”).  Such agreement shall be in writing and in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to customary and prevailing terms and conditions.  Notwithstanding whether the Participant has signed such an agreement, the Company may impose stop-transfer instructions with respect to the Shares or other securities of the Company subject to the foregoing restrictions until the end of the Lock-Up Period.

12.2The Participant acknowledges and agrees that neither the Company, its shareholders nor its directors and officers, has any duty or obligation to disclose to the Participant any material information regarding the business of the Company or affecting the value of the Shares before, at the time of, or following a termination of the service of the Participant by the Company, including, without limitation, any information concerning plans for the Company to make a public offering of its securities or to be acquired by or merged with or into another firm or entity.

13.NO OBLIGATION TO MAINTAIN RELATIONSHIP.

The Company is not by the Plan or this Option obligated to continue the Participant as an employee, director or Consultant of the Company or an Affiliate.  The

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Participant acknowledges:  (i) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (ii) that the grant of the Option is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (iii) that all determinations with respect to any such future grants, including, but not limited to, the times when options shall be granted, the number of shares subject to each option, the option price, and the time or times when each option shall be exercisable, will be at the sole discretion of the Company; (iv) that the Participant’s participation in the Plan is voluntary; (v) that the value of the Option is an extraordinary item of compensation which is outside the scope of the Participant’s employment or consulting contract, if any; and (vi) that the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

14.IF OPTION IS INTENDED TO BE AN ISO.

If this Option is designated in the Stock Option Grant Notice as an ISO so that the Participant (or the Participant’s Survivors) may qualify for the favorable tax treatment provided to holders of Options that meet the standards of Section 422 of the Code then any provision of this Agreement or the Plan which conflicts with the Code so that this Option would not be deemed an ISO is null and void and any ambiguities shall be resolved so that the Option qualifies as an ISO.  Nonetheless, if the Option is determined not to be an ISO, the Participant understands that neither the Company nor any Affiliate is responsible to compensate him or her or otherwise make up for the treatment of the Option as a Non-Qualified Option and not as an ISO.  The Participant should consult with the Participant’s own tax advisors regarding the tax effects of the Option and the requirements necessary to obtain favorable tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.

Notwithstanding the foregoing, to the extent that the Option is designated in the Stock Option Grant Notice as an ISO and is not deemed to be an ISO pursuant to Section 422(d) of the Code because the aggregate fair market value (determined as of the date hereof) of any of the Shares with respect to which this ISO is granted becomes exercisable for the first time during any calendar year in excess of $100,000, the portion of the Option representing such excess value shall be treated as a Non-Qualified Option and the Participant shall be deemed to have taxable income measured by the difference between the then fair market value of the Shares received upon exercise and the price paid for such Shares pursuant to this Agreement.

15.NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION OF AN ISO.

If this Option is designated in the Stock Option Grant Notice as an ISO then the Participant agrees to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any of the Shares acquired pursuant to the exercise of the ISO.  A Disqualifying Disposition is defined in Section 424(c) of the

7

Code and includes any disposition (including any sale) of such Shares before the later of (a) two years after the date the Participant was granted the ISO or (b) one year after the date the Participant acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code.  If the Participant has died before the Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

16.NOTICES.

Any notices required or permitted by the terms of this Agreement or the Plan shall be given by recognized courier service, facsimile, registered or certified mail, return receipt requested, addressed as follows:

If to the Company:

Caliper Life Sciences, Inc.

68 Elm Street

Hopkinton, MA 01748

Attention:  Stock Plan Administrator

If to the Participant at the address set forth on the Stock Option Grant Notice

or to such other address or addresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have been given upon the earlier of receipt, one business day following delivery to a recognized courier service or three business days following mailing by registered or certified mail.

17.GOVERNING LAW.

This Agreement shall be construed and enforced in accordance with the law of the State of Delaware, without giving effect to the conflict of law principles thereof.  For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in Delaware and agree that such litigation shall be conducted in the state courts of Middlesex County, Massachusetts or the federal courts of the United States for the District of Massachusetts.

18.BENEFIT OF AGREEMENT.

Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

19.ENTIRE AGREEMENT.

This Agreement, together with the Plan, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof

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and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict, the express terms and provisions of this Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the Plan.

20.MODIFICATIONS AND AMENDMENTS.

The terms and provisions of this Agreement may be modified or amended as provided in the Plan.

21.WAIVERS AND CONSENTS.

Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

22.DATA PRIVACY.

By entering into this Agreement, the Participant:  (i) authorizes the Company and each Affiliate, and any agent of the Company or any Affiliate administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its Affiliates such information and data as the Company or any such Affiliate shall request in order to facilitate the grant of options and the administration of the Plan; (ii) waives any data privacy rights he or she may have with respect to such information; and (iii) authorizes the Company and each Affiliate to store and transmit such information in electronic form.

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EX-10.83

Exhibit 10.83

FIRST LOAN MODIFICATION AGREEMENT

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of December 11, 2009, by and between (i) SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462 (“Bank”) and (ii)  CALIPER LIFE SCIENCES, INC., a Delaware corporation with a principal place of business located at 68 Elm Street, Hopkinton, Massachusetts 01748 (“Caliper”), NOVASCREEN BIOSCIENCES CORPORATION, a Maryland corporation (“NovaScreen”), XENOGEN CORPORATION, a Delaware corporation (“Xenogen”), and CALIPER LIFE SCIENCES LTD., a company organized under the laws of Canada (“Caliper Ltd.”) (hereinafter, Caliper, NovaScreen, Xenogen, and Caliper Ltd. are jointly and severally, individually and collectively, referred to as “Borrower”).

1.             DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of March 6, 2009, evidenced by, among other documents, a certain Second Amended and Restated Loan and Security Agreement, dated as of March 6, 2009, by and between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

2.             DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”).

Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

3.             DESCRIPTION OF CHANGE IN TERMS.

A.Modifications to Loan Agreement.

1The Loan Agreement shall be amended by deleting the following, appearing as Section 6.6 thereof, in its entirety:

“6.6        Access to Collateral; Books and Records.  At reasonable times, on one (1) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right, on a semi-annual basis (or more frequently after the occurrence of an Event of Default) to inspect the Collateral and the right to audit and copy Borrower’s Books.  The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $750 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses.  In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000 plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.”

and inserting in lieu thereof the following:

“6.6        Access to Collateral; Books and Records.  At reasonable times, on one (1) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right, on a semi-annual basis (or more frequently after the occurrence of an Event of Default) to inspect the Collateral and the right to audit and copy Borrower’s Books.  The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $850 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses.  In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000 plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.”

2The Loan Agreement shall be amended by deleting the following, appearing as Section 6.9(b) thereof, in its entirety:

“(b)         Minimum EBITDA-Cap Ex.  Borrower’s EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”) for the two (2) quarter period ending as of the last day of each quarter, shall be in an amount equal to: (i) losses not greater than (A) One Million Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31, 2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for the quarter ending March 31, 2009; (C) Eight Million Seven Hundred Thousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) Five Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30, 2009; (ii) Sixty Thousand Dollars ($60,000) for the quarter ending December 31, 2009; (iii) losses not greater than (A) Two Million Dollars ($2,000,000) for the quarter ending March 31, 2010; (B) Six Million Dollars ($6,000,000) for the quarter ending June 30, 2010; and (C) Two Million Dollars ($2,000,000) for the quarter ending September 30, 2010; and (iv) Three Million Eight Hundred Thousand Dollars ($3,800,000) for the quarter ending December 31, 2010.”

and inserting in lieu thereof the following:

“(b)         Minimum EBITDA-Cap Ex.  Borrower’s EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”) for the two (2) quarter period ending as of the last day of each quarter, shall be in an amount equal to: (i) losses not greater than (A) One Million Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31, 2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for the quarter ending March 31, 2009; (C) Eight Million Seven Hundred Thousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) Five Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30, 2009; (ii) not less than Sixty Thousand Dollars ($60,000) for the quarter ending December 31, 2009; (iii) losses not greater than (A) Two Million Dollars ($2,000,000) for the quarter ending March 31, 2010; (B) Five Million Dollars ($5,000,000) for the quarter ending June 30, 2010; and (C) Two Million Dollars ($2,000,000) for the quarter ending September 30, 2010; (iv) not less than Two Million Dollars ($2,000,000) for the quarter ending December 31, 2010; and (v) losses not greater than Five Hundred Thousand Dollars ($500,000) for the quarter ending March 31, 2011.”

3The Loan Agreement shall be amended by deleting the following definition appearing in Section 13.1thereof:

“Revolving Line Maturity Date” is November 30, 2010.

and inserting in lieu thereof the following:

“Revolving Line Maturity Date” is April 1, 2011.”

4The Compliance Certificate appearing as Exhibit B to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit A hereto.

4.             FEES.  In addition to and supplemental of any fees that are due or that may become due and payable by Borrower to Bank pursuant to Section 2.4 of the Loan Agreement, Borrower shall pay to Bank a non-refundable modification fee equal to Twenty Five Thousand Dollars ($25,000), which fee shall be deemed fully earned as of the date hereof and shall be payable as follows: (i) Ten Thousand Dollars ($10,000) shall be payable on or before the date hereof; and (ii) Fifteen Thousand Dollars ($15,000) shall be payable on the earlier to occur of (x) an Event of Default and (y) February 1, 2010.  Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

5.             WAIVER OF LANDLORD CONSENTS.  In connection with this Loan Modification Agreement, the Bank has agreed to waive delivery of outstanding Landlord Consent agreements formerly deliverable as a post-closing item in connection with the execution of the Existing Loan Documents.

6.             RATIFICATION OF NEGATIVE PLEDGE.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of a certain negative pledge arrangement with respect to Borrower’s intellectual property, between Borrower and Bank, and Borrower acknowledges, confirms and agrees that said negative pledge arrangement remains in full force and effect.

7.             ADDITIONAL COVENANTS: RATIFICATION OF PERFECTION CERTIFICATE.  Borrower is not a party to, nor is bound by, any license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral.  Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public).  Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under the Loan Agreement and the other Loan Documents.  In addition, the Borrower hereby certifies that no Collateral is in the possession of any third party bailee (such as at a warehouse) that has not otherwise been previously disclosed to Bank.  In the event that Borrower, after the date hereof, intends to store or otherwise deliver the Collateral to such a bailee, then Borrower shall first receive the prior written consent of Bank and such bailee must acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of March 6, 2009 (as updated, amended, amended and restated, supplemented and/or modified as of the date hereof), and acknowledges, confirms and agrees the disclosures and information provided by Borrower to Bank in the Perfection Certificate (as updated, amended, amended and restated, supplemented and/or modified as of the date hereof) has not changed.

8.             AUTHORIZATION TO FILE.  Borrower hereby authorizes Bank to file UCC financing statements without notice to Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in order to further perfect or protect Bank’s interest in the Collateral, including a notice that any disposition of the Collateral, by either the Borrower or any other Person, shall be deemed to violate the rights of the Bank under the Code.

9.             CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

10.           RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

11.           NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

12.           CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this Loan Modification Agreement.

13.           RIGHT OF SET-OFF.  In consideration of Bank’s agreement to enter into this Loan Modification Agreement, Borrower hereby reaffirms and hereby grants to Bank, a lien, security interest and right of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Silicon Valley Bank  (including a Bank subsidiary) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the loan.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

14.           CONFIDENTIALITY.  Bank may use confidential information for the development of databases, reporting purposes, and market analysis, so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.  The provisions of the immediately preceding sentence shall survive the termination of the Loan Agreement.

15.           JURISDICTION/VENUE.  Borrower accepts for itself and in connection with its properties, unconditionally, the exclusive jurisdiction of any state or federal court of competent jurisdiction in the Commonwealth of Massachusetts in any action, suit, or proceeding of any kind against it which arises out of or by reason of this Loan Modification Agreement.  NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE BANK’S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

16.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

[The remainder of this page is intentionally left blank]

This Loan Modification Agreement is executed as a sealed instrument under the laws of the Commonwealth of Massachusetts as of the date first written above.

BORROWER:

CALIPER LIFE SCIENCES, INC.

By:	/s/ Peter F. McAree
Name:	Peter F. McAree
Title:	Senior Vice President and Chief Financial Officer
NOVASCREEN BIOSCIENCES CORPORATION
By:	/s/ Peter F. McAree
Name:	Peter F. McAree
Title:	Vice President, Finance
XENOGEN CORPORATION
By:	/s/ Peter F. McAree
Name:	Peter F. McAree
Title:	Vice President, Finance
CALIPER LIFE SCIENCES LTD.
By:	/s/ Peter F. McAree
Name:	Peter F. McAree
Title:	Vice President, Finance
BANK:
SILICON VALLEY BANK
By:	/s/ Ryan Ravenscroft
Name:	Ryan Ravenscroft
Title:	Vice President

EXHIBIT B

COMPLIANCE CERTIFICATE

TO:	SILICON VALLEY BANK	Date:
FROM:	CALIPER LIFE SCIENCES, INC.
	NOVASCREEN BIOSCIENCES CORPORATION
	XENOGEN CORPORATION
	CALIPER LIFE SCIENCES, LTD.

The undersigned authorized officers of Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation, and Caliper Life Sciences, Ltd. (individually and collectively, jointly and severally, “Borrower”) certify that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending                                with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant	Required	Complies
Quarterly consolidated and consolidating financial statements with Compliance Certificate	Quarterly within 45 days	Yes   No
Annual consolidated and consolidating financial statement (CPA Audited) + CC	FYE within120 days	Yes   No
10-Q, 10-K and 8-K	Within 5 days after filing with SEC	Yes   No
A/R & A/P Agings; Deferred Revenue report, cash report	Monthly within 15 days	Yes   No
Transaction Reports	Weekly and with each Advance request	Yes   No
Board approved projections	Annually, as revised	Yes   No

The following intellectual property was registered after the Effective Date (if no registrations, state “None”)

Financial Covenant	Required	Actual	Complies
Maintain at all times, tested quarterly:
Minimum Quick Ratio	0.95:1.00	:1.0	Yes   No
Minimum EBITDA minus Cap Ex*	$	$	Yes   No

*See Section 6.9(b) of the Loan and Security Agreement

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The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)

Caliper Life Sciences, Inc.	BANK USE ONLY
By:	Received by:
Name:			AUTHORIZED SIGNER
Title:	Date:
NovaScreen Biosciences Corporation	Verified:
		AUTHORIZED SIGNER
By:
Name:	Date:
Title:
	Compliance Status:      Yes   No
Xenogen Corporation
By:
Name:
Title:
Caliper Life Sciences, Ltd.
By:
Name:
Title:

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall control.

I.              ADJUSTED QUICK RATIO (Section 6.9(a))

Required: A ratio of Quick Assets to Quick Liabilities of at least: 0.95 to 1.0 for the quarter ending March 31, 2009 and for each fiscal quarter thereafter

A.	Aggregate value of the unrestricted cash and Cash Equivalents and Marketable Securities of Borrower	$
B.	Aggregate value of the net billed accounts receivable and Unbilled Accounts of Borrower	$
C.	Quick Assets (the sum of lines A and B)	$
D.	Aggregate value of Obligations to Bank	$
E.	Aggregate value of liabilities of Borrower (including all Indebtedness) that matures within one (1) year and current portion of Subordinated Debt permitted by Bank to be paid by Borrower	$
F	Aggregate value of (i) Deferred Revenue, (ii) real estate related restructuring expenses, and (iii) customer deposits
G.	Quick Liabilities (the sum of lines D and E minus line F)	$
H.	Adjusted Quick Ratio (line C divided by line G)

Is line H equal to or greater than 0.95 to 1.0

o No, not in compliance o Yes, in compliance

3

II.            MINIMUM EBITDA minus CAP-EX (Section 6.9(b)

Required: Borrower’s EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”) for the two (2) quarter period ending as of the last day of each quarter, shall be in an amount equal to: (i) losses not greater than (A) One Million Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31, 2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for the quarter ending March 31, 2009; (C) Eight Million Seven Hundred Thousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) Five Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30, 2009; (ii) not less than Sixty Thousand Dollars ($60,000) for the quarter ending December 31, 2009; (iii) losses not greater than (A) Two Million Dollars ($2,000,000) for the quarter ending March 31, 2010; (B) Five Million Dollars ($5,000,000) for the quarter ending June 30, 2010; and (C) Two Million Dollars ($2,000,000) for the quarter ending September 30, 2010; (iv) not less than Two Million Dollars ($2,000,000) for the quarter ending December 31, 2010; and (v) losses not greater than Five Hundred Thousand Dollars ($500,000) for the quarter ending March 31, 2011.

A.	Net Income		$
B.	Interest Expense		$
C.	To the extent included in the determination of Net Income:
	1.	Depreciation expense	$
	2.	Amortization expense	$
	3.	Non-cash stock-based compensation expense and restructuring expense	$
D.	income tax expense		$
E.	EBITDA (line A, plus line B, plus line C.1, plus line C.2, plus line C.3, and plus line D)		$
F.	capital expenditures		$
G.	EBIDTA minus CAP EX (line E minus line F)		$

Is line G equal to or greater than $[                                          ]?

o No, not in compliance o Yes, in compliance

1

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1)

Registration Statement (Form S-3 File No. 333-147571) of Caliper Life Sciences

(2)

Registration Statement (Form S-8 File No. 333-161173) pertaining to the 2009 Equity Incentive Plan and the 1999 Employee Stock Purchase Plan of Caliper Life Sciences

(3)

Registration Statement (Form S-8 File No. 333-156149) pertaining to the 1999 Employee Stock Purchase Plan of Caliper Life Sciences

(4)

Registration Statement (Form S-8 File No. 333-141373) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(5)

Registration Statement (Form S-8 File No. 333-129861) pertaining to the 1999 Employee Stock Purchase Plan of Caliper Life Sciences

(6)

Registration Statement (Form S-8 File No. 333-117273) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(7)

Registration Statement (Form S-8 File No. 333-106946) pertaining to the Acquisition Equity Inventive Plan of Caliper Life Sciences

(8)

Registration Statement (Form S-8 File No. 333-106436) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(9)

Registration Statement (Form S-8 File No. 333-91276) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(10)

Registration Statement (Form S-8 File No. 333-76636) pertaining to the 2001 Non-Statutory Stock Option Plan

(11)

Registration Statement (Form S-8 File No. 333-69722) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(12)

Registration Statement (Form S-8 File No. 333-40466) pertaining to the 1999 Equity Incentive Plan, the 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

(13)

and Registration Statement (Form S-8 File No. 333-95007) pertaining to the 1996 Equity Incentive Plan, the 1999 Equity Incentive Plan, 1999 Employee Stock Purchase Plan, and the 1999 Non-Employee Director's Stock Option Plan of Caliper Life Sciences

of our reports dated March 12, 2010, with respect to the consolidated financial statements and schedule of Caliper Life Sciences Inc. and the effectiveness of internal control over financial reporting of Caliper Life Sciences Inc., included in this Annual Report (Form 10-K) of Caliper Life Sciences Inc. for the year ended December 31, 2009.

/s/ Ernst & Young LLP

Boston, Massachusetts
March 12, 2010

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO RULE 13A-14(A) AND 15D-14(A)

I, E. Kevin Hrusovsky, certify that:

1.

I have reviewed this annual report on Form 10-K of Caliper Life Sciences, 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 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: March 12, 2010

By: /s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) AND 15D-14(A)

EX-31.2

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO RULE 13A-14(A) AND 15D-14(A)

I, Peter F. McAree, certify that:

1.

I have reviewed this annual report on Form 10-K of Caliper Life Sciences, 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 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: March 12, 2010

By: /s/ PETER F. MCAREE
Peter F. McAree

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) AND 15D-14(A)

EX-32.1

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EXHIBIT 32.1

CALIPER LIFE SCIENCES, INC.
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 Annual Report of Caliper Life Sciences, Inc. (the "Company") on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, E. Kevin Hrusovsky, President and Chief Executive Officer of the Company certify, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By: /s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky
President and Chief Executive Officer

Date: March 12, 2010

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EXHIBIT 32.1

CALIPER LIFE SCIENCES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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EXHIBIT 32.2

CALIPER LIFE SCIENCES, INC.
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 Annual Report of Caliper Life Sciences, Inc (the "Company") on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter F. McAree, Senior Vice President and Chief Financial Officer of the Company certify, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By: /s/ PETER F. MCAREE
Peter F. McAree
Senior Vice President and Chief Financial Officer

Date: March 12, 2010

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EXHIBIT 32.2

CALIPER LIFE SCIENCES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002