10-Q

UNITED STATES SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

for the quarterly period ended June 30, 2008.

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 # 000-28229

CALIPER LIFE SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0675808
(State of Incorporation)	(I.R.S. Employer Identification Number)

68 Elm Street

Hopkinton, Massachusetts 01748

(Address and zip code of principal executive offices)

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

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

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

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

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

NUMBER OF SHARES OF COMMON STOCK OUTSTANDING ON July 31, 2008:  48,386,705

CALIPER LIFE SCIENCES, INC.

TABLE OF CONTENTS

	Page
PART I   FINANCIAL INFORMATION	2
Item 1. Financial Statements (unaudited)	2
Condensed Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007	2
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2008 and 2007	3
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	17
Item 4. Controls and Procedures	18
PART II  OTHER INFORMATION	19
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults Upon Senior Securities	19
Item 4. Submission of Matters to a Vote of Security Holders	19
Item 5. Other Information	19
Item 6. Exhibits	20
SIGNATURES	21
EXHIBIT INDEX	22
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

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PART I. FINANCIAL INFORMATION

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

Item 1.    Financial Statements

	June 30, 2008			December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	7,969		$	15,709
Marketable securities	2,631			3,246
Accounts receivable, net	26,865			30,248
Inventories	21,660			19,572
Prepaid expenses and other current assets	2,733			2,353
Total current assets	61,858			71,128
Property and equipment, net	11,042			11,477
Intangible assets, net	37,808			42,862
Goodwill	80,590			80,836
Other assets	1,054			1,626
Total assets	$	192,352		$	207,929
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,183		$	8,371
Accrued compensation	5,369			6,530
Other accrued liabilities	8,571			12,825
Deferred revenue and customer deposits	17,702			15,553
Accrued restructuring, current portion	301			2,112
Borrowings under credit facility, current portion	14,900			—
Total current liabilities	56,026			45,391
Accrued restructuring	253			506
Borrowings under credit facility	—			12,900
Other noncurrent liabilities	7,399			6,816
Deferred tax liability	1,130			1,130
Commitments and contingencies (Note 8)
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, 48,243,749 and 47,768,611 shares issued and outstanding in 2008 and 2007, respectively	48			48
Additional paid-in capital	377,368			374,629
Accumulated deficit	(250,738		)	(234,120		)
Accumulated other comprehensive income	866			629
Total stockholders’ equity	127,544			141,186
Total liabilities and stockholders’ equity	$	192,352		$	207,929

See accompanying notes.

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CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Revenues:
Product revenue	$	22,024		$	21,022		$	39,689		$	36,283
Service revenue	9,290			8,942			18,298			17,872
License fees and contract revenue	2,717			5,326			5,331			9,575
Total revenue	34,031			35,290			63,318			63,730
Costs and expenses:
Cost of product revenue	13,232			12,555			24,337			22,522
Cost of service revenue	6,447			5,437			12,544			11,089
Cost of license revenue	282			825			566			1,268
Research and development	5,041			6,648			10,573			13,422
Selling, general and administrative	12,757			13,306			26,690			25,913
Amortization of intangible assets	2,490			2,533			4,979			5,070
Restructuring charges (credits), net	(27		)	(18		)	(20		)	7
Total costs and expenses	40,222			41,286			79,669			79,291
Operating loss	(6,191		)	(5,996		)	(16,351		)	(15,561		)
Interest expense, net	(203		)	(123		)	(358		)	(116		)
Other income (expense), net	(87		)	(93		)	319			(81		)
Loss before income taxes	(6,481		)	(6,212		)	(16,390		)	(15,758		)
Provision for income taxes	(201		)	(108		)	(228		)	(159		)
Net loss	$	(6,682	)	$	(6,320	)	$	(16,618	)	$	(15,917	)
Net loss per share, basic and diluted	$	(0.14	)	$	(0.13	)	$	(0.35	)	$	(0.34	)
Shares used in computing net loss per common share, basic and diluted	47,897			47,228			47,790			47,104

See accompanying notes.

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CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Six Months Ended June 30,
	2008			2007
Operating activities
Net loss	$	(16,618	)	$	(15,917	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization	6,880			7,016
Stock-based compensation expense, net	1,997			2,734
Non-cash restructuring (credits), net	(20		)	7
Foreign currency exchange (gains) losses	(292		)	98
Changes in operating assets and liabilities:
Accounts receivable	3,879			2,015
Inventories	(1,864		)	(2,512		)
Prepaid expenses and other current assets	202			(694		)
Accounts payable and other accrued liabilities	(3,348		)	565
Accrued compensation	(1,350		)	(1,822		)
Deferred revenue and customer deposits	2,004			740
Other noncurrent liabilities	583			(525		)
Payments of accrued restructuring obligations, net	(2,002		)	(4,789		)
Net cash from operating activities	(9,949		)	(13,084		)
Investing activities
Purchases of marketable securities	(1,933		)	(1,648		)
Proceeds from sales of marketable securities	—			4,102
Proceeds from maturities of marketable securities	2,536			5,862
Purchase of intangibles	—			(250		)
Other assets	32			(587		)
Purchases of property and equipment	(1,376		)	(848		)
Net cash from investing activities	(741		)	6,631
Financing activities
Borrowings under credit facility	4,000			4,500
Payments of credit facility and other obligations	(2,000		)	(248		)
Proceeds from issuance of common stock	866			1,994
Net cash from financing activities	2,866			6,246
Effect of exchange rates on changes in cash and cash equivalents	84			50
Net decrease in cash and cash equivalents	(7,740		)	(157		)
Cash and cash equivalents at beginning of period	15,709			11,634
Cash and cash equivalents at end of period	$	7,969		$	11,477

See accompanying notes.

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of Caliper Life Sciences, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Caliper”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules or regulations. The December 31, 2007 consolidated balance sheet has been derived from the Company’s audited financial statements as of that date, but does not include all disclosures required by U.S. generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal recurring entries) considered necessary for a fair presentation have been included. However, these unaudited consolidated financial statements should be read in conjunction with Caliper’s Annual Report on Form 10-K for the year ended December 31, 2007.

Operating results for the three and six months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the full fiscal year or for any future periods. For example, the Company typically experiences higher revenue in the fourth quarter of its fiscal year due to spending patterns of its customers, and may realize significant periodic fluctuations in license and contract revenue depending on the timing and circumstances of underlying individual transactions.

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 development and other life sciences research.

The accompanying financial statements assume that Caliper’s cash, cash equivalents and marketable securities balance at June 30, 2008 and access to available capital under its credit facility with a bank (the “Credit Facility”) are sufficient to fund operations through at least December 31, 2008 based upon its current operating plan. Caliper’s ability to fund its ongoing operations will depend on many factors, including particularly its ability to increase product and service sales, control margins and operating costs and maintain compliance with the covenants of its Credit Facility. As more fully described in Note 7, certain conditions associated with its Credit Facility could have a potentially adverse impact on its ability to fund its operations and its access to capital under its Credit Facility.

Summary of Significant Accounting Principles

The accounting policies underlying the accompanying unaudited consolidated financial statements are those set forth in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC. Those policies are not presented herein, except to the extent that new policies have been adopted or that the description of existing policies has been meaningfully updated.

Fair Values of Assets and Liabilities

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”), effective for financial statements issued for fiscal years beginning after November 15, 2007.  SFAS No. 157 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.  SFAS No. 157 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 SFAS No. 157 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 accordance with the provisions of SFAS No. 157, 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

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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 June 30, 2008, 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	$	261	$	261	$	—	$	—
Commercial paper	397		—		397		—
U.S. corporate notes and bonds	2,073		—		2,073		—
Other	162		—		162		—
Total	$	2,893	$	261	$	2,632	$	—

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.

Income Taxes

Caliper accounts for income taxes in accordance with FAS 109, Accounting for Income Taxes, and accounts for uncertainty in income taxes recognized in financial statements in accordance with FIN 48, Accounting for Uncertainty in Income Taxes.   FIN 48 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 FIN 48. Caliper classifies uncertain tax positions as short-term liabilities within accrued expenses.  During the six month period in each of 2008 and 2007, Caliper’s tax provision primarily relates to foreign taxes in jurisdictions where its wholly owned subsidiaries are profitable.

2. 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):

	June 30, 2008		December 31, 2007
Raw material	$	12,424	$	11,228
Work-in-process	825		561
Finished goods	8,411		7,783
	$	21,660	$	19,572

3. Intangibles

Intangibles, net, consist of the following assets acquired in connection with previous business combinations (in thousands):

	June 30, 2008		December 31, 2007
Core technologies	$	23,601	$	25,323
Developed and contract technologies	7,000		9,427
Customer contracts, lists and relationships	4,199		5,007
Trade names	2,898		2,898
Other intangibles	110		207
	$	37,808	$	42,862

4. 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 FAS 5,  Accounting for Contingencies, and FASB Interpretation No. 45 (FIN 45), 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 of defective goods, a preventative maintenance visit on certain products, and telephone-based technical support. Factors that affect

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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.

Changes in Caliper’s warranty obligation are as follows (in thousands):

	Six Months Ended June,
	2008			2007
Balance at beginning of period	$	1,684		$	2,223
Warranties issued during the period	555			776
Settlements made during the period	(737		)	(930		)
Balance at end of period	$	1,502		$	2,069

5. Comprehensive Loss

Comprehensive loss is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net loss	$	(6,682	)	$	(6,320	)	$	(16,618	)	$	(15,917	)
Unrealized gain (loss) on marketable securities	(3		)	9			(11		)	16
Foreign currency translation gain (loss)	(198		)	172			248			163
Comprehensive loss	$	(6,883	)	$	(6,139	)	$	(16,381	)	$	(15,738	)

6. Restructuring Obligations

The following table summarizes restructuring obligations as of June 30, 2008 and related activity during the six months ended June 30, 2008 (in thousands):

	Severance and Related			Facilities			Total
Balance, December 31, 2007	$	9		$	2,609		$	2,618
Adjustments to estimated obligations	—			(210		)	(210		)
Interest accretion	—			148			148
Payments	(9		)	(1,993		)	(2,002		)
Balance, June 30, 2008	$	—		$	554		$	554

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

Years Ended December 31:
2008 (remainder of fiscal year)	$	176
2009	355
2010	119
Total minimum payments	650
Less: Amount representing interest	(96		)
Present value of future payments	554
Less: Current portion of obligations	301
Non-current portion of obligations	$	253

The restructuring obligations reflected above resulted from the following actions.

Prior Facility Closures

During the period from May 2003 through December 2006, Caliper consolidated certain facilities, the effects of which were originally reflected and have been subsequently adjusted through restructuring charges (credits) in the accompanying statement of operations. These facility closures were accounted for in accordance with SFAS No. 146, 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 for each of the closed facilities. Fair value was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 5%), for the space no longer occupied, considering sublease income at each point in time. The consolidated facilities included two vacated facilities in Mountain View, California.  As of June 30, 2008, there are no remaining obligations because the leases terminated on that date.

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Xenogen Acquisition

In connection with the acquisition of Xenogen Corporation (“Xenogen”), Caliper incurred costs that 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.

In 2006, Caliper consolidated Xenogen’s West Coast operations in Alameda, California into a single facility, leaving one facility unoccupied with the intention to sublease any excess space. As of August 9, 2006, which was the date of the acquisition of Xenogen, Caliper established a liability of $1.0 million related to this lease obligation based on its intention to sublease 100% of the facility.  Approximately 57% of the facility was subleased. In March 2008, in connection with the 2008 consolidation actions discussed below under “2008 Consolidation Plan,” Caliper reversed its decision 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.

In 2006, Caliper also assumed a $1.0 million obligation related to Xenogen’s St. Louis, Missouri facility. The facility closure was previously accounted for 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, considering the sublease income potential of the property. The lease term expires April 30, 2011.

2008 Consolidation Plan

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 entails vacating approximately 37,000 square feet of currently occupied space in Mountain View, California during the third quarter of 2008 and moving approximately 33 employees engaged principally in research and development activities from Mountain View, California into Caliper’s facilities in Alameda, California.  The consolidation plan resulted in year to date severance and retention charges of approximately $0.5 million in connection with the reduction of approximately 12 positions.  These charges are reflected in the accompanying statement of operations, primarily within research and development and general and administrative expenses.

7. Revolving Credit Facility

On February 15, 2008, Caliper entered into an Amended and Restated Loan and Security Agreement (the “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. The Credit Facility amends and restates in its entirety a certain Loan and Security Agreement by and among Caliper and the bank dated as of August 9, 2006, as amended. Principal borrowings under the Credit Facility accrue interest at a floating per annum rate equal to the prime rate if Caliper’s unrestricted cash held at the bank exceeds or is equal to $25 million, or prime plus one-half of one percentage point if Caliper’s unrestricted cash held at the bank is below $25 million. Under the Credit Facility, Caliper is permitted to borrow up to $25 million, provided it maintains unrestricted cash of at least $25 million with the bank, or is otherwise subject to a borrowing base limit consisting of up to (a) 80% of eligible accounts receivable, as defined in the Credit Facility, plus (b) the lesser of 90% of Caliper’s unrestricted cash maintained at the bank or $10 million. The Credit Facility matures on June 30, 2009. The Credit Facility will serve 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 June 30, 2008, Caliper was in compliance with the covenants.

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 prime 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, and if 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 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.

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8. Commitments and Contingencies

As of June 30, 2008, future minimum payments under operating leases (excluding idled facilities accounted for within accrued restructuring in the accompanying balance sheet) were as follows (in thousands):

Years ending December 31:
2008 (remainder of fiscal year)	$	3,986
2009	8,398
2010	8,176
2011	7,623
2012	7,460
Thereafter	19,510
Total minimum lease payments	$	55,153

During March 2008, Caliper amended the lease on its LabChip manufacturing facility to extend the lease term through November 2013.  Annual payments under the lease are approximately $1.8 million.  During May 2008, Caliper amended the lease on its Alameda, California facilities to extend the lease through March 2019.  Annual payments under the lease are approximately $1.1 million.  During June 2008, Caliper amended the lease on its Cranbury, New Jersey facility to extend the lease through September 2014.  Annual payments under the lease are approximately $1.7 million.

9. Legal Proceedings

During the quarter ended June 30, 2008, there were no new developments with respect to Caliper’s litigation matter, the IPO lawsuits, as more fully described in Note 15 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (the “2007 Form 10-K.”)

On April 2, 2008, Caliper settled an outstanding litigation with Young & Partners LLC (“Young”) (as also described in Note 15 to the Company’s consolidated financial statements in the 2007 Form 10-K).  In connection with this settlement, Caliper paid approximately $1.4 million to Young in full settlement and release of all claims.  This amount was accrued for in full at December 31, 2007.

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.

10. Stock-Based Compensation, Options and Restricted Stock Activity and Net Loss per Weighted Average Common Share Outstanding

Stock-Based Compensation

Caliper accounts for stock-based compensation in accordance with Statement of Financial Accounting Standard No. 123R, Share-Based Payment (“SFAS 123R”), 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 a Black-Scholes-Merton based option-pricing model.

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

	Three Months Ended  June 30				Six Months Ended  June 30
	2008		2007		2008		2007
Cost of product revenue	$	84	$	114	$	165	$	242
Cost of service revenue	21		34		42		77
Research and development	95		211		188		465
Selling, general and administrative	787		1,022		1,602		1,950
Total	$	987	$	1,381	$	1,997	$	2,734

On June 30, 2008, Caliper had five share-based compensation plans (the “Plans”), which are described within Note 13 to the consolidated financial statements included in the 2007 Form 10-K.

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. The expected term of the options is based on Caliper’s historical option exercise data taking into consideration the exercise patterns of the option holders 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.

	Six Months Ended June 30,
	2008	2007
Expected volatility (%)	40-43	40-45
Risk-free interest rate (%)	2.20-3.20	4.50-5.00
Expected term (years)	3.4-4.2	3.2-4.2
Expected dividend yield (%)	—	—

Options and Restricted Stock Activity

A summary of stock option and restricted stock activity under the Plans as of June 30, 2008, and changes during the six months then ended is as follows:

Stock Options	Shares		Weighted Average  Exercise  Price		Weighted  Average  Remaining  Contractual  Term		Aggregate  Intrinsic Value
							(in thousands)
Outstanding at December 31, 2007	7,159,848		$	5.69
Granted	1,102,758		4.02
Exercised	(322,505	)	1.15
Canceled	(201,568	)	7.01
Outstanding at June 30, 2008	7,738,533		$	5.61	$	6.28	$	336
Exercisable at June 30, 2008	4,839,225		$	5.87	$	6.24	$	336
Vested or expected to vest at June 30, 2008	7,600,262		$	5.61	$	6.28	$	325

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Restricted Stock Units	Shares		Weighted Average  Grant Date  Fair Market  per Share Value
Outstanding and non-vested at December 31, 2007	646,641		$	5.99
Granted	320,298		3.96
Vested	(125,099	)	5.19
Cancelled restricted stock awards	(14,621	)	5.28
Outstanding and non-vested at June 30, 2008	827,219		5.23

During the six months ended June 30, 2008, Caliper granted its employees 1,102,758 options at a weighted average grant date fair value of $1.47 per share using a Black-Scholes-Merton based option pricing model. The total intrinsic value of options exercised during the six months ended June 30, 2008 was approximately $683,000. The total fair value of restricted stock that vested during the six months ended June 30, 2008 was approximately $649,000.

As of June 30, 2008, there was $7.4 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 (vesting) period of approximately 2.6 years.

Common Shares Outstanding

During the six months ended June 30, 2008, Caliper issued 580,138 shares of common stock as a result of stock purchases under Caliper’s employee stock purchase plan, stock option exercises and vesting of restricted stock.

Net Loss per Weighted Average Common Share Outstanding

Basic net loss per share is calculated based upon net loss divided by the weighted-average number of common shares outstanding during the period. The calculation of diluted net loss per share excludes common stock equivalents consisting of stock options, unvested restricted stock, unvested restricted stock units and warrants (calculated using the treasury stock method) which would have an anti-dilutive effect.

The weighted average number of shares used to compute both basic and diluted net loss per share consists of the following (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2008	2007	2008	2007
Basic and diluted	47,897	47,228	47,790	47,104
Anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share (prior to the application of the treasury stock method)	14,740	14,052	14,740	14,052

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations as of June 30, 2008 and for the three and six months ended June 30, 2008 should be read in conjunction with our financial statements included in this Quarterly Report on Form 10-Q and Management’s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2007.

The discussion in this report contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed here. Factors that could cause or contribute to these differences include those discussed under the caption “Risk Factors” below, as well as those discussed elsewhere. The cautionary statements made in this report should be read as applying to all related forward-looking statements wherever they appear in this report.

Executive Summary

Business

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 technologies 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. Our offerings leverage our extensive portfolio of molecular imaging, microfluidics, automation and liquid handling technologies, and scientific applications expertise to address key limitations in the drug discovery and development process—namely, the complex and costly process to conceive of and bring a new drug to market across the in vitro and in vivo testing landscape.

Our imaging product and service offerings, which are comprised of optical imaging instruments and associated services and reagents, allow researchers visibility into molecular level biological processes inside living animal models.  Our in vitro products and service offerings incorporate microfluidics and automation technology to provide tools, services and complete integrated systems to perform assays.  Additionally, through our Caliper Discovery Alliances and Services (CDAS), comprised of our NovaScreen and Xenogen Biosciences subsidiaries, we offer a wide range of drug discovery services spanning in vitro and in vivo testing including primary and secondary screening, profiling and assay development services, in vitro ADME/TOX analysis, and pharmacological testing and database development.

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 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.

General Overview

During the three months ended June 30, 2008, we achieved total revenues of $34.0 million, within our projected range of $33.0 to $36.0 million.  Our second quarter projection anticipated a license and contract revenue decline during the second quarter of $3.5 million from 2007 as a result of $3.0 million of non-recurring microfluidic license revenue and $0.6 million of contract revenue from microfluidic research collaborations that were concluded during the second quarter of 2007.  Our overall combined product and service revenues grew by approximately $1.3 million, or 4.5% versus the second quarter of 2007.  This included product growth of 5% and service growth of 4%.

Second quarter product revenue growth was driven primarily by strong discovery instrument sales of workflow productivity solutions led by Staccato Automated Workstations and Zephyr liquid handling instruments.  Overall discovery instrument product revenues increased by $1.7 million, or approximately 14% compared to the second quarter of 2007.  Within the discovery product family, we experienced a modest decline in microfluidic product revenues during the second quarter primarily as a result of the loss of a customer that ceased operations.  We are expecting steady improvement in microfluidic product sales in the second half of 2008 as we overcome the loss of revenue from this customer account, and as sales of the new LabChip GX and LabChip GXII microfluidic benchtop instruments begin to increase.  In addition, we recently launched the LabChip GX instrument series in response to strong market demand for fast, automated, 1-D electrophoretic separations of protein, DNA, and RNA samples.  Imaging product sales

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decreased by approximately $0.7 million, or 8%, compared to the second quarter of 2007, despite a 9% increase in IVIS instrument placements.  The revenue decrease was due primarily to an increase in sales in the second quarter of 2008 toward Lumina instruments which carry a lower average selling price.  Periodic variations in product mix such as this are not unusual, and may cause temporary fluctuations in revenue performance when comparing results of a given quarter to another quarter.  We are anticipating robust growth in imaging product sales over the remainder of 2008 as a result of backlog carried into the third quarter as well as our continued strong pipeline opportunities.

Total service revenues increased by approximately 4% during the quarter, and resulted primarily from service contracts and billable services related to the expansion of our installed base of IVIS instruments.  Revenues from our CDAS unit were lower than anticipated by approximately $1.3 million for the second quarter, and $1.5 million on a year-to-date basis as a result of customer contract delays involving two major contracts.

Our operating loss was $6.2 million compared to $6.0 million in the second quarter of 2007 primarily reflecting the margin effects of the change on the license fee and contract revenue line, partially offset by an aggregate operating expense (R&D and SG&A) savings of $2.2 million achieved in the second quarter of 2008 compared to the second quarter of 2007.

Our revenue outlook for the third quarter of 2008 is $33 to $36 million, and for the full year remains $142 to $148 million.

Critical Accounting Estimates

The critical accounting policies that we believe impact significant judgments and estimates used in the preparation of our consolidated financial statements presented in this report are described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the Notes to the Consolidated Financial Statements, each included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Results of Operations for the Three and Six Months Ended June 30, 2008

Operating results for the six months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. For example, we typically experience higher revenues in the fourth quarter of our fiscal year as a result of the capital spending patterns of our customers.  During the three and six months ended June 30, 2008, the effect on revenues related to foreign exchange resulted in a 3% favorable impact for both periods as compared to the prior year, respectively.  During the three and six months ended June 30, 2008, the effect on net loss related to foreign exchange was less than 1% in each period, as compared to the prior year.

Revenue

	Three Months Ended									Six Months Ended
	June 30,									June 30,
(In thousands)	2008		2007		$	Change		% Change		2008		2007		$	Change		% Change
Product revenue	$	22,024	$	21,022	$	1,002		5	%	$	39,689	$	36,283	$	3,406		9	%
Service revenue	9,290		8,942		348			4	%	18,298		17,872		426			2	%
License fees and contract revenue	2,717		5,326		(2,609		)	(49	)%	5,331		9,575		(4,244		)	(44	)%
Total Revenues	$	34,031	$	35,290	$	(1,259	)	(4	)%	$	63,318	$	63,730	$	(412	)	(1	)%

Product Revenue.    Product revenue increased during the three months ended June 30, 2008 compared to the same period in 2007 due primarily to strong overall discovery product line sales which increased by an overall $1.7 million, or approximately 14%, compared to the second quarter of 2007, due to increased sales of workflow productivity solutions led by sales of Staccato Automated Workstations and Zephyr liquid handling instruments.  Within discovery product line sales we experienced a modest decline in microfluidic product revenues during the second quarter as a result of the loss of chip and datapoint revenues from a customer that ceased operations.  We are expecting steady improvement in microfluidic product sales in the second half of 2008 as we overcome the loss of revenue from this customer account, and as sales of the new LabChip GX and LabChip GXII microfluidic benchtop instruments begin to increase.  The LabChip GX instrument series was recently launched on July 15, 2008, in response to strong market demand for fast, automated, 1-D electrophoretic separations of protein, DNA, and RNA samples.  Imaging product line sales decreased by approximately $0.7 million, or 8%, compared to the second quarter of 2007, despite a 9% increase in IVIS instrument placements.  The revenue decrease was due primarily to an increase in sales within the second quarter of 2008 toward Lumina instruments which carry a lower average selling price.

Product revenue increased during the six months ended June 30, 2008 compared to the same period in 2007 due primarily to strong discovery product line sales which increased $2.8 million, or 12%, led by sales of liquid handling and automation products. The increase in liquid handling and automation product sales similarly reflected the strong market interest in workflow productivity solutions as discussed above.  Imaging product line sales increased by $0.7 million, or 5%, driven by overall IVIS instrument growth, including a 9% increase in instrument placements.

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Service Revenue.   Service revenue increased during the three and six months ended June 30, 2008 compared to the same periods in 2007 primarily from service contract and billable revenue associated with the increase in the installed base of IVIS imaging instruments.  All other instrument services grew modestly, while revenues from CDAS remained substantially unchanged in comparison to the second quarter of 2007 and were down approximately $0.5 million in comparison to the six months ended June 30, 2007.  The decreases were a result of a large in vivo compound profiling contract in 2007 that did not recur in 2008, and customer contract delays related to two major contracts.  Within CDAS, our in-vivo services business experienced a $0.7 million and $1.5 million decrease, for the three and six month periods, respectively, in compound profiling revenue related to a single customer contract in 2007 that did not recur in 2008.  Additionally, our in-vivo services business has experienced customer contractual delays over the first half of 2008 with respect to a large phenotyping contract that resulted in a revenue decrease of $0.6 million and $1.2 million on a three- and six-month basis compared to similar project revenues with this same customer in 2007.  Notwithstanding these unfavorable differences, offsetting increases from growth in revenue from other CDAS platforms including animal imaging studies, transgenic animal production services, and in vitro government projects resulted in substantially unchanged total CDAS revenues during the second quarter and a decline of approximately $0.5 million on a six month basis compared to the same period in 2007.

License Fees and Contract Revenue.    License fees and contract revenue decreased during the three and six months ended June 30, 2008 compared to the same periods in 2007 primarily as a result of anticipated declines in both non-recurring microfluidic license revenues of $2.9 million and $4.2 million, respectively, and contract research collaboration revenue of approximately $0.6 million and $1.8 million, respectively, due to projects completed in 2007 within our collaboration business channel.  These decreases were partially offset by increases in imaging license revenues of $0.5 million and $1.5 million, respectively, during the three and six months ended June 30, 2008 compared to the same period in 2007 including purchase accounting effects of $0.3 million and $0.9 million, respectively, in the three and six months ended June 30, 2008, caused by the elimination of such revenues in the corresponding periods of 2007 as a result of fair value purchase accounting.

Costs of Revenue

	Three Months Ended									Six Months Ended
	June 30,									June 30,
(In thousands)	2008		2007		$ Change			% Change		2008		2007		$ Change			% Change
Product	$	13,232	$	12,555	$	677		5	%	$	24,337	$	22,522	$	1,815		8	%
Service	6,447		5,437		1,010			19	%	12,544		11,089		1,455			13	%
License	282		825		(543		)	(66	)%	566		1,268		(702		)	(55	)%
Total Costs	$	19,961	$	18,817	$	1,144		6	%	$	37,447	$	34,879	$	2,568		7	%

Cost of Product Revenue.    Cost of product revenue increased during the three months ended June 30, 2008 primarily as a result of the overall increase in product sales together with increases in warranty parts costs, freight and obsolescence reserve charges which increased by approximately 3% of product sales.  Offsetting these increases was a $0.7 million decrease in overall manufacturing spending comprised primarily of reduced labor costs incurred with respect to warranty and installation activities.

Cost of product revenue increased during the six months ended June 30, 2008 primarily as a result of the overall increase in product sales, and to a lesser extent due to the revenue shift involving Staccato sales which incorporate a higher cost of materials as a result of third party material content, especially in the first quarter of 2008.  For the six months ended June 30, 2008, we experienced a decrease in labor costs associated with warranty and installation activities compared to the first six months of 2007.

Cost of Service Revenue.    The cost of service revenue increase during the three and six months ended June 30, 2008 was primarily a result of greater resources dedicated to the more complex installation and start up training for our IVIS imaging products.  The increase also relates to increases in CDAS expenses of $0.4 and $0.6 million for the three- and six-months ended June 30, 2008, respectively.  The CDAS cost increase occurred primarily within our in vitro operations due primarily to expansion of facility needs and to a lesser extent as a result of variable spending on project materials associated with higher in vitro drug discovery revenues in comparison to 2007.

Cost of License Revenue.    Cost of license revenue decreased during the three and six months ended June 30, 2008 compared to the same periods in 2007 due to the overall decrease in license revenues described above.

Gross Margins.    Gross margin on product revenue was 40% for the three months ended June 30, 2008 which was unchanged compared to the same period in 2007, reflecting the effect of incremental margin contribution associated with increased sales volumes, offset by higher material and other variable costs incurred.  For the six months ended June 30, 2008, product gross margins improved to 39%, from 38% for the six months ended June 30, 2007.  The six month improvement was primarily a volume-driven increase, offset by higher material and other variable costs resulting from sales of Staccato automated workstations as described above. Gross margin on service revenue was 31% for the three months ended June 30, 2008 as compared to 39% for the same period in 2007. Gross margin on service revenue was 31% for the six months ended June 30, 2008 and 38% for 2007.  These decreased service margins resulted from an increase in the service costs, primarily headcount related, of the instrument services business, including material costs, the increased fixed cost base from the in vitro facility and the delay in timing of work within our in vivo services business.

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Expenses

	Three Months Ended											Six Months Ended
	June 30,											June 30,
	2008			2007			$	Change		% Change		2008			2007		$	Change		% Change
	(In thousands)
Research and development	$	5,041		$	6,648		$	(1,607	)	(24	)%	$	10,573		$	13,422	$	(2,849	)	(21	)%
Selling, general and administrative	12,757			13,306			(549		)	(4	)%	26,690			25,913		777			3	%
Amortization of intangible assets	2,490			2,533			(43		)	(2	)%	4,979			5,070		(91		)	(2	)%
Restructuring charges, (credits), net	(27		)	(18		)	(9		)	(50	)%	(20		)	7		(27		)	(386	)%

 Research and Development Expenses.    Research and development spending decreased during the three months ended June 30, 2008 compared to the same period in 2007 primarily as a result of actions taken in the second quarter of 2007 to consolidate research and development spending in the area of automation, and more recently as a result of actions begun in the first quarter of 2008 to consolidate research and development costs in our West Coast operations.  The net decrease was comprised of a $1.1 million reduction in payroll and employee related costs due to an average reduction of 14 employees compared to the prior year, $0.2 million in reduced material and operating supplies, $0.2 million in reduced facility costs, and a $0.1 million reduction in all other costs.

Research and development spending decreased by $2.8 million during the six months ended June 30, 2008 compared to the same period in 2007.  This overall decrease was due primarily to reduced spending related to microfluidic collaboration projects that ended in 2007 as well as the reduction in spending on automation projects following cost reduction actions in the second quarter of 2007.  The net decrease was comprised of a $1.8 million reduction in payroll and employee related costs, $0.3 million of severance charges in the first quarter of 2008 associated with our plan to consolidate West Coast operations, $0.6 million in reduced material and operating supplies, a $0.6 million decrease in facility and information technology costs that are driven based on headcount and square footage, and a $0.1 million reduction in all other costs.

In the six months ended June 30, 2008, we recorded a severance charge of $0.5 million within research and development costs.  We estimate total additional costs associated with the West Coast consolidation to be approximately $3.4 million.  The following are the major categories of the additional costs expected to be incurred:  (1) approximately $0.9 million in employee severance and retention costs of which $0.5 million has been incurred to date and $0.4 million will be incurred over the remainder of the fiscal year; and (2) approximately $2.5 million in facility abandonment charges in the third quarter with the abandonment of approximately 36,000 square feet of space in Mountain View, California.  We estimate that ongoing facility cash outflow, primarily rent payments net of sublease income, will be spread over the 5.4 years remaining on our Mountain View, California lease.  This facility closure will be accounted for in accordance with SFAS No. 146, pursuant to which we will record a liability equal to the fair value of the remaining lease payments, net of expected sublease payments, as of the cease-use date.

Based on preliminary financial data, we expect this initiative to result in annual cost savings of approximately $2.6 million, including annual facility costs of $1.4 million and headcount savings of $1.2 million once fully implemented, and we expect to incur total costs of approximately $3.4 million in fiscal year 2008 to achieve these savings.  The major elements of this consolidation plan are expected to be completed on or prior to September 30, 2008.

Selling, General and Administrative Expenses.    Selling, general and administrative expenses decreased by $0.5 million during the three months ended June 30, 2008 compared to the same period in 2007 primarily due to a decrease in general and administrative expenses which included a $0.2 million reduction in office and operating supplies, $0.2 million in reduced FAS 123R stock compensation expense and $0.1 million reduction in all other costs.

Selling, general and administrative expenses increased by $0.8 million during the six months ended June 30, 2008 compared to the same period in 2007 primarily due to increased investment in selling and marketing personnel of $0.6 million and increased sales commissions of $0.4 million, offset by a decrease in all other costs of $0.2 million.

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Amortization of Intangible Assets.  The amortization of intangible assets for the three and six months ended June 30, 2008 relates to assets acquired in our previous business combinations. Amortization 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.

Restructuring Charges.    We incurred restructuring charges in 2008 and 2007 related to acquisition and integration activities that are more fully discussed in Note 6 to the accompanying financial statements. Restructuring charges during the six month periods ending June 30, 2008 and 2007 relate to accretion of interest related to idle facility rent obligations.

Interest and Other Income (Expense), Net

	Three Months Ended											Six Months Ended
	June 30,											June 30,
(In thousands)	2008			2007			$ Change			% Change		2008			2007			$ Change			% Change
Interest expense, net	$	(203	)	$	(123	)	$	(80	)	(65	)%	$	(358	)	$	(116	)	$	(242	)	(209	)%
Other income (expense), net	(87		)	(93		)	6			6	%	319			(81		)	400			494	%

Interest Expense, Net.    Interest expense, net, increased during the three and six months ended June 30, 2008 compared to the same periods in 2007, primarily due the $0.1 million and $0.2 million decrease, respectively, in interest income which resulted in lower invested cash and marketable securities, and to a lesser extent, the effect of interest costs on average outstanding borrowing as compared to 2007.

Other Income (Expense), Net.    Other income (expense), net, was relatively unchanged for the three months ended June 30, 2008 as compared to 2007.  Other income (expense), net, increased on a six month basis compared to 2007 due to transaction gains on foreign denominated accounts receivable due to weakening of the U.S. dollar in comparison primarily to the Euro and the Yen. During the six months ended June 30, 2008, we incurred foreign currency transaction gains of approximately $0.3 million, compared to losses of approximately $0.1 million for the same period in 2007.

Liquidity and Capital Resources

As of June 30, 2008, we had $10.6 million in cash, cash equivalents and marketable securities, as compared to $19.0 million as of December 31, 2007.

As noted in Note 7 of the accompanying Notes to Consolidated Financial Statements, on February 15, 2008, we entered into an Amended and Restated Loan and Security Agreement (Credit Facility) with a bank, which 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. The Credit Facility amends and restates in its entirety a previous Loan and Security Agreement between us and the bank dated as of August 9, 2006, as amended. Principal borrowings under the Credit Facility accrue interest at a floating per annum rate equal to the prime rate if our unrestricted cash held at the bank exceeds or is equal to $25 million, or prime plus one-half of one percentage point if our unrestricted cash held at the bank is below $25 million. Under the Credit Facility, we are permitted to borrow up to $25 million, provided we maintain unrestricted cash of at least $25 million with the bank. Otherwise our ability to borrow under the Credit Facility is subject to a borrowing base limit consisting of up to (a) 80% of eligible accounts receivable, as defined in the Credit Facility, plus (b) the lesser of 90% of our unrestricted cash maintained at the bank or $10 million. The Credit Facility matures on June 30, 2009. The Credit Facility will serve 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.  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 prime 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, and if based on such default the bank were to decide to declare all outstanding obligations immediately due and payable, 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. 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.

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Cash Flows

	Six Months Ended June 30,
	2008			2007			$ Change
	(In thousands)
Cash provided by (used in)
Operating Activities	$	(9,949	)	$	(13,084	)	$	3,135
Investing Activities	(741		)	6,631			(7,372		)
Financing Activities	2,866			6,246			(3,380		)

 Operating Activities.    During the six months ended June 30, 2008, we used $9.9 million of cash for operating activities which included approximately $2.0 million related to our idle facilities and $1.4 million related to our settlement of the Young & Partners LLC claim discussed further in Note 9 to the accompanying Consolidated Financial Statements.  We used approximately $6.5 million of cash to fund operations and working capital needs, which primarily related to fiscal 2007 employee annual performance bonuses of $2.0 million, a $1.9 million increase in inventory within the period, offset by an increase in customer deposits of approximately $1.8 million, and a $4.4 million increase in cash flow from all other working capital activities.

Investing Activities.    During the six months ended June 30, 2008, net proceeds from purchases, sales and maturities of marketable securities generated $0.6 million of cash which we used primarily for operations. Our primary investing activities were the purchase of property and equipment of $1.4 million primarily related to facility improvements and information systems.

Financing Activities.    During the six months ended June 30, 2008, financing cash proceeds were related to $2.0 million in incremental borrowing under our credit facility as well as proceeds from option exercises and the employee stock purchase plan.

Contractual Obligations

Our commitments under leases and other obligations are described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Other than the amended lease agreements described in Note 8 to the accompanying Consolidated Financial Statements,  there has been no material change during the six months ended June 30, 2008 in the contractual obligations disclosed at December 31, 2007.

Capital Requirements

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 in vivo imaging, microfluidic and lab automation products and services;

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

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

·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.

Based upon our current financial projections, we expect that revenue from operations, our current cash balances and borrowing availability under our credit facility will be sufficient to fund our operations through December 31, 2008.  Additionally, our ability to fund ongoing operations beyond December 31, 2008 will depend on many factors, including particularly our ability to increase revenues, control margins and operating costs and maintain compliance with the covenants of our credit facility.  Our credit facility currently matures on June 30, 2009, and we anticipate that we will be able to renew the credit facility in order to ensure that we have sufficient long-term capital resources to meet the needs of ongoing operations.

If, however, our actual results do not meet our current projections, we fail to meet required bank covenants, or we are unable to renew the credit facility beyond its current maturity, we may be required to reduce our costs and expenses, sell additional equity or debt securities, or restructure portions of our business.

Under any circumstance, 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. 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.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Sensitivity

Our primary market risk exposures are foreign currency fluctuation and interest rate sensitivity. There have been no material changes to the information included under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

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Item 4.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 Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of June 30, 2008, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to provide reasonable assurance 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 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 second quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II—OTHER INFORMATION

Item 1.Legal Proceedings

Commencing on June 7, 2001, Caliper and three of its 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. The time to appeal the dismissal has not yet expired. On December 5, 2006 the Court of Appeals for the Second Circuit issued an opinion reversing Judge Scheindlin’s prior certification of the plaintiff classes in several “focus” cases pending before her as part of the consolidated IPO Lawsuits. As a result of this ruling, on June 25, 2007, Judge Scheindlin issued an order terminating the settlement that had previously been agreed to among the plaintiffs, the issuers and their insurers. The parties in the “focus” cases have briefed plaintiffs’ motion seeking certification of a new class of plaintiffs. The final resolution of this litigation is not expected to have a material impact on Caliper.

From time to time Caliper is involved in litigation arising out of claims in the normal course of business.  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 1A.Risk Factors

Our risk factors are described in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2007. There have been no material changes in the risks affecting Caliper since the filing of our Annual Report on Form 10-K.

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

None.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Submission of Matters to a Vote of Security Holders

Our 2008 Annual Meeting of Shareholders was held on June 3, 2008. There were present at the meeting, in person or represented by proxy, the holders of 33,631,833 shares of common stock. The matters voted on at the meeting and the votes cast are as follows:

(1) Allan C. Comstock was elected to serve as a director of the company to hold office until our 2011 Annual Meeting of Stockholders or until his successor is chosen and qualified. There were 33,245,159 shares of common stock voting in favor, and 386,403 shares of common stock for which votes were withheld.

(2) The appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2008 was ratified. There were 33,217,605 shares of common stock voting in favor, 399,944 shares of common stock voting against, and 14,284 shares of common stock abstaining with zero broker non-votes.

In addition to the foregoing matters, Dr. Robert Bishop was elected Chairman of the Board of Directors effective June 3, 2008 by unanimous decision of the board of directors.  Following the meeting, our board of directors consisted of Dr. Bishop, Van Billet, David W. Carter, Mr. Comstock, E. Kevin Hrusovsky, David Milligan, Ph.D. and Kathryn Tunstall.

Item 5.Other Information

None.

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Item 6.Exhibits

EXHIBIT INDEX

Exhibit Number	Description of document
10.1	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.
10.2	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.
31.1	Certification of Chief Executive Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

* The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by Caliper for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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SIGNATURES

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

	CALIPER LIFE SCIENCES, INC.
Date: August 8, 2008
	By:	/s/  E. KEVIN HRUSOVSKY
		E. Kevin Hrusovsky
		Chief Executive Officer and President
Date: August 8, 2008
	By:	/s/  PETER F. MCAREE
		Peter F. McAree
		Senior Vice President and Chief Financial Officer

21

EXHIBIT INDEX

Exhibit Number	Description of document
10.1	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.
10.2	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.
31.1	Certification of Chief Executive Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

* The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by Caliper for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

22

EX-10.1

EXHIBIT 10.1

AMENDMENT TO LEASE

THIS AMENDMENT TO LEASE (“Amendment”) dated June 27, 2008 by and between CEDAR BROOK 5 CORPORATE CENTER, L.P. having an office at 1000 Eastpark Boulevard, Cranbury, N J  08512, (hereinafter called the “Landlord”); and XENOGEN BIOSCIENCES CORPORATION, having an office at 5 Cedar Brook Drive, Cranbury NJ 08512 (hereinafter called the “Tenant”).

W I T N E S S E T H :-

WHEREAS,  The Landlord entered into a Lease dated August 31, 1998  with Chrysalis DNX Transgenic Science Corp. (“First Lease”), for 41,200 square feet of space representing a portion of the Building located at 5 Cedar Brook Drive, Cranbury, NJ 08512; and

WHEREAS, Chrysalis DNX Transgenic Science Corp. was subsequently purchased by Xenogen Corporation, and following such purchase Chrysalis DNX Transgenic Science Corp. changed its name to Xenogen Biosciences Corporation and operated as a wholly owned subsidiary of Xenogen Corporation; and

WHEREAS, Xenogen Corporation then entered into a second Lease (“Second Lease”) with Landlord dated December 29, 2004 for 16,563 square feet of space in the same Building; and

WHEREAS, in August, 2006 Caliper Life Sciences, Inc. purchased Xenogen Corporation, and following such purchase Xenogen Corporation has continued to operate as a wholly owned subsidiary of Caliper Life Sciences, Inc.; and

WHEREAS, the initial term of the each lease expires on September 30, 2009; and

WHEREAS, the parties now wish to extend the lease term, amend certain portions of the Second Lease and add additional provisions to the Second Lease.

NOW, THEREFORE, the parties hereto covenant and agree as follows:

1.The First Lease and the Second Lease shall remain in effect until their expiration dates of September 30, 2009 except that the annual Base Rent under the First Lease and the Second Lease shall be changed to $30.05 per square foot for the remaining term thereunder.  Thereafter the two leases shall be combined into one new Lease for a total of 57,763 rentable square feet of leased space, Tenant shall be the tenant under such combined Lease, and the terms and conditions of the Second Lease shall govern the rights and responsibilities of the parties thereafter, except as modified by this Amendment.  All defined terms shall have the same meaning as set forth in the Second Lease.  All references in the Second Lease to Finished Space and Reserved Space shall be deleted.

2.Paragraph 2, TERM OF LEASE, shall be replaced by the following:

a.The initial term of this Lease shall be 5 years (“Initial Term”), to commence on October 1, 2009  and to end on the last day of the month in which occurs the 5th anniversary of the Commencement Date.  In the event Landlord provides at Tenant’s request any Additional Funding for any further Tenant Improvements, in addition to the Allowance set forth below, the Initial Term of the Lease shall be increased to 7.5 years from the later of the date of Substantial Completion of such Tenant Improvements or October 1, 2009.  In the event Substantial Completion occurs before October 1, 2009, the rent set forth in the First and Second Leases shall remain in effect until October 1, 2009, and the Tenant shall also pay to Landlord,

from the date of Substantial Completion, the additional rent for the amortized portion of the Additional Funding provided by Landlord, as set forth in paragraph 3. b. v. below.

b.The Tenant shall have the option, upon written notice to the Landlord, to extend the Initial Term to 10 years.  In such event, the Base Rent shall increase after the 5th year of the Lease term, as set forth in paragraph 4 below.

3.Paragraph 3, CONSTRUCTION OF TENANT IMPROVEMENTS, shall be amended as follows:

a.Any Tenant Improvements that Tenant wishes to perform at the Leased Premises may be constructed by Tenant using a contractor selected by Tenant and reasonably approved by Landlord.  Landlord shall provide no allowance for such construction.  Tenant agrees to pay a fee of 3% of the total cost of the work to be performed, including all construction and materials, equipment attached to the Building, and professional fees incurred by Tenant, but excepting therefrom any of Tenant’s personal property.  The 3% fee shall be paid to Landlord proportionately with each payment that Tenant makes toward the total cost of the work to be performed.

b.Tenant shall also have the option of having the construction of the Tenant Improvements performed by Landlord.  In such event, the provisions of paragraph 3 of the Second Lease shall apply, with the following changes:

i.In 3.1 delete the reference to 9,890 square feet.

ii.In 3.2 (a) the Tenant shall use the architect of its choice The last sentence of the paragraph shall be deleted.

iii.Paragraph 3.2 (c) is deleted.

iv.Paragraph 3.3 (a) is deleted.

v.In paragraph 3.4 (a) the Allowance for construction costs shall be $275,800.00.  In addition, Tenant shall have the option to request that Landlord fund up to an additional 25% to 33% of the construction costs (“Additional Funding”), such allowable percentage amount to be determined by Landlord’s lender.  The Additional Funding will be amortized over the term of the Lease by increasing the annual Base Rent by $7.50 per rentable square foot of the Leased Premises for every additional $40.00 per rentable square foot of construction costs, or part thereof.  Any cost in excess of the Allowance or the Additional Funding shall be considered Tenant’s Cost Share and shall be paid as set forth in paragraph 3.4 (a).

vi.The reference in paragraph 3.6 to a four month period to complete construction, and the date of April 1, 2005, shall be deleted.

4.Paragraph 4.1, RENT, shall be deleted and replaced with the following:

a.The annual Base Rent as of October 1, 2009, for the Leased Premises in its “AS IS” condition, shall be $30.05 per square foot, for an aggregate annual Base Rent of $1,735,778.15, payable monthly in the amount of $144,648.18.

b.In the event Landlord provides at Tenant’s request any Additional Funding for any further Tenant Improvements in addition to the Allowance, the Base Rent shall be increased in accordance with the formula set forth in paragraph 3. b. v. above.  In addition, the

Initial Term will be extended to 7.5 years from Substantial Completion of the Tenant Improvements, or October 1, 2009, whichever occurs later.  During the Initial Term the Base Rent in year 6 shall increase by 15% over the rent paid in the 5th year, but such increase shall only apply to the initial Base Rent of $30.05 per square foot and not to any additional amount that may be added to the Base Rent in order to amortize any construction costs funded by Landlord pursuant to paragraph 3. b. v. hereof.

c.In the event Tenant exercises its option to increase the Lease term to 10 years, the Base Rent in year 6 shall increase by 15% over the rent paid in the 5th year, but such increase shall only apply to the initial Base Rent of $30.05 per square foot and not to any additional amount that may be added to the Base Rent in order to amortize any construction costs funded by Landlord pursuant to paragraph 3. b. v. hereof.  Such increase shall be in lieu of and not in addition to the 15% increase set forth in paragraph 4. b. above.

5.Paragraph 6 shall be amended by adding the following to the end:

Tenant shall have access to the Building and its respective parking lots 7 days per week and 24 hours per day.

6.Paragraph 8.4 shall be deleted and replaced with the following:

The Tenant covenants and agrees that it will, at its sole cost and expense, carry liability insurance covering the Leased Premises in the minimum amount of $2,000,000.00 per accident for 1 person, $5,000,000.00 per accident for 2 or more persons, and a minimum amount of $500,000.00 for property damage, with a deductible of no more than $20,000.00.    The foregoing limits may be carried in a combination of primary coverage and umbrella or excess coverage.  The Tenant shall add the Landlord as an additional insured on such policy and will

furnish Landlord with a certificate of said liability insurance prior to the Commencement Date and annually thereafter.  The certificate shall contain a clause that the policy will not be canceled except on 10 days written notice to the Landlord.

7.Paragraph 10, ASSIGNMENT AND SUBLETTING, shall be modified to provide that Landlord’s reasonable consent shall be limited to determining the compatibility of the subtenant to the Building.

8.Paragraph 11, FIRE AND CASUALTY, shall be modified such that the the reference to “Landlord” in the first sentence shall be changed to “either party” and the reference to “Tenant” in the first sentence shall be changed to “other”.

9.Paragraph 27, SURRENDER OF PREMISES, shall be modified to remove the reference to double rent and replace it with 150% of the Rent.  In addition, Tenant shall not be responsible for indemnifying Landlord against any loss or liability resulting from delay by Tenant in surrendering the Leased Premises for the first 60 days of the holdover period.

10.Paragraph 37, BROKERAGE, shall be modified to remove the reference to CB Richard Ellis, Inc. and replace it with Lincoln Property Company.

11.Paragraph 42, OPTION TO RENEW, shall be modified to provide that the Base Rent for each renewal term shall increase 15% over the Base Rent for the last month of the prior term, but the 15% increase shall not apply to any additional amount added to the Base Rent in order to amortize any construction costs funded by Landlord pursuant to paragraph 3 (b) iii. hereof.  In addition, Paragraph 42.2 is deleted.  Notwithstanding the foregoing, if as a result of an extension of the Initial Term pursuant to paragraph 2.a above, the increase pursuant to this paragraph shall result in more than one 15% increase in any five-year period, then the effective

date of the increase under this paragraph shall be delayed until the sixth year following the prior 15% increase.

12.A new paragraph 45 shall be added to the Lease as follows:

45.  RIGHT OF FIRST OFFER

During the term of this Lease Agreement, Tenant shall have a continuing right of first offer to lease additional space in the Building, which space is contiguous to the Leased Premises and is, as of the date of this Amendment, currently leased to other tenants (“Designated Space”).  Landlord shall first offer to Tenant any Designated Space that becomes vacant or that Landlord knows will become vacant as of a certain date.  Tenant shall then have 10 business days after receipt of Landlord’s offer to notify Landlord whether it is interested in leasing the Designated Space.  If Tenant does not respond during said 10 business day period, then Landlord shall be free to market the Designated Space to other tenants.  If Tenant notifies Landlord, in writing, that it desires to lease said Designated Space then the parties agree to negotiate in good faith to reach an agreement on the terms of a lease.  In the event the parties have not entered into a lease after a 30 day period, Landlord shall be free to market the Designated Space to other tenants.

13.Tenant shall not be required to make any further security deposit.

14.Tenant represents that its current North American Industry Classification System (“NAICS”) number is 541711.

15.Except as set forth above, all other terms and conditions of the Lease shall remain in full force and effect, unimpaired and unmodified.

16.This Amendment shall be binding upon the parties hereto, their heirs, successors and assigns.

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands or caused these presents to be executed by their proper corporate officers the day and year first above written.

CEDAR BROOK 5 CORPORATE CENTER, L.P.

By Cedar Brook 5, Inc., its General Partner

       /s/ Joseph Stern

          A. Joseph Stern, President

XENOGEN BIOSCIENCES CORPORATION

       /s/ Peter McAree

          Peter McAree, Chief Financial Officer

EX-10.2

EXHIBIT 10.2

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of February 15, 2008 (the “Effective Date”) between (a) SILICON VALLEY BANK, a California corporation and with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462 (“Bank”), and (b) CALIPER LIFE SCIENCES, INC., a Delaware corporation (“Caliper”), NOVASCREEN BIOSCIENCES CORPORATION, a Maryland corporation (“NovaScreen”), XENOGEN CORPORATION, a Delaware corporation (“Xenogen”), and XENOGEN BIOSCIENCES CORPORATION, an Ohio corporation (“Xenogen Biosciences”) (hereinafter, Caliper, NovaScreen, Xenogen, and Xenogen Biosciences are jointly and severally, individually and collectively, referred to as “Borrower”), amends and restates a certain Loan and Security Agreement by and among Borrower and Bank dated as of August 9, 2006, as amended, and provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:

1ACCOUNTING AND OTHER TERMS

1.1Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.

1.2Agented Loan Arrangement.

(a)Designation of Agent. Each Borrower hereby designates Caliper as the agent (the “Agent”) of each Borrower to discharge the duties and responsibilities of the Agent as provided herein.

(b)Operation of Loan Arrangement.

(i)Except as otherwise permitted by Bank, Credit Extensions hereunder shall be requested solely by the Agent as agent for each Borrower.

(ii)Any Credit Extension which may be made by Bank under this Agreement and which is directed to the Agent is received by the Agent in trust for that Borrower who is intended to receive such Credit Extension. The Agent shall distribute the proceeds of any such Credit Extension solely to that Borrower. Each Borrower shall be directly indebted to Bank for each Credit Extension distributed to any Borrower by the Agent, together with all accrued interest thereon, as if that amount had been advanced directly by Bank to a Borrower (whether or not the subject Credit Extension was based upon the accounts and/or inventory or other assets of the Borrower which actually received such distribution), in addition to which each Borrower shall be liable to Bank for all Obligations under this Agreement, whether or not the proceeds of the Credit Extension are distributed to any particular Borrower.

(iii)Bank shall have no responsibility to inquire as to the distribution of Credit Extensions made by Bank through the Agent as described herein.

(c)Credit Extensions Directly to Borrower.

(i)If, for any reason, and at any time during the term of this Agreement:

(A)any Borrower, including the Agent, as agent for each Borrower, shall be unable to, or prohibited from carrying out the terms and conditions of this Agreement (as determined by Bank in Bank’s sole and absolute discretion); or

(B)Bank deems it inexpedient (in Bank’s sole and absolute discretion) to continue making Credit Extensions to or for the account of any particular Borrower, or to channel such Credit Extensions through the Agent, then Bank may make Credit Extensions directly to such Borrower as Bank determines to be expedient, which Credit

Extensions may be made without regard to the procedures otherwise included in this Article 1.

(ii)In the event that Bank determines to forgo the procedures included herein pursuant to which Credit Extensions are to be channeled through the Agent, then Bank may designate one or more Borrower to fulfill the financial and other reporting requirements otherwise imposed herein upon the Agent.

(iii)Each Borrower shall remain liable to Bank for the payment and performance of all Obligations (which payment and performance shall continue to be secured by all Collateral) notwithstanding any determination by Bank to cease making Credit Extensions to or for the benefit of any Borrower.

(d)Continuation of Authority of Agent. The authority of the Agent to request Credit Extensions on behalf of, and to bind, each Borrower, shall continue unless and until Bank acts as provided in Section 1.2(c) above, or Bank actually receives:

(i)written notice of: (i) the termination of such authority, and (ii) the subsequent appointment of a successor Agent, which notice is executed by the respective Presidents of each Borrower then eligible for borrowing under this Agreement; and

(ii)written notice from the successor Agent (i) accepting such appointment; (ii) acknowledging that the removal and appointment has been effected by the respective Presidents of each Borrower eligible for borrowing under the within Agreement; and (iii) acknowledging that from and after the date of appointment, the newly appointed Agent shall be bound by the terms hereof, and that as used herein, the term “Agent” shall mean and include the newly appointed Agent.

(e)Indemnification. The Agent and each Borrower respectively shall indemnify, defend, and save and hold Bank harmless from and against any liabilities, claims, demands, expenses, or losses made against or suffered by Bank on account of, or arising out of, this Agreement, Bank’s reliance upon Credit Extension requests made by the Agent, or any other action taken by Bank hereunder or under any of Bank’s various agreements with the Agent and/or any Borrower and/or any other Person arising under this Agreement.

2LOAN AND TERMS OF PAYMENT

2.1Promise to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.

2.1.1Revolving Advances.

(a)Availability. Subject to the terms and conditions of this Agreement, Bank shall make Advances not exceeding the Availability Amount. Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.

(b)Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.

(c)Prepayment. Borrower shall have the option to prepay the Revolving Line at anytime, provided Borrower (i) provides written notice to Bank of its election to prepay the Revolving Line, and (ii) pays, on the date of such prepayment (A) all outstanding principal plus accrued interest, (B) the Minimum Usage Fee which would be due, and (C) all other sums, if any, that shall have become due and payable.

2

2.1.2Letters of Credit Sublimit.

(a)As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for Borrower’s account. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed $5,000,000.00. Such aggregate amounts utilized hereunder shall at all times reduce the amount otherwise available for Advances under the Revolving Line. If, on the Revolving Maturity Date, there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to said Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto.

(b)The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application.

(c)Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

(d)To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding.

2.2Overadvances. If, at any time Borrower’s Unrestricted Cash is less than Twenty-Five Million Dollars ($25,000,000.00) and the Credit Extensions under Section 2.1.1 and Section 2.1.2 exceed the lesser of either (a) the Revolving Line or (b) the Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.

2.3Payment of Interest on the Credit Extensions.

(a)Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to: (x) if Borrower’s Unrestricted Cash is equal to or greater than Twenty-Five Million Dollars ($25,000,000.00), the Prime Rate, or (y) if Borrower’ Unrestricted Cash is less than Twenty-Five Million Dollars ($25,000,000.00), one-half of one percentage point (.50%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.3(f) below. Any changes to the applicable interest rate due as set forth in (x) or (y) above, shall be effective on the first day of the month following such event.

(b)Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is two percentage points above the rate effective immediately before the Event of Default (the “Default Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.

(c)Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change.

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(d)360-Day Year. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed.

(e)Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.

(f)Payments. Unless otherwise provided, interest is payable monthly on the first calendar day of each month. Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue.

2.4Fees. Borrower shall pay to Bank:

(a)Commitment Fee. A non-refundable commitment fee of $100,000.00 fully earned as of the Effective Date and due and payable upon the earliest to occur of: (i) July 1, 2008, (ii) the termination of this Agreement, or (iii) the occurrence of an Event of Default; and

(b)Letter of Credit Fee. Bank’s customary fees and expenses for the issuance or renewal of Letters of Credit, upon the issuance, each anniversary of the issuance, and the renewal of such Letter of Credit; and

(c)Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.

3CONDITIONS OF LOANS

3.1Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of the following matters:

(a)Duly executed original signatures to the Loan Documents to which it is a party;

(b)Duly executed original signatures to the Control Agreements;

(c)Each Borrower shall have delivered its Operating Documents and a good standing certificate certified by the Secretary of State of the state in which such Borrower is incorporated as of a date no earlier than thirty (30) days prior to the Effective Date;

(d)Duly executed original signatures to the completed Borrowing Resolutions for each Borrower;

(e)Bank shall have received certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released; and

(f)Borrower shall have paid the fees and Bank Expenses then due as specified in Section 2.4 hereof.

3.2Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following:

(a)except as otherwise provided in Section 3.4, timely receipt of an executed Payment/Advance Form;  and

(b)the representations and warranties in Section 5 shall be true in all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that

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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, and no Default or Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; 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; and

(c)there has not been a Material Adverse Change.

3.3Covenant to Deliver.

Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition to any Credit Extension. Borrower expressly agrees that the extension of a Credit Extension prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and any such extension in the absence of a required item shall be in Bank’s sole discretion.

3.4Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Agent shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Advance. Together with any such electronic or facsimile notification, Agent shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due.

4CREATION OF SECURITY INTEREST

4.1Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

4.2Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code.

5REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

5.1Due Organization and Authorization. Borrower and each of its Subsidiaries are duly existing and in good standing, as Registered Organizations in their respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of their business or their ownership of property requires that they be qualified except where the failure to do so could not reasonably be

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expected to have a material adverse effect on Borrower’s business. Borrower has previously delivered to Bank the Perfection Certificate. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete in all material respects. If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.

The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s organizational documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

5.2Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

The Collateral is not in the possession of any third party bailee (such as a warehouse) except (x) as otherwise provided in the Perfection Certificate and (y) Equipment or Inventory in the possession of third party carriers in the ordinary course of business for delivery to Borrower or to customers of Borrower and its Subsidiaries. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion.

All Inventory is in all material respects of good and marketable quality, free from material defects.

Except as noted on the Perfection Certificate, Borrower is not a party to, nor is bound by, any material license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (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 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. Notwithstanding the foregoing, the terms of the preceding sentence shall not apply to, and the Collateral shall not include, license agreements solely for the use of Intellectual Property of a third party, with respect to which license Borrower is the licensee.

5.3Accounts Receivable. For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to

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all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

5.4Litigation. Except as disclosed in Borrower’s Report of Form 10-K for the year ended December 31, 2006 and in Xenogen’s Report of Form 10-K for the year ended December 31, 2006 and as otherwise disclosed to Bank in writing prior to the Effective Date, there are no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than One Million Dollars ($1,000,000.00).

5.5No Material Deviation in Financial Statements. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

5.6Solvency. The fair salable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

5.7Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its business as currently conducted,  except for such consents, approvals, authorizations, declarations and filings the failure to obtain or make would not reasonably be expected to have a material adverse effect on Borrower’s business or operations.

5.8Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.

5.9Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns and reports, and Borrower and its Subsidiaries have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower in the aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000.00). Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

5.10Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements, and not for personal, family, household or agricultural purposes.

5.11Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representations, warranties, or other statements were made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the

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certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

6AFFIRMATIVE COVENANTS

Borrower shall do all of the following:

6.1Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so maintain existence of a Subsidiary or to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could have a material adverse effect on Borrower’s business.

6.2Financial Statements, Reports, Certificates.

(a)Deliver to Bank:  (i) as soon as available, but no later than forty-five (45) days after the last day of each quarter, a company prepared consolidated balance sheet and income statement covering Caliper’s consolidated (including each Borrower and any other Subsidiary of Caliper) operations during the period certified by a Responsible Officer and in a form acceptable to Bank; (ii) as soon as available, but no later than one hundred twenty (120) days after the last day of Caliper’s fiscal year, Caliper’s audited consolidated (including each Borrower and any other Subsidiary of Caliper) financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Bank in its reasonable discretion; (iii) within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt (iv) within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on Caliper’s or another website on the Internet; (v) a prompt report of any legal actions pending or threatened against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of One Million Dollars ($1,000,000.00) or more; (vi) annually, Caliper’s consolidated (including each Borrower and any other Subsidiary of Caliper) annual operating budget, substantially as presented to the Board; (vii) as soon as available, but no later than fifteen (15) days after the last day of each month, a monthly cash report; and (viii) other financial information reasonably requested by Bank.

(b)Within thirty (30) days after the last day of each month in which the Borrower’s Unrestricted Cash is less than Twenty-Five Million Dollars ($25,000,000.00), and Advances are outstanding or an Advance request has been made, deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged listings of accounts receivable (by invoice date).

(c)Within forty-five (45) days after the last day of each quarter, deliver to Bank with the quarterly financial statements, a duly completed Compliance Certificate signed by a Responsible Officer setting forth calculations showing compliance with the financial covenants set forth in this Agreement.

(d)Allow Bank to audit Borrower’s Collateral at Borrower’s expense. Such audits shall be conducted no more often than once every twelve (12) months unless a Default or an Event of Default has occurred and is continuing.

6.3Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Million Dollars ($1,000,000).

6.4Taxes; Pensions. Make, and cause each of its Subsidiaries to make, timely payment of all foreign, federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting pursuant to the terms of Section 5.9 hereof) and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

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6.5Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with companies having a minimum AM Best rating of A-, and in amounts that are commercially reasonable. All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee, and all liability policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Bank at least thirty (30) days notice before canceling its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to $250,000, in the aggregate, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent.

6.6Operating Accounts.

(a)Maintain its and its Subsidiaries’ depository, operating and securities accounts with Bank and Bank’s affiliates, with the exception of up to thirty percent (30.0%) of all of Borrower’s accounts required to be maintained in the ordinary course of business outside of the U.S. Any Guarantor shall maintain all depository, operating and securities accounts with Bank, or SVB Securities.

(b)Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or its Affiliates. In addition, for each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

6.7Financial Covenants.

Borrower shall maintain at all times, to be tested as of the last day of each quarter:

(a)Adjusted Quick Ratio. A ratio of Quick Assets to Quick Liabilities of at least: (i) 0.95 to 1.0 for the quarters ending March 31, 2008, June 30, 2008 and September 30, 2008; and (ii) 1.0 to 1.0 for the quarters ending December 31, 2008 and March 31, 2009.

(b)Minimum EBITDA-Cap Ex. Borrower’s EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”) for the two (2) quarter period ending with each quarter, shall be in an amount equal to: (i) losses not greater than (A) Seven Million Dollars ($7,000,000.00) for the quarter ending March 31, 2008; (B) Ten Million Dollars ($10,000,000.00) for the quarter ending June 30, 2008; and (C) Three Million Dollars ($3,000,000.00) for the quarter ending September 30, 2008; (ii) Two Million Dollars ($2,000,000.00) for the quarter ending December 31, 2008; and (iii) losses not greater than Two Million Five Hundred Thousand Dollars ($2,500,000.00) for the quarter ending March 31, 2009.

6.8Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.

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6.9Further Assurances. Borrower shall execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.

7NEGATIVE COVENANTS

Borrower shall not do any of the following without Bank’s prior written consent, which shall not be unreasonably withheld or delayed:

7.1Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) Equipment and Intellectual Property no longer necessary or useful in the conduct of Borrower’s business, up to a maximum aggregate amount of One Million Dollars ($1,000,000.00) per annum; (d) in connection with Permitted Liens and Permitted Investments; (e) of licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business; and (f) cross-licenses entered into in the settlement of litigation or threatened or potential litigation and consistent with Borrower’s past practices.

7.2Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) enter into any transaction or series of related transactions in which the stockholders of Borrower immediately prior to the first such transaction own less than 51% of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies to Bank the venture capital investors prior to the closing of the transaction). Borrower shall not, without at least ten (10) days prior written notice to Bank: (1) add any new offices or business locations at which any material amount of Inventory or Equipment will be located, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.

7.3Mergers or Acquisitions. Without Bank’s prior written consent, which shall not be unreasonably withheld, merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, except (i) where (A) the aggregate purchase price or other consideration for such transactions does not exceed $5,000,000.00, in the case of a cash transaction or $15,000,000.00 in the case of a stock transaction, (B) no Event of Default has occurred and is continuing or would result from the consummation of such transaction during the term of this Agreement, and (C) Borrower is the surviving entity after such transaction or is the parent company of the surviving entity after such transaction, and (ii) a Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

7.4Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5Encumbrance. Create, incur, or allow any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s intellectual property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Lien” herein.

7.6Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6.(b) hereof.

7.7Distributions; Investments. (a) Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock, other than any Investments or redemptions, retirements or purchases of capital stock that in the aggregate exceed One Million Dollars ($1,000,000.00) during any period of twelve (12) consecutive months.

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7.8Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

7.9Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank.

7.10Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940 or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

8EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

8.1Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three day grace period will not apply to payments due on the Maturity Date).  During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period);

8.2Covenant Default.

(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.6, 6.7 or violates any covenant in Section 7; or

(b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement, any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Grace periods provided under this section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above;

8.3Material Adverse Change.  A Material Adverse Change occurs;

8.4Attachment.  (a) Any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy is not removed in ten (10) days; (b) the service of process upon Bank ( or Bank’s Affiliate) seeking to attach, by trustee or similar process, any funds of, or of any entity under control of Borrower (including a Subsidiary) on deposit with the Bank; (c) Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business; (d) a judgment or other claim in excess of One Million Dollars ($1,000,000.00) becomes a Lien on any of Borrower’s assets; or (e) a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid

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within ten (10) days after Borrower receives notice.  These are not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions shall be made during the cure period);

8.5Insolvency (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while of any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);

8.6Other Agreements.  There is a default in any agreement to which Borrower or any Guarantor is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, which results in the acceleration of the maturity of any Indebtedness in an amount in excess of One Million Dollars ($1,000,000.00) or that could have a material adverse effect on Borrower’s business;

8.7Judgments.  A judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least One Million Dollars ($1,000,000.00) (not covered by independent third-party insurance) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of thirty (30) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment);

8.8Misrepresentations.  Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

8.9Subordinated Debt.  A default or breach occurs under any agreement between Borrower and any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Bank, or any creditor that has signed such an agreement with Bank breaches any terms of such agreement.

9BANK’S RIGHTS AND REMEDIES

9.1Rights and Remedies.  While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following:

(a)declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);

(b)stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;

(c)demand that Borrower (i) deposits cash with Bank in an amount equal to the aggregate amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;

(d)settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, notify any Person owing Borrower money of Bank’s security interest in such funds, and verify the amount of such account;

(e)make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates.  Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;

(f)apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower;

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(g)ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral.  Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;

(h)place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

(i)demand and receive possession of Borrower’s Books; and

(j)exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

9.2Power of Attorney.  Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to:  (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits.  Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder.  Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.

9.3Accounts Verification; Collection.  In the event that an Event of Default has occurred and is continuing, Bank may notify any Person owing Borrower money of Bank’s security interest in such funds and verify the amount of such account.  After the occurrence of an Event of Default, any amounts received by Borrower shall be held in trust by Borrower for Bank, and, if requested by Bank, Borrower shall immediately deliver such receipts to Bank in the form received from the Account Debtor, with proper endorsements for deposit.

9.4Protective Payments.  If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest applicable rate, and secured by the Collateral.  Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

9.5Application of Payments and Proceeds.  Unless an Event of Default has occurred and is continuing, Bank shall apply any funds in its possession, whether from Borrower account balances, payments, or proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, first, to Bank Expenses, including without limitation, the reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by Bank in the exercise of its rights under this Agreement; second, to the interest due upon any of the Obligations; and third, to the principal of the Obligations and any applicable fees and other charges, in such order as Bank shall determine in its sole discretion.  Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If an Event of Default has occurred and is continuing, Bank may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole discretion.  Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If Bank, in its

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good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.

9.6Bank’s Liability for Collateral.  So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

9.7No Waiver; Remedies Cumulative.  Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by Bank and then is only effective for the specific instance and purpose for which it is given.  Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative.  Bank has all rights and remedies provided under the Code, by law, or in equity.  Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of any Event of Default is not a continuing waiver.  Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.

9.8Demand Waiver.  Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.

10NOTICES

All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  Bank or Borrower may change its address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

If to Borrower:	Caliper Life Sciences, Inc.
	68 Elm Street
	Hopkinton, Massachusetts 01748
	Attn: Thomas Higgins, Chief Financial Officer
	Fax: (508) 497-2726
	Email:  Thomas.Higgins@caliperls.com
with a copy to:	Caliper Life Sciences, Inc.
	650 Fairchild Drive
	Mountain View, CA 94043-2234
	Attn: Steve Creager, General Counsel
	Fax: (650) 623-0505
	Email: Stephen.Creager@caliperls.com
If to Bank:	Silicon Valley Bank
	One Newton Executive Park, Suite 200
	2221 Washington Street
	Newton, Massachusetts 02462
	Attn:  Mr.  Tom Davies
	Fax:  (617) 939-5973
	Email: tdavies@svb.com

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with a copy to:	Riemer & Braunstein LLP
	Three Center Plaza
	Boston, Massachusetts 02108
	Attn: David A. Ephraim, Esquire
	Fax: (617) 880-3456
	Email: DEphraim@riemerlaw.com

11CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE

Massachusetts law governs the Loan Documents (other than the Securities Account Control Agreements dated as of the Effective Date executed by, among others, Bank and each Borrower) without regard to principles of conflicts of law.  Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Massachusetts; provided, however, that if for any reason Bank cannot avail itself of such courts in the Commonwealth of Massachusetts, Borrower accepts jurisdiction of the courts and venue in Santa Clara County, California.  NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12GENERAL PROVISIONS

12.1Successors and Assigns.  This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion).  Bank has the right, without the consent of or notice to Borrower, to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.

12.2Indemnification.  Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank harmless against:  (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by Bank’s gross negligence or willful misconduct.

12.3Limitation of Actions.  Any claim or cause of action by Borrower against Bank, its directors, officers, employees, agents, accountants, attorneys, or any other Person affiliated with or representing Bank based upon, arising from, or relating to this Loan Agreement or any other Loan Document, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Bank, its directors, officers, employees, agents, accountants or attorneys, shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by (a) the filing of a complaint within one year from the earlier of (i) the date any of Borrower’s officer or directors had knowledge of the first act, the occurrence or omission upon which such claim or cause of action, or any part thereof, is based, or (ii) the date this Agreement is terminated, and (b) the service of a summons and complaint on an officer of Bank, or on any other person authorized to accept service on behalf of Bank, within thirty (30) days thereafter.  Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower to investigate and act upon any such claim or cause of action.  The one-year period provided herein shall not be waived, tolled, or extended except by the written consent of Bank in its sole discretion.  This provision shall survive any termination of this Loan Agreement or any other Loan Document.

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12.4Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.

12.5Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

12.6Amendments in Writing; Integration.  All amendments to this Agreement must be in writing signed by both Bank and Borrower.  This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

12.7Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Agreement.

12.8Survival.  All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied.  The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

12.9Confidentiality.  In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; and (e) as Bank considers appropriate in exercising remedies under this Agreement.  Confidential information does not include information that either: (i) is in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.

12.10Right of Set Off.   Borrower 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 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 Obligations.  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.

12.11Borrower Liability.  As detailed in Article 1, each Borrower has appointed Caliper as Agent for each Borrower for all purposes hereunder, including with respect to requesting Credit Extensions hereunder.  Each Borrower hereunder shall be obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions.  Each Borrower waives any suretyship defenses available to it under the Code or any other applicable law.  Each Borrower waives any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.  Bank may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability.  Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to

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participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise.  Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void.  If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.

12.12Amended and Restated Loan and Security Agreement.  This Agreement amends and restates in its entirety a certain Loan and Security Agreement by and among Borrower and Bank dated as of August 9, 2006, as amended.

12.13Confirmations and Ratifications by Borrower.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in the Perfection Certificate, and acknowledges, confirms and agrees that, except as set forth on Schedule 12.13 attached hereto, the disclosures and information Borrower provided to Bank in the Perfection Certificate have not changed as of the date of this Agreement.

13DEFINITIONS

13.1Definitions.  As used in this Agreement, the following terms have the following meanings:

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

“Advance” or “Advances” means an advance (or advances) under the Revolving Line.

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“Agent” is defined in Section 1.2(a).

“Agreement” is defined in the preamble hereof.

“Availability Amount” is (a) if the Borrower’s Unrestricted Cash is greater than or equal to Twenty-Five Million Dollars ($25,000,000.00) (i) the Revolving Line, minus (ii) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserves, and minus (iii) the outstanding principal balance of any Advances; or (b) if Borrower’s Unrestricted Cash is less than Twenty-Five Million Dollars ($25,000,000.00) (i) the lesser of (x) the Revolving Line or (y) the Borrowing Base, minus (ii) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserves, and minus (iii) the outstanding principal balance of any Advances.

“Bank” is defined in the preamble hereof.

“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.

“Board” is Borrower’s Board of Directors.

“Borrower” is defined in the preamble hereof.

“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

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“Borrowing Base” is (a) eighty percent (80.0%) of Eligible Accounts based upon a Borrowing Base Certificate delivered to, and acceptable to Bank, plus (b) the lesser of ninety percent (90.0%) of Borrower’s Unrestricted Cash or Ten Million Dollars ($10,000,000.00), as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that, Bank may decrease the foregoing percentages in its good faith business judgment, after an audit of Borrower’s Accounts, based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.

“Borrowing Base Certificate” is that certain certificate in the form attached hereto as Exhibit C.

“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s Board of Directors and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying that (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.

“Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

“Caliper” is defined in the preamble hereof.

“Cash Equivalents and Marketable Securities” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue, and (d) any marketable securities owned and held by Capiler in compliance with Caliper’s approved investment guidelines as of the Effective Date (a copy of which has been delivered to Bank).

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of Massachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes on the provision s thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“Communication” is defined in Section 10.

“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit D.

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest

18

rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

“Credit Extension” is any Advance, Letter of Credit, or any other extension of credit by Bank for Borrower’s benefit.

“Current Liabilities” are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year.

“Default” means any event which with notice or passage of time or both, would constitute an Event of Default.

“Default Rate” is defined in Section 2.3(b).

“Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

“Designated Deposit Account” is Borrower’s deposit account, account number                           , maintained with Bank.

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

“Domestic Subsidiary” means a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia.

“EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense, amortization expense, and non-cash stock-based compensation expense, plus (d) income tax expense, plus, without duplication (f) restructuring charges and litigations charges not to exceed $5,000,000 in the aggregate (for the quarters ending March 31, 2008, June 30, 2008 and September 30, 2008).

“Effective Date” is defined in the preamble of this Agreement.

“Eligible Accounts” are Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3.  Bank reserves the right, at any time and from time to time after the Effective Date, to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment.  Unless Bank agrees otherwise in writing, Eligible Accounts shall not include:

(a)Accounts for which the Account Debtor has not been invoiced;

(b)Accounts that the Account Debtor has not paid within ninety (90) days of invoice date;

(c)Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety (90) days of invoice date;

(d)Credit balances over ninety (90) days from invoice date;

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(e)Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;

(f)Accounts owing from an Account Debtor which does not have its principal place of business in the United States but only to the extent any such Accounts are specifically deemed ineligible in writing by Bank in its sole and absolute discretion;

(g)Accounts owing from an Account Debtor which is a federal, state or local government entity or any department, agency, or instrumentality thereof but only to the extent any such Accounts are specifically deemed ineligible in writing by Bank in its sole and absolute discretion. Notwithstanding the foregoing, Accounts of the United States with respect to which Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended, and are otherwise Eligible Accounts, shall be deemed Eligible Accounts;

(h)Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

(i)Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms if Account Debtor’s payment may be conditional;

(j)Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent;

(k)Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business;

(l)Accounts owing from an Account Debtor with respect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue);

(m)Accounts for which Bank in its good faith business judgment determines collection to be doubtful; and

(n)other Accounts Bank deems ineligible in the exercise of its good faith business judgment.

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

“Event of Default” is defined in Section 8.

“Foreign Currency” means lawful money of a country other than the United States.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

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“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“Intellectual Property” is (a) any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, (b) any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, (c) any know-how, operating manuals, trade secret rights, rights to unpatented inventions, and (d) any claims for damage by way of any past, present, or future infringement of any of the foregoing.

“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower, including, without limitation or duplication, all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred payment obligation (including leases of all types).

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

“Letter of Credit” means a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2.

“Letter of Credit Application” is defined in Section 2.1.2(a).

“Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(d).

“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

“Loan Documents” are, collectively, this Agreement, the Perfection Certificate, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified.

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“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment of any portion of the Obligations; or (d) Bank determines in good faith, based upon information available to it and in its reasonable judgment, that there is a substantial likelihood that Borrower shall fail to comply with one or more of the financial covenants in Section 6 during the next succeeding financial reporting period.

“Net Income” means, as calculated on a consolidated basis for Borrower for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.

“NovaScreen” is defined in the preamble hereof.

“Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents.

“Operating Documents” are, for any Person, such Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and its bylaws in current form, each of the foregoing with all current amendments or modifications thereto.

“Payment/Advance Form” is that certain form attached hereto as Exhibit B.

“Perfection Certificate” is: (a) with respect to Caliper, that certain Perfection Certificate dated as of August 9, 2006 executed by Caliper in favor of Bank, (b) with respect to NovaScreen, that certain Perfection Certificate dated as of August 9, 2006 executed by NovaScreen in favor of Bank, (c) with respect to Xenogen, that certain Perfection Certificate dated as of September 28, 2006 executed by Xenogen in favor of Bank, and (d) with respect to Xenogen Biosciences, that certain Perfection Certificate dated as of September 28, 2006 executed by Xenogen Biosciences in favor of Bank.

“Permitted Indebtedness” is:

(a)Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;

(b)Indebtedness existing on the Effective Date and shown on the Perfection Certificate;

(c)Subordinated Debt;

(d)unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

(e)Indebtedness secured by Permitted Liens;

(f)other unsecured Indebtedness that does not, in the aggregate, exceed One Million Dollars ($1,000,000.00) outstanding at any time; and

(g)extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (f) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

“Permitted Investments” are:

(a)Investments shown on the Perfection Certificate and existing on the Effective Date;

(b)Cash Equivalents and Marketable Securities;

22

(c)Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors; and

(d)joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash investments by Borrower do not exceed One Million Dollars ($1,000,000.00) in the aggregate in any fiscal year.

“Permitted Liens” are:

(a)Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;

(b)Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s Liens;

(c)Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than One Million Dollars ($1,000,000.00) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Liens in both (i) and (ii) are confined to the property and improvements and the proceeds of the Equipment; and

(d)Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase.

(e)leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest;

(f)non-exclusive license of intellectual property granted to third parties in the ordinary course of business; and

(g)Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7.

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.

“Quick Assets” is, on any date, all cash and Cash Equivalents and Marketable Securities as shown on Borrower’s consolidated financial statements as of such date prepared in accordance with GAAP, plus net billed accounts receivable and Unbilled Accounts, excluding any cash or Cash Equivalents and Marketable Securities that are restricted or are pledged to any Person other than Bank or any of Bank’s Affiliates.

“Quick Liabilities” are Current Liabilities, less Deferred Revenue, real estate related restructuring reserves, and customer deposits.

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made

“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and Vice President, Finance of Borrower.

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“Revolving Line” is an Advance or Advances in an aggregate amount of up to Twenty-Five Million Dollars ($25,000,000.00) outstanding at any time.

“Revolving Line Maturity Date” is June 30, 2009.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.

“Subsidiary” means, with respect to any Person, any Person of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person.

“Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other Subordinated Debt.

“Transfer” is defined in Section 7.1.

“Unbilled Account” is the estimated face value amount (as reasonably determined by Borrower based upon the best information available to Borrower) of an invoice for an Account pursuant to services performed by Borrower, which invoice will be generated (but has not yet been generated) within thirty (30) days of the last day of the month in which such services were performed, net of any offsets.

“Unrestricted Cash” shall mean all cash, Cash Equivalents and Marketable Securities maintained at Bank or SVB Securities (provided a control agreement is in place) in Borrower’s name that is unrestricted and not pledged to any other Person.

“Xenogen” is defined in the preamble hereof.

“Xenogen Biosciences” is defined in the preamble hereof.

Signature page follows.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed instrument under the laws of the Commonwealth of Massachusetts as of the Effective Date.

BORROWER:
CALIPER LIFE SCIENCES, INC.
By	/s/ Thomas T. Higgins
Name:	Thomas T. Higgins
Title:	CFO
NOVASCREEN BIOSCIENCES CORPORATION
By	/s/ Thomas T. Higgins
Name:	Thomas T. Higgins
Title:	CFO
XENOGEN CORPORATION
By	/s/ Thomas T. Higgins
Name:	Thomas T. Higgins
Title:	CFO
XENOGEN BIOSCIENCES CORPORATION
By	/s/ Thomas T. Higgins
Name:	Thomas T. Higgins
Title:	CFO
BANK:
SILICON VALLEY BANK
By	/s/ Clark Hayes
Name:	Clark Hayes
Title:	RM

[Signature page to Loan and Security Agreement]

EXHIBIT A

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; [and]

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include any of the following, whether now owned or hereafter acquired (a) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter, (b) license agreements solely for the use of Intellectual Property of a third party, with respect to which license Borrower is the licensee, (c) any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, (d) any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, (e) any know-how, operating manuals, trade secret rights, rights to unpatented inventions, and (f) any claims for damage by way of any past, present, or future infringement of any of the foregoing; provided, however, the Collateral shall include all Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or relating to any of the foregoing.

Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any of its copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, without Bank’s prior written consent.

1

EXHIBIT B

Loan Payment/Advance Request Form

DEADLINE FOR SAME DAY PROCESSING IS NOON E.S.T.*

Fax To:		Date:
LOAN PAYMENT:
Caliper Life Sciences, Inc., as Agent
From Account #	To Account #
(Deposit Account #)	(Loan Account #)
Principal $	and/or Interest $
Authorized Signature:	Phone Number:
Print Name/Title:
LOAN ADVANCE:
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.
From Account #	To Account #
(Loan Account #)	(Deposit Account #)
Amount of Advance $
All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; 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:
Authorized Signature:	Phone Number:
Print Name/Title:

OUTGOING WIRE REQUEST:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, E.S.T.
Beneficiary Name:	Amount of Wire: $
Beneficiary Bank:	Account Number:
City and State:
Beneficiary Bank Transit (ABA) #:	Beneficiary Bank Code (Swift, Sort, Chip, etc.):
	(For International Wire Only)
Intermediary Bank:	Transit (ABA) #:
For Further Credit to:
Special Instruction:
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).
Authorized Signature:	2nd Signature (if required):
Print Name/Title:	Print Name/Title:
Telephone #:	Telephone

* Unless otherwise provided for an Advance bearing interest at LIBOR.

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EXHIBIT C

BORROWING BASE CERTIFICATE

Borrower:CALIPER LIFE SCIENCES, INC., NOVASCREEN BIOSCIENCES CORPORATION, XENOGEN CORPORATION and XENOGEN BIOSCIENCES CORPORATION

Lender:SILICON VALLEY BANK

Commitment Amount:$25,000,000.00

ACCOUNTS RECEIVABLE
1.	Accounts Receivable Book Value as of	$
2.	Additions (please explain on reverse)	$
3.	TOTAL ACCOUNTS RECEIVABLE	$
		$
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4.	Amounts over 90 days due	$
5.	Balance of 50% over 90 day accounts	$
6.	Credit balances over 90 days	$
7.	Concentration Limits	$
8.	Foreign Accounts (only if specifically deemed ineligible by Bank)	$
9.	Governmental Accounts (only if specifically deemed ineligible by Bank)	$
10.	Contra Accounts	$
11.	Promotion or Demo Accounts	$
12.	Intercompany/Employee Accounts	$
13.	Disputed Accounts	$
14.	Deferred Revenue	$
15.	Other (please explain on reverse)	$
16.	TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS	$
17.	Eligible Accounts (#3 minus #16)	$
18.	ELIGIBLE AMOUNT OF ACCOUNTS (80% of #17, plus 90% of Unrestricted Cash)	$
BALANCES
19.	Maximum Loan Amount	$
20.	Total Funds Available (Lesser of #18 or #19)	$
21.	Present balance owing on Line of Credit	$
22.	Outstanding under Sublimits	$
23.	RESERVE POSITION (#20 minus #21 and #22)	$

The undersigned represents and warrants that this is true, complete and correct, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.

	BANK USE ONLY
COMMENTS:	Received by:
	AUTHORIZED SIGNER
	Date:
By:	Verified:
Authorized Signer	AUTHORIZED SIGNER
Date:	Date:
	Compliance Status:	Yes o	No o

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EXHIBIT D

COMPLIANCE CERTIFICATE

TO:	SILICON VALLEY BANK	Date:
FROM:	CALIPER LIFE SCIENCES, INC.
	NOVASCREEN BIOSCIENCES CORPORATION
	XENOGEN CORPORATION
	XENOGEN BIOSCIENCES CORPORATION

The undersigned authorized officers of Caliper Life Sciences, Inc., NovaScreen Biosciences Corporation, XenogenCorporation, and Xenogen Biosciences Corporation (individually and collectively, “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 financial statements with Compliance Certificate	Quarterly within 45 days	Yes o No o
Annual financial statement (CPA Audited)	FYE within 120 days	Yes o No o
Board Approved Projections	Annually, as revised	Yes o No o
Audit	Annually	Yes o No o
Borrowing Base Certificate & A/R Agings	Monthly within 30 days (when Unrestricted Cash < $25,000,000.00 and months in which Credit Extensions requested or outstanding)	Yes o No o
Cash Report	Monthly within 15 days	Yes o No o

Financial Covenant	Required		Actual	Complies
Maintain at all times (tested quarterly):
Minimum Adjusted Quick Ratio	: 1.0	*	:1.0	Yes o No o
Minimum EBITDA-Cap Ex	$	**	$	Yes o No o

*As set forth in Section 6.7(a) of the Agreement.

**As set forth in Section 6.7(b) of the Agreement.

1

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:	Date:
Name:
Title:	Compliance Status:		Yes o	No o
Xenogen Corporation
By:
Name:
Title:
Xenogen Biosciences Corporation
By:
Name:
Title:

2

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

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:

(i) 0.95 to 1.0 for the quarters ending March 31, 2008, June 30, 2008 and September 30, 2008

(ii) 1.0 to 1.0 for the quarters ending December 31, 2008 and March 31, 2009

o No, not in compliance o Yes, in compliance

II.MINIMUM EBITDA minus CAP-EX

Required:

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	$
D.	income tax expense		$

3

E.	without duplication, restructuring charges and litigations charges not to exceed $5,000,000 in the aggregate (for the quarters ending March 31, 2008, June 30, 2008 and September 30, 2008)	$
F.	EBITDA (line A, plus line B, plus line C.1, plus line C.2, plus line C.3, plus line D, and plus line E)	$
G.	capital expenditures	$
H.	EBIDTA minus CAP EX (line F minus line G)	$

Is line H equal to or greater than:	(a) ($7,000,000) for the two-quarter period ending 3/31/08
	(b) ($10,000,000) for the two-quarter period ending 6/30/08
	(c) ($3,000,000) for the two-quarter period ending 9/30/08
	(d) $2,000,000 for the two-quarter period ending 12/31/08
	(e) ($2,500,000) for the two-quarter period ending 3/31/09

o No, not in compliance o Yes, in compliance

4

SCHEDULE 12.13

Caliper Life Sciences, Inc.

1 (h)The Company currently maintains its bank and investment accounts at:

(1)Bank Accounts – Wachovia, SVB

(2)Investment Accounts – SVB Asset Management

(3)Payroll Accounts – SVB

(4)Other depository/operating accounts – SVB, Bank of America, Wachovia

2 (d)If different from the addresses set fort in subparagraphs (a), (b) or (c) above, the following are all places of business of the Company and/or locations maintained by the Company where any Collateral consisting of equipment and/or inventory are located:

Mailing Address	City	State
605 Fairchild Drive	Mountain View	CA
7170 Standard Dive	Hanover	MD
2061 Challenger Drive	Alameda	CA
5 Cedar Brook Drive	Cranbury	NJ

NovaScreen Biosciences Corporation

1 (h)The Company currently maintains its bank and investment accounts at:

(1)Bank Accounts – SVB

(2)Investment Accounts –

(3)Payroll Accounts – SVB through Caliper Life Sciences, Inc.

(4)Other depository/operating accounts – SVB through Caliper Life Sciences, Inc.

5

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, E. Kevin Hrusovsky, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q 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(s) 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(s) 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:

(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: August 8, 2008

/s/ E. KEVIN HRUSOVSKY

E. Kevin Hrusovsky
 President and Chief Executive Officer
 (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Peter F. McAree, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q 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(s) 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(s) 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:

(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: August 8, 2008

/s/ PETER F. MCAREE

Peter F. McAree
 Senior Vice President and Chief Financial Officer
 (Principal Financial Officer)

EX-32.1

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 Quarterly Report of Caliper Life Sciences, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2008 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.

	/s/ E. KEVIN HRUSOVSKY
	E. Kevin Hrusovsky  President and Chief Executive Officer  (Principal Executive Officer)
Date: August 8, 2008

EX-32.2

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 Quarterly Report of Caliper Life Sciences, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2008 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.

	/s/ PETER F. MCAREE
	Peter F. McAree  Senior Vice President and Chief Financial Officer  (Principal Financial Officer)
Date: August 8, 2008